Thursday, June 23, 2011

20110623 1819 FCPO EOD Daily Chart Study.

FCPO closed : 3136, changed : -42 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : resumed lower, seller taking position again.
Support : 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed recorded loss again with lower volume participation changed hand while overnight soy oil closed recorded loss and currently trading lower.
Price hit 7 month low as investors expect second half of the year production level to continue higher due to stable weather and higher harvest yield pressure price to move lower. Reuters reported that Indonesia official are considering to lower maximum palm oil export tax from 25% to 20%.
Daily chart formed a down doji bar candle with longer upper shadow closed nearer to lower Bollinger band after market opened gap down, edge upwards tested the higher near yesterday closing price and plunge downward all the way to closed near the low of the day.
Technical chart reading suggesting a further downside biased market development possibly testing lower support.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110623 1751 FKLI EOD Daily Chart Study.

FKLI closed : 1563 changed : -0.5 point, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : rissing higher, buyer in control.
Support : 1550, 1540, 1530, 1515 level.
Resistance : 1565, 1580, 1590, 1600 level.
Comment :
FKLI closed 1 tick lower with decreasing quiet volume changed hand doing almost par with cash market that closed recorded loss while Asia markets closed mixed and Europe markets curently trading lower with overnight U.S. market resume lower after few days of technical rebound.
News wise, Federal Reserve Chairman Ben S. Bernanke cut the central bank’s growth forecast for U.S. and didn’t signal further stimulus lead market sentiment to negative territory again while earlier in the morning, Japan report another earthquake that triggered tsunami alert. 
Daily chart formed an up doji bar candle with upper shadow closed below upper Bollinger band level after market opened gap down, pushed higher tested above resistance level and eased lower to closed off the high of the day.  
Technical reading suggesting pullback correction upside biased market development possibly testing lower support near middle Bollinger band.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110623 1522 Global Market & Commodities Related News.

Risky assets out of favour before Europe leaders meet
SINGAPORE, June 23 (Reuters) - The U.S. dollar rose and Asian stocks fell on Thursday with investors reluctant to buy riskier assets ahead of a European leaders meeting which could be dominated by talk of Greece's debt crisis, and after the Federal Reserve cut its growth forecasts for this year and next.
"The key in this environment is really just low leverage," Adrian Foster, head of financial market research at Rabobank, told Reuters Television.

U.S. corn slides to 6-week low as selloff continues
SINGAPORE, June 23 (Reuters) - U.S. corn futures fell 1.6 percent on Thursday, dropping to a six-week low, while wheat lost 0.2 percent to trade near its lowest in almost 11 months as long liquidation, sparked by Black Sea wheat continued to hammer the grain markets.
"The thing with corn is that at what point does the market think it is overdone," said Brett Cooper, senior manager of markets at FCStone Australia.

Farm commods regulation best left to G20 finmins-UK
PARIS, June 22 (Reuters) - Britain supports efforts to improve regulation of commodity markets and it will be up to G20 finance ministers, rather than farm ministers, to come up with concrete measures on this, the UK agriculture secretary said.
Caroline Spelman also said boosting agricultural output remained the priority to curb food price volatility, in comments casting doubts that G20 farm ministers gathered in Paris on June 22-23 will make any real inroads on the issue of regulation.

Hungry world needs sun to shine on US corn crop
CHICAGO, June 23 (Reuters) - Rarely have the inches of rainfall in Iowa or the hours of sunshine in Ohio been more pivotal to soaring global food prices and inflation than they will be this summer.
The U.S. Midwest needs good crop weather to produce a corn crop bountiful enough to fill export demand and to help rein in galloping inflation in countries like China and India.

Paraguay farmers see 2010/11 soy crop at 8.4 mln T
ASUNCION, June 22 (Reuters) - Paraguay's 2010/11 soy harvest came in at a record 8.4 million tonnes, in line with the government's forecast, a research institute representing farming and exporting groups said on Wednesday.
Paraguay is the world's No 4 soybean exporter, though it trails far behind neighboring agricultural giants Brazil and Argentina. The small country's economy is highly dependent on increasing oilseed exports for economic growth.

Brazil cocoa arrivals nudge higher after pause
BRASILIA, June 22 (Reuters) - Deliveries of cocoa to warehouses in Brazil picked up again in the last week following a dip a week prior, data from the commercial association of the top cocoa state Bahia showed.
Output from the mid crop harvest which began last month, rose in both Bahia and outlying cocoa states.

China to import up to 5 mln T corn in 2011-USGC
LONDON, June 22 (Reuters) - China is expected to import up to five million tonnes of corn in 2011, the U.S. Grains Council said on Wednesday.
Speaking on the sidelines of the Agriculture Investment Summit, USGC president and CEO Thomas Dorr said China had already purchased around 1.25 million tonnes of corn this year and was expected to meet the bulk of its 2011 import needs from the coming 2011-12 new crop.

Ivorian cocoa prices rise on thinning supply-farmers
ABIDJAN, June 22 (Reuters) - Cocoa farm gate prices in Ivory Coast's cocoa growing regions were mainly higher last week, following San Pedro port prices, as buyers anticipated supply tightening with the mid-crop tapering off, farmers and exporters said on Wednesday.
An accurate average price for the centre-western growing region of Daloa was not available at the Coffee and Cocoa Bourse (BCC), but farmers said buyers were paying at 650 CFA francs per kg, up from 600 CFA francs the previous week, anticipating lower supply as the April-September mid-crop tails off.

Ukraine weather forecaster sees grain crop rising
KIEV, June 22 (Reuters) - Ukraine's grain harvest is set to rise to 42.5-44.5 million tonnes this year from 39.2 million tonnes in 2010, Mykola Kulbida, the head of the country's weather forecasting centre, said on Wednesday.
He said the harvest was likely to include 18-19 million tonnes of wheat and 13-14 million of maize. Ukraine harvested 16.8 million tonnes of wheat and 11.9 million tonnes of maize in 2010, a season affected by drought.

Demand for sustainable cocoa to surge-Fairtrade
ABIDJAN, June 22 (Reuters) - Global demand for sustainable cocoa that pays a stable price to farmers and protects the environment is set to surge well over fivefold to more than 200,000 tonnes a year by 2020, Fairtrade said on Wednesday.
Alex Assanvo, global product manager of the Fairtrade Labelling Organisation, told Reuters on a visit to top cocoa grower Ivory Coast that his projection was partly based on targets set by chocolate maker Mars  which appear increasingly likely to be met.

Sugar prices seen strong near term, to fall in Q4
BRUSSELS, June 22 (Reuters) - Sugar futures prices are expected to stay fairly strong in the near term on worries over Brazilian output and port congestion, but prices should ease in the fourth quarter as new harvests roll in.
A rally to 2-1/2-month highs had been driven by worries over shipping bottlenecks in top producer Brazil, mainly centred on a terminal at Santos due to big orders from China, as well as delays in number two exporter Thailand.

Oil slips over $1 as dollar gain overshadows stocks draw
SINGAPORE, June 23 (Reuters) - Oil fell more than $1 on Thursday, reversing the previous session's gains, as a rise in the dollar overshadowed a surprise draw in gasoline stockpiles in the world's top consumer U.S.
"The Fed comments suggest that it will be more of the same for a long time," said Jonathan Barratt, managing director of Commodity Broking Services. "Growth, in terms of employment and the economy, will remain stagnant for some time and that is not a good thing."

India silver imports tumble in May as prices fall
MUMBAI, June 22 (Reuters) - Imports of silver into India, the world's biggest buyer, in May tumbled by a third to 200 tonnes from April as buying interest tapered off after prices declined 20 percent, a trade body head told Reuters on Wednesday.
"There are no buyers now, buying was absent from second week of May.... Much will depend on the monsoon rains," said Prithviraj Kothari, president of the Bombay Bullion Association, adding June and July are generally slack for the precious metals business.

