Tuesday, July 12, 2011

20110712 1847 FCPO EOD Daily Chart Study.

FCPO closed : 3034, changed : -39 points, volume : higher.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : rising higher, seller reducing position as buyer testing market.
Support : 3020, 2970, 2930, 2900 level.
Resistance : 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed recorded loss with improved volume changed hand while overnight soy oil closed slightly lower and currently trading weaker.
News wise, Reuters reported that India to keep high buying interest for vegetable oil in the month of July ahead of festival season. Reuters survey also reported India's June vegetable imports seen up 28% to 847,500 tonnes, palm oil imports seen up 29% and soy oil imports seen up 0.2% vs May. Market also awaits tonight USDA report with the anticipation of bearish crop soybean crop data.
Daily chart formed a down bar candle closed away from middle Bollinger band level after market opened lower and traded lower within 27 points tight range bound market followed by last half an hour selling activities pressed price to closed near the low of the day.
Technical reading remained suggesting a correction range bound downside biased market development possibly testing lower support level.
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.

20110712 1817 FKLI EOD Daily Chart Study.

FKLI closed : 1573 changed : -7.5 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling, buyer reducing position while seller testing market.
Support : 1565, 1550, 1540, 1530 level.
Resistance : 1580, 1590, 1600, 1610 level.
Comment :
FKLI closed recorded loss for the 2nd day with better volume transacted doing 5 points discount compare to cash market that closed lower while Asia and European markets traded negatively with overnight U.S. market continue to closed weaker.
Negative sentiment accelerate today on worries of Europe third largest economy Italy could be the next sovereign debt country plus. On the other hand, factor to monitor closely will be possibility of another round of China central bank rate hike to counter inflation that continue to reach higher level.
Daily chart formed a down doji bar candle with lower shadow positioned below middle Bollinger band level after market opened gap down, moved side ways within tight 4 points range market for the morning session and break lower in the after noon before recovered upward partially to closed off the low of the day.
Chart reading wise, FKLI are currection having correction range bound upside biased development testing support and resistance level with MACD indicator having positive cross up.
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.

20110712 1657 Global Market & Commodities Related News.

Euro, stocks slide as Eurozone debt woes deepen
SINGAPORE, July 12 (Reuters) - The euro fell to a four-month low on Tuesday after new IMF Managing Director Christine Lagarde said the fund was not yet ready to discuss terms of a second Greek bailout, while stock markets tumbled on fears that more countries will be engulfed by the euro zone's debt crisis.
"Even if they agree on a multi-billion dollar package for Greece and other affected peripheral countries, if we don't see a continuation of implementation of the austerity cuts, all bets are off," said Thomas Lam, group chief economist at OSK-DMG in Singapore.

Market worries drag Italy into euro zone turmoil
ROME, July 11 (Reuters)- A surge in Italy's bond yields over the past week does not doom the country's efforts to keep its sovereign debt under control, but it does increase the risk of a further spiral of yields that could prove disastrous.  
Despite a debt mountain second only to that of Greece, Italy has until now managed to stay on the sidelines of the euro zone crisis. The euro zone's third largest economy, its debt costs have been tempered by its relatively modest budget deficit, its conservative banking system and its high level of private savings.

Wheat, corn drop on supply prospects, euro zone woes
SINGAPORE, July 12 (Reuters) - U.S. wheat futures slid around 2.5 percent on Tuesday, while corn lost around 1 percent, losing more ground on prospects of higher supplies and fears that the euro zone debt crisis could spread to Italy.
"Grains will be weaker across the board because of the U.S. dollar strength and euro zone crisis," said Adam Davis, a senior commodity analyst at Melbourne-based funds Merricks Capital.

US corn and soy surviving high temps, for now
CHICAGO, July 11 (Reuters) - Rising temperatures around the U.S. Midwest were not yet hurting corn and soybean crops because there was plenty of moisture stored up in the soil after a spring of heavy rains, analysts said.
U.S. corn ratings were expected to rise one percentage point while soybean ratings were seen unchanged when the U.S. Agriculture Department releases its latest update on crop conditions Monday afternoon.

India panel allows rice, wheat exports, okays food bill
NEW DELHI, July 11 (Reuters) - India has agreed to allow 1 million tonnes of common rice exports and an unspecified amount of wheat, government sources said on Monday, as it weighs managing millions of tonnes of grains stockpiles with fighting persistently high inflation.
The sources said after a meeting of a panel of ministers that the exact quantity of wheat exports will be decided later. Sources had told Reuters it could be one million tonnes also. India has banned wheat exports since 2007 to ensure local supplies.

High heat not yet parching corn and soy
CHICAGO, July 11 (Reuters) - U.S. corn ratings were expected to rise one percentage point because the crop had plenty of moisture to sustain it even as temperatures rose in many growing areas last week, analysts said.
Soybean ratings were expected to be unchanged.
The damp soil that delayed planting this spring also were keeping crop conditions well above average despite the scorching heat.

Vietnam delays loading of 40,000 T coffee -traders
HANOI, July 12 (Reuters) - Vietnamese coffee exporters have delayed loading of around 40,000 tonnes, or nearly 670,000 bags, due to thin domestic  stocks and a jump in local market prices beyond export levels, traders said on Tuesday.
Around two thirds of the volume were delayed by two exporters, including a major firm in the Central Highlands coffee belt, while several smaller firms made up the remaining quantity, traders in Ho Chi Minh City said.

Mexico, El Salvador coffee exports jump in June
MEXICO CITY, July 11 (Reuters) - Coffee exports from Mexico and El Salvador, both known for their arabica coffee, jumped in June compared to the same month a year ago, the national coffee associations said on Monday.
Mexico's exports in the month were up more than 50 percent, but accumulated shipments for the entire season slipped compared to last year since the country is expecting a slightly smaller crop due to frosts in some areas.

Brazil consultant sees record 2011/12 soy planting
SAO PAULO, July 11 (Reuters) - Brazil will expand the planted area of the 2011/12 soy crop by about 3 percent to a record 24.9 million hectares, consultancy Agencia Rural said on Monday, but it expected production to fall nonetheless.
Brazil is the world's No. 2 soy producer and exporter after the United States and would notch its fifth consecutive year of expansion in area if it plants more hectares again this year once the sowing period begins around September.

Cameroon says exports 190,945 T cocoa to May 31
YAOUNDE, July 11 (Reuters) - Cameroon, the world's fifth  largest cocoa grower, exported 190,945 tonnes of beans in the  current season to May 31, up from 162,154 tonnes for the same  period last year, the National Cocoa and Coffee Board (NCCB)  said on Monday.
The statistics show the central African country exported  2,358 tonnes in May, compared to 2,381 tonnes in the same month  last year. The cocoa season runs from August to July.

Unica to release Brazil sugar forecast Wednesday
SAO PAULO, July 11 (Reuters) - Brazilian cane industry group Unica plans to release its latest forecast for 2011/12 sugar production in the center-south of Brazil on Wednesday, a spokesperson said on Monday.
The sugar market is focused on Unica's forecast after private analysts including Datagro and London-based merchant Czarnikow reduced their projections for Brazilian output. Brazil is the world's top producer and exporter of sugar.

Indonesia rubber price seen above $4/kg in H2
JAKARTA, July 11 (Reuters) - Indonesian rubber prices could stay above $4 a kg in the second half of this year on steady demand from tyre makers, but are unlikely to revisit a life-time high struck earlier this year, the Indonesian Rubber Association (Gapkindo) said on Monday.
"Demand is still strong, despite China's tight money policy," said Suharto Honggokusumo, executive director of Gapkindo, referring to the world's largest consumer.

