Friday, June 29, 2012

20120629 1820 FCPO EOD Daily Chart Study.

FCPO closed : 3020, changed : +22 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histogram : weakening, buyer seller battling.
Support : 2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded gains with improving volume transacted. Soy oil price currently trading higher after overnight closed declined lower while crude oil price currently surging higher after overnight slump.
Crude palm oil price trading higher ahead of next Monday export data and USDA tonight report as broad commodities price soars after positive development over EU summit meeting.
Daily chart reading revised to calling a side way range bound market development swing between 2930 and 3060 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.

20120629 1650 Global Market & Commodities Related News.

Gold eyes longest monthly losing streak since 1997 29-Jun-2012 09:17
SINGAPORE, June 29 (Reuters) - Gold steadied on Friday, but is heading for a fifth straight month of decline, its longest monthly losing streak since early 1997, as a deepening global economic slowdown from Europe to China pushed investors to safer havens like the dollar. The precious metal is also on course for its steepest quarterly loss since 2004, having moved in tandem with riskier assets for the most part of this year.

Spot gold XAU= edged up 0.2 percent to $1,553.51 an ounce by 0055 GMT, after hitting a four-week trough of $1,547.24 on Thursday.
Bullion is down less than half a percent for the month, its fifth straight monthly decline, the longest since a six-month slide from late 1996 to early 1997. It has also dropped nearly 7 percent for the quarter, its biggest since the second quarter of 2004.
Gold has fallen more than 13 percent from the 2012 peak of around $1,790, and 19 percent from the record above $1,920 reached in September 2011.
U.S. gold GCcv1 gained 0.2 percent to $1,553.90.
Italy and Spain refused to sign off on a 120 billion euro ($149 billion) growth package until Germany approved short-term measures to ease their soaring cost of credit, holding off an agreement at an EU summit which is on its final day on Friday.
The U.S. economy grew at an annual 1.9 percent rate in the first quarter, which was unchanged from a prior reading and marked a sharp step down from the fourth quarter's 3 percent gain, underscoring the economy's vulnerability as global growth slows.

Asian shares and the euro were pressured as European leaders argued over how to ease borrowing strains in Italy and Spain and stop the euro zone debt crisis spreading, with investors fearful of U.S. reaction to the deadlock. MKTS/GLOB
U.S. crude rose on Friday, recovering from an eight-month low, after the European Union announced a $149 billion growth package that could lift the global economy and fuel demand, though a delay by Italy and Spain in signing off on the agreement capped gains

20120629 1719 FKLI EOD Daily Chart Study.

FKLI closed : 1600 changed : +8 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histogram : weakenning, buyer taking profit.
Support : 1590, 1580, 1570, 1565 level.
Resistance : 1600, 1610, 1620, 1630 level.
Comment :
FKLI closed soar higher with lower volume exhcanged with July contract closed doing 4.5 points premium compare to cash market that closed higher. Overnight U.S. markets closed little lower and today Asia markets ended positively while European markets currently trading substantially higher.
Half yearly window dressing activities and news on European leader agreed to eased repayment rules for Spanish banks, relaxed condition for possible aid to Italy and $120 billion euros growth plan for the European region economy push world markets higher despite U.S. reported stubbornly jobless data and 1st quarter GDP stood at 1.9% .
Technical chart reading remained suggesting a correction range boung upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120629 1700 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : correction range bound little upside biased.
 Hang Seng chart reading : correction range bound little upside biased with triangle breakout.
KLCI chart reading :  correction range bound upside biased.

20120629 1620 Global Market & Commodities Related News.

Asian shares jumped and Europe looked set to open higher after euro zone leaders agreed to take emergency action to bring down Italy's and Spain's spiralling borrowing costs and to create a single supervisory body for euro zone banks. U.S. stocks fell on Thursday but pared back sharp losses late in the session on talk of progress by European leaders in easing the region's debt crisis, while a Supreme Court ruling upholding a landmark healthcare law hit large health insurers.

The euro surged 1.1 percent, poised for its biggest daily jump in eight months, after European leaders agreed  to emergency action to lower borrowing costs of Italy and Spain and to create a single supervisory body for euro area banks.

FOREX-Euro rallies most in 8 mths on bond support for Italy, Spain
TOKYO, June 29 (Reuters) - The euro surged 1.1 percent, poised for its biggest daily jump in eight months, after European leaders agreed on Friday to emergency action to lower borrowing costs of Italy and Spain and to create a single supervisory body for euro area banks.
A summit of the 17-nation currency zone agreed that its rescue funds could be used to stabilise bond markets without forcing countries that comply with EU budget rules to adopt extra austerity measures or economic reforms.

Chicago corn bounced back on Friday, rising for five out of six sessions as a severe drought in the U.S. Midwest curbs yields of what was once estimated to be a record-large crop.

Argentina farmers plant wheat, weather helps
Argentine wheat farmers have planted nearly half the area forecast for the 2012/13 crop, and seedlings are off to a good start due to favorable weather, the Buenos Aires Grains Exchange said on Thursday.

U.S. crops cook under Midwest heat dome
Stifling heat and bone dry conditions will persist across the center the U.S. Midwest for at least the next 10 days, adding more stress to young corn and soybean plants already suffering from a lack of rain, agricultural meteorologists said on Thursday.

Australia sugar exports face delays due to rains
Australia's sugar exports may be delayed after rain pushes back cane harvesting in Queensland state and disrupts crushing operations in about half the 24 sugar mills in the world's third-largest raw sugar exporter.

Brazil, India to add 10 mln t sugar output by 2020
The world's top two sugar producers, Brazil and India, will add more than 10 million tonnes to global production by 2020, in a drive to keep pace with rising demand in Asia, a senior economist said on Thursday.

Brent oil rose more than a dollar to above $92 per barrel  after European leaders agreed on steps to tackle the region's intractable crisis in a move that could lift the global economy and fuel demand, while supply disruptions also aided.

US April oil demand down 1.77 pct from year ago-EIA
U.S. oil consumption in April was weaker than expected, the U.S. government said on Thursday, but after months of declines there are signs oil demand may finally be leveling off.

Euro Coal-S.African tightness boosts prices by $1/T
LONDON, June 27 (Reuters) - Prompt South African FOB physical coal prices rose by around $1.00 on Wednesday as traders bought to cover short positions amid tight supply for July and August cargoes.
"Supply is extremely tight for July, you can't find anything from South Africa, nobody is willing to sell and August is looking like it'll be just as tight," one European trader said.

ASIA COAL-Coal prices rebound toward $89/T
SHANGHAI, June 27 (Reuters) - Prompt Australian thermal coal prices rebounded toward $89 a tonne during the week, bolstered by expectations of more production cuts and as traders bought to cover short positions for the third quarter.
"There is some buying interest from China but they are still bidding very low prices. The overall fundamentals haven't changed; there is still a lot of coal around and the Chinese are still trying to defer and re-negotiate prices," said a Singapore-based trader.

Iron ore developers turn to unconventional backers
LONDON, June 28 (Reuters) - Iron ore mine developers are turning to unconventional finance providers as many banks withdraw support on likely medium-term price weakness, according to an executive at Sweden-based Nordic Iron Ore.
Benchmark iron ore rose to almost $200 per tonne in early 2011, supported by tight supply and booming demand in top consumer China.

EU steel industry in terminal decline - sector chief
BRUSSELS, June 28 (Reuters) - The European Union's steel industry may need to shut three quarters of its capacity in the next two decades because of declining demand, rising costs and cheap imports, a European sector chief said on Thursday.
"It is foreseeable in the next 10, 15, 20 years, at least for normal grade steel, that production in Europe will not be competitive any more," Wolfgang Eder, president of European steel industry body EUROFER told Reuters in an interview.

Iron Ore-Spot prices fall, mills' appetite weak
SHANGHAI, June 29 (Reuters) - Spot prices for iron ore cargoes to China fell as buying interest from steel mills remained tepid, with data showing a fall in industrial profits for a second straight month underlining slower domestic growth.
"Traders sealed deals (to buy iron ore) but have found it difficult to sell on market as mills are not buying," said a Shenzhen-based iron ore trader.

EU steel industry in terminal decline - sector chief
BRUSSELS, June 28 (Reuters) - The European Union's steel industry may need to shut three quarters of its capacity in the next two decades because of declining demand, rising costs and cheap imports, a European sector chief said on Thursday.
"It is foreseeable in the next 10, 15, 20 years, at least for normal grade steel, that production in Europe will not be competitive any more," Wolfgang Eder, president of European steel industry body EUROFER told Reuters in an interview.

Japan's May zinc exports up 68 pct yr/yr
TOKYO, June 28 (Reuters) - Japan's May zinc exports to Asia rose 68 percent from a year earlier as smelters resumed work following earthquake-related closures last year.  
Taiwan is the biggest buyer of refined zinc from Japan last month, totalling 2,120 tonnes and up 11 percent from a year earlier, customs-cleared trade data showed on Thursday. Among other importers are Indonesia, up 44 percent at 1,941 tonnes, and China, up 69 percent at 1,170 tonnes.

Japan's May imports of Indonesia nickel ore jump
TOKYO/JAKARTA, June 28 (Reuters) - Japanese imports of nickel ore from Indonesia jumped 80 percent from a year earlier in May, government data showed on Thursday, as importers rushed to buy ahead of expected disruptions to shipments by suppliers in coming weeks.
The Indonesian government in May ordered all miners to submit plans to build local smelters or process ore domestically by 2014, when a total ban on raw mineral exports kicks in. It also imposed a tax of 20 percent on ore exports.

Japan July-Sep crude steel demand seen up slightly yr/yr
TOKYO, June 28 (Reuters) - Demand for crude steel in Japan is expected to rise 0.6 percent in the third quarter from a year ago, the trade ministry said, as appetite from the construction sector picks up following last year's earthquake.
Demand for crude steel in Japan, the world's No.2 producer of the construction material, is seen at 27.1 million tonnes for the July-September quarter, the ministry estimated, based on a survey of steelmakers and inventory levels at the end of June.

Japan May copper exports to China double
TOKYO, June 28 (Reuters) - Japan's exports of copper cathode to China continued to increase at a robust pace in May, reflecting strong appetite for the metal from the world's biggest consumer, customs data from the Ministry of Finance showed on Thursday.
Japan's exports to China nearly doubled to 17,014 tonnes during the month from 8,645 tonnes a year earlier, helping to push up Japan's overall refined copper exports, including billet and other products, by 94 percent to 46,124 tonnes.

Indonesia needs 1,500 MW for new smelters -Chamber of Commerce
JAKARTA, June 28 (Reuters) - Indonesia has received 167 proposals from companies planning to build smelters to meet new government mineral export rules but only 40 are likely to go ahead, a senior official from the Chamber of Commerce and Industry (Kadin) said on Thursday.
"There are 167 (mining companies) that have registered, but ... only 40 will likely be able to afford to build smelters, if the smaller companies work together," Bambang Sujagad, the chamber's deputy chairman of industry, research and technology, told Reuters.