Copper retreats as dollar lifted by lack of stimulus hint
SINGAPORE, June 23 (Reuters) - Copper drifted lower on Thursday as the dollar strengthened after the U.S. Federal Reserve gave no hint of further monetary support even as it acknowledged the world's top economy was recovering more slowly than it had expected.
The absence of any sign that the Fed would provide more stimulus when its current $600-billion bond-buying program expires at the end of June helped boost the dollar against the euro  and a basket of currencies.

Lion Corp in talks for strategic investor for steel business
KUALA LUMPUR, June 23 (Reuters) - MALAYSIA'S Lion Cop  said on Thursday it had commenced preliminary discussions with various parties over a strategic investment in its steel businesses.
"The company wishes to emphasize that these discussions are at an exploratory stage and accordingly, there can be no certainty that it will lead to a more definitive and conclusive understanding between the parties," Lion Corp said in a statement to the stock exchange.

Japan smelters agree copper TC/RCs at $85/8.5 cents-sources
TOKYO, Jun 23 (Reuters) - Mitsubishi Materials Corp , Japan's third-biggest copper smelter, said it had struck a deal with BHP  on midyear copper treatment and refining charges, without giving any details.
Two trading sources told Reuters that Japanese smelters had struck the deal at $85 per tonne and 8.5 cents per pound. A source said at least one company agreed the term for two years starting on July 1.

Minmetals sees potential restart, sale of nickel mine
SYDNEY, June 23 (Reuters) - China's Minmetals  has received interest from outside parties to operate its mothballed Avebury nickel mine in Australia, MMG, the company's Australian subsidiary, said on Thursday.
The mine was shut down at the height of the global financial crisis due to low world nickel prices, which fell below $10,000 a tonne, less than half the current price.

Rio Tinto sets July-Sept iron ore prices for China steel mills -sources
SHANGHAI, June 23 (Reuters) - World No.2 iron ore miner Rio Tinto Ltd  has asked some Chinese steel mills to pay $2.7234 per dry metric tonne for iron ore fines and $3.0109 per dry metric tonne unit for lump ore for the July-September period, sources familiar with the situation told Reuters.
An iron ore buying official at a mid-sized steel mill in northern China said the company had received the pricing details from Rio Tinto on Tuesday.

China copper imports may rise in 2nd half-Aurubis
HAMBURG, May 22 (Reuters) - China's copper imports are likely to rise in the second half of 2011 after a fall in past months as the country uses up its domestic stocks, Aurubis , Europe's biggest copper producer, said on Wednesday.
Imports into the world's top copper buyer in May fell to 149,235 tonnes from April's 160,236 tonnes and by 46.7 percent from May 2010, a breakdown of the May data by the General Administration of Customs showed on Tuesday.-

Gold ends 4-day winning streak, sterling gold at record
TOKYO, June 23 (Reuters) - Gold fell on Thursday, snapping a four-day winning streak, as the dollar gained after the Federal Reserve gave no hint of further stimulus, but gold priced in sterling hit a record high as the British currency sagged on views of more easing.
"The market will likely remain in narrow ranges around current levels with the topside capped until fresh factors emerge to prompt funds to aggressively want to buy gold," said   Yuichi Ikemizu, branch manager for Standard Bank in Tokyo.

20110623 1116 Global Market & commodities Related News.

GLOBAL MARKETS: Risky assets out of favour before Europe leaders meet
SINGAPORE, June 23 (Reuters) - The euro slipped on Thursday, while Asian stocks steadied but were still locked in a downtrend for the past six weeks, with investors prone to sell risky assets ahead of a European leaders meeting kicking off later that will focus on Greece.
An estimate of Chinese industrial activity in June due later in the morning could ignite a sharper move away from risky assets if it reflects a contraction.

OIL: US crude oil slips more than $1 on quake, Fed
HOUSTON, June 22 (Reuters) - U.S. crude oil futures fell more than $1 a barrel after Wednesday's settlement as a 6.8-magnitude earthquake shook northeast Japan and markets reacted to comments by U.S. Federal Reserve Chairman Ben Bernanke.
During a Wednesday afternoon news conference, Bernanke said the Federal Reserve Federal Open Market Committee voted on Wednesday to keep interest rates near zero because the economic recovery was not expected to pick up until 2012.

NATURAL GAS: Natural gas ends down on weather change, storage
NEW YORK, June 22 (Reuters) - U.S. natural gas futures ended lower on Wednesday, undermined by a slightly milder turn in a still-warm extended weather outlook and expectations for an above average weekly inventory build on Thursday.
"The forecast turned a little more moderate, and there's plenty of gas around, but we're still just range trading (between $4.30 and $5), waiting for something to change," a Florida-based trader said.

EURO COAL: Prices dip 50c/T on lack of buying
LONDON, June 22 (Reuters) - Prompt physical coal prices softened by around 50 cents on Wednesday on a lack of buying interest and despite oil's $2 gain, traders and utilities said.
"The dislocation between swaps and physical and indeed the dislocation between where physical prices are visibly trading and what's really happening is definitely putting people off trading right now," one major utility source said.

U.S. crude oil stocks drop as refinery rates soar
NEW YORK, June 22 (Reuters) - US crude stocks fell last week as refinery utilization increased by the most since December to hit a ten-month high, according to data from the U.S. Energy Information Administration's weekly report on Wednesday.
Crude stocks fell 1.71 million barrels to 363.84 million barrels in the week ended June 17, the data showed. Analysts in a Reuters survey had forecast a 1.4 million barrel decline.

U.S. refinery rates jump to highest since August 2010
NEW YORK, June 22 (Reuters) - U.S. refineries ran at 89.2 percent for the week ending June 17, the highest rate since August 2010, aided by a large jump in East Coast refinery runs, weekly government inventory data showed on Wednesday.
Rates rose by 3.1 percent, the largest increase since December 2010 when they rose 4.9 percent, according to Energy Information Administration data.

Oil price falls 2.5 percent after Reuters reports Saudi offering Asian refiners more crude (Source: Reuters)
U.S. crude fell around 2.5 percent after Reuters was first to report that top exporter Saudi Arabia had offered to supply more crude to Asian refiners for loading in July. The news provided the first hard evidence from consumers of Saudi crude that the kingdom was making good on its promise to boost output to meet demand despite its failure to convince other members of OPEC to make a coordinated increase in supply. DJ followed up over 3 hours later, while Platts came in an hour after that. Bloomberg never matched and relied on a newspaper pick up from the Middle East on Saudi plans to increase supply- which Reuters also had and which again gave the producer rather than the consumer view. New Delhi followed up on the beat on the same day with an exclusive story that Indian refiner MRPL had agreed to buy an extra cargo for July - the first confirmed additional purchase of Saudi crude after the OPEC meeting.

20110623 1024 Global Economic Related News.