Oil slips for 3rd day, euro zone debt fears weigh
SINGAPORE, July 12 (Reuters) - Oil slipped for a third day on Tuesday as pledges to contain the spread of the euro zone's debt crisis failed to dispel unease among investors about slowing energy demand growth.
"Any continued contagion, including in Spain and Italy, or any of the larger economies, could certainly drive oil prices lower," Anthony Danaher, President of Los Angeles-based Guild Investment Management, said from Singapore.

Assailants blow up Egypt gas pipeline station
CAIRO, July 12 (Reuters) - Saboteurs blew up an Egyptian pipeline distribution station in northern Sinai on Tuesday that supplies natural gas to Israel, the official MENA news agency said.
It was the fourth attack on facilities supplying Egyptian gas to Israel this year.

US oil reserve bids were double amount offered
WASHINGTON, July 11 (Reuters) - The U.S. government received bids for more than double the amount of oil it was selling from its emergency reserves last month, and the first 7 million barrels are set to hit the market before August.
The latest details from the biggest-ever sale from the Strategic Petroleum Reserve showed for the first time just how great demand was, but also highlighted those who lost out, including one company targeted by regulators in a landmark manipulation case and China's top state-run oil firm.

IEA trims total oil volume planned in release
LONDON, July 11 (Reuters) - The International Energy Agency (IEA) on Monday said the amount of oil made available from emergency reserves, to make up for disrupted Libyan supply, would be slightly less than earlier stated after sales by member-countries met with mixed demand.
Oil available under the plan will amount to 59.83 million barrels, down 784,000 barrels from an earlier estimate, said the IEA, an adviser to 28 industrialised countries, in a statement on its website.

LME copper steady on demand-supply views, euro zone weighs
SHANGHAI, July 12 (Reuters) - LME Copper steadied on Tuesday as continued fears that the euro zone debt crisis would spread to Italy curbed a more positive outlook linked to fundamental demand and potential supply disruptions in Indonesia and Chile.
"On the demand side, copper metal will pick up again towards the end of the third quarter as the Northern Hemisphere starts to crank production up after the summer holidays," said MineLife analyst Gavin Wendt.

China hikes smelting, steel capacity cuts
HONG KONG/SHANGHAI, July 11 (Reuters) - China has ordered local governments to phase out a total 2.04 million tonnes of aluminium, copper, lead and zinc smelting capacity in 2011 as part of a multi-year plan to crack down on energy-intensive and polluting industries, raising the target by 13 percent from  an earlier one set in May.  
The iron smelting industry -- which the government has been trying to consolidate -- bore the brunt of the crackdown and was ordered to slash 31.22 million tonnes of production capacity, up 17.7 percent from May's target, according to a statement on the Ministry of Industry and Information Technology website.

Alcoa Q2 profit jumps on metal, alumina prices
NEW YORK, July 11 (Reuters) - Alcoa Inc , America's biggest aluminum producer, posted a big jump in second-quarter profit on Monday, matching Wall Street estimates, partly due to soaring prices for the metal and alumina, its raw material.
But some analysts said a recent softening of aluminum prices might affect the company's third-quarter results and Alcoa's stock slipped 7 cents to $15.84 in after-hours trade on the New York Stock Exchange.

World aluminium demand to double in 10 years -Amag
LONDON, July 11 (Reuters) - World demand for aluminium will double in the next decade, driven by growing use in aircraft, transportation and luxury cars, the head of major European products maker Amag  said on Monday.
"We forecast that demand for aluminium will double within the next 10 to 12 years, so a global growth rate of 7 percent. This is a nice picture," Gerhard Falch, the Austrian aluminium group's chief executive, told Reuters.

China unlikely to yield on rare earths despite WTO
BRUSSELS, July 11 (Reuters) - China will probably not yield to demands to ease export restrictions on rare earths, unlike its flexibility in some previous trade disputes, even after the World Trade Organization ruled against it in a related case.  
The WTO ruled last week that China breached trade law by curbing exports of eight raw materials including bauxite and zinc. Europe and the United States said the judgment meant China should also be forced to increase exports of 17 rare earths as the almost exclusive supplier of these minerals crucial to global electronics, defense and renewable energy industries.

Zambia Jan-May 2011 copper output down -c.bank
LUSAKA, July 11 (Reuters) - Copper output in Zambia, Africa's top producer of the metal, declined by about 5 percent in the first five months of 2011 from a year ago as mines scaled down production due to heavy rain, the central bank said on Monday.
Copper output dropped to 308,777 tonnes for January to May from 326,877 tonnes in the same period last year, the central bank said in a fortnightly statistics report.

Gold steady on euro zone woes; dollar, equities weigh
SINGAPORE, July 12 (Reuters) - Spot gold held ground above $1,550 on Tuesday, as investors fled from risky assets on fears of a spreading euro zone debt crisis, but a stronger dollar and weak equities weighed on sentiment.
"We'll probably see a lot of support for gold from rising risk aversion due to concerns of escalating debt in Europe," said Natalie Robertson, a commodities analyst at ANZ.

20110712 1127 Global Market & Commodities Related News.

GLOBAL MARKETS: Italy woes hit stocks, euro, boost bonds
NEW YORK, July 11 (Reuters) - Stocks and the euro fell as fears the euro zone debt crisis could spread to Italy caused investors to sell risky assets and snap up safe-haven debt, pushing the yield on the benchmark 10-year U.S. Treasury note below 3.0 percent.
"Italy has a more realistic financial plan than Greece and is much better equipped to meet their debt obligations," said Kathy Lien, director of currency research at GFT Forex in New York.

OIL: Oil falls on concerns about demand slowing
NEW YORK, July 11 (Reuters) - Oil fell for a second consecutive day as fears of a widening euro-zone debt crisis and a drop in Chinese crude imports rekindled concerns about a demand slowdown.
"Concerns about Europe keep getting ratcheted up and demand expectations lower, and China's inflation and worry about slowing growth add to worries about demand," said Phil Flynn, analyst at PFGBest Research in Chicago.

NATURAL GAS: Natural gas ends up 2 pct, heat backs gains
NEW YORK, July 11 (Reuters) - Front-month U.S. natural gas futures ended higher as hot weather across much of the nation this week boosted demand despite concerns about ample supplies that continue to limit the upside.
"This (rally) was heat driven. It's hot everywhere, and the physical market has been really strong," a Houston-based trader said, noting Henry Hub cash was trading 8 cents above futures.

EURO COAL: Prices drop $1/T with oil 2 pct fall
LONDON, July 11 (Reuters) - Prompt physical coal prices fell by around $1.00 a tonne in line a 2 percent drop in oil and in the absence of fresh buying from end-users in Asia and Europe.
"The Indians and Chinese are nowhere in the market right now, for any quality of coal, it seems, they're under no pressure to take prompt cargoes," one Europe-based market source said.

COMMODITIES: Down broadly as euro zone fears bump up dollar
NEW YORK, July 11 (Reuters) - Oil, copper and grains markets tumbled as worry that the euro zone debt crisis could spill over into Italy bumped the dollar up against the euro, hurting prices of dollar-denominated commodities.
"A default by Greece would be enough to set off a widespread sell-off in the financial market but a default by Italy would be worse than Lehman," said Kathy Lien, director of currency research at GFT Forex in New York.