London copper rose more than 2 percent  after European leaders agreed to create a single supervisory body for euro zone banks and allow them to be recapitalised without adding to government debt, easing fears over Italy and Spain.

Indian gold imports to pick up in July-Dec
India's gold imports could pick up in the second half of 2012 if record prices ease but annual volumes will still fall about 30 percent after a tax hike, which could crimp demand until 2014, the head of Mumbai's gold trade association said.

Gold rose more than 1 percent , tracking a surge in the euro after European leaders agreed on the recapitalisation of banks without boosting government debt, helping ease fears over the region's debt crisis.

METALS-LME copper rises toward $7,500/T on EU bond support
SHANGHAI, June 29 (Reuters) - Copper rose on Friday after European leaders agreed to create a single supervisory body for euro zone banks and allow them to be recapitalised without adding to government debt, easing fears of spiralling debt in Italy and Spain.
The move prompted a surge in other riskier assets, including Asian shares and the euro, as it surprised many who had not expected the summit of regional leaders to produce any substantive measures to stem the bloc's spreading debt crisis.

PRECIOUS-Gold rises on EU pledge, but eyes worst quarter in 8 yrs
SINGAPORE, June 29 (Reuters) - Gold rose more than 1 percent on Friday, tracking a surge in the euro after European leaders agreed on the recapitalisation of banks without boosting government debt, helping ease fears over the region's debt crisis.
But heavy losses over the past three months mean gold is still on track to post its worst quarter since 2004, as a growing global economic slowdown from Europe to China pushed investors to safer havens such as the dollar.

Baltic shipping index up on higher capesize rates
June 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose on Thursday, as higher capesize rates offset the continued softer performance in the panamax segment.  
"Bunker prices have stabilized at lower levels and the freight market has seemed to have stabilized, with the exception of the Atlantic, which is dismal. The usual large operators have continued to turn over their fleets at stable rates," ship broker Fearnleys said in its weekly note.

Asia dry-bulk rates to edge up on China demand
SINGAPORE, June 28 (Reuters) - Rates for large dry-bulk carriers on key Asian freight routes are expected to edge up next week due to a revival of trading activity from China, but ample vessel supplies will limit gains, ship brokers said on Thursday.
"The anticipated increase in activity finally materializes," said broker firm Marex Spectron. "There should be a similar level of activity on Thursday as the current programme is still slightly lagging behind but...any rise in rates will be modest."

POLL-Key freight index to rise 35 pct in H2 on China
SINGAPORE, June 28 (Reuters) - The Baltic Exchange's Dry Index, an indicator of global economic activity, will rebound by 35 percent in the second half of 2012 versus the last six months on a recovery in Chinese iron ore and coal demand, a Reuters poll showed on Thursday.
The euro debt crisis, slowing economic growth in China, and an oversupplied global fleet have battered the shipping industry in the first half of this year, driving down the benchmark index by around 45 percent from H2 2011.

20120629 1109 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian shares down on EU deadlock, awaiting US reaction
TOKYO, June 29 (Reuters) - Asian shares and the euro were pressured on Friday as European leaders argued over how to ease borrowing strains in Italy and Spain and stop the euro zone debt crisis spreading, with investors fearful of U.S. reaction to the deadlock.
"Investors are waiting for further developments overnight in Europe and the reaction in Wall Street before making their bets," said Cho Byung-hyun, an analyst at Tong Yang Securities.

COMMODITIES-Down on bets EU summit will fail; oil loses 3 pct
NEW YORK, June 28 (Reuters) - Oil prices fell by up to 3 percent on Thursday and copper and gold prices slumped too as traders and investors expect an ongoing summit of European leaders to do little to resolve the region's debt crisis.
"Nobody in the world has a solution to Europe, and if they did, they would have stepped forward by now," said Adam Sarhan, chief executive at Sarhan Capital, a New York-based financial advisory that regularly comments on commodity markets.

High prices result in soaring oil reserves
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, June 28 (Reuters) - For all that Malthusians worry about oil running out, and analysts cite the rising costs of exploration and production, the oil industry has been adding reserves faster than they are being consumed since 2005, as high prices spur an investment boom across the industry.
Contrary to the alarming predictions made a few years ago, and still periodically revived by peak oilers, there is no sense in which oil is running out.

OIL-Oil heads for worst quarter since 2008 crisis
NEW YORK, June 28 (Reuters) - Crude oil futures fell as much as 3 percent on Thursday, and are on track for the worst quarterly performance since the 2008 financial debacle, on worries that an EU summit will not find durable solutions to the euro zone crisis, stifling global growth prospects.
"It's the euro zone problems, the strength of the dollar and the weak equities," said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania, commenting on the reasons for the day's price drop.

US April oil demand down 1.77 pct from year ago-EIA
WASHINGTON, June 28 (Reuters) - U.S. oil consumption in April was weaker than expected, the U.S. government said on Thursday, but after months of declines there are signs oil demand may finally be leveling off.
The Energy Information Administration said in its Petroleum Supply Monthly report that oil demand for the world's top consumer dropped to 18.283 million barrels per day, which was 470,000 bpd lower than previously estimated.

Nigerian crude export steady above 2 mln bpd in Aug
LONDON, June 28 (Reuters) - Nigeria is expected to export 2.03 million barrels of crude oil per day in August, steady from July, the provisional loading programmes showed on Thursday.
The volume excludes Oyo grade and condensate. Nigeria and Angola are Africa's two largest oil producers and OPEC members. Their oil exports have so far seen no signs of a cut-back for August as the oil market watches out for potential coordinated reductions to OPEC exports amid a sharp fall in prices since May.

NATURAL GAS-US natgas futures end down 3 pct on EIA stocks data
NEW YORK, June 28 (Reuters) - U.S. natural gas futures reversed course and ended lower on Thursday for the first time in six sessions, pressured by a government report showing a weekly inventory build slightly above market expectations.
"The market moved up too far, too fast, and given the EIA build, it looks like we may have lost some coal switching on the way up due to the elevated prices," a New York analyst said.

EURO COAL-S.African tightness boosts prices by $1/T
LONDON, June 27 (Reuters) - Prompt South African FOB physical coal prices rose by around $1.00 on Wednesday as traders bought to cover short positions amid tight supply for July and August cargoes.
"Supply is extremely tight for July, you can't find anything from South Africa, nobody is willing to sell and August is looking like it'll be just as tight," one European trader said.

20120629 1014 Local & Global Economic Related News.

Malaysia : The liberalisation of the services sector is expected to help speed up economic growth through the process of integration into the global market, the Dewan Rakyat was informed Thursday. Apart from providing a more attractive economic environment for foreign investments, the opening up of the market have also raised domestic capacities and filled in the gaps in the services sector through these investments, said Deputy Minister of International Trade and Industry Datuk Mukhriz Tun Mahathir. Investments in the sector had gone up by 91.8% to RM70.4bn in 2011, compared with RM36.7bn in 2010, where the contribution of foreign investors had also gone up to 25.4% from 11.2% previously. Domestic investments nevertheless continued to stay high at RM52.4bn in 2011 against RM32.6bn in 2010, he added. (Bernama, Financial Daily)

Malaysia is on target to realise the investment goal of RM115bn for this year, said Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed. This is despite the uncertainty in the US, the Eurozone crisis and moderation in economic growth in some countries. Malaysia's performance is reasonable and on track to achieve 4-5% economic growth for this year, he added. According to a survey by the Malaysian Investment Development Authority (Mida), 976 companies which responded, planned to invest RM97.4bn this year. Of this, 42% were from oil and gas, 20% from manufacturing, 13% in infrastructure and utilities, 23% from services and 2% from agriculture. (Bernama, Financial Daily)

Thailand: Finance ministry raises growth forecast as output rises
Thailand’s finance ministry raised its growth forecast for a second time this year after industrial output rose more than what economists expected in May as supply constraints after last year’s floods eased. The industrial production index rose 5.5% y-o-y after a revised 0.1% contraction in April. The median of 11 estimates in a Bloomberg News survey was for a 2.5% gain. The ministry raised its 2012 growth forecast to as much as 6.2% and said easing inflationary pressure will allow the central bank to hold the interest rate through 2012. (Bloomberg)

Thailand: Seeks to limit rubber exports
Thailand, the largest rubber producer, will discuss with Indonesia and Malaysia possible limits on shipments from the countries that represent about 70% of global supply in a move to boost plunging prices. “If necessary, there will be a limit on exports,” deputy farm minister Nattawut Saikuar said without giving more details. “The three countries will have to jointly make the decision and set the amount.” Prime Minister Yingluck Shinawatra will discuss the matter “informally” with leaders from Indonesia and Malaysia, he added. (BT)

India: Singh seeks to restart growth as rupee falls
Indian Prime Minister Manmohan Singh pledged to restore confidence in Asia’s third-largest economy as he resumed control of the finance ministry after growth slowed to the weakest in almost a decade and the rupee slumped. Singh, 79, urged senior ministry officials to act quickly to revive investor sentiment as he assumed the role vacated this week by Pranab Mukherjee, who has earlier resigned to run for president. (Bloomberg)

India is likely to face elevated inflation risks from supply bottlenecks and lingering threats to economic expansion, the Reserve Bank of India said. (Bloomberg)

China defended its limits on exports of rare earths, saying they are “aimed at protecting environmental resources and people's health, not the protection of domestic industries," according to Chinese foreign ministry spokesman Hong Lei. (AFP)

The Hong Kong stock exchange is setting up a joint venture with the Shanghai and Shenzhen exchanges as it seeks to boost economic integration. (AFP)

South Korea’s current-account surplus was US$3.61bn in May, a six-month high, compared to a revised US$1.73bn in Apr and US$2.18bn in May last year. (AFP)

South Korea’s 8.5tr won of economic support measures announced yesterday, including assistance for small businesses and low-income earners, leaves room for a bigger response if conditions deteriorate, said finance ministry director-general Choi Sang Mok. (Bloomberg)

Japan’s retail sales grew 3.6% yoy in May (5.7% in Apr), more than the 2.9% expected by economists as rebuilding in northeastern regions and government automobile incentives boosted consumption. (Bloomberg)

Greek Prime Minister Antonis Samaras will ask EU partners to "respond to sacrifices" by recession-hit Greeks, and seek changes to the conditions of a second EU-IMF bailout. (AFP)

EU: Leaders reportedly planning EUR120bn growth pact
EU officials have agreed to a EUR120bn package to support growth in the most vulnerable countries, media reports said late Thursday. However, Italy and Spain are asking other members, particularly Germany, to take steps to lower their borrowing costs first, according to the reports. (MarketWatch)