China: Housing boom spreads to smaller cities, posing dilemma
China’s property boom is shifting from Beijing and Shanghai as government measures to curb the market haven’t kept prices from rising in secondary cities. New home prices rose in 67 of 70 cities in May led by smaller centers as developers hold off price cuts, even as existing home prices cool following higher interest rates and down-payment requirements. Efforts to rein in property prices have been focused on the nation’s largest urban areas, leaving less affluent cities such as Urumqi in the northwest and northeastern Dandong with surging home values as developers increased building there. That raises challenges for a government that last week escalated its fight against inflation by raising bank reserve requirements for the ninth time since October. (Bloomberg)

France: Business confidence unexpectedly rose for the first time in three months in June as demand for manufactured goods increased at home and abroad. An index of sentiment among factory executives climbed to 109 from a revised 106 in May, national statistics institute Insee said in an emailed statement from Paris. (Source: Bloomberg)

Taiwan: Unemployment rate unexpectedly climbed from the lowest level in more than two years last month. The seasonally adjusted rate rose to 4.41% in May from 4.35% in April, the statistics bureau said in Taipei. That's the first advance since August 2009. (Source: Bloomberg)

EU: Greece vote turns spotlight back on German-ECB ‘Cage Match’
The Greek Parliament’s vote of confidence in Prime Minister George Papandreou shifts the spotlight back to Germany and the European Central Bank as key to Greece’s quest for further international financial aid. Lawmakers in Athens supported Papandreou in a 155-143 vote after the prime minister shuffled his Cabinet and sought the chamber’s approval. The vote may bolster Greece’s chances of securing a EUR12bn (USD17bn) loan payment, which hinges on support from European leaders and on Greece’s ability to push through UER78bn in additional budget cuts next week. The Frankfurt-based central bank and German Chancellor Angela Merkel’s government have clashed over the role of private creditors in the Greek rescue, with the ECB resisting Germany’s calls to require investor participation. (Bloomberg)

US: Bernanke sees small impact on US banks of a Greek default
Federal Reserve Chairman Ben S. Bernanke said a default by Greece would have little impact on US banks, which aren’t “significantly exposed” to European nations struggling to meet debt payments. “We have asked the banks to essentially do stress tests and ask, looking at all their positions, all their hedges, what would the effect on their capital be if Greece defaulted,” Bernanke said to reporters yesterday. “The answer is that the effects are very small.” Bernanke and Fed Governor Daniel Tarullo have led sweeping changes in the central bank’s approach to supervision, establishing the Large Institution Supervision Coordinating Committee. Bernanke said the Fed has also kept “a close eye” on money-market mutual funds, which hold dollar liabilities issued by European banks to fund their holdings of dollar assets. (Bloomberg)

US: Fed to maintain record stimulus after ending bond purchases
Federal Reserve officials decided to keep the central bank’s balance sheet at a record to spur the slowing economy after completing USD600bn of bond purchases this month. “The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said yesterday. Bernanke and his colleagues on the panel cut their growth forecasts for this year and next and raised their estimates for the unemployment rate, driving stocks lower. (Bloomberg)

U.K: Bank of England officials voted 7-2 to keep interest rates on hold this month as some of the majority saw a risk more bond purchases may be needed because of potential downside risks to growth and inflation. Chief Economist Spencer Dale and Martin Weale continued a push for a quarter-point increase in the benchmark rate. Governor Mervyn King and the other six members of the Monetary Policy Committee, including Ben Broadbent, voted for no change. Adam Posen kept up a call for more bond purchases. (Source: Bloomberg)

20110623 1022 Malaysia Corporate Related News.

KLCI chart reading :
correction range bound upside biased.

Baosteel said in talks to buy stake in Lion’s Amsteel Mills
Baosteel Group, China’s second-biggest steelmaker, is in talks to buy a stake in a steel unit of Malaysia’s Lion Group for about USD1bn (RM3.03bn), said two people with knowledge of the matter. The size of the holding in Amsteel Mills to be sold has yet to be determined, one of the people said, declining to be identified because the negotiations are private. Chinese steel mills, the world’s biggest producers, need to target foreign markets to boosts sales because of domestic oversupply. Malaysia’s economy may expand 5%-6% this year after growing 7.2% in 2010, its central bank estimates. (Malaysian Reserve)

BCorp not selling Inter-Pac to Kim Eng
Berjaya Corp is not selling its stock-broking arm Inter-Pac Securities to Kim Eng Holdings, which is now a subsidiary of Malayan Banking. An announcement to Bursa Malaysia yesterday stated that both BCorp and Kim Eng could not agree on the terms of the proposed disposal/acquisition of the entire stake in Inter-Pac. Hence the negotiations between both parties have discontinued. (Financial Daily)

Petronas forgoes RM133bn to keep gas prices low
Petronas should have saved almost RM133bn between 1997 and end-March 2011 if the Government had not fixed gas prices to the power and non-power generation industry. Gas prices have been capped at RM6.40 per million metric British thermal unit (mmBtU) for almost 10 years since 1997 as an interim measure. The decision to cap prices had to be extended beyond the original schedule as the region faced the Asian Financial Crisis. (Financial Daily)

OldTown to raise RM79m from IPO
CafĂ© chain operator OldTown, which plans to list on Bursa Malaysia’s Main Market next month, intends to raise RM79.2m from its IPO. The fresh capital will be used for capital expenditure to open new stores and purchase manufacturing equipment. Group MD Lee Siew Heng said the company is looking to open 27 new stores by the end of the year, the bulk of which will be in Malaysia, followed by Singapore and Indonesia. (Financial Daily)

Dijaya Corp to unveil projects worth RM762m
Property developer Dijaya Corp plans to launch three new projects this financial year ending 31 Dec with a GDV of RM762m. MD Datuk Tong Kien Onn said the total GDV for the three projects was more than RM1bn but as the group planned to launch them in phases the GDV was RM762m. (StarBiz)

K-Star orders up 57%, set to expand
The China-based shoemaker raked in orders of approximately RM148.6m at the recently concluded Winter 2011 Sales Fair, representing a 57% growth compared to the same event held last year. With the positive book order earned through its wholly-owned subsidiary, Fujian Jinjiang Dixing Shoes Plastics, K-Star is set to enhance and expand its production facilities as well as retail outlets, said its executive chairman and CEO Ding Jian Ping yesterday. (Financial Daily)

AirAsia: Gets nod for 5 new coveted routes. AirAsia X has received approval from the government for five new coveted routes, but a couple of routes may be launched sooner than the rest. The five destinations include Jeddah, Beijing, Shanghai, Osaka and Istanbul. (Source: Business Times)

Mudajaya: Order book to balloon to RM6b. Mudajaya Group Bhd says its order book will balloon to RM6b within the next eight months from both domestic and overseas jobs. The company has RM5b jobs in hand that should keep it busy for the next two to three years. (Source: Business Times)

Banking: Banks likely to submit RHBCap plans by June 29. Malayan Banking Bhd (Maybank) and CIMB Group Holdings Bhd, are each expected to submit their merger proposals to RHB Capital Bhd (RHBCap) on June 29. (Source: Business Times)

Construction: Eversendai fixes prices for IPO. Eversendai Corp Bhd has fixed its retail price under its initial public offering (IPO) exercise at RM1.62 per share and institutional price at RM1.70 per share. (Source: The Star)

Stockbroking: Inter-Pacific sale terminated. The asset purchase agreement between Berjaya Corp Bhd and Singapore-based Kim Eng Holdings Ltd for the acquisition of Inter-Pacific Securities Sdn Bhd has been mutually terminated.(Source: Bursa Malaysia)

20110623 1019 Renewable Energy Related News.

WASHINGTON, June 21 (Reuters) - The dream of making a green motor fuel from switchgrass or wood chips got kicked down the road for a few more years after the U.S. government on Tuesday slashed its proposed mandate for next-generation biofuels.
For the second year in a row, the Environmental Protection Agency cut the amount of cellulosic ethanol that must be mixed into motor fuel.

LOS ANGELES, June 21 (Reuters) - Renewable energy investment firm CleanPath LLC will pour more than $800 million into large photovoltaic solar projects in North America, the company said on Tuesday.
The company's new fund is expected to invest in more than 1,000 megawatts of solar power plants over the next five years. The plants will range in size from 5 MW to over 100 MW.

HOUSTON, June 21 (Reuters) - Bonneville Power Administration (BPA) has proposed two power line improvement projects that will allow more electricity produced at wind farms in Montana to flow to markets that need power, the agency said in a release.
The Northern Intertie Reinforcement Project would include  substation, line and other equipment upgrades to increase capacity on BPA's link to Canada in coordination with Puget Sound Energy.

June 21 (Reuters) - Demand for solar energy could shrink over an eighth this year as changes to subsidy plans in Italy will hurt module sales, Wunderlich Securities said but forecast growth over 40 percent next year on high hopes from Germany, the U.S. and China.
The brokerage cut its 2011 demand forecast to just under 16,000 MW, from 16,200 MW earlier.