GLOBAL MARKETS: Italy woes hit stocks, euro, boost bonds
NEW YORK, July 11 (Reuters) - Stocks and the euro fell as fears the euro zone debt crisis could spread to Italy caused investors to sell risky assets and snap up safe-haven debt, pushing the yield on the benchmark 10-year U.S. Treasury note below 3.0 percent.
"Italy has a more realistic financial plan than Greece and is much better equipped to meet their debt obligations," said Kathy Lien, director of currency research at GFT Forex in New York.

China crude imports to recover in July on steady demand
BEIJING, July 11 (Reuters) - China's crude imports will recover in July from a downward blip as refiners crank up production to meet rising demand after a heavy maintenance program led to the first decline in shipments at the world's second-largest oil consumer in six months in June.
The nation's demand growth is expected to slow this year from last, as monetary tightening measures pare consumption. But China will continue to provide the majority of the world's increased crude use, at 40 percent in 2011, the International Energy Agency forecasts.    

20110712 1045 Local & Global Economic Related News.

Malaysia: Industrial production index down 5.1% in May
The Industrial Production Index (IPI) in May 2011 decreased 5.1% compared to May 2010. M-o-m, May 2011 IPI decreased 1.3%, the Department of Statistics Malaysia said in its IPI report for the month. The decline in May 2011 was due to decreases in the mining index (20.1%) and electricity index (1.6%). The manufacturing index posted an increase of 0.6%. The IPI from January – May 2011 recorded a positive growth of 0.2% compared to the same period of 2010. Manufacturing output in May 2011 grew 0.6% against May 2010. The growth for the first 5 months of 2011 increased by 3.7% compared to the same period last year. (Bernama)

EU: EU revives buybacks for Greek solution as crisis swamps Italy
European finance ministers weighed using bond buybacks to ease Greece’s plight, reviving previously discarded ideas as the debt crisis leapt to Italy, the continent’s third-largest economy. Prodded by investors and the European Central Bank, the euro’s guardians said a bailout fund set up last year may be used to buy bonds in the secondary market or enable Greece to retire its debt at a discount. They offered another cut in Greece’s interest rates. As exploding bond yields in Italy and Spain brought the crisis closer to the heart of the euro area, Europe’s search for answers took it back to proposals that were scuttled by Germany earlier this year. (Bloomberg)

EU: Italy, Spain trade like junk as contagion spreads: Euro Credit
Italian and Spanish sovereign bonds are trading like junk-rated debt amid faltering efforts by European Union finance ministers to ring fence the debt crisis to the three already-bailed out nations. Italy’s 10-year borrowing costs surged to 5.68% yesterday, the highest since November 2000, while Spanish notes exceeded 6% for the first time since 1997. The cost of default insurance implies their Aa2 investment-grade rankings could be as much as nine steps lower at Ba2 -- below Iceland and on par with El Salvador, according to Moody’s Investors Service. Italy and Spain are being dragged into the crisis on concern soaring bond yields triggered by a failure to resolve rescues of Greece, Ireland and Portugal may make it impossible for them to finance their borrowings. Italy has EUR1.6tn (USD2.25tn) of bonds outstanding, the world’s third-largest debt pile after the U.S. and Japan, while Spain owes EUR655bn. (Bloomberg)

EU: French industrial output climbs on electronics, refining
French industrial production rose for the first time in three months in May, lifted by electric equipment and cars as well as refineries. Output from factories, mines and utilities climbed 2% from April, when it declined a revised 0.5%, statistics office Insee said today. Economists forecast a 0.5% gain, according to the median of 12 estimates in a Bloomberg News survey. France’s expansion probably almost stalled in the three months through June as demand for exports slowed and consumer spending declined, according to economists at Barclays Capital and BNP Paribas SA. The trade deficit of the euro area’s second largest economy rose to a record in May as exports declined. (Bloomberg)

US: Obama says he continues to push ‘largest possible deal’
President Barack Obama urged Republican leaders to compromise on their opposition to tax increases and achieve “the largest possible deal” to cut the federal budget deficit. Obama said he won’t agree to a short-term extension of the government’s debt limit and plans to continue meeting with members of Congress every day until an agreement is reached. (Bloomberg)

US stocks decline on global debt concerns as financials fall
US stocks slid, giving the Standard & Poor’s 500 Index its biggest two-day drop since March, as concerns grew Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. JPMorgan Chase & Co. and Bank of America Corp fell more than 3.2%, driving financial shares in the S&P 500 down the most since 1 June, as Italian and Spanish government bonds sank. Alcoa Inc. tumbled 2.9% before the aluminum producer started the earnings season after the market close. All 10 S&P 500 industries slumped, falling at least 0.7%. The S&P 500 retreated 1.8% to 1,319.49, its lowest level since 29 June. The gauge fell 2.5% over two sessions, the most since 16 March. The Dow Jones Industrial Average declined 151.44 points, or 1.2 %, to 12,505.76. (Bloomberg)

20110712 1044 Malaysia Corporate Related News.

KLCI chart reading :
pullback correction upside biased.

Proposal to merge SapuraCrest, Kencana
Maybank Investment Bank (Maybank IB) and CIMB Investment Bank have joined forces to entice SapuraCrest Petroleum and Kencana Petroleum to merge and create the largest local oil and gas service provider by assets. The merged entity is expected to have a market capitalisation of RM10bn as well as some RM6bn worth of assets. A special purpose vehicle, Integral Key SB (IKSB), yesterday offered to acquire the assets and liabilities of SapuraCrest and Kencana Petroleum in exchange for cash and IKSB shares. The cash portion for SapuraCrest is RM875m or about 14.9% of the deal, while for Kencana the cash portion is RM969m or 16.2% of the deal. Under the proposed deal, Sapura-Crest and Kencana Petroleum will have equal share in IKSB, while IKSB will maintain the listing status of only one of the two companies. (BT)

Tenaga to implement new tariff in Sabah from 15 July
Tenaga Nasional’s unit Sabah Electicity SB will impose the new electricity tariff structure in Sabah and the Federal Territory of Labuan with effect from 15 July, 2011. Tenaga said the new tariff structure was to promote efficient utilization of electricity by the consumers, adding that it had minimal impact on lower income households and small businesses. Tenaga said 75% of domestic consumers or 275,276 households in Sabah and the Federal Territory of Labuan with consumption of 350 kiloWatt-hour (kWh) and below would not experience any increase in their monthly bills. Meanwhile, the electricity rebate by the government for domestic consumers with monthly bill of not more than RM20 will be maintained until 31 Dec, 2011, it said. (Financial Daily)

TNB unit to boost overseas income
Tenaga Nasional Bhd's (TNB) wholly-owned unit Malaysia Transformer Manufacturing (MTM) expects its overseas operations to  contribute 25 per cent to the company's bottom line within three contributions from our overseas operations," said its chairman Datuk Seri Abdul Rashid Abdullah. Currently, the overseas operation contribute 10 per cent of its total earnings of RM200 million. Spea system certificate handover ceremony from Sirim QAS International Sdn Bhd here yesterday, Abdul Rashid said the company is expanding its operations in the Asean region. "We are also in the midst of looking for opportunities in the Middle East," he said. (btimes.com.my)