EU: Confidence slumps while German unemployment rises
Economic confidence in the euro area slumped to the lowest in more than 2 years in June and German unemployment increased more than economists forecast, adding to signs that the European economy has fallen into a recession. An index of executive and consumer sentiment in the 17-nation euro area dropped to 89.9, the lowest since October 2009, from a revised 90.5 in May. In Germany, the number of people out of work rose a seasonally adjusted 7,000 to 2.88m, coming in higher than the economists’ forecast of 3,000. (Bloomberg)

EU: Moment of truth elusive as leaders gather for euro summit
Europe’s leaders today cap their latest effort to check the financial crisis that claimed Cyprus this week as its fifth victim. Euro-area finance ministers set the stage for today’s gathering in Brussels of the EU’s 27 chiefs, approving Cyprus’s bailout and detailing how they would aid Spanish banks. Consensus breaks down on safeguarding governments in Spain and Italy, with German Chancellor Angela Merkel rejecting calls to do more to cut their borrowing costs. (Bloomberg)

The US economy grew 1.9%qoq in 1Q12 in the third estimate, matching consensus and prior estimates (3.0% in 4Q11). The GDP price index (measuring economy-wide inflation) was revised to 2.0% qoq from the prior estimate of 1.7% (0.9% in 4Q11), exceeding consensus of 1.7%. (Bloomberg)

The US Supreme Court upheld the core of President Barack Obama’s health-care overhaul, giving him an election-year triumph and preserving a law that would expand insurance to millions of people and transform an industry that makes up 18% of the nation’s economy. (Bloomberg)

US corporate profits gained 13.1% yoy in 1Q12 to US$1.645tr (11.7% in 4Q11), revised down from the initial estimate of US$1.669tr. (Bloomberg)

The US exempted China and Singapore from sanctions over purchases of oil from Iran, hours before restrictions would have entered into force against their banks. (AFP)

US: Jobless claims remain near 2012 high
First-time filings for jobless benefits last week fell slightly but remained near the highest level of the year, the US government reported. Initial claims declined by 6,000 to a seasonally adjusted 386,000 in the week ended 23 June 23. However claims from two weeks ago were revised up to 392,000 from an original reading of 387,000, based on more complete data collected at the state level. (MarketWatch)

20120629 1013 Malaysia Corporate Related News.

Petronas in deal to speed up Canadian shale gas venture
Petronas unit Petronas Carigali Canada will acquire Progress Energy Resources Corp for CAD5.5bn to facilitate Petronas’ foray into unconventional gas development to diversify its gas sources. The proposed acquisition builds on the previous arrangement between the two parties to develop a portion of Progress’ shale assets as well as on the intention to pursue the development of an integrated LNG export facility in western Canada. (Malaysian Reserve)

KLCCP management to explore REIT
KLCC Property (KLCCP) had instructed management to explore the idea of repackaging its assets under a REIT structure. KLCCP has over RM13.3bn of real estate in Kuala Lumpur and will be the largest REIT in Malaysia should the idea pan out. KLCCP owns the Petronas Twin Towers and Suria KLCC mall, which have a total value of RM10.1bn. Taking into account KLCCP’s 50.5% and 60% stakes in the respective properties, KLCCP has a stake of RM5.5bn. KLCCP’s main shareholder Petronas, with a 52.3% stake, is poised to reap a significant cash payout from the restructuring. (Financial Daily)

Crest Builder gets LOI for a RM1.3bn project
Crest Builder’s 51% subsidiary received a letter of intent from the Malaysian Rubber Board (MRB) for a proposed mixed development on a plot of land located at the intersection of Jalan Ampang and Jalan Jelatek. The land measures 19,247m2 and has an estimated GDV of RM1.33bn. The development will comprise 3 28-storey apartments and SOHO Towers, a 33-storey corporate tower and a 6-storey boutique retail mall. The development is expected to commence works in 2013 and completed in 2018. MRB will receive RM299.9m in a mixture of cash and property. (Malaysian Reserve)

MRT Corp awards 2 more contracts
MRT Corp awarded two more viaduct tenders. MRT Corp award Gadang Engineering SB the Package V2, worth RM863.4m, which is for viaduct and associated works from the proposed Kota Damansara station to the proposed Dataran Sunway station. Package V3 for the viaduct and associated works from Dataran Sunway to Section 17 in Petaling Jaya was secured by Mudajaya, valued at RM816.2m. (Financial Daily)

Government to probe steel wire rods import
The government will initiate a preliminary investigation into the import of steel wire rods from Taiwan, China, Indonesia, South Korea and Turkey. The government has determined that “there was sufficient evidence of dumping, injury and a causal link,” according to the Ministry of International Trade and Industry (MITI). A domestic producer petitioned that steel wire rods originating from the said countries were being brought into Malaysia at a price much lower than that in their domestic markets. (Financial Daily)

Felda Global Ventures Holdings Bhd (FGVH), is looking to penetrate a number of markets in the African continent. "We will implement the Felda model -- a successful social engineering scheme -- in the continent within one to three years," its Group President Datuk Sabri Ahmad said after FGVH's listing ceremony. It would participate in nucleus estate development and place more emphasis on processing as well as provide advisory service on planting materials. "Our Felda model is successful in Malaysia and we have 50 years experience. We want to share our experience with African countries like Cameroon," he said. Sabri said FGVH's immediate focus is to focus on how to selectively get into the downstream business including speciality fats and oleochemical. (Bernama)

Felda Global Ventures Holdings Bhd (FGV) is still negotiating terms for its strategic partnership with Louis Dreyfus. "We can't just have one partner in this business. We will announce any strategic alliances accordingly," said group chairman Tan Sri Isa Samad. (Financial Daily)

The euphoric debut of Felda Global Ventures Holdings Bhd (FGV) on Bursa Malaysia was marred by claims of some investors not having their allotment deposited into their Central Depository System (CDS) accounts. The affected investors were entirely those who applied for shares as eligible bumiputera investors from the Ministry of International Trade and Industry (Miti). Brokers say that due to the overwhelming response from investors for FGV shares, brokers, banks and Miti may have been unable to credit the CDS accounts in time. (Financial Daily)

Felda Global Ventures Holdings Bhd (FGV) should be able to hit its internal targets and maintain profitability as long as crude palm oil prices (CPO) remain at a minimum of RM3,000 per tonne, said its president Datuk Sabri Ahmad. Its chairman Tan Sri Isa Samad added that 30% of trees are immature and young trees would provide buffer against fluctuating CPO prices. (Malaysian Reserve).

Muhibbah Engineering said it was surprised by CIMB Bank's move to withdraw from backing a restructuring scheme of Asia Petroleum Hub Sdn Bhd (APH). "We think the main reason could be the issue of the land lease which has affected the value of the asset" said MD, Mac Ngan Boon. The initial restructuring scheme would have paved the way for CIMB Bank and Muhibbah to swap their debt for equity in APH while a new shareholder would be brought in to inject fresh capital to complete the oil terminal project. "There was a lot of interest from potential invetors but the whole thing has been hampered. This job was promoted by the government as a national project in 2005" Mac said. It is learnt that APH's shareholders and other creditors, who were expecting a speedy conclusion, are upset that the restructuring exercise could be called off and payment delayed. "Some of the creditors are mulling legal action against the bank and the government if this matter is not properly resolved," said a financial executive close to the project. Mac also maintained that Muhibbah's ongoing woes with the APH would not push the group into PN17 status as it has the financial muscle to absorb the provisions for the claim if necessary. (Financial Daily)

Telekom Malaysia today signed a service agreement with IJM Land for the provision of high speed broadband (HSBB) infrastructure in Saujana Duta at S2 Heights, Seremban 2. With the collaboration, IJM land will be the first property developer in Negeri Sembilan to offer residents of its new residential development, Saujana Duta @ S2 Heights, TM's Unifi infrastructure and services. (Bernama)

Celcom has signed a pact with Konsortium Transnasional Bhd and Sinar Aki Sdn Bhd for a project that allows passengers on Transnasional express buses to access various wireless broadband services. The project, dubbed "57 coach-mate", will see Sinar Aki installing Celcom's WiFi service on-board 50 Transnasional express buses via 3G SIM Bonding. This service will be available via 850 units of mobile tablets for rental on selected routes. (BT)

Time DotCom hopes to set up its first overseas data centre by year-end to tap into the growing demand of such centres. The location has yet been finalised but it is believed that Singapore, Thailand and Indonesia are on the top of its list. "We are currently looking at sites and talking to partners. Our aim is to replicate our data centre business across the region," Time dotCom CEO Afzal Abdul Rahim said after its extraordinary general meeting yesterday. BT)

Multi-Code Electronics Industries (M) Bhd has received letters of acceptance from Perusahaan Otomobil Nasional Sdn Bhd (Proton) to supply parts for a new car model under a five-year contract. The supply of these parts is expected to commence in the first quarter of the financial year ending July 31, 2014. Multi-Code expected the project to generate RM90.6m in revenue for the company over the five-year period. (Sun)

LBS Bina Group Bhd plans to launch its maiden property project in Zhuhai, China, by the middle of next year. MD Datuk Lim Hock San said the first phase of the 79ha project might comprise a resort-type high-end landed one. "We are definitely going to launch the project in China next year. Depending on the market, it could be in 2Q-3Q13," he said after LBS' AGM here yesterday. LBS had submitted its plans to the authorities for approval and should receive a reply in October, Lim added. (BT)

LBS Bina Group Bhd (LBS) is paying a first dividend and final dividend of 2.5 sen per share for the financial year ended Dec 31, 2011. This was the first time the group announced a dividend payout since 2005. "As long as the company makes money, we will continue to reward our shareholders with dividends," its managing director Datuk Lim Hock San said. (StarBiz)

The Parkson Retail Group is investing US$15m (RMRM48m) to open 5 new stores in Indonesia next year, said MD, Datuk Alfred Cheng. Cheng said the company was bullish on the Indonesian market as the political stability has provided a fantastic foundation for the growth of the private sector. In September 2013, Parkson will open its first store in Indonesia, which will be at The St Moritz within the Puri CBD in West Jakarta. Cheng said Parkson's retail chain in Indonesia contributed less than 3% of its total sales last year, while its stores in China contributed around 70% of the company's revenue. He said Parkson would open a store in Cambodia in the second quarter of next year. Executive director, Toh Peng Koon, said the 5 new stores due to open next year would comprise 1 or 2 Parkson stores and 3 Centro outlets. Toh said the company would only focus on the expansion of the Parkson chain in Jakarta, Surabaya and Medan in its early years, while for Centro, the company planned to penetrate four cities in Indonesia, in Sumatra, Kalimantan and Sulawesi. Centro currently has 8 stores in Greater Jakarta, Yogyakarta, Bali and Surabaya, in East Java. "We will open one Centro outlet in Surakarta, Central Java, this year and in Pekanbaru, Riau, by early next year," said Toh. (Bernama)