LONDON, June 21 (Reuters) - AMP Ltd , Australia's second-largest wealth manager, sees attractive opportunities for its infrastructure arm in investing in the submarine cables that connect Europe's offshore wind farms to the electricity grid.
The European Union estimates that North Sea offshore wind capacity could reach up to 150 gigawatts by 2030 -- equivalent to 150 of the latest nuclear reactors -- meeting 16 percent of Europe's expected electricity consumption.

HONG KONG, June 20 (Reuters) - China WindPower Group Ltd , the largest non-state-owned wind farm developer in mainland China, is planning to spin off its tower tube manufacturing business, allowing it to expand into solar-energy equipment manufacturing.
The HK$5 billion ($600 million) company, which invests in wind power plants, said in a statement to the Hong Kong stock exchange on Monday that the spun off business would be undertaken by two indirect wholly-owned subsidiaries of the company.

LONDON, June 20 (Reuters) - The UK government's decision to slash support tariffs for large solar plants will keep the average cost for producing solar power high, consultancy Ernst & Young said in a report on Monday.
Britain's energy ministry will introduce a 40-70 percent cut in subsidies for solar plants larger than 50 kilowatts (kW) from Aug. 1 in a bid to prevent a small number of big projects from scooping up money destined for community and domestic installations, the government said.

WASHINGTON, June 17 (Reuters) - The U.S. Energy Department on Friday offered a $150 million conditional loan guarantee to 1366 Technologies Inc to support development of a "breakthrough solar manufacturing process."
The technology being developed through the company's project could lower the costs of manufacturing wafers for solar energy by 50 percent and dramatically cut the cost of solar power, the department said.

June 17 (Reuters) - China-based JinkoSolar Holding Co  said it is targeting to raise the conversion efficiency rate of its solar cells to more than 18.6 percent by the end of this year to meet demand for cost-effective products.
JinkoSolar --  whose manufacturing operations are based in Jiangxi and Zhejiang provinces of China, and marketing offices in Shanghai, Munich, San Francisco and Bologna -- also said its Chief Technology Officer Guoxiao Yao had resigned for personal reasons.

ROME, June 16 (Reuters) - A reform of Italy's solar energy incentives scheme has put 1 billion euros ($1.41 billion) of financing for the sector at risk of renegotiation, the director general of Italian banking association ABI said on Thursday.
The association said it was ready to help solar operators renegotiate funding after cuts to spending on generous solar power incentives were approved last month.

OSLO, June 16 (Reuters) - Norway's state-owned utility Statkraft announced on Thursday it would construct two onshore wind energy projects in Scotland and Sweden that will jointly generate 450 GWh of electricity per year.
Statkraft said its total investment will amount to 250 million euros ($359.4 million).

BRUSSELS, June 15 (Reuters) - A group of 72 businesses, including household names such as Coca-Cola  and Google , joined forces on Wednesday in support of deeper European cuts to greenhouse gases.
They signed a declaration calling for the European Union to extend to 30 percent its planned emissions cuts, which are now targeted at 20 percent below 1990 levels by the end of this decade.

NEW DELHI, June 15 (Reuters) - India is on track to produce 700 megawatts of solar power at a cost of $2.2 billion by December, ahead of an initial target for an ambitious plan that seeks to boost green power generation from near zero to 20 gigawatts (GW) by 2022.
Under India's Solar Mission, investors bid to build solar power plants and the winning bids are determined by the electricity tariff that they accept as viable. Such has been the interest that the government has been flooded with investment pledges for the first batch of projects rolling out in December. 

20110623 1018 Biofuels Related News.

WASHINGTON, June 21 (Reuters) - The U.S. would have to use 13.2 billion gallons of mostly corn-based ethanol in 2012 as mandated by Congress, the Environmental Protection Agency proposed  on Tuesday, but the agency slashed the target for advanced cellulosic ethanol output.
The EPA proposed cutting the amount of cellulosic ethanol, which is made from switchgrass and other agricultural waste, that must be produced next year to between 3.45 million and 12.9 million gallons from the original goal of 500 million gallons.

WASHINGTON, June 21 (Reuters) - The U.S. Environmental Protection Agency is set to unveil next year's mandate for renewable fuels as soon as Tuesday, likely cutting back the target for making the fuel from cellulosic sources for a second year, industry and agency sources said.
While the 2012 target to produce 13.2 billion gallons (60 billion litres) of corn-based ethanol are unlikely to be much altered since the industry is already exceeding the volume, the second-generation biofuel producers have failed to thrive due expensive enzymes needed to make the advanced fuel.

SAO PAULO, June 21 (Reuters) - Brazil's government may finance fuel distributors to build ethanol stocks equivalent to one month of consumption in an attempt to avert price spikes between cane harvests, a local newspaper said on Tuesday.
Folha de S. Paulo newspaper said the the proposal was presented to President Dilma Rousseff on Monday in a meeting with several ministers, without citing the source of the information. The stocks would be kept at the mills.

WASHINGTON, June 20 (Reuters) - Biofuels are a "tremendous job creator" for rural areas, said U.S. Agriculture Secretary Tom Vilsack on Monday, ahead of a global meeting where the farm-grown fuels may be criticized as a factor in high food prices.
Later this week in Paris, agriculture ministers from the Group of 20 rich nations are expected to agree to share data on crop output and supplies more widely, as a step to calm volatile commodity markets, Vilsack told reporters.

WASHINGTON, June 20 (Reuters) - Big Ethanol has enough clout in Congress and in the Obama administration to keep growing with U.S. government support, even though decades of large tax credits may be winding down.
Amid pressure to cut yawning U.S. deficit and debt, the  Senate voted overwhelmingly late last week to immediately repeal subsidies for the ethanol industry, first won in 1978, that now cost tax payers about $6 billion a year.

KANSAS CITY, Mo., June 17 (Reuters) - The U.S. ethanol industry is growing up. Moves in Washington to start weaning producers off government support are not expected to stunt a sector that had often been perceived as too fragile to withstand the travails of market forces.
This week's largely symbolic Senate vote to eliminate $6 billion in federal subsidies refocused attention on an industry that consumes nearly 40 percent of America's corn crop. Yet, experts and analysts had but one gesture: to shrug.

SAO PAULO, June 16 (Reuters) - Recent sales of Brazilian ethanol to the United States now appear to have dried up after soaring local prices made it more viable to deal on the local market, brokers and an analyst said on Thursday.
After importing corn-based ethanol earlier this year, mills in Brazil reversed the flow of trade with the United States and sold about 300 million liters (79 million gallons) of cane-based ethanol to the U.S. over the past few months. Some of it went via the Caribbean for tax reasons.

June 16 (Reuters) - The U.S. Senate voted overwhelmingly on Thursday to eliminate $6 billion in subsidies for the ethanol industry, although the measure must clear high political hurdles before it would take effect.
While farmers and the ethanol industry like biofuels programs, the incentives have been targeted by environmentalists and lawmakers looking to cut spending, as well as the World Bank, which says they are driving up world food prices.

WAGENINGEN, Netherlands, June 16 (Reuters) - The cost of farming algae as a biofuel must be cut by about 90 percent if it is to become commercially viable and reduce pressure on food prices, according to research by Dutch scientists.
Major companies including oil giant Exxon Mobil Corp , Finnish refiner Neste Oil  and Dutch vitamin maker DSM  are investing in algae production technology in order to develop biofuel.

NEW YORK, June 16 (Reuters) - The high price of corn and low price of ethanol have some gasoline blenders and refiners contemplating buying RINS and banking them in the event that ethanol becomes scarce.
Late last week, after U.S. data showed the U.S. corn harvest was expected to be 2 percent lower than previously forecast, corn prices soared, ethanol prices fell and prices of RINS moved up to the 4.30 cent per gallon level.