KPJ inks JV to set up specialist hospital in Perlis
KPJ Healthcare has inked a joint venture agreement with Yayasan Islam Perlis (YIP) to set up and operate a new hospital to be known as KPJ Perlis Specialist Hospital. KPJ said its wholly owned subsidiary Kumpulan Perubatan (Johor) SB (KPJSB) had signed the agreement with YIP on 11 July. It said the JV would operate under the name Perlis Specialist Hospital SB, of which KPJSB would hold 60% equity interest while YIP would hold the remaining 40%. KPJ said the JV company will have an initial authorised share capital of 25m shares of RM1 each, which YIP would subscribe 6.5m shares payable in consideration for transfer of land to the company, while KPJSB would subscribe 9.75m shares payable in cash. (Financial Daily)

AirAsia X to move to Gatwick
AirAsia X (AAX), which flies six times weekly to London by way of Stansted airport, will move its base to Gatwick, which is Britain's second largest airport from late-October this year. The major consideration for the move is said to be Gatwick's offer of “irresistible rates” to AAX for landing and parking at the airport. Another advantage of Gatwick is that it has a larger number of transiting passengers and connecting flights, compared with Stanstead. Apart from Gatwick, Machester airport had also been courting AAX for some time now, the sources said. Stansted is the third busiest airport in Britain and has been AAX's first point of entry into Europe since 2008. Another plus for AAX moving to Gatwick is that it is closer to the city, making travel into London easier for passengers. Apart from London, the only other point in Europe that AAX flies to is Paris via Orly International Airport. (StarBiz)

E&O sells assets for RM134m
Eastern & Oriental (E&O) is selling a building and the freehold 27,744 sq m it is located on for RM134m cash to Soaring Profit SB. The land and building in Penang is part of the E&O Group's 240-acre phase one of the Seri Tanjung Pinang mixed development project. In a Bursa Malaysia filing yesterday, E&O said the building was completed in May this year and subsequently leased to hypermarket retail operator Tesco for a 20-year period. The rental receivable from the building, which has about 269,418 sq ft of gross floor area and 1,042 car park bays, is RM7.6m per annum. (StarBiz)

SILK wins RM40m Petronas contract
SILK Holdings Bhd has won a contract from Petronas Carigali Sdn Bhd to provide four anchor handling tug supply vessels for RM39.75 million. The term of the contract is for one year, starting this month, but the contract tenure could be extended for additional year, SILK informed the stock exchange.  (btimes.com.my)

20110712 0959 Global Market Related News.

DJIA chart reading :  pullback correction upside biased.

Hang Seng chart reading : downside biased. 

Stocks, euro fall on Italy debt contagion concerns
LONDON, July 11 (Reuters) - World stocks hit one-week lows and the euro slid across the board as intensifying concerns that Italy could be the next victim of the euro zone debt crisis prompted an emergency meeting of top European officials.
Italian government bonds tumbled and the yield premium investors demand to hold Italian debt over German bunds widened to a fresh euro-era high as focus shifted to a country which has the euro zone's highest sovereign debt ratio relative to its economy after Greece.

Asian Stocks Drop on European Debt-Contagion Concerns as Financials Fall (Source: Bloomberg)
Asian stocks fell for a second day after U.S. lawmakers failed to agree on cutting the deficit and concern increased that Greece’s debt crisis may spread to bigger European nations, risking earnings at financial companies. Sony Corp. (6758), which sells about 21 percent of its PlayStation game consoles and other products in Europe, retreated 2.7 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, declined 2.2 percent. Commonwealth Bank of Australia, the nation’s largest lender by market value, slid 1.1 percent in Sydney. BHP Billiton Ltd., the world’s biggest mining company and Australia’s No. 1 oil producer, lost 1 percent as oil and metal prices dropped.

Obama Urges ‘Largest Possible Deal’ on Debt (Source: Bloomberg)
President Barack Obama urged Republican leaders to compromise on their opposition to tax increases and achieve “the largest possible deal” to cut the federal budget deficit. Obama said he won’t agree to a short-term extension of the government’s debt limit and plans to continue meeting with members of Congress every day until an agreement is reached. “I will not sign a 30-day or a 60-day or a 90-day extension -- that is not just not an acceptable approach,” Obama told a White House news conference before resuming talks with congressional leaders of both parties toward a compromise on reducing deficits and raising the $14.3 trillion federal debt ceiling before the government exhausts its borrowing authority on Aug. 2.

Treasuries Snap Two-Day Gain as U.S. Prepares to Sell $66 Billion on Debt (Source: Bloomberg)
Treasuries snapped a two-day gain as the U.S. prepared to sell $66 billion of notes and bonds this week, starting with a $32 billion three-year auction today.

Fed Rates on Hold Longest Since 1940s as Treasury Curve Sees Slower Growth (Source: Bloomberg)
The Federal Reserve may keep interest rates at record lows for the longest period since World War II as the economic slowdown that sparked a four-month bond rally worsens, according to Treasury market signals. The 3-percentage-point gap between yields for three-month and 10-year Treasuries indicates the economy may grow 1.1 percent in the 12 months ending June 2012, a study by the Fed Bank of Cleveland says. That’s less than half the central bank’s current forecast, and may delay any rate increase from the zero- to-25 basis point range held since December 2008.

Best Currency Forecasters Say Worst Is Over for Dollar After Index Tumbles (Source: Bloomberg)
The best currency forecasters say the dollar’s 12 percent slide over the past year is coming to an end as Europe’s deepening debt crisis discourages bets against the world’s reserve currency. Led by Schneider Foreign Exchange Ltd., the five most- accurate firms during the six quarters through June 30 as measured by Bloomberg see the dollar trading at $1.42 per euro on average by year-end, compared with $1.43 on July 8. Against the yen, they predict the greenback will rise to 83 from 80.64.

U.S. Stocks Decline on Global Debt Concerns as Financials Fall (Source: Bloomberg)
U.S. stocks slid, giving the Standard & Poor’s 500 Index its biggest two-day drop since March, as concern grew Europe’s debt crisis will spread and American lawmakers failed to agree on cutting the deficit. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) fell more than 3.2 percent, driving financial shares in the S&P 500 down the most since June 1, as Italian and Spanish government bonds sank. Alcoa Inc. (AA) tumbled 2.9 percent before the aluminum producer started the earnings season after the market close. All 10 S&P 500 industries slumped, falling at least 0.7 percent.

US jobs barely rise, dousing hopes of revival
WASHINGTON, July 8 (Reuters) - U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dousing hopes the economy would regain momentum in the second half of the year.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists' expectations for a 90,000 rise.

China Premier Wen: To Maintain Direction Of Macroeconomic Policy (Source: CME)
China will uphold and maintain the current direction of macroeconomic policy, keeping price stability as the main objective, Chinese Premier Wen Jiabao said in a statement. Wen's comments come as inflation reached a three-year-high in June, rising 6.4% from a year earlier, but also as some voices in China have called for an easing of monetary policy due to a slowdown in growth. Wen, while touring rural areas in remote Shaanxi province, noted that high pork prices, the main driver of rapid inflation in June, are positive for farmers but negative for urban residents. "Stabilizing pork markets is a responsibility that the government must not shirk," Wen said in a statement posted on the central government website. Government officials should immediately take measures to promote pork production, while also studying measures to reduce the cyclical fluctuations in pork prices, Wen said.