TH Heavy Engineering Bhd, formerly known as Ramunia Holdings Bhd, has set aside a total of RM62m capital expenditure this year. Its MD and CEO Nor Badli Mohd Alias said it would be spent on upgrading its yard in Pulau Indah, Selangor, to make it more appealing for international jobs. "We are planning to bid for RM1.5bn jobs soon. We expect to secure at least 15 to 20% of it," Nor Badli told reporters after its re-branding exercise at Lembaga Tabung Haji's (LTH) headquarters yesterday. He said LTH has now emerged as the company's largest single shareholder with a total investment of RM300m since 2008. The fund holds 32% of the company. "Our order book currently stands at RM220m and we are planning to increase this through new tenders that we have submitted. (BT)

The speculated winner of the Ampang Light Rail Transit (LRT) system works, the George Kent consortium, was one of three bidders which failed both the technical and commercial evaluation for the RM960m contract, say sources. The Malaysian Insider understands that only five of the eight bidders passed the technical and commercial evaluation stage but project owner Syarikat Prasarana Negara Bhd (SPNB) finally recommended one of the two South Korean consortiums in the running — PDA Consortium — as the other consortiums were said to not have complied with all conditions. “George Kent was never in the running as it failed both the technical and commercial evaluation, so it’s a surprise that it is speculated to be the winner and PKR is making a fuss about it,” a source said. (Malaysian Insider)

MBf Holdings: To sell card business in 2 months
MBf Holdings is undergoing a tender process to dispose of its cards business, an exercise it expects to complete within the next 2 months. MBf group CEO and executive director Tan Sri Dr Ninian Mogan Lourdenadin said the company has some good offers and was in the process of considering them. (Financial Daily)

Mah Sing Group: Looking at JV, buying land in Sungai Buloh tract
Mah Sing Group is keen on taking part in the development of the Rubber Research Institute (RRI) land measuring 2,200 acres (880ha) in Sungai Buloh, Selangor. Mah Sing group MD and CEO Tan Sri Leong Hoy Kum said the company is interested to participate in the tender as it is one of the last pieces of large prime residential and commercial land in Selangor. (Financial Daily)

SILK Holdings: Gets RM23.7m contract from Talisman
SILK Holdings has secured a RM23.7m extension contract from Talisman Malaysia Ltd to provide an anchor handling tug supply vessel. The contract, secured via its subsidiary, Jasa Merin (Malaysia) Sdn Bhd, commenced back in June 19, 2011, and had a primary period of one year with extension options of 1+1 year. The extension is for the period commencing June 19, 2012, until June 18, 2013. (Business Times)

Can-One, Kian Joo Can Factory: Directors say companies have good work relationship
Can-One’s directors believe they will have good working relationship with the existing board of Kian Joo Can Factory as both parties have a common objective to grow these companies' operations. Can-One executive director Ooi Teik Huat said both firms can cross sell each other's products to their respective customers and together become a one-stop packaging solutions provider. (Financial Daily)

Perdana Petroleum: Subsidiary gets Murphy contract worth RM86m
Perdana Petroleum’s subsidiary has secured a contract worth RM86m from Murphy Sabah/ Sarawak Oil Co Ltd (Murphy) to supply one anchor handling tug supply vessel. The company said on Thursday that the contract secured by Perdana Nautika Sdn Bhd was to support Murphy’s 2012/2014 Shallow Water Drilling Programme. It said the contract was for a period of two years with an extension option of an additional year, effective from 27 June 2012.(Financial Daily)

Sumatec Resources: Shipping assets acquired by Halim Saad
Tan Sri Halim Saad is buying Sumatec Resources’ flagship shipping assets under a deal that will wipe out the oil and gas company's big debts. Sumatec signed with once-influential businessman Halim on Thursday to sell Semua International Sdn Bhd (Semua Group) and its subsidiaries. Semua Group owns a fleet of 10 oil product tankers with capacities ranging from 6,000 to 13,000 tonnes. Semua Group, which was bought by Sumatec in 2005, has been the latter's crown jewel. However, over-gearing as well as declining profits and cash flows have affected Sumatec's performance. Sumatec is now saddled with a mounting debt of RM530m, which nearly all of it is attributed to the money owed to Semua Group. (Business Times)

Steel: Government probes imports of steel wire rods
The Malaysian government is launching a preliminary investigation into the imports of steel wire rods from Taiwan, China, Indonesia, South Korea and Turkey. The Ministry of International Trade and Industry said on Thursday the probe was initiated after receiving a petition from a domestic producer that anti-dumping duty should be imposed on imports of steel wire rods. It said the government has determined that there was sufficient evidence of dumping, injury and causal link. MITI said under the Countervailing and Anti-Dumping Duties Act 1993 and its related regulations, a preliminary determination would be made within 120 days from the date of initiation. It said that if the final determination is affirmative, the government may impose an anti-dumping duty at the rate that would rectify the situation. (StarBiz)

20120629 1002 Global Market Related News.

Market Briefs (Source: Reuters)
• US Q1 GDP as f/c 1.9% vs. prev 1.9%
• US Weekly Initial Jobless Claims 386k; f/c 385k prev up to 392k from 387k
• US Weekly Continuing Claims 3.296mm; f/c 3.28mm prev revised up to 3.31mm
• Dutch PM says doesn’t want to think up new instruments to help countries under market pressure; Only way forward for Spain & Italy is to continue with reforms; Spain, Italy can use existing EZ support instruments, but must continue with reforms
• Bank of Italy to take on oversight of Italian insurance sector under govt decree to be approved next week
• IMF Spokesman:Objectives of Greek program remain basis for talks, if new govt has ideas on other ways to objectives then IMF open to discuss them
• U.S. Supreme Court upholds healthcare mandate; says expansion of Medicaid violates U.S. constitution
• ECB’s Coeure: Joint debt issuance can’t be a substitute for fiscal consolidation, restoring competitiveness

Asian Stocks Drop on Skepticism Europe Will Solve Crisis (Source: Bloomberg)
Asian stocks dropped for the first time in three days as European leaders disagreed over the next steps to end the region’s debt crisis at a summit in Brussels. Sony Corp. (6758), Japan’s biggest consumer electronics exporter that makes 20 percent of sales in Europe, slid 2 percent. Nippon Sheet Glass Ltd., the company with the largest revenue exposure to the debt-stricken region on the Nikkei 225 Stock Average, retreated 2.3 percent. David Jones Ltd. (DJS), Australia’s second- largest department store operator, soared 15 percent after receiving an approach about a possible takeover. The MSCI Asia Pacific Index (MXAP) slid 0.2 percent to 114.65 as of 9:22 a.m. in Tokyo. The gauge fell 12 percent through yesterday from its highest level of 2012 in February amid concern growth in China and the U.S. is slowing as the euro-zone debt crisis escalates.
“There’s an awful lot of disagreement,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth-management unit. The Swiss bank has about $1.5 trillion in assets under management. “They need to come out with a blueprint with a timeline that says ‘this is what we are going to do and how they’re going to do it.’ That has to include an agreement on banking regulation and a serious consideration of euro bonds.”

China Stocks to Extend Drop After Losing 2012 Gains (Source: Bloomberg)
China’s stocks are poised to extend losses after erasing this year’s gains amid concerns over a slowing economy, according to the only strategist who forecast declines for Chinese shares in 2012. The economy probably expanded at a “subpar” rate in the second quarter and investors should buy shares of companies such as consumer-staples producers, whose earnings may be sheltered from the slowdown, Hao Hong, head of Chinese research at Bank of Communications Co. in Hong Kong, said by e-mail yesterday, declining to name stocks. The Shanghai Composite Index may fall “briefly” below 2,000 in a worse-case scenario, he said. The gauge is down 0.2 percent this year after losing 1 percent yesterday to 2,195.84, the lowest level since Jan. 6. It tumbled 7.4 percent in June, the second-worst performance of 95 major indexes tracked by Bloomberg, as lower-than-estimated industrial output and retail sales data overshadowed the central bank’s first interest-rate cut since 2008.
“The market is collapsing,” said Hong, who was previously a global equity strategist at China International Capital Corp. “I am again waiting for a capitulation like the one in January.” The Shanghai Composite (SHCOMP) sank to a three-year low on Jan. 5 before rallying 15 percent through March 2 amid speculation the government would ease monetary policy to bolster an economy that grew by the slowest pace in almost three years in the first quarter. The People’s Bank of China cut lending and deposit rates by a quarter percentage point on June 8 and has lowered banks’ reserve ratios three times since November.

Japan Stocks Fall on Industrial Output, European Standoff (Source: Bloomberg)
Japan stocks fell, snapping a two- day gain, after the nation’s industrial production fell more than expected and as a standoff between Italy and Germany emerged at a summit over the European debt crisis. Machine-tools maker Okuma Corp. (6103) slid 1.7 percent. Nippon Sheet Glass, which gets almost 40 percent of its revenue in Europe, fell 1.2 percent. Nippon Yusen K.K. fell as shipping companies led declines on the Topix Index. The Nikkei 225 Stock Average (NKY) fell 0.7 percent to 8,808.71 as of 9:40 a.m. in Tokyo, with volume almost 30 percent below the 30-day average. The broader Topix lost 0.5 percent to 755.15, trimming its weekly gain to 0.6 percent. Almost three times as many shares declined as advanced on the gauge. “Investors are waiting for the results of the European Summit meeting and are reluctant to buy shares,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “There have been no surprises from the EU meeting so far.”

U.S. Stocks Pare Losses on Bets Europe Nearing Debt Pact (Source: Bloomberg)
U.S. stocks pared losses in the final hour of trading amid speculation European leaders were nearing an agreement to halt contagion from the debt crisis. After the market close, European Union President Herman Van Rompuysaid leaders agreed to spend 120 billion euros ($149 billion) to stimulate growth. JPMorgan Chase & Co. (JPM) tumbled 2.5 percent after the New York Times said trading losses from credit derivatives may total as much as $9 billion, exceeding the firm’s initial estimate. Health-care (S5HLTH) stocks in the Standard & Poor’s 500 Index fell 0.3 percent as the Supreme Court upheld the core of President Barack Obama’s industry overhaul. The S&P 500 dropped 0.2 percent to 1,329.04 at 4 p.m. New York time, paring a loss of as much as 1.4 percent. The Dow Jones Industrial Average slid 24.75 points, or 0.2 percent, to 12,602.26. Volume for exchange-listed stocks in the U.S. was 6.8 billion shares, about in line with the three-month average.
European leaders began a two-day summit in Brussels today intended to chart a path out of their financial crisis. Stocks pared losses as German Chancellor Angela Merkel canceled a press briefing and her spokesman said talks on a growth accord were ongoing.