HOUSTON, June 15 (Reuters) - Celanese Corp  is spending more than $700 million to turn coal and natural gas into ethanol, but so far the chemical maker cannot sell any of the fuel in the United States.
U.S. renewable fuel standards dictate that 15 billion gallons of ethanol blended into gasoline each year come from corn.

KANSAS CITY, June 15 (Reuters) - A rare inversion in prices of corn and wheat is prompting some ethanol plants to consider a previously unthinkable measure -- using wheat as their feedstock for producing the popular biofuel.
With the price of Chicago corn surging 5 percent, or more than 40 cents, above wheat, the economics of a short-term switch are asserting themselves.

20110623 1017 Global Market Related News.

DJIA chart reading : correction range bound little downside biased.
Hang Seng chart reading : pullback correction downside biased.

Asian Stocks Drop as Fed Cuts Forecast (Source: Bloomberg)
Asian stocks fell, driving the region’s key index lower for the first day in three, after the U.S. Federal Reserve lowered its growth forecast for the world’s biggest economy and said further stimulus measures are unlikely, fueling global growth concerns. Kyocera Corp., a maker of mobile phones and solar panels that gets more than 20 percent of its sales in the U.S., retreated 1.5 percent in Tokyo. Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, slid 0.6 percent in Sydney. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, dropped 0.5 percent as crude oil and copper prices declined.

Baltic sea index falls for 3rd day, outlook seen weak
LONDON, June 21 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a third session on Tuesday as sluggish cargo business and rising vessel supply weighed on the market.
Brokers said they were looking for signs of a pick up in coal demand from China, facing its worst power shortages in years.

Fed to Maintain Stimulus as Bond Buying Ends (Source: Bloomberg)
Federal Reserve officials decided to keep the central bank’s balance sheet at a record to spur the slowing economy after completing $600 billion of bond purchases this month. “The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said at a press conference after a meeting of the Federal Open Market Committee. Bernanke and his colleagues on the panel cut their growth forecasts for this year and next and raised their estimates for the unemployment rate, driving stocks lower.

Obama Says 33,000 Troops Can Begin to Leave Afghanistan (Source: Bloomberg)
President Barack Obama said the surge of military force he ordered to Afghanistan in 2009 largely has accomplished its objectives and he’ll pull the 33,000 extra troops from the country by the summer of 2012. With waning public support for the almost 10-year-old war, Obama outlined a plan to withdraw 10,000 troops this year with the rest returning home by September of next year. He reiterated a goal of turning over security for the country to Afghan forces in 2014.

Bernanke Says Low-Rate Extended Period Means at Least Two, Three Meetings (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the “extended period” of very low interest rates means at least two to three central bank policy meetings and could be “significantly longer.” “The thrust of ‘extended period’ is that we believe we’re at least two or three meetings away from taking any further action, and I emphasize ‘at least,’” Bernanke said today at a press conference in Washington.

Greece Impact Small for U.S. Banks: Bernanke (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said a default by Greece would have little impact on U.S. banks, which aren’t “significantly exposed” to European nations struggling to meet debt payments.

Federal Reserve Frets Over Fiscal Recklessness Behind Calm of 0.09% Yield (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke is stepping up his call for the government to rein in the federal deficit -- just not now. The central bank chief and his lieutenants are expressing concern that Congress’s failure to close what Dallas Fed President Richard Fisher called the nation’s “fiscal sinkhole” puts the economy at risk. At the same time, they say that acting too quickly may choke off a recovery hobbled by an unemployment rate above 9 percent. Concern that government spending cuts will inhibit economic growth may prompt the Fed to maintain record stimulus well beyond the completion of its $600 billion bond purchase program this month, said Dean Maki of Barclays Capital. Should the economy weaken further, there’s little more the Fed can do to spur growth and create jobs with interest rates near zero and the balance sheet at a record $2.83 trillion.

China Housing Boom Spreads to Smaller Cities (Source: Bloomberg)
China’s property boom is shifting from Beijing and Shanghai as government measures to curb the market haven’t kept prices from rising in secondary cities. New home prices rose in 67 of 70 cities in May led by smaller centers as developers hold off price cuts, even as existing home prices cool following higher interest rates and down-payment requirements. Standard & Poor’s on June 15 cut its outlook on Chinese developers, echoing concerns of a property bubble aired by bears such as hedge fund manager Jim Chanos.

China June inflation likely to exceed May –NDRC
BEIJING, June 22 (Reuters) - China's annual inflation in June will be higher than May's 34-month high of 5.5 percent before moderating in the second half, the National Development and Reform Commission (NDRC) said on Wednesday.
The top economic planner said government tightening measures to control inflation were gradually taking effect and consumer prices would remain under control this year

Japanese Stocks Swing Between Gains, Loss as Fed Cuts Growth Forecasts (Source: Bloomberg)
Japanese stocks swung between gains and losses after the U.S. Federal Reserve cut its forecast for growth in the world’s biggest economy. Kyocera Corp. (6971), a maker of mobile phones and solar panels that gets more than 20 percent of its sales in the U.S., declined 1.2 percent. Nikon Corp., a camera maker that counts North America as its biggest market, retreated 4.2 percent. Isuzu Motors Ltd. rose 4 percent after forecasting profit growth.

South Korea Won Weakens for First Time in Five Days as Fed Cuts Forecast (Source: Bloomberg)
South Korea’s won weakened for the first time in five days after the Federal Reserve trimmed its economic growth forecast for the U.S., prompting declines in stocks and reducing demand for emerging-market assets. The Fed maintained its vow to keep interest rates low for an “extended period,” predicting the economy will grow as much as 2.9 percent this year, down from April’s forecast of 3.3 percent. Separately, South Korea’s finance regulator plans to tighten rules related to banks’ loan-to-deposit ratios as the government seeks to rein in rising household debt.

Emerging-Market IPOs Slump, Brazil to Russia (Source: Bloomberg)
The emerging-market initial public offering boom, predicted for Brazil, Russia and India, is fizzling as inflation sends interest rates up, share prices down and prompts companies to scale back or cancel sales.

Euro stabilises after Greek vote, Fed eyed
SINGAPORE, June 22 (Reuters) - The euro stabilised on Wednesday and Asian shares rose after the Greek government won a vote of confidence as expected, prompting investors to shift focus to the U.S. Federal Reserve's news conference due later in the day for further cues.
"The market is up on Greece, but it's a temporary rise on a news event. We may see some more short-covering going into the afternoon, but that's about it -- fundamentals haven't changed a notch," said Mitsushige Akino, chief fund manager for Ichiyoshi Investment Management.

Trichet Says Risk Signals ‘Red’ as Debt Crisis Threatens Banks (Source: Bloomberg)
European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks. “On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

Greek govt survives, battles on to avoid bankruptcy
ATHENS, June 22 (Reuters) - Greece's government will approve a new austerity package on Wednesday after it survived a confidence vote that was a crucial hurdle in a battle to avert the euro zone's first sovereign debt default.
Prime Minister George Papandreou's reshuffled cabinet aims to get parliamentary approval for a package of spending cuts, tax hikes and state asset sales by June 28 and implement it by July 3 to secure 12 billion euros ($17 billion) in aid that is vital to avoid bankruptcy.

Greece Vote Turns Spotlight Back on Germany, ECB to See Who Blinks First (Source: Bloomberg)
The Greek Parliament’s vote of confidence in Prime Minister George Papandreou shifts the spotlight back to Germany and the European Central Bank as key to Greece’s quest for further international financial aid. Lawmakers in Athens supported Papandreou in a 155-143 vote after the prime minister shuffled his Cabinet and sought the chamber’s approval. The vote may bolster Greece’s chances of securing a 12 billion-euro ($17 billion) loan payment, which hinges on support from European leaders and on Greece’s ability to push through 78 billion euros in additional budget cuts next week.