China May Expand Least Since 2009 as Wen Faces Limited Scope for Response (Source: Bloomberg)
China’s economy probably grew the least in almost two years last quarter, contributing to a global weakening that Premier Wen Jiabao confronts with more limited scope for policy response than during the 2008 world recession. The government is forecast to report July 13 gross domestic product rose 9.3 percent from a year before, according to the median estimate in a Bloomberg survey, down from 9.7 percent the previous quarter. With data two days ago showing consumer prices climbed the most in three years in June, any easing in the central bank’s monetary stance risks escalating price pressures.

China June inflation at 3-yr high; revives rate debate
BEIJING, July 9 (Reuters) - China's annual inflation accelerated to a three-year high in June, increasing the chances that the central bank will keep raising interest rates to tame price pressures that are spreading beyond food and energy.
Saturday's data, which comes just three days after China raised interest rates for the third time this year, may prove to be the near-term peak for China's inflation as global commodity prices cool, but most economists were still pencilling in one more rate increase this year.

Japanese Stocks Decline for a Second Day on Europe Debt-Contagion Angst (Source: Bloomberg)
Japanese stocks fell for a second day, driving down the Nikkei 225 Stock Average by the most in almost a month, amid mounting concern Europe’s debt crisis may infect the rest of Europe, weakening earnings prospects for exporters to the region.

Strauss-Kahn Saga Exposes Flaws in Europe’s Greek Debt-Crisis Management (Source: Bloomberg)
Greece’s budget was unraveling, Germany and the European Central Bank were at odds over the fix, revelations of secret meetings and cover-ups were sapping confidence in Europe’s crisis management -- and then came the encounter between Dominique Strauss-Kahn and the maid. Strauss-Kahn’s May 14 arrest on charges of sexual assault left a void atop the International Monetary Fund, busting the one thing that had gone consistently right in the handling of the euro-area debt crisis: cooperation between European leaders and the Washington-based IMF. The fund’s contribution to Greece’s next loan was no longer a sure thing, said two European officials with direct knowledge of the talks who declined to be identified because the deliberations were private.

EU Revives Buyback Idea as Crisis Hits Italy (Source: Bloomberg)
European finance ministers revived the prospect of bond buybacks to ease Greece’s plight and declined to rule out a temporary default, struggling to contain the debt crisis as investors pounded Italy, the continent’s third-largest economy.

Italy Moves to Curb Short Selling After Contagion Concerns Slam Markets (Source: Bloomberg)
Italy’s market regulator moved to curb short selling after the country’s benchmark stock index fell the most in almost five months and bonds tumbled on investor concern the nation may be the next crisis victim. Consob ordered yesterday that short sellers must reveal their positions when they reach 0.2 percent or more of a company’s capital and then make new filings for each additional 0.1 percent. The measure takes effect today and runs through Sept. 9. The FTSE Italia All-Share Financials Index fell 0.8 percent as of 9:50 a.m. to the lowest in at least two years.

Indonesia May Avoid Rate Increase as Slowing Inflation Gives `Wiggle Room’ (Source: Bloomberg)
Indonesia’s central bank will probably keep interest rates unchanged for a fifth month after inflation eased, delaying an increase as risks emerge of a slowdown in global growth. Bank Indonesia will hold its reference rate at 6.75 percent, according to all 14 economists surveyed by Bloomberg News ahead of a decision due in Jakarta tomorrow. Policy makers last increased borrowing costs in February, the only move this year. The rupiah is the second-biggest gainer in Asia this year, helping cap import costs and restrain inflation. That has allowed central bank Governor Darmin Nasution to extend Indonesia’s pause in monetary tightening as Europe’s debt crisis and slowing U.S. growth threaten Asia’s exports, even as neighbors from Thailand to India and China kept raising rates.

Australia carbon tax hits miners, airlines
SYDNEY, July 11 (Reuters) - Coal miners, steel firms and airlines were sold off on Monday a day after Australia's unpopular government introduced a carbon tax scheme, while power suppliers warned the tax could risk A$4-6 billion in assets if banks tightened financing.
But economists said the tax on the top 500 carbon polluters would have little impact on economic growth, which is riding on the back of China's appetite for its mineral resources.

Rupiah, Won Will Lead Asian Currency Gains This Half, Top Forecaster Says (Source: Bloomberg)
Indonesia’s rupiah and South Korea’s won will lead Asian currency gains for the rest of 2011 as central banks use appreciation to counter inflation, says Credit Suisse Group AG (CSGN), the region’s most-accurate forecaster. The rupiah will climb 4.5 percent and the won 4 percent in the six months through Dec. 31, after the two currencies were also the best performers in the first half, according to Credit Suisse, which Bloomberg data show had the best projections for the six quarters through June 2011. The Thai baht will climb 4 percent following a peaceful election on July 3, the bank predicted. Barclays Plc (BARC), which ranked second, expects the Taiwan dollar to perform best with a 4.7 percent advance.

Australia, N.Z. Dollars Fall to Two-Week Lows Amid Global Recovery Concern (Source: Bloomberg)
The New Zealand and Australian dollars fell to two-week lows against the yen and dollar as concerns that the global economic recovery is weakening sapped demand for stocks and currencies linked to growth.

Euro Weakens to Lowest in Four Months Against Yen, Erasing Earlier Gains (Source: Bloomberg)
The euro fell, erasing earlier gains, and dropping to the lowest in almost four months against the yen. The 17-nation currency declined to as low as 112.32 yen, the weakest level since March 18, before trading at 112.42 as of 9:25 a.m. in Tokyo from 112.61 yen yesterday. The euro fetched $1.4025 from $1.4029 in New York, after reaching $1.4062 earlier today.

FOREX-Euro falls on debt-crisis contagion concerns
LONDON, July 11 (Reuters) - The euro fell on Monday on concerns that the region's debt crisis is spreading, as top EU finance officials gathered for an emergency meeting in Brussels, and the single currency may be set for more losses.
European Council President Herman Van Rompuy will meet European Central Bank President Jean-Claude Trichet and Jean-Claude Juncker, chairman of the Eurogroup, for talks in Brussels around midday (1000 GMT), ahead of a meeting of the 17 euro zone finance ministers later on Monday.

20110712 0957 Global Commodities Related News.

Corn (Source: CME)
US corn futures finish mixed as traders wait for USDA to update supply and demand estimates in a monthly crop report tomorrow. Market participants evened up positions as recent crop reports have shocked markets. Expectations for an increase in corn inventories are likely priced in after USDA issued a larger-than-expected stockpile estimate June 30, says Mike Krueger of The Money Farm. If Tuesday's reports offer no surprises, traders will refocus on external markets and the weather, he says. CBOT December corn ends down 4 1/4c at $6.32 3/4 a bushel.

Wheat (Source: CME)
US wheat futures end lower as the climbing dollar pressures prices. Traders worry foreign demand will drop as a firmer greenback makes US grains less attractive pricewise, fueling expectations for a decline in overseas demand. The US already faces increased competition for export business from Russia, which lifted a ban on grain exports July 1. Russian farmers are expected to bring in a good harvest due to favorable conditions. CBOT July wheat slides 12c to $6.39 1/4 a bushel, KCBT July loses 16c to $7.11 1/4 and MGE July sinks 22 3/4c to $7.94 1/4.

Rice (Source: CME)
US rice futures end down the one-day limit of 50c on profit-taking. The market pulls back after nearing a five-month high Friday on concerns about output. Prices had surged since USDA on June 30 slashed its estimate for how much crop was planted. Traders on tomorrow will review fresh supply and demand estimates from USDA. CBOT September rice falls 3.1% to $15.63 per hundredweight. The daily limit expands to 75c Tuesday.