U.S. Stocks May Set New Low for 2012: Technical Analysis (Source: Bloomberg)
The Standard & Poor’s 500 (SPX) Index was accompanied by other benchmark gauges when it slid to near its 2012 low on June 4, a sign the market may retreat further, according to JPMorgan Chase & Co. Equity gauges from Germany to South Korea and Brazil also tumbled to or near their lowest levels of the year that day, as did other U.S. measures such as the Dow Jones Transportation Average and the Dow Jones Industrial Average. Major bottoms in benchmark equity indexes usually do not occur simultaneously, Michael Krauss, head of global technical research at JPMorgan Chase, wrote in a note to clients dated yesterday. “More likely it was just the first step down, in a larger three-step decline from the April high,” Krauss wrote. “Expect huge divergences at major turns, like this year’s tops” which were “widely dispersed” between February and May, he said.
The S&P 500 slid as much as 11 percent from its four-year high on April 2 through June 4, when it sank as low as 1,266.74 intraday amid concern about Europe’s debt crisis and the weakest growth in American jobs in a year. The gauge then rebounded 5.1 percent through yesterday’s closing level.

European Stocks Near Cheapest Ever as Invesco Buys Repsol (Source: Bloomberg)
Two years of losses have pushed European equities toward the lowest valuations ever, prompting fund managers from Invesco Ltd. to JPMorgan Chase & Co. to increase holdings in Spain, Italy and Germany. While the Euro Stoxx 50 Index has fallen to 0.9 times book value, cheaper than any time except the week markets bottomed in March 2009, Invesco is betting on Repsol SA (REP), the Spanish oil producer. London-based Artemis Investment Management LLC is buying stock in Amplifon SpA (AMP), a hearing aid maker in Milan. Fidecum AG is adding shares of German lender Aareal Bank AG. (ARL) Two emergency plans for lenders from the European Central Bank, four national bailouts and 18 summit meetings for heads of state have failed to keep the euro region’s share gauge from dropping. With more investors than ever saying European equities are undervalued in a monthly survey by Bank of America Corp., managers who help oversee about $430 billion say they are finding bargains across the continent.
“What’s in the price for Europe is beginning to be Armageddon,” Stephanie Butcher, who helps manage $62 billion at Invesco Perpetual in Henley-on-Thames, England, said at a presentation on June 26. “This is a region that has been hugely de-rated, that has a lot of high-quality international assets that are very lowly valued. This is an unusual circumstance and one offering genuine opportunities.”

Emerging Stocks Decline as China Index Erases 2012 Gain (Source: Bloomberg)
Developing-nation stocks fell as the Shanghai Composite Index erased its 2012 advance on concern China’s economic slowdown will choke earnings and as a two-day summit for European Union leaders started in Brussels. The MSCI Emerging Markets Index (MXEF) declined 0.7 percent to 906.71 by the close in New York, snapping two days of gains. The Shanghai Composite fell 1 percent, the seventh straight slide in its longest losing streak in 13 months. OGX Petroleo e Gas Participacoes SA and MMX Mineracao e Metalicos SA slumped to lead decliners on Brazil’s Bovespa index. Russia’s Micex Index (INDEXCF) retreated 1.7 percent, the most since May 23.
China’s curbs on the housing market will remain “tight” this year, preventing transactions and prices from rebounding significantly, Shui On Land Ltd. Chief Executive Freddy Lee said yesterday. European Union leaders approved a 120 billion-euro ($149 billion) plan to promote growth in the 27-nation bloc. The growth plan came before leaders took on the thornier measures to prevent the euro area’s financial crisis from swamping Spain and Italy. “The global markets backdrop remains quite challenging, given the persisting risks on the euro zone crisis front, as well as rising concerns that the global growth outlook may have to be substantially downgraded again,” Benoit Anne, head of emerging-markets strategy at Societe Generale in London, wrote in an e-mailed note to clients.

FOREX-Euro falls as prospect of EU summit progress dims
LONDON, June 28 (Reuters) - The euro fell to a three-week low against the dollar on growing expectations that a European Union ummit starting later in the day will fail to agree concrete measures to deal with the region's worsening debt crisis.
"It's rare that we've seen this amount of discord going into a summit," said Chris Turner, head of foreign exchange strategy at ING. On the face of it it looks like it's going to be reasonably negative for the euro."

Euro Heads for Second Weekly Decline Before French Economic Data (Source: Bloomberg)
The euro headed for a second weekly drop before data today forecast to confirm French growth stalled in the first quarter, adding to signs Europe’s debt crisis is hurting the region’s larger economies. The 17-nation currency fell for a second day versus the yen as French President Francois Hollande said he’ll withhold endorsement of a European Union fiscal pact at least until the end of a two-day summit under way in Brussels. EU leaders pledged to inject 120 billion euros ($149 billion) into the currency bloc’s economy before a report next week may show the region’s unemployment reached the highest on record. The yen gained against all its major counterparts amid investor demand for refuge assets. “I’m bearish on the euro the most among the major currencies,” said Kengo Suzuki, a foreign-exchange strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third- largest bank by market value. “It’s quite clear the European economies are slowing because of austerity measures.”
The euro was little changed at $1.2439 at 9:01 a.m. in Tokyo from the close in New York yesterday, having dropped 1 percent this week. The shared currency slid 0.2 percent to 98.64 yen, after touching 98.33 yesterday, the weakest since June 6. Japan’s currency climbed 0.2 percent to 79.31 yen per dollar.

Aussie, Kiwi Set for Weekly Drop on Europe Growth Woes (Source: Bloomberg)
The Australian and New Zealand dollars headed for weekly declines on speculation growth in the euro zone is continuing to slow even as European Union leaders outlined plans to boost the economy at a summit. The so-called Aussie was set for its first five-day slide versus the greenback in four weeks before figures today that may confirm France’s first-quarter gross domestic product was unchanged from the previous period and ahead of data next week that may show the jobless rate in the 17-nation currency bloc climbed to a record. New Zealand’s dollar, nicknamed the kiwi, is poised to complete its biggest weekly drop since May after a report showed home-building approvals fell last month.
“Whatever does eventually come out of the summit, markets are sooner or later going to face up to the reality that growth in Europe is going to remain weak for some time,” said Mike Jones, a Wellington-based currency strategist at Bank of New Zealand Ltd. “We’re in an environment of slowing global growth, and that will certainly continue to weigh on the Aussie and kiwi.” The Australian dollar lost 0.2 percent to $1.0022 as of 9:35 a.m. in Sydney, extending this week’s slide to 0.4 percent. It bought 79.50 yen, 0.4 percent lower than yesterday’s close in New York. New Zealand’s currency fell 0.4 percent to 78.54 U.S. cents and has dropped 0.7 percent since June 22. The so-called kiwi retreated 0.5 percent to 62.30 yen.

Jobless Claims in U.S. Hovered Last Week Near 2012 High (Source: Bloomberg)
Applications for jobless benefits hovered last week near the highest level of the year, showing continuing weakness in the U.S. labor market. Claims for unemployment insurance payments decreased by 6,000 to 386,000 in the week ended June 23, according to Labor Department figures issued today in Washington. The revised 392,000 claims in the previous week matched the most this year. The Bloomberg Consumer Comfort Index also showed growing apprehension over the state of the economy. Concern about the European debt crisis and the so-called fiscal cliff that the U.S. faces at the end of this year may prompt employers to keep payrolls lean, limiting the hiring needed to boost consumer spending. A 57-cent per gallon decrease in gasoline prices since early April is providing some relief, helping offset concern the job market is weakening by allowing employed Americans to stretch their paychecks.
“We’re going to see consumers be cautious over the next few months,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who projected 385,000 claims. “Spending is going to be soft, and I think it’s because of the job market. The labor market is not creating the wage income necessary.”

Consumer Comfort in U.S. Climbs to Highest Level in Two Months (Source: Bloomberg)
Consumer confidence in the U.S. climbed last week to the highest level in two months as optimism over personal finances helped alleviate growing apprehension about the economy. The Bloomberg Consumer Comfort Index rose to minus 36.1 in the week ended June 24 from minus 37.9 in the previous period. The gauge of household finances was positive for the first time since April, while sentiment toward the state of the economy dropped to the lowest level since February. A 57-cent decrease in gasoline prices since early April is providing some relief, helping offset concern the job market is weakening by allowing employed Americans to stretch their paychecks. At the same time, sentiment among higher-income households turned negative for the first time in three months as Europe’s debt crisis hurts stock prices.
“The decline in confidence among households earning more than $100,000 per year likely reflects concerns about portfolio exposure to the crisis in Europe and the global economic slowdown,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Since the top 40 percent of income earners accounts for about 60 percent of consumer purchases, “even a modest pullback can have outsized effects on household spending and overall growth,” he said.

Stockton, California, Files for Bankruptcy Protection (Source: Bloomberg)
The California city of Stockton filed a petition seeking U.S. bankruptcy court protection after talks with bondholders and labor unions failed, making the agricultural center the biggest U.S. city to seek court protection from creditors. A river port about 80 miles (130 kilometers) east of San Francisco, Stockton ran out of options after three months of negotiations with creditors ended June 25 without enough concessions to close a $26 million deficit. The city listed assets of more than $1 billion and debt of $500 million to $1 billion in court filings today in U.S. Bankruptcy Court in Sacramento, California. “We are extremely disappointed that we have been unable to avoid bankruptcy,” Mayor Ann Johnston said in a statement. “This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens. We will emerge from bankruptcy with a solid financial future.”
The Chapter 9 filing allows Stockton, a city of 292,000, to suspend payments to creditors while it seeks court approval for a plan that balances its revenue with its debt. The budget for the fiscal year beginning July 1 calls for defaulting on $10.2 million in debt payments and cutting $11.2 million in employee pay and benefits under union contracts that could be voided by the bankruptcy court.

JPMorgan Slips on Report Trading Loss Widened to $9 Billion (Source: Bloomberg)
JPMorgan Chase & Co. (JPM) fell more than 6 percent in New York trading after the New York Times reported the lender’s losses from credit derivatives may eventually total as much as $9 billion, exceeding the firm’s initial estimate. JPMorgan dropped to $35.77 as of 8:44 a.m. from the $36.78 close in New York yesterday, and reached $34.50 earlier today. Chief Executive Officer Jamie Dimon said on May 10 the bank lost more than $2 billion on bets in credit markets taken by its chief investment office in London and that the loss could increase by as much as $1 billion this quarter. Dimon, 56, has said JPMorgan doesn’t want to “do anything stupid” by unwinding the trades too quickly, and he hopes that by the end of the year the holdings will no longer have a significant impact on results.
The firm’s losses have increased in recent weeks as JPMorgan sought to exit its holdings, the New York Times reported, citing unidentified former traders and executives at the bank. The company has already closed out more than half of its positions, the newspaper said.

Japan’s Industrial Output Falls Most Since 2011 Quake (Source: Bloomberg)
Japan posted its biggest decline in factory output since last year’s disaster, backing forecasts that growth may have peaked in the first quarter. Industrial production slid 3.1 percent in May from April, the biggest decline since March 2011, the Trade Ministry said in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a 2.8 percent fall. The government’s 20 trillion yen ($252 billion) in spending to rebuild areas devastated by the earthquake and tsunami has supported three straight quarters of economic growth. The risk now is that the European debt crisis and a slowing U.S. economy could hamper exports and slow the recovery just as the effect of domestic public spending begins to taper off. “Growth will peak in the first quarter,” Matthew Circosta, an economist at Moody’s Analytics in Sydney, said before the report. “We expect second quarter growth to be slower because of headwinds facing exporters on the global demand front.”