Barclays Seeks Dismissal of Lehman $500 Million Claim to Unpaid Bonuses (Source: Bloomberg)
Barclays Plc (BARC), after fending off an $11 billion lawsuit by Lehman Brothers Holdings Inc., asked a judge to dismiss the defunct firm’s remaining claim for $500 million in allegedly unpaid bonuses. Lehman asked U.S. Bankruptcy Judge James Peck in May to order the U.K. bank to pay the rest of the $2 billion in bonuses it agreed to when it bought Lehman’s North American business in 2008. Barclays, which contended the $2 billion was an estimate of both bonuses and severance payments, said it paid everything assented to in the purchase agreement, according to a court filing today.

Australian mining boom meets spending barrier
SYDNEY, June 22 (Reuters) - Australia's road to resource riches is proving bumpier than first thought as miners struggle to meet ambitious investment plans, another reason for the country's central bank to go slow on further interest rate rises.
The Reserve Bank of Australia (RBA) has long assumed that it would have to tighten policy to temper inflationary pressures from a mining boom. But the sector's race to meet red-hot demand in China and India is running into other constraints, from dire weather to a dearth of skilled labour.

Brazil eyes new tax on big mining projects: paper
SAO PAULO, June 21 (Reuters) - Brazil could create a new tax on large mining projects as part of the government's overhaul of the mining code, a local paper reported on Tuesday, a move that would be costly for mining giant Vale .
The mining and finance ministries are considering imposing a so-called "special participation" tax on large mining projects similar to one that already exists in the oil sector for high productivity fields, the Folha de S. Paulo newspaper reported, without naming sources.

New Congo law demands environmental impact studies
KINSHASA, June 21 (Reuters) - Companies working in Democratic Republic of Congo will soon be forced to submit environmental impact reports or be fined, according to a law passed by the country's parliament.
Details of what the law requires still need to be finalised by ministers but the legislation will apply to existing and future projects in sectors ranging from oil and mining to infrastructure, forestry and farming, according to a copy of the law, seen by Reuters on Tuesday.

FOREX-Euro slips as uncertainty persists, Fed in focus
LONDON, June 22 (Reuters) - The euro slipped against the dollar on Wednesday as investors who bought the single currency following a vote of confidence in the Greek government took profits, signalling market concerns that the euro zone debt crisis is far from over.
Sterling also fell, tumbling to $1.6123 against the dollar  and failing to gain against a broadly weak euro after Bank of England minutes showed policymakers raised the possibility of future quantitative easing.

20110623 1011 Global Commodities Related News.

Corn (Source: CME)
US corn futures settle down the one-day limit in several contract months amid heavy fund selling. Funds sold an estimated 30,000 corn contracts, according to floor traders. They note talk that a large fund was liquidating positions in the grains and pre-placed sell orders were triggered as prices declined. "It seems like everybody hit the sell button today," says Jason Britt, president of Central States Commodities. CBOT December corn drops 30c, or 4.4%, to $6.50 1/4 a bushel. The daily limit expands to 45c Thursday.

Wheat (Source: CME)
US wheat futures close sharply lower as heavy selling hits grain markets. Commodity funds were unloading positions, including an estimated 8,000 wheat contracts at CBOT. Nearby July contract settles down 5.3%, or 36c, at a seven-month low of $6.38 1/4 a bushel. A selloff in European wheat futures added pressure to US prices. Slide should attract buyers, with traders predicting Egypt will issue a tender. Most-active CBOT Sep wheat drops 32 1/4c to $6.73 1/4; KCBT Sep loses 32 3/4c to $7.88 3/4; MGE Sep drops 33 3/4c to $8.51 1/2.

Rice (Source: CME)
Rice futures settle weaker as selling engulfs grain markets. Steep losses in wheat and a limit-down drop in corn dragged down rice, traders say. Wheat, which exerts the most influence on rice because both grains are global food staples, sank more than 5% to a seven-month low. CBOT September rice lost 22 1/2c, or 1.5%, to $14.62 1/2 per hundredweight.

Brazil brings farming muscle to corn and cotton
SAO PAULO, June 21 (Reuters) - After transforming global agriculture by quintupling their soybean production since 1980, Brazilian farmers are now on the brink of crop breakthroughs in cotton and corn, long dominated by growers in America.
Helped by high futures prices and a sustained local agricultural boom, cotton and corn acreage is spreading fast despite being twice as capital intensive as soybean crops.

Corn rises for 3rd day on weather woes, wheat firm
SINGAPORE, June 22 (Reuters) - Chicago corn gained around half a percent, rising for a third straight session on forecasts of hot weather moving into the U.S. corn belt, threatening crop prospects at a time when old-crop supplies are running tight.
"Corn has rallied in the last few sessions as investors are buying on dips because fundamentals are supportive for prices," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Ukraine wheat exports to fall to 3.7 mln T in 10/11
KIEV, June 22 (Reuters) - Ukraine's wheat exports in the 2010/11 season which ends on June 30 will not exceed 3.7 million tonnes compared with 9.2 million in 2009/10, analyst ProAgro said on Wednesday.
"The export of wheat would be at the level of 3.7 million tonnes. A smaller harvest at 16.8 million tonnes and the export curbs that followed were the reason for the decrease," ProAgro said in a statement.

India 2011 monsoon rains seen just below normal
NEW DELHI, June 21 (Reuters) - India's vital monsoon this year is expected to be just below normal, the weather office said in a revised forecast on Tuesday, but the rains could pick up after July 15, during the key planting month for rice, sugar cane and corn.
India's Meteorological Department said in a statement this year's monsoon rains would be 95 percent of the long-term average overall, down from its April forecast of 98 percent and just short of the 96-104 percent range which counts as normal monsoon. 

Sierra Leone seeks 50,000 tonnes rice from Vietnam
HANOI, June 22 (Reuters) - A delegation from Sierra Leone has held talks with Vinafood 2, Vietnam's top rice exporter, to import 50,000 tonnes of the grain, a government statement said, as the southeast Asian nation seeks to boost rice shipment to Africa.
The trade ministers of Sierra Leone and Vietnam signed a memorandum of understanding on rice trading in Hanoi on Tuesday, by which Vietnam hopes to sell more rice to African nations, the Industry and Trade Ministry said in the statement.

World Bank unveils hedging tool to aid poor farmers
WASHINGTON, June 21 (Reuters) - The World Bank on Tuesday launched a new agricultural hedging tool to help farmers in developing countries curb increasing food price volatility.
The launch of the Agricultural Price Risk Management facility together with JP Morgan Chase & Co precedes a June 22-23 meeting in Paris of G20 agriculture ministers seeking a deal on improving global food security amid increasing global commodity prices.

Heavy rains to affect Ukraine's grain harvesting
KIEV, June 22 (Reuters) - Heavy rains expected late this month across Ukraine's leading grain production areas in southern regions may affect grain harvesting and reduce the crop, a senior weather forecaster said on Wednesday.
"We expect heavy rains, rainstorms and squalls to arrive in Ukraine at the end of this month. They could damage some planting areas and poor weather in southern regions will delay harvesting," said Mykola Kulbida, the head of the country's weather forecasting centre.