U.S. wheat slips on harvest pressure, corn down
SINGAPORE, July 11 (Reuters) - Chicago corn and wheat futures slid on Monday as weak economic data from China and the United States weighed, following last week's gains that were led by strong physical demand.
"In terms what we are seeing in wider markets, we have crude oil trading touch lower and U.S. dollar higher, which is continuation of risk aversion that swept through global markets on Friday," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia.

U.S. spring wheat production limited by floods
CHICAGO, July 8 (Reuters) - U.S. spring wheat production is expected to fall to the lowest level in three years as flooding throughout the northern U.S. Plains curtailed planting and reduced yield potential, analysts said.
A Reuters poll of analysts predicted that an upcoming U.S. Agriculture Department report will forecast spring wheat production (excluding durum) at 551 million bushels, the smallest since 2008 when flooding also hampered farmers' efforts.

AGROKHLEB-Russia 2011 grain crop fcst raised to 87-92 mln tonnes
MOSCOW, July 11 - SovEcon has raised its forecast for  Russia's grain production in 2011 to 87-92 million tonnes from  82-86 million tonnes due to improved weather conditions in the  European part of the country and in the Urals.
Rains in the end of June and in the first 10 days of July  have created favourable conditions to the new crop formation.

Argentina wheat sowing speeds up, good crop weather
BUENOS AIRES, July 8 (Reuters) - Favorable crop weather allowed Argentine farmers to forge ahead with 2011/12 wheat planting last week, the government said on Friday.
Argentina is a leading wheat grower and exports the bulk of its crop to neighboring Brazil. Planting began last month and is progressing at a good pace despite some dryness.

Russia grain output to rebound to 85.5 mln tonnes-attache
WASHINGTON, July 8 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Russia: "Russia's grain production this year is expected to rebound from last year's drought-affected crops, and assuming normal summer weather in the grain producing provinces, FAS Moscow forecasts Russia's grain (including legumes) crop at 85.5 million tonnes.
The government of Russia has announced that Russian grain exports will be able to restart on July 1, 2011, although some uncertainty remains on future export policies. FAS Moscow forecasts total grain exports in MY 2011 at 12.5 million tonnes, nearly triple last year's level."

Informa pares U.S. corn, soy production forecasts
CHICAGO, July 8 (Reuters) - Analytical firm Informa Economics lowered its forecasts for U.S. 2011 corn and soybean production, trade sources said on Friday.
For corn, Informa forecast U.S. 2011 corn production at 13.759 billion bushels, below its previous estimate of 13.891 billion but above the U.S. Department of Agriculture's June 9 estimate of 13.2 billion.

Australia wheat production estimate too optimistic-farmers
PARKES, Australia, July 8 (Reuters) - An Australian government forecast of a near record 2011/12 wheat crop could be too optimistic because it did not take into account risks that lie ahead before the harvest starts in October, farmers interviewed during a crop tour this week said.
According to farmers in the top eastern grain growing state of New South Wales, the actual harvest by the world's fourth largest wheat exporter, could be impacted by anything from weather to an explosion in the mice population that causes crops to be devoured.

Corn and soybean crops get a boost
Plentiful soil moisture reserves combined with warmer and drier weather over the next week will give corn and soybean crops a boost.
A high pressure ridge may shift eastward next week, leading to hotter temperatures. There is the potential for scattered showers in the northwest and north-central areas.

Andersons add cheap US wheat to corn-based ethanol
KANSAS CITY, Mo.,July 8 (Reuters) - The Andersons Inc , a major U.S. ethanol producer, has started mixing a small percentage of wheat along with costlier corn to make the alternative fuel, diversifying its sourcing amid increasingly tight corn supplies.
Andersons, which operates three U.S. ethanol plants with total capacity of 300 million gallons, confirmed it has started using soft red winter wheat along with corn, taking advantage of a rare inversion in prices for the grains.

China 2011 Summer Grain Output 126.27 Mln Tons, Up 2.5% On Year -Bureau (Source: CME)
China's 2011 summer grain output reached 126.27 million metric tons, up 3.12 million tons or 2.5% from a year earlier, the National Bureau of Statistics said. The rise will help ease grain supply concerns in the world's most populous country and stabilize food prices, after the consumer price index hit three-year high of 6.4% in June, mainly led by soaring food prices. Winter wheat output rose for the eighth consecutive year in 2011 to 110.79 million tons, up 2.12 million tons from last year, it said. Per-hectare wheat output rose 1.6% from a year earlier to 4.9 tons. Summer grain output roughly accounts for around a quarter of the nation's total grain output. The majority of China's grain output is summer grain, including corn, rice and soybeans.
The government is "confident" of a good grain harvest this year, despite unfavorable weather, but it isn't clear whether China can could increase grain output for the eighth consecutive year, the state-run China Daily reported last week. "We have achieved a marvelous harvest for the first half of this year," the newspaper quoted Chen Xiwen, general director of the Office of the Central Rural Work Leading Group, as saying. "Everything now depends on the autumn crop." China's grain output rose 2.9% to 546.4 million tons last year, marking the seventh consecutive year of growth.

India Allows 1M Tons Rice Exports; Defers Wheat Decision (Source: CME)
An Indian ministerial panel allowed private traders to export 1.0 million metric tons of rice, but deferred a decision on permitting wheat shipments, two food ministry officials said. Rice exports have been allowed at a minimum $400 a ton, a food ministry official said. "A decision on wheat exports was deferred because it won't be commercially viable," the second official said. "The issue is likely to be taken up again at the next meeting of the ministerial panel." Over and above the rice exports allowed to private trade, the panel also permitted exports of 500,000 tons each of wheat and rice to honor diplomatic commitments, Food Minister K.V. Thomas said. Exports by India, the world's second largest rice producer, are likely to dampen international prices of the grain currently quoting in a range of $430-$500/ton.
The South Asian country has maintained a ban on wheat shipments since 2007 and on rice since 2008 to keep a lid on prices, but has allowed exports of small quantities from time to time to honor diplomatic commitments. The food minister also said that the panel is open to allowing wheat exports to the private trade in future, whenever it made commercial sense. "The issue [of wheat exports] is likely to be taken up again at the next meeting of the ministerial panel," one of the ministry officials said. The panel has allowed wheat exports of 650,000 tons during this fiscal year, virtually extending a policy that allowed similar quantities of shipments in the last two financial years. So far the government has been extremely cautious in considering wheat and rice exports as it is preparing to introduce a food security law that guarantees cheap foodgrains to nearly 70% of the population.
However, wheat and rice stocks have hit an all-time high, forcing government agencies to store mounds of grain in the open, leaving them at the mercy of rain and rodents. Thomas also said the ministerial panel has approved the draft of the proposed food security law, and it will soon come before the cabinet for approval. It will need to be ratified by the parliament before it becomes law. "We expect to introduce the bill during the monsoon session," the minister said, referring to the upcoming parliamentary session that starts Aug. 1. The Congress Party-ruled government is expected to push through the law this year ahead of key state elections around Christmas, because it would be popular with people living in rural areas who have been hit by prolonged high inflation.