Japan Consumer Prices Fall Before Central Bank Policy Meeting (Source: Bloomberg)
Japan’s consumer prices declined 0.1 percent in a report released ahead of a central bank meeting next month, when policy makers will review adding more stimulus. Consumer prices excluding fresh food fell 0.1 percent in May from a year earlier, the statistics bureau said in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for no change. The Bank of Japan (8301) is under pressure to do more to help the nation shake off deflation and sustain a recovery from last year’s tsunami and earthquake. A planned increase in the consumption tax in 2014 and 2015, approved by the lower house of parliament this week, may become a drag on the economy by discouraging spending.
“Japan’s progress towards defeating deflation is very slow,” said Yoshiki Shinke, chief economist at Dai-Ichi Life Research Institute in Tokyo, before the release. “The BOJ may come under more pressure for additional stimulus because of stagnant price growth, especially when the government is coming closer to increasing sales tax.” The jobless rate dropped to 4.4 percent in May and the number of available jobs per job applicant rose to 0.81. Household spending increased 4 percent, separate government reports also showed in Tokyo today.

South Korea Eyes Bigger Fiscal Response to Europe Growth Threat (Source: Bloomberg)
South Korea indicated that it’s preserving fiscal firepower for worsening economic conditions after Europe’s debt crisis triggered a cut to the nation’s growth forecast. The government’s 8.5 trillion won ($7.4 billion) of economic support measures announced yesterday, including assistance for small businesses and low-income earners, leaves room for a bigger response if conditions deteriorate, said Choi Sang Mok, a director-general at the finance ministry. Europe’s austerity drive is capping demand for Asian exports, with surging borrowing costs for Spain showing the euro region has yet to contain its crisis. South Korea’s gross domestic product may expand 3.3 percent this year, less than a December estimate of 3.7 percent, the Finance Ministry said yesterday in Gwacheon, south of Seoul. “The European debt crisis is such a big challenge that South Korea will have to struggle to meet even the lowered growth target,” said Kim Nam Hyun, a Seoul-based fixed income analyst at Eugene Investment & Futures.
“The worst may not be over yet.” The government also yesterday announced incentives to attract foreign-currency deposits to banks, a buffer against volatility in capital flows. The cut to the growth forecast followed the central bank paring its estimate to 3.5 percent from 3.7 percent. The finance ministry predicts a 4.3 percent expansion next year.

Singh Seeks to Restart Growth as Rupee Falls: Economy (Source: Bloomberg)
Indian Prime Minister Manmohan Singh pledged to restore confidence in Asia’s third-largest economy as he resumed control of the finance ministry after growth slowed to the weakest in almost a decade and the rupee slumped. Singh, 79, urged senior ministry officials to act quickly to revive investor sentiment as he assumed the role vacated this week by Pranab Mukherjee, who resigned to run for president. India needs to address “problems on the tax front,” as well as in the mutual funds and insurance industries, he said at a meeting in New Delhi yesterday. “At the current juncture, we are passing through challenging times economically,” Singh said in the meeting, according to a statement on the government’s website. “We need to work to get the economy going again and restart the India growth story.”
Singh will need to call on his experience in turning around the economy as finance chief in the 1990s, when India was on the brink of defaulting on some of its overseas debt. He now faces a budget deficit requiring record borrowing, a paralysis in policy making that has hurt efforts to spur investment and a faltering global recovery, which have pushed the rupee to an unprecedented low and put the country’s investment-grade rating at risk.

Reserve Bank Says India Is Facing Inflation, Growth Risk (Source: Bloomberg)
India is likely to face elevated inflation risks from supply bottlenecks and lingering threats to economic expansion, the Reserve Bank of India said. “Threats to stability are posed by the global sovereign debt problem and risk aversion, domestic fiscal position, widening current-account deficit and structural aspects of food inflation,” the central bank said in its Financial Stability Report released in Mumbai yesterday. While India’s financial system “remains robust,” challenges to stability have increased since the last assessment in December 2011. Growth in Asia’s third-largest economy slowed to a near- decade low last quarter, hurt by a faltering global recovery, political gridlock that has deterred investment and price pressures. Prime Minister Manmohan Singh, who took charge of the finance ministry three days ago, faces a budget deficit requiring record borrowing as well as a trade shortfall as he tries to revitalize his development agenda.
“Sovereign default concerns and the need for substantial bank recapitalization in the euro zone have escalated fears of contagion and recession,” central bank Governor Duvvuri Subbarao said in the report. In India, an “already high fiscal deficit leaves little room for the government to stimulate the economy,” he said.

Demands for Bond-Buying Agreement Roil European Summit (Source: Bloomberg)
European Union leaders struggled to meet demands by Spain and Italy for relief from rising borrowing costs, threatening to derail a 120 billion-euro ($149 billion) pledge to boost economic growth. Leaders from the 17 euro nations stayed on to debate the crisis-fighting plan early this morning after all 27 nations informally signed off on the growth strategy. Italy is withholding its final endorsement of the initiative as it pushes for collective action at an EU summit in Brussels to push down its bond yields, said two Italian officials who spoke on the condition that they not be named. EU President Herman Van Rompuy said talks weren’t gridlocked and will continue through the night and later today. “We haven’t yet a conclusion on the growth agenda because we have to discuss also the aspects of financial stability and we do this related to the discussion also foreseen” on the future of the euro, Van Rompuy told reporters late yesterday.

German June Unemployment Rises as Crisis Starts to Bite (Source: Bloomberg)
German unemployment climbed in June for the fourth month this year as the debt crisis in the euro region weighed on companies’ willingness to create jobs. The number of people out of work rose a seasonally adjusted 7,000 to 2.88 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast an increase of 3,000, the median of 30 estimates in a Bloomberg News survey shows. The adjusted jobless rate held at 6.8 percent after last month’s rate was revised up from 6.7 percent. “Signs are increasing that the resilience of the German labor market is slowly cracking up,” Carsten Brzeski, an economist at ING Group in Brussels, said in a note to investors. “This might not be a cause for concern for the German economy, yet, but definitely for the rest of the euro zone.”
Rising joblessness in Europe’s biggest economy underscores the deepening financial crisis in the 17-nation euro area as the turmoil shifts from states on the region’s periphery such as Greece and Ireland to core members Spain and Italy. Chancellor Angela Merkel and fellow European Union leaders begin a summit in Brussels today that aims to address the widening turmoil.

IMF May Consider Greek Loan Changes After Visit Next Week (Source: Bloomberg)
An International Monetary Fund team will start negotiating possible changes to the conditions attached to a loan to Greece after a fact-finding mission travels to Athens early next week, a fund spokesman said. The mission, which includes officials from the European Central Bank and the European Commission, “will assess the recent economic developments and meet with the new authorities,” Gerry Rice, the IMF spokesman, told reporters in Washington today. He said he had no date for the follow-up negotiating mission. “The objectives of the program as agreed remain the basis for those discussions,” Rice said. “If the new government has ideas on how those program objectives can be achieved, we’re open to those discussions.”
Greek Prime Minister Antonis Samaras asked fellow European leaders to loosen budget-austerity requirements for emergency aid while saying he would press ahead with an economic overhaul. Greece has slipped behind budget-cutting targets that euro-area nations and the IMF imposed in exchange for 240 billion euros ($298 billion) in aid pledges in the past two years.

U.K. Disposable Income Plunges as Economy Contracts 0.3% (Source: Bloomberg)
Britons’ disposable income fell for a second quarter in the first three months of the year, when consumer spending unexpectedly declined and the economy shrank. Real disposable income dropped 0.9 percent from the previous three months, when it also fell by that amount, the Office for National Statistics said today in London. Consumer spending was revised to a 0.1 percent decline from a 0.1 percent increase, while gross domestic product fell 0.3 percent. The Bank of England is edging closer to resuming bond purchases to kickstart a recovery as the euro-area debt crisis worsens and the U.K. struggles to shake off a recession. With consumers confidence under pressure, Chancellor of the Exchequer George Osborne this week scrapped a planned fuel-duty increase, his fourth policy U-turn in a month, a move he said was aimed at helping people at a “very difficult economic time.”
“It looks highly questionable whether the economy has been able to return to growth in the second quarter,” said Howard Archer, an economist at IHS Global Insight in London, citing “intensified problems” in the euro area. The economy may begin to recover after that, helped by “ultra accommodative monetary policy,” he said.

Hungary Set to End Stalemate to Start IMF Bailout Talks (Source: Bloomberg)
Hungary is on the brink of breaking a deadlock to start bailout negotiations with the International Monetary Fund after a seven-month stalemate that has made its currency the world’s most volatile. The IMF agreed to start aid talks as soon as legislators approve proposed changes to a disputed central bank law, which has blocked talks since December, Managing Director Christine Lagarde said in a letter to Hungarian leaders, distributed to reporters yesterday. Parliament will vote on the amendments by July 12, government negotiator Mihaly Varga said. The forint, stocks and bonds gained and Hungary’s default risk fell after the announcement. “This is clearly a positive,” Simon Quijano-Evans, head of emerging-market research for Europe, the Middle East and Africa at ING Groep NV (INGA), said by phone from London. “There’s room for more yield and spread compression for bonds.”
Prime Minister Viktor Orban requested the aid in November as the country’s credit grade was cut to junk and the forint fell to a record against the euro. Preliminary talks broke down in December after Hungary passed a law that the IMF and the European Union said may curb central bank independence.

European Leaders Put Bond Buying on Table at Crisis Summit (Source: Bloomberg)
European Union leaders focused on immediate help for Spain and Italy at the start of a two-day summit intended to chart a path out of their financial crisis. The 27 government chiefs will discuss buying Spanish and Italian government bonds to bring down borrowing costs that are near euro-era records, Finnish Prime Minister Jyrki Katainen said. He also proposed that bailout funds buy collateralized government debt in primary markets. The Finnish proposal joined discussion of whether the euro area’s rescue fund should aid banks directly and the role of the European Central Bank, which has already bought more than 200 billion euros ($249 billion) of government bonds and pumped more than 1 trillion euros of three-year loans into the banking system. It shelved its bond-purchase program earlier this year amid growing resistance to the policy on the ECB Governing Council.
European Union Economic and Monetary Affairs CommissionerOlli Rehn said the ECB’s actions have prevented the crisis from worsening. He also called for “concrete measures” to help Italy and Spain and more debate about mutualized public debt.

20120629 1001 Soy Oil & Palm Oil Related News.