Sarkozy Urges G-20 Agriculture Ministers To Back French Plan (Source: CME)
French President Nicolas Sarkozy urged agriculture ministers of the Group of 20 industrialized and emerging nations gathered for a meeting in Paris to back France's proposals to curb food price volatility, stressing they could help rebalance global growth. "In remedying the problem of volatility in agricultural markets and ensuring food security for the world of today and tomorrow, it is the entire edifice of capitalism that we are in the process of rebalancing," he told ministers in a speech at the Elysee palace at the opening of the G-20 summit. Echoing recent remarks made at the European Commission last week in Brussels on France's G-20 agenda for agriculture, Sarkozy said "rocketing" food prices are endangering the global food recovery. He called on agriculture ministers to agree on increasing transparency in physical commodities markets as well as to tighten oversight of food commodities derivatives markets. "Commodities markets are among the least transparent of all markets," he said.
France's proposals include the creation of a global data base on food stocks and agricultural production, similar to the one which exists for oil. "This lack of transparency fosters volatility." Even as Sarkozy said increasing food production globally to match rising demand is key in reducing food price volatility, he insisted the expansion of derivatives markets play a role in fueling erratic price swings. "The financialization of agricultural markets, even if it does not explain everything, is a major contributory factor in price volatility and food insecurity for the most vulnerable," Sarkozy said, underlining the need for stricter regulation of derivatives markets. In order to increase food security and prevent food crises, France is also suggesting that G-20 nations agree on a code of conduct to restrict export bans on agricultural products for humanitarian reasons. Another proposal involves setting up emergency food reserves that would be located in the most vulnerable regions of the world.

Brazil Minister: Raising Food Output Way To Curb Price Volatility (Source: CME)
Any attempt to regulate commodity prices won't work to curb food price volatility, and the best way to combat erratic price fluctuations is to dramatically increase food production, Wagner Rossi, Brazil's minister of agriculture, said. "Brazil's experience, which is no different from the experience of other countries in the world, shows that the only instrument capable of reducing food price volatility is to increase food production," Rossi said ahead of a meeting of agriculture ministers of the Group of 20 industrial and developing nations Wednesday and Thursday. As G-20 chair, France has put curbing commodity price volatility, which it sees as one of the main threats to world growth, at the top of its agenda.
French Agriculture Minister Bruno Le Maire intends to discuss with his G-20 peers an action plan revolving around five main proposals, which include increasing food production, improving the transparency of physical commodities markets through the creation of a global data base on stocks, setting up emergency food reserves for humanitarian purposes, as well as stepping up the oversight of soft commodities derivatives markets. Although he said Brazil agrees with most of the French proposals, Rossi warned such measures shouldn't be used to regulate food prices, which is bound to be counter-productive. "Our disagreement bears on the possibility of intervening to regulate or to curb prices. For the last 30 years, food prices in emerging markets have been low and during that time, no rich country has ever offered to come to Brazil to discuss how to increase revenues for food producers," Rossi said.
Brazil intends to play a significant role in meeting the rising need for food across the world in the coming years by raising its agricultural production, Rossi added. Intervening to regulate food prices is bound to fail eventually and even result in higher prices, Rossi said. "Every time you threaten producers to regulate food prices, this may succeed one year but lead to lower production and higher prices the following year," he stressed. Even as French President Nicolas Sarkozy has said on several occasions that France doesn't intend to regulate agricultural prices, Brazil's comments show that emerging food producers, which have benefited from the recent rise in commodity prices, remain wary that the French G-20 agenda could put a brake on their growth. "If you look at international exchanges, the part of the world producing industrial goods still has an advantage over those who produce commodities," Rossi said, describing the recent rise in food prices as slow and gradual.
"Food prices are not high. They are unstable," he said, adding the recent rise in commodity prices has been gradual.

FAO Warns Of More High Food Prices As Cuts World Crop Forecast (Source: CME)
World cereals markets face a second season of deficit as early forecasts for crops in Europe and the U.S. this year have been lowered "significantly" cutting hopes of a rebound in output, the United Nation's food body said. Food prices are expected to stay high and volatile into 2012, putting growing pressure on poor importing countries and causing headaches for policy makers, the Food and Agriculture Organization said in a report. "With total cereal production in 2011 below the anticipated utilization, international prices are likely to remain high, especially in the wheat and coarse grain markets," it said. The warning comes as agriculture ministers for the Group of 20 developing and developed nations are meeting in Paris to negotiate a deal on how best to rein in near record-high food prices and damp volatility.
Food-price inflation has been blamed for sparking the wave of unrest which has rocked the Arab world this year and the FAO warned that Libya, hit by months of civil unrest, is facing serious shortages. The FAO cut its forecast of world cereals output to 2.302 billion metric tons in 2011-12 from an earlier estimate of 2.315 billion tons, driven by a downgrade in output from the U.S and Europe. Wheat output is expected to come in "significantly" below earlier forecasts at 671 million tons, including 134 million tons from Europe, after drought cut hopes for yields. That still marks a 2.8% rise compared with 2010, however, due to a rebound in output from the Black Sea. World cereal stocks are expected to suffer as a result, falling to 486.2 million tons and cutting the world stocks-to-use ratio by 2.3% to just 20.7%.
"With grain inventories remaining at low levels, especially for maize, international grain prices are expected to stay not only high, but also volatile in the 2011-12 marketing season," said the report. Still, the FAO said favorable weather means North African countries--including the world's largest wheat importer Egypt--are likely to have to rely less on world imports. Output from the region is expected to rise 14% to 18 million tons in 2011, it said.

US Agriculture Secy Says US To Push For More Transparent Food Production, Open Mkts (Source: CME)
The United States will push for more transparent food production and open markets to reduce food price volatility at Thursday's meeting of big economy agricultural ministers, U.S. Secretary of Agriculture Tom Vilsack said. Speaking the day before the meeting of Group of 20 agriculture ministers, Vilsack said hoped countries could be discouraged from imposing food export bans, which were a factor in food price spikes in 2008 and again in the past year after Russia banned wheat exports in July 2010 amid a drought. "It's difficult to tell a country what they can and can't do," he said. But, he said there's an "international consensus on what are appropriate practices." Vilsack said Russia's desire to join the World Trade Organization should be a factor in it ceasing to ban exports in future. Such bans distort prices over the long term, he said. One contribution to reducing price volatility could be better knowledge of world food production and stocks.
G-20 host France hopes ministers will agree to set up a database at the Rome headquarters of the United Nations' Food and Agriculture Organization. A problem, however, is a lack of reliable data from developing countries: post-harvest losses might not be registered in remote areas. Vilsack said that the U.S. could help provide more accurate food data through satellite technology. "Many countries are faced with a significant difference of technology and capacity in rural and urban and suburban parts of the country," he said. "We're prepared to work with the international community." Greater transparency of stocks was likely a more efficient way to deal with potential food shortages in certain countries, he said--another possible solution, more emergency food reserves, was expensive and troublesome to manage.
"Historically we've had some reservations about reserves," he said. Instead, "You should know where stocks are... You should be able to use those stocks reasonably quickly. You have to ask what is the most efficient."

India To Be Net Corn Importer By 2014-15 -US Grain Council CEO (Source: CME)
India will join China to become a net corn importer by 2014-15, placing increased pressure on world corn markets, the head of the U.S. Grains Council said. Speaking at an agriculture investment summit here, Thomas Dorr forecast that India will import as much as 300,000 metric tons of corn in 2014-15, rising to 808,000 tons in 2018-19. In 2009-10 India exported 995,000 tons of corn. "We believe that in four short years India will turn into a consistent importer," he said. This shift is expected to come as Chinese demand for corn rockets. Dorr said that despite a push by Beijing to improve domestic production, the Asian giant will increasingly rely on imports to meet rising consumption by its rapidly-expanding livestock industry. "China's government is now coming to grips with the fact that food security and food self-sufficiency aren't necessarily the same thing," he said.
World corn production is expected to set a new record in the coming 2011-12 season and yet rising demand from emerging countries and ethanol blenders mean global corn ending stocks are expected to fall by 3 million tons, to near-historic lows. This pressure is only expected to increase in the future. According to the World Bank, developing country populations with incomes of more than $16,000 a year are expected to rise to 2.1 billion by 2030 from 352 million in 2000, driving demand for meat. Dorr, who is also former under secretary for rural development of the U.S. Department of Agriculture, said producers and investors have a huge opportunity to benefit from such demand growth, but it will require openness to technology, trade and investment. The use of genetically-modified crops, which is already widespread in the U.S. corn industry but extremely restricted in other parts of the world like the European Union, will also become increasingly important in order to meet growing demand, he said.
"Non-scientific objections [to GM] must be weighed against the moral imperative to feed a world of 9 billion people by 2050," he said.