Tariff Move Is Bad Timing for Brazil (Source: CME)
To Brazilian sugarcane producers who have long wanted to export ethanol to the U.S., news that Congress may finally tear down trade barriers protecting U.S. fuel from competition comes at a bad time. An agreement by senators this past week to end a tax of 54 cents a gallon on imported ethanol was cheered by the Brazilian sugarcane industry. For years, Brazil's government and industry have chided the U.S. for protecting its corn-based ethanol producers from potential imports of Brazilian sugarcane-based ethanol, which is considered to be more energy-efficient. But Brazil's current sugarcane harvest is expected to decline for the first time in many years, and, with heavy demand pressure coming from both domestic drivers and global sugar consumers, experts doubt there will be any ethanol left over to ship abroad.
"The irony of it all is that precisely when the U.S. looks ready to reduce tariffs on ethanol imports, Brazil structurally is not in a position to reap the potential benefits," said Christopher Garman, a Brazil analyst at Eurasia Group. Brazil's weak harvest is also driving global sugar prices higher, as buyers scramble for limited supplies. Raw sugar for October delivery traded on the IntercontinentalExchange has risen nearly 18% in the past month. Officials from sugarcane association Unica said this week that the crop now being harvested in Brazil's main producing region could yield less sugar and ethanol this year than last. Sugarcane fields are faltering as a result of both weather conditions and a lack of investment during the global financial crisis. With global sugar prices so high, Brazilian mills would be unlikely to ramp up production of ethanol this year, even if there was sugarcane to spare.
"Production of sugar is more attractive" for the mills, said Michael McDougall, a senior vice president at brokerage Newedge. In addition, Brazilian ethanol producers can get much higher prices at home than in the U.S. In the first six months of the year, ethanol prices averaged $5 a gallon in Brazil compared with $3 in the U.S. And demand for the fuel in Brazil is expected to keep growing, as the nation's consumption-driven economic boom is expected to increase sales of new cars -- more than 80% of which are capable of running on pure ethanol or gasoline -- about 5% higher this year. Given the circumstances, the government would almost certainly respond to a surge in ethanol exports with trade barriers of its own, several analysts said. The Brazilian government, concerned with rising inflation that has in part been fed by high fuel prices, has put the National Petroleum Agency in charge of regulating ethanol production to avoid future shortfalls.
Possible means to that end include requiring sugarcane millers to keep mandatory stockpiles of ethanol, officials say. The government is also considering reducing to as low as 18% the amount of anhydrous ethanol blended with gasoline, from the current 25%. Though drivers also consume massive amounts of hydrous ethanol, virtually pure alcohol, such a measure would ease demand for the biofuel. Sugar watchers doubt it would rattle the futures market much, given the struggling sugarcane harvest. "The situation is bad," said Arnaldo Correa, a sugar market analyst at Archer Consulting, adding that some cane growers are already concerned that next year's harvest won't bring much of a recovery. "There's no way out." In the long term, however, lower U.S. trade barriers would boost incentives for sugarcane producers to invest in capacity improvements.
"It provides a tremendous boost in incentive for new investments in ethanol production in Brazil, to the extent that Brazil can be a platform for exports to the U.S. market into the long term," Eurasia's Mr. Garman said. It's. . .a stimulus for the sector."

Cocoa Seen Advancing to New Highs on Africa-Indonesia Fix: Freight Markets (Source: Bloomberg)
The U.S., the world’s biggest market for chocolate, is importing the most West African cocoa in three years as disease and taxes curb Indonesian supply, driving prices to a three-decade high. Cargoes from Ivory Coast, Ghana, Togo and Nigeria rose 2.6 percent to 145,394 metric tons in the first four months while those from Indonesia fell 88 percent to 7,301 tons, U.S. trade data show. Increased competition for beans will mean cocoa averaging $3,300 a ton in the fourth quarter on ICE Futures U.S. in New York, 8.2 percent more than now and the most since 1979, said Kona Haque, the analyst at Macquarie Group Ltd. in London who correctly predicted a rally in February.

Sugar falls as strong dollar weighs on commodities
LONDON, July 11 (Reuters) - ICE raw sugar futures fell on Monday as a stronger dollar weighed on the commodities complex, while cocoa and coffee prices also eased.  ICE raw sugar futures trimmed gains, as the firmer dollar weighed, after sugar prices rose around 7 percent last week.  

Uganda coffee exports up 58 pct yr/yr in June
KAMPALA, July 8 (Reuters) - Coffee exports from Uganda, one of Africa's leading exporters of the beans, rose by 58 percent in June compared with the year ago period, a source at state-run Uganda Coffee Development Authority (UCDA) said on Friday.
The rise was partly due to a good harvest and the weakening local currency, which has been weak against the dollar in recent months, and hit a record low of 2,710 on June 30 against the U.S. currency before the central bank stepped in to prop it up.

Ivorian cocoa arrivals hit 1,285,716 T by June 30
ABIDJAN, July 8 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached 1,285,716 tonnes by June 30, up from 1,052,181 tonnes in the same period a year ago, according to data from Bourse du Cafe et Cacao (BCC) obtained by Reuters on Friday.
The figures included 18,601 tonnes of cocoa that had been declared late, with 5,616 tonnes of beans declared at the ports of Abidjan and San Pedro from June 27 to June 30.

India, China set for cotton wars on stubborn yields
MUMBAI, July 11 (Reuters) - India, the world's second biggest exporter of cotton, could turn into an importer within three or four years as production peaks out because of falling yields, forcing the country's textile mills to compete for supplies with top importer China.
Despite rising acreage, India's cotton yields are down to about 475 kg per hectare, or 38 percent below the global average, as plants need to be spaced widely for hand picking, in contrast to other leading growers, such as the United States and Australia, which use machines.

Crude Oil Trades Near One-Week Low in New York on European Debt Concern (Source: Bloomberg)
Crude oil traded near the lowest in more than a week in New York as concern that the European debt crisis will spread to Italy stoked speculation that fuel demand may falter. Futures were little changed after dropping 1.1 percent yesterday. The European Central Bank is forecasting a regional bailout fund may have to double to cover a crisis in Italy, according to German newspaper Die Welt. An Energy Department report tomorrow may show U.S. gasoline supplies rose for the first time in four weeks, according to a Bloomberg News survey of analysts.

SapuraCrest, Kencana Plan to Combine in $3.9 Billion Malaysian Oil Deal (Source: Bloomberg)
SapuraCrest Petroleum Bhd. (SCRES) and Kencana Petroleum Bhd. (KEPB) plan to combine in an 11.9 billion ringgit ($3.9 billion) deal, creating Malaysia’s biggest listed oilfield services company by assets. Integral Key Sdn., a company set up by a bank to facilitate the merger, bid 4.60 ringgit per share in stock and cash for SapuraCrest and the equivalent of 3 ringgit per share for Kencana, the companies said yesterday. They would have combined assets of about 6 billion ringgit when the merger is completed in eight months, they said.

Coal miners say Australia carbon tax treatment unfair
SYDNEY, July 10 (Reuters) - Australia's powerful coal mining industry on Sunday warned it was being unfairly singled out under the country's new carbon emissions trading scheme, predicting it will lead to job losses and fewer collieries at a time when buyers are paying top dollar for coal.
Xstrata , one of the country's biggest coal mining companies, said it was "disappointed at the government's lack of genuine consultation" before unveiling its plan to slap a carbon tax of A$23 a tonne on its 500 worst polluters.

U.S. coal use up 4 pct from previous week-Genscape
HOUSTON, July 8 (Reuters) - U.S. coal consumption was up 4 percent in the past week, Genscape said Friday, as power demand in the North surged over the Fourth of July weekend.
Use of coal for the week ended Thursday fell 4 percent from the same week in 2010, the power industry data monitor said. Temperatures were cooler than during the same week last year.

Euro Coal-Futures edge up but fail to break $130/mt
LONDON, July 8 (Reuters) - European coal futures moved slightly upward on Friday but lacked clear price signals in any direction ahead of the weekend.
The API2 2012 futures coal contract opened at $129.25 a tonne on Friday morning and traded up a notch to around $129.40 a tonne by 1445 GMT.

Alcoa Profit Doubles as Aluminum Price Increase Outweighs Costs (Source: Bloomberg)
Alcoa Inc., the largest U.S. aluminum producer, said second-quarter profit more than doubled after higher prices for the lightweight metal outweighed increasing raw-material costs.

Iron Ore-Spot prices at over 2-wk high as Chinese mills restock
SINGAPORE, July 11 (Reuters) - Spot iron ore prices may build on recent gains this week as Chinese steel mills, encouraged by rising steel prices, restock the raw material.
Iron ore prices rose to more than two-week highs at the end of last week as Chinese buyers, the world's biggest consumers of the steelmaking component, returned to the market. Further gains may be in store with Shanghai steel futures rising to their highest in more than a month on Monday.

India's 2011/12 iron ore exports seen at 85-90 mln tonnes-trade body
NEW DELHI, July 11 (Reuters) - India's iron ore exports are expected at 85-90 million tonnes in 2011/12, 10.5 percent below an earlier forecast, R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI), told Reuters on Monday.
In late June, he had projected exports at 90-95 million tonnes for the year ending next March, saying this would be about the same as last year.

Indonesia June tin exports up 35pct on weather, price recovery
JAKARTA, July 11 (Reuters) - Indonesia's refined tin exports rose 35.4 percent in June from the year-ago period, as improving weather boosted mining and producers cashed in on a global price recovery to increase shipments, industry sources said on Monday.
Resilient demand and tight global supply will keep tin prices supported this year, despite the impact of the earthquake on big consumer Japan and increasing exports from Indonesia, the world's top tin exporter, a Reuters survey of metals analysts in April showed.

China says to close 2 mln T smelting capacity in 2011
HONG KONG, July 11 (Reuters) - China has ordered local governments to phase out a total 2.0431 million tonnes of aluminium, copper, lead and zinc smelting capacity in 2011 as part of a multi-year plan to crack down on energy-intensive and polluting industries.
The target, contained in a statement on the Ministry of Industry and Information Technology website, is 13 percent higher that set in May, when Beijing said it aimed to phase out a total 1.813 million tonnes of outdated aluminium, copper, lead and zinc smelting capacity this year.

China's copper demand stages comeback in June
SHANGHAI, July 10 (Reuters) - China's copper staged a strong comeback in June, but the outlook was marred by falls in a list of other key commodities, showing that Beijing's cooling measures were weighing on the economy.  
Crude oil imports fell 11.5 percent from a year ago to their lowest in eight months, while aluminium dropped about 14 percent, iron ore was down 4.3 percent and soybean shed 5.7 percent from May.

Freeport Indonesia copper mine strike extended a week
TIMIKA, Indonesia, July 8 (Reuters) - A strike paralyzing production at Freeport Indonesia's Grasberg mine, one of the world's largest sources of copper and gold, will extend into a second week after talks broke down between the company and workers, a union official said on Friday.
The union, which represents 8,000 workers who have been on strike since Monday, asked U.S.-based Freeport-McMoRan Copper & Gold  to send Chairman James Moffett to the remote Indonesian mine to negotiate.

Chile's giant mines recover after winter storm
SANTIAGO, July 9 (Reuters) - Some of the world's top copper mines started to return to normal on Saturday after a once in half a century winter storm dissipated over Chile's copper-rich north, companies' officials and union leaders said.
A week of heavy rains and sporadic snow hit mining operations in a region that produces about a fifth of the world's mined copper, helping lift global copper prices to three-month highs and en route to another historical record.

Big funds boost bullish copper bets to 12-week high
NEW YORK, July 8 (Reuters) - Hedge funds and other big speculators jacked up their bullish bets on U.S. copper futures to the highest in 12 weeks as the metal embarked on its most sustained rally this year, data showed on Friday.
Managed money in COMEX copper added 13,008 lots in the latest week, boosting their net long position to 21,901 lots, which marked the largest holding for the key speculator group since the week of April 17, when they held 28,030 lots. U.S. Commodity Futures Trading Commission figures showed.

METALS-Copper slips on Italy debt worries, but supply in focus
July 11 (Reuters) - Copper fell on Tuesday, as concerns over Italy's sovereign debt curtailed appetite for risky assets, but a series of strikes in producer countries highlighted supply constraints and lent support to prices.
Three-month copper  on the London Metal Exchange traded at $9,628.50 a tonne at 1000 GMT, down from the $9,661 close on Friday.

PRECIOUS-Gold steady, euro-gold at record on crisis fear
LONDON, July 11 (Reuters) - Gold steadied on Monday, having risen for five days in a row, supported by investor concerns over the spread of the euro zone debt crisis and by U.S. data that showed the poorest jobs growth in nine months in June.
The euro  fell 1 percent against the dollar after European Union officials held an emergency meeting to discuss whether the troubles that have plagued Greece, Portugal and Ireland could spread to Italy.

Gold Tops $1,550 on Concern Europe’s Sovereign-Debt Crisis Will Escalate (Source: Bloomberg)
Gold climbed to a two-week high, topping $1,550 an ounce, on demand for a store of value amid escalating concerns that Europe’s sovereign-debt woes will widen. European equities tumbled the most in seven weeks, led by banks and insurers, as contagion from Greece’s debt crisis threatened to spread to Italy and Spain. Gold priced in euros and the U.K. pound climbed to records. The metal gained 4 percent last week on signs that U.S. interest rates will remain low.

Baltic index drops, cargo demand momentum falters
LONDON, July 8 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned negative on Friday as cargo demand on the larger capesize vessels slowed after active bookings earlier this week.
The overall index fell 0.28 percent or 4 points to 1,449 points after having risen for three sessions previously. The index has stayed erratic in recent weeks and has declined close to 20 percent this year.

20110712 0955 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures hover near unchanged levels, with uncertainty about weather and its impact on yields and production offsetting the selloff in many other asset classes. Traders anticipating slightly bearish crop data in Tuesday's crop report applied weakness, but mixed opinions on weather and global economic worries led to caution and limited price movement, says PFG Best's Tim Hannagan. CBOT November soybeans ended 1/2c higher at $13.47/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures mostly steady, moving in unison with soybean futures. Markets followed the ups and downs of soybeans, with traders unwilling to aggressively push prices ahead of tomorrow's USDA reports and uncertainty of soybean crop weather, analysts said. CBOT Dec soyoil finished down 0.05c at 57.26c/lb; Dec soymeal rose $1.70 to $351.70/short ton.

Palm up on weather concerns affecting soy, stocks data may weigh
KUALA LUMPUR, July 11 (Reuters) - Malaysia palm oil futures inched up on Monday, buoyed by competing soyoil markets that gained on prospects of unfavourable crop weather.
"Malaysia market was helped by soybean and soyoil futures that went up due to worries on weather in U.S.," said a trader in Kuala Lumpur.