Palm-Oil Exports From Indonesia Set to Advance on Ramadan (Source: Bloomberg)
Palm-oil shipments from Indonesia, the world’s largest producer, may climb 9.5 percent in June from a month earlier on sustained demand before the Muslim fasting month of Ramadan. Exports are set to climb to 1.5 million metric tons from 1.37 million tons while output will probably be little changed at 2.1 million tons, according to the median of five plantation and refining company executives in a Bloomberg News survey. Inventory will also be little changed at 1.85 million tons, two of the respondents said. Futures lost 17 percent from a 13-month high in April as the debt crisis in Europe and the slowing economy in China, the largest cooking-oil user, cut demand, potentially reducing costs for Nestle SA (NESN), the world’s largest foodmaker, and curbing revenues at PT Astra Agro Lestari and Golden Agri-Resources Ltd. (GGR), the second-biggest grower.
“Global demand, either from India or other countries, will usually increase by 15 percent to 20 percent during the festive seasons,” said Derom Bangun, a deputy chairman at the Indonesian Palm Oil Board, a group of growers and refiners. “This will support prices even as the pressure from the European crisis is still quite strong.” The holy month of Ramadan starting this year in late July is a time when consumption of cooking oil usually climbs as followers break daylong fasts with communal meals. The Eid al- Fitr festival marks the end of fasting.

Pro Farmer: After the Bell Soybean Recap (Source: CME)
As expected, soybean futures saw a choppy day of trade, but bears had momentum into the close. Futures settled mid- to low-range with losses of 5 to 9 3/4 cents. Soyoil and soymeal futures also finished under pressure. At times today, the soybean market took part in corn's weather rally as scorching temps and the limited precip are worrisome.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished down 8 3/4 at 1447 1/4, 17 3/4 off the high and 8 1/2 up from the low. November Soybeans closed down 9 at 1403. This was 10 1/4 up from the low and 19 1/2 off the high. August Soymeal closed down 2.4 at 421.3. This was 0.8 up from the low and 8.1 off the high. August Soybean Oil finished down 0.45 at 51.09, 0.63 off the high and 0.32 up from the low. November soybeans closed lower for the third session in a row. August soybean meal traded moderately higher early and was unchanged coming into the close. August soybean oil was weaker throughout the day to close near it's session lows. Outside markets turned negative midday after President Obama's healthcare package was upheld in the Supreme Court. Considering the long fund position in the soybean market, outside market pressure likely triggered some profit taking in the soybean market. Afternoon weather maps continue to show rainfall in the 1 to 3 day forecast for Iowa, northern Illinois, northern Indiana, and Ohio. Changes vs. the morning maps include showers reaching farther south with heavier rainfall to the north. The USDA reported that private exporters sold 110,000 tonnes of soybeans to an unknown destination for the 2012/13 marketing year. The steady sales pace of new crop soybeans continues to provide a positive market sentiment to the trade going forward. Weekly exports sales were considered neutral with 403,900 metric tonnes for the current marketing year and 389,200 for the next marketing year for a total of 793,100. Cumulative soybean sales stand at 102.8% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 99.2%. Net meal sales came in at 229,600 metric tonnes for the current marketing year and 31,600 for the next marketing year for a total of 261,200. Old crop sales of 61,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 8,300 metric tonnes for the current marketing year and 5,200 for the next marketing year for a total of 13,500. Sales of 4,000 metric tonnes are needed each week to reach the USDA forecast. The USDA will release its Grain Stocks and Planting Intentions report tomorrow morning. Heading into the report, traders are keying off the soybean planted acreage report. Many will quickly believe that the USDA will be too high as parts of the Midwest will not be able to double crop soybeans over harvested wheat due to topsoil dryness. Traders are penciling in an increase of 1.6 million acres from the March estimate of 73.9 million acres.

Palm oil hits 2-week low ahead of EU summit, USDA eyed
SINGAPORE, June 28 (Reuters) - Malaysian crude palm oil futures slipped to a more-than-two-week low on Thursday, as investors awaited the outcome of a European leaders' summit that is unlikely to produce concrete measures to solve the region's debt crisis.
"Prices are juxtaposed between the positive vibes of U.S. weather and negative news from Europe. Market players are awaiting Friday's USDA numbers before adding on more exposure," said a trader with a local commodities brokerage in Malaysia.

The government will host a roundtable discussion with the private sector, especially plantation industry players, on the details of a proposal to export excess oil palm seeds, says Minister of Plantation Industries and Commodities Tan Sri Bernard Dompok. He said the private sector plays a huge role in making the proposal a reality, as the government is only the policy maker and the execution has to be done by industry players. "The discussion will begin as soon as the private sector is ready. The government is keen to implement the policy. (Bernama)

20120629 1001 Global Commodities Related News.

Commodities Falls Most in Week on Europe Concerns, Jobless Rate (Source: Bloomberg)
Commodities fell the most in a week on skepticism that European Union leaders will make progress on the debt crisis and after a report showed U.S. jobless claims hovered near the highest level of the year. The S&P GSCI Index of 24 raw materials dropped, led by declines in energy and metals, as 27 European government chiefs met in a two-day summit to focus on immediate financial help for Spain and Italy. The U.S. Labor Department said applications for unemployment benefits were 386,000 in the week ended June 23. “We’re not getting a lot of good news with the economy,” said Dan Flynn, a trader at Price Futures Group in Chicago. The S&P GSCI dropped 1.7 percent to 567.47 after earlier touching 565.5. Eighteen of the commodities fell, led by silver, crude oil and natural gas. The euro fell as much as 0.5 percent to $1.2407, the lowest level since May 31. It was down 0.2 percent to $1.2445 at 4:01 p.m. in New York.
Crude oil for August delivery fell $2.52, or 3.1 percent, to settle at $77.69 a barrel on the New York Mercantile Exchange, the lowest price since Oct. 4. Brent for August settlement decreased $2.14, or 2.3 percent, to $91.36 a barrel on the London-based ICE Futures Europe exchange.

Monsoon Worst Since 2009 Threatening Sugar, Rice Crops (Source: Bloomberg)
The worst start to the monsoon season in India in three years is threatening crops from rice to sugar cane, stoking concern that the nation may limit exports to preserve supplies. Soybean futures in India climbed to the highest since 2003 and corn rose to a five-month high. Rainfall from June to September, which represents 70 percent of annual amount, may be below normal with the main cane-growing regions getting less rain than required, said Michael Ferrari, a commodity director and senior scientist at Falls Church, Virginia-based Computer Sciences Corp. (CSC) Rain is 23 percent below average since the season started on June 1, according to the India Meteorological Department.
Dry weather from the U.S. to Australia has parched fields, pushing up corn and wheat prices by as much as 17 percent this month in Chicago, curbing a decline in global food costs. El Nino weather conditions, which can parch Asia and bring cooler weather to the U.S, may develop some time during July to September, the World Meteorological Organization said June 26. India extended a ban on exports of sugar, rice and wheat in 2009, following the weakest monsoon since 1972.

DTN Closing Grain Comments 06/28 14:45 : All Bets Are In, USDA Set to Show Its Hole Card
Grains couldn't figure out which direction to trade, with traders placing their final bets before the dealer, USDA, shows its cards Friday morning with the release of the quarterly stocks and acreage update reports.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Wheat futures were choppy through the day, but the market softened with corn into the close. Chicago wheat ended around 3 to 6 cents lower and Kansas City saw slightly heavier losses. Minneapolis ended narrowly mixed with a downside bias; the July contract was an outlier as it closed 23 1/2 cents higher. Action in the wheat market mirrored that of corn today.

Wheat Market Recap Report (Source: CME)
September Wheat finished down 5 1/4 at 746, 11 1/2 off the high and 3 3/4 up from the low. December Wheat closed down 5 1/2 at 766 3/4. This was 4 up from the low and 11 1/2 off the high. September wheat closed slightly lower with an inside trading session. The market bounced off early morning lows due to short covering, caused by a rebound in the corn market. Minneapolis spring wheat was the leader today as traders widened out the premium between Kansas City and Minneapolis, possibly on the potential for much better protein potential in the spring wheat crop. Outside markets turned negative midday after President Obama's healthcare package was upheld in the Supreme Court. U.S. stocks and energies are sharply lower while the US Dollar turned higher. Afternoon weather maps continue to show rainfall in the 1 to 3 day forecast for Iowa, northern Illinois, northern Indiana, and Ohio. Changes vs. the morning maps include showers reaching farther south with heavier rainfall to the north. Trader reaction was neutral to the forecast as the market positions themselves ahead of the Grain Stocks and Seeding report tomorrow morning. Heading into the report, traders are expecting all wheat planted acreage near 56.6 million acres. This would be slightly higher vs. the March forecast of 55.90 million acres. Wheat markets saw underlying support as traders continue to believe further revisions will need to be made to the Black Sea wheat production numbers on the next USDA report in July. The weekly export sales report was viewed as neutral to negative with 324,500 metric tonnes for the current marketing year. As of June 21st, cumulative wheat sales stand at 21.5% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 21.8%. Sales of 499,000 metric tonnes are needed each week to reach the USDA forecast. September Oats closed down 1 1/2 at 336. This was 6 1/2 up from the low and 8 3/4 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures spent much of the day in positive territory, but attention shifted to minimizing risk heading into the close; the market ended fractionally to pennies lower in all but the July contract which was 2 1/2 cents higher. Futures spent much of the day enjoying moderate gains thanks to ongoing worries about heat and dryness across the Corn Belt, but attention shifted to minimizing risk ahead of tomorrow's USDA's reports, which have historically delivered some surprises.

Corn Market Recap for 6/28/2012 (Source: CME)
September Corn finished down 2 1/2 at 625, 17 3/4 off the high and 4 3/4 up from the low. December Corn closed down 3/4 at 632 1/4. This was 6 3/4 up from the low and 16 1/2 off the high. The corn market was trading higher midday as traders continue to be concerned with the above normal temperatures during corn pollination. The December contract gained 12 cents my mid-session but gains slowly eroded as traders took profits ahead of tomorrow's Grain Stocks and Seeding Report. The trade expects a slight increase in corn acreage, however traders will key off the stocks estimate. The trade expects June 1 stocks of near 3.17 billion bushels with range of estimates as wide as 670 million bushels. Afternoon weather maps continue to show rainfall in the 1 to 3 day forecast for Iowa, northern Illinois, northern Indiana, and Ohio. Changes vs. the morning maps include showers reaching farther south with heavier rainfall to the north. Trader reaction was neutral to the forecast. Outside markets turned negative midday after President Obama's healthcare package was upheld in the Supreme Court. U.S. stocks and energies are sharply lower while the US Dollar turned higher. The outside market pressure and pre-report jitters likely triggered profit taking after this week's gains. Weekly export sales for the week ending June 21st were considered negative. Net weekly export sales for corn, came in at just 192,900 metric tonnes for the current marketing year and 99,900 for the next marketing year for a total of 292,800. Cumulative corn sales stand at 92.9% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 94.7%. Old crop sales of 291,000 tonnes are needed each week to reach the USDA forecast. September Rice finished down 0.105 at 14.905, 0.115 off the high and 0.005 up from the low.

The Hightower Report: Corn and Soybean Strategy Update (Source: CME)
The weather outlook is still threatening, and many traders are holding long positions going into the key USDA Acreage and Quarterly Grain Stocks reports that will be released on Friday, June 29th. For end users who are not already covered, a bearish surprise might present an opportunity to sell puts and/or buy calls for coverage.

Corn up for 5th day as dryness curbs yields, soy rises
SINGAPORE, June 28 (Reuters) - Chicago new-crop corn rose for a fifth consecutive session to around a nine-month top, while soybeans edged higher as hot and dry weather curbed yields in the U.S. Midwest, threatening to squeeze global supplies.
"I think there is likely to be reduction in yield numbers which will ultimately lead to overall reduction in output," said Abah Ofon, an analyst at Standard Chartered Bank in Singapore.

US drought brings back memories of 1988 crop losses
CHICAGO, June 28 (Reuters) - Just one year ago Jeff Scates saw the worst flooding on his southern Illinois farmland since 1937. Today, Scates is watching his corn fields shrivel from the driest season in 24 years.
"We've gone from one extreme to the other, from being flooded on three-quarters of the farm now to a drought," said Scates, 42, who with his family members farms 15,000 acres of corn, soybeans and other crops along the Kentucky-Indiana border where the Ohio and Wabash Rivers meet.

Stunted stalks, shriveled silks portend US corn calamity
CHICAGO, June 28 (Reuters) - Under threat of the worst drought in a quarter-century, corn crops from Indiana to Illinois may have a window of just three days for windblown pollen to reach shriveled cobs next month, crippling grain-making potential and fuelling the biggest price rally in over two years.
During the critical pollination phase of its life, which determines how many kernels will appear on each cob, this summer's parched crop must make grain with a fifth less soil moisture than average and only a third as much rain as usual for June, robbing it of the fuel needed for photosynthesis.

Scorching heat forecast for struggling US corn, soy
CHICAGO, June 27 (Reuters) - A heat wave, with highs that could top 100 degrees Fahrenheit, is forecast for the southern U.S. Midwest this week and next week, which should put more stress on corn and soybean crops, agricultural meteorologists predicted Wednesday.
"There's not much change in the midday forecast. Still above to much-above normal temperatures for the Midwest for next week," said Anthony Chipriano, meteorologist for MDA EarthSat Weather.

India's monsoon rains 18 pct below average in the week to June 27
NEW DELHI, June 28 (Reuters) - India's crucial monsoon rains were 18 percent below average in the week to June 27, the weather office said on its website on Thursday, reflecting a lull phase over oilseed-growing areas of central India.
The monsoon rains are important for farm output and economic growth as about 55 percent of the south Asian nation's arable land is rain-fed, and the farm sector accounts for about 15 percent of a nearly $2-trillion economy, Asia's third-biggest.

ICE sugar little changed, nearby premium widens
LONDON, June 28 (Reuters) - Raw sugar futures on ICE were little changed in early trade with the market's focus on a widening premium for the July contract ahead of its expiry on Friday. Raw sugar futures on ICE were little changed with the nearby premium  edging up ahead of Friday's expiry of the July contract.

Australia sugar exports face delays due to rains
SYDNEY, June 28 (Reuters) - Australia's sugar exports may be delayed after rain pushes back cane harvesting in Queensland state and disrupts crushing operations in about half the 24 sugar mills in the world's third-largest raw sugar exporter.
Delays in exports could help boost sugar prices, which have surged in recent days on concern about near-term supplies in top grower Brazil and on talk of Chinese buying.

Rain curses early stages of Brazil coffee harvest
BATATAIS, Brazil, June 27 (Reuters) - Unseasonably wet weather has spoiled much of the first arabica coffee being harvested in Brazil and put the futures market on edge, but dryness now returning to the coffee belt has averted damage to the bulk of the crop, which has yet to be picked.
Arabica futures have risen some 12 percent in the past week and a half to a one-month high with persistent rain irreversibly damaging harvested beans, denting the potential supply of high-quality produce from the world's top supplier this year.

Datagro sees 2012/13 c/s Brazil cane output 508.7 mln t
LONDON, June 28 (Reuters) - Sugarcane output in the centre-south of Brazil in 2012/13 is projected to stand at 508.70 million tonnes, up from 493.3 million tonnes in 2011/12, Brazilian sugar and ethanol consultancy Datagro said on Thursday.
Sao Paulo-based Datagro forecast production of sugar in centre-south Brazil at 33.9 million tonnes in 2012/13

Colombia coffee growers see June output up 17 pct
BOGOTA, June 27 (Reuters) - Colombia's coffee production in June will likely rise to 550,000 60-kg bags, up almost 17 percent from the same month last year, according to the coffee growers federation.
Colombia, the world's top producer of high quality arabica beans, has missed its yearly coffee production goals for three years in a row, due to torrential rains brought about by the La Nina weather phenomena.

Coffee growing countries drive up robusta demand
GENEVA, June 27 (Reuters) - Coffee growing countries are driving up global demand for cheaper robusta beans as their domestic consumption rises, analysts said on Wednesday.
The world's top arabica coffee producer Brazil, along with the top two robusta producers Vietnam and Indonesia, have seen strong consumption growth for robusta - mainly used for instant coffee.

Vietnam 2012/13 coffee crop seen at a record-FO Licht
GENEVA, June 27 (Reuters) - Vietnam is forecast to produce a record 2012/13 crop of 23.7 million 60-kg bags, analyst F.O. Licht said on Wednesday.
Speaking on the sidelines of the World Coffee Outlook conference in Geneva, analyst Stefan Uhlenbrock said that top robusta grower Vietnam was expected to raise its output 1 million bags from its 2011/12 production of 22.7 million bags.

Uganda sugar producer says to double output by 2015
KAMPALA, June 27 (Reuters) - Uganda's third largest sugar producer, Sugar Corporation of Uganda Ltd. (SCOUL), aims to double its output by 2015 after securing a $23 million loan from a French financing firm, it said on Wednesday.
East Africa's third largest economy forecasts its production of raw sugar will soar by 26 percent this year to 327,075 tonnes from 2011's 259,413 tonnes, lifted by favourable weather and higher cane supplies.

Biggest Coal Takeover No Easy Flip for Tinkler: Real M&A (Source: Bloomberg)
An electrician-turned-dealmaker is poised to make the biggest bet ever on coal mining in Australia just as prices of the fuel tumble. Nathan Tinkler has held talks with banks to fund a bid for Sydney-based Whitehaven (WHC) Coal Ltd., according to people familiar with the matter, after his initial approach was rejected on June 13. The 36-year-old multimillionaire is seeking to acquire the 79 percent he doesn’t yet own of a company already trading at more than 38 times estimated earnings, making Whitehaven the most expensive coal mining company globally with a market value of more than $1 billion, data compiled by Bloomberg show.
Tinkler may now need to pay a 35 percent premium, valuing Whitehaven at A$5.6 billion ($5.6 billion), Macquarie Group Ltd. said, in the largest acquisition of an Australian coal company on record, the data show. While he would be buying a company that is targeting a fivefold increase in coal production by 2016, prices for the commodity are mired in their worst slump since the financial crisis. Tinkler may need to weather four more years of a bear market as the start of mining projects in Australia and exports from Indonesia and Colombia further depress prices for coal, Standard Chartered Plc. said. “To do a deal like this, you have to be a lot more bullish on coal prices than the market is right now,” David Cotterell, a Sydney-based analyst at Nomura Holdings Inc., said in a phone interview. “Unless the market’s wrong, you could be waiting a long time to get your money back.”

U.S. Weather Promises Energy Boost as Temperatures Rise (Source: Bloomberg)
Chicago may reach 99 degrees Fahrenheit (37 Celsius) today and New York City 90 as a heat wave that set or tied 196 daily temperature records yesterday moves east, promising to raise energy demand. Temperatures broke 100 from North Dakota to Texas yesterday as 138 new daily highs and 58 warmest lows were set or tied across the Great Plains, according to the National Climatic Data Center in Asheville, North Carolina. Yesterday’s highest temperature was 114 in Benkelman, Nebraska. “A very hot pattern continues over many areas of North America over the next two weeks,” said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland. Ninety to 100-degree temperatures in the large cities and suburbs of the U.S. East Coast will spike energy demand, raising prices in spot electricity markets. The forecasts helped boost natural gas futures to a five-month high yesterday.
Energy demand may rise by 60 percent from Chicago to the mid-Atlantic states through July 5, said David Salmon, owner of Weather Derivatives in Belton, Missouri. It may be 30 percent more in New York, Boston and Philadelphia, he said.

Iran's top Asian oil buyers cut imports 18 pct
TOKYO, June 28 (Reuters) - Asia's top buyers of Iranian oil cut imports by more than a quarter of a million barrels per day in the first five months of the year as they prepared for U.S. sanctions that take effect on Thursday and EU curbs that bite from Sunday.    
Most of Iran's exports flow to Asia and Tehran acknowledged for the first time on Wednesday that its oil exports had fallen sharply, down as much as 30 percent from normal volumes of 2.2 million barrels daily.

Oil Rises From Nine-Month Low on European Summit, Iran (Source: Bloomberg)
Oil rebounded from the lowest close in almost nine months amid European Union talks on a plan to stem the region’s debt crisis and speculation that crude supplies will tighten as an embargo on Iran starts. Futures rose as much as 1.2 percent in New York, trimming the biggest quarterly decline since the final three months of 2008. Leaders have agreed on a 120 billion euro ($149 billion) plan to boost the economy, EU President Herman Van Rompuy said yesterday during a summit in Brussels. Oil pared gains after French President Francois Hollande said the pact is “not enough.” Prices may advance next week as the EU imposes new sanctions on Iranian crude, a Bloomberg survey showed. Oil for August delivery increased as much as 89 cents to $78.58 a barrel in electronic trading on the New York Mercantile Exchange, and was at $78.40 at 9:42 a.m. Sydney time. The contract yesterday plunged $2.52, or 3.1 percent, to $77.69, the lowest close since Oct. 4.
Prices are down 21 percent this year and have dropped 24 percent this quarter. Brent oil for August settlement slid $2.14, or 2.3 percent, to $91.36 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark’s premium to West Texas Intermediate closed at $13.67.

Oil- Brent below $93 as EU worries outweigh Norway strike
LONDON, June 28 (Reuters) - Brent crude oil slipped below $93 per barrel as worries a deepening euro zone crisis would curb conomic growth and energy demand outweighed a cut in Norwegian oil output.
"The Norwegian strike is lending some support, at least at the moment, but market sentiment is very negative," said Carsten Fritsch, ommodities analyst at Commerzbank in Frankfurt.

Petronas Agrees to Buy Canada’s Progress Energy (Source: Bloomberg)
Petroliam Nasional Bhd, Malaysia’s state-owned oil and natural-gas company, agreed to buy Progress Energy Resources Corp