Liffe robusta coffee hits 4-month low
LONDON, June 22 (Reuters) - Liffe robusta coffee set a four-month low in early trade  bearish technicals helped to spark sales while ICE arabicas edged higher.
Cocoa prices were mixed with a firmer dollar weighing on ICE prices while sugar slipped back slightly but remained within striking distance of peaks set earlier this week.

Coffee premiums soar in Asia; supply scarcity worsens
SINGAPORE, June 22 (Reuters) - Premiums for robusta skyrocketed in Asia as supply scarcity worsened, with Indonesian beans changing hands at $200 above London futures and Vietnamese coffee at $150 premiums, raising fears of more delays and even default, dealers said on Wednesday.
Stocks were thinning in top robusta producer Vietnam ahead of the next crop later this year, while exporters in second-largest producer Indonesia are struggling to get beans after persistent rains caused a shift in harvesting time, which damaged coffee cherries.

Brazilian port to limit loading of bagged sugar
SAO PAULO, June 21 (Reuters) - Brazil's main sugar port of Santos will restrict the loading of bagged sugar in the public quay, a measure aimed at improving efficiency, an official said on Tuesday.
But shipping agents fear the decision could cause more congestion in the short term.

Drought, dust darken biggest U.S. cotton patch
LUBBOCK, Texas, June 21 (Reuters) - Punishing temperatures of more than 100 degrees left Wesley Butchey's 2,000 acres of West Texas cotton looking as if they had been zapped in a microwave.
Mother Nature followed up one afternoon with a 45-minute, 60-mile-per hour dust storm, battering tender green plants peeking out of the roasted soil.

US increases sugar import quota by 7 percent
WASHINGTON, June 21 (Reuters) - The U.S. sugar import quota was increased by 120,000 short tons, the second increase since April, the Agriculture Department said on Tuesday, because the freeze-shortened U.S. crop is too small to satisfy needs.
With the increase, the import quota for the year ending on Sept 30 is 1,676,497 tons raw value (1,520,892 tonnes), up 7 percent. The Office of the U.S. Trade Representative will apportion the increase among sugar-producing nations.

Crude Declines After Federal Reserve Lowers U.S. Economic Growth Forecast (Source: Bloomberg)
Oil declined for the first day in four in New York after the Federal Reserve lowered its economic growth outlook for the U.S., signaling that fuel demand in the world’s biggest crude-consuming nation may weaken. Futures slipped as much as 1.5 percent after Fed officials yesterday lowered their forecasts for growth and employment this year and next. An Energy Department report showed U.S. oil stockpiles fell less than forecast and inventories at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, increased for the first time in four weeks.

U.S. Govt cuts use of next-generation biofuels
WASHINGTON, June 21 (Reuters) - The dream of making a green motor fuel from switchgrass or wood chips got kicked down the road for a few more years after the U.S. government on Tuesday slashed its proposed mandate for next-generation biofuels.
For the second year in a row, the Environmental Protection Agency cut the amount of cellulosic ethanol that must be mixed into motor fuel.

Gold Futures Top $1,550 as Currencies Fluctuate (Source: Bloomberg)
Gold rose to a seven-week high as fluctuations in currency markets boosted demand for the precious metal as an alternative investment. The euro fell against the dollar in the two weeks ended June 17 on speculation that the Greek government will struggle to pass austerity measures to avoid a default. Gold prices in U.K. pounds rose to a record today. The metal gained for seventh straight sessions, the longest rally since April.

Copper market in 18,000 T surplus in March -ICSG
LONDON, June 22 (Reuters) - The refined copper market was in an 18,000 tonnes surplus in March, the International Copper Study Group (ICSG) said on Wednesday.
The apparent refined copper balance for the first quarter showed a production deficit of 33,000 tonnes, the Lisbon-based ICSG said in a statement. This compared with a surplus of 10,000 tonnes in the same quarter of 2010.

India's NALCO issues 6,000 T aluminium export tender-source
BHUBANESWAR, India, June 21 (Reuters) - India's state-run National Aluminium Co. Ltd (NALCO)  has issued a tender to export 6,000 tonnes of aluminium ingots, a senior company official said on Tuesday.
The last date for submission of bids is June 28, the official, who is close to the tendering process but could not be named due to company policy, told Reuters.

Iron Ore-Spot prices fall for third day, Vale reroutes cargo
SINGAPORE, June 22 (Reuters) - Spot iron ore prices fell for a third day running and bids remained scarce on Wednesday as tighter credit and slower steel demand in top market China kept buyers at bay.
Key Chinese steelmakers, led by industry leader Baoshan Iron and Steel , have cut prices for July bookings, anticipating a seasonal decline in steel demand in the third quarter.

China leads global steel production down in May
LONDON, June 20 (Reuters) - Global crude steel production dropped for the first time in three months in May from April as top producer China tried to tackle overcapacity after the government implemented credit tightening measures.
Global steel production slipped to 4.189 million tonnes a day in May from 4.231 million in April, World Steel Association figures showed on Monday.

China's global share of rare earth production to drop - report
BEIJING, June 22 (Reuters) - China's global share of rare earth output will drop steeply in the next two years as other countries ramp up production to compensate for domestic curbs on mining the minerals, a former government official and future rare earth group chief said.
The country's rare earth output would drop from 95 percent of global output to 60 percent, reversing global reliance on China, Wang Caifeng, a former Ministry of Industry and Information Technology (MIIT) official told the official China Daily.

METALS- Copper slips on dollar, eyes FOMC meet
LONDON, June 22 (Reuters) - Copper slipped on Wednesday as the dollar strengthened ahead of a U.S. rate statement and after Greek debt concerns eased, but signs of a slow demand ramp up from top consumer China underpinned prices.
Copper  traded down around half a percent at $9,015 a tonne at 0938 GMT from $9,080 on Tuesday's close.
The metal used in power and construction hit a one-week low at $8,900 a tonne on Monday and remains more than 10 percent below record highs of $10,190 a tonne hit in February.

PRECIOUS-Gold dips ahead of Fed decision
June 22 (Reuters) - Gold eased modestly on Wednesday ahead of the outcome of a U.S. Federal Reserve meeting which could determine the near-term outlook for U.S. monetary policy, while the dollar edged up.
The Fed's two-day meeting ends on Wednesday and the central bank is widely expected to repeat its commitment to keeping U.S. interest rates low, but without fanning any expectations for a third round of quantitative easing.

20110623 1009 Soy Oil & Palm Oil Related News.

Soy Oil chart reading : pullback correction downside biased

Soybeans (Source: CME)
US soybean futures stumble, ending at a five-week low on spillover weakness from grain futures. Market was consumed in broad-based selling in grain futures, falling on domino effect of tumbling wheat and corn futures, said Citi analyst Mario Balletto in Chicago. Favorable near-term weather forecasts for developing crops enticed traders to take a more cautious approach to the market. Slowing demand added further pressure to keep sellers in control of price direction, with fund liquidation in ag commodities pinning prices in negative territory, analysts say. CBOT Nov soy ended down 1.3% at $13.32 1/2/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures fell in unison with soybeans and the rest of the grain complex at the CBOT today. Broader-based fund selling kept buyers on the run, with slowing demand and a lack of a crop threat for soybeans leaving soy products pinned in negative territory, analysts note. CBOT July soymeal dropped 1.3% to $347.10/short ton; Dec soyoil fell 0.8% to 57.50c/pound.

Palm flat as output rise offsets improving demand
JAKARTA, June 22 (Reuters) - Malaysian palm oil futures traded flat on Wednesday, flirting with near one-week highs, as expectations of a higher production cycle offset a likely short-term demand uptick.
"The market today is slightly down," said one trader. "People are looking for direction and new leads in the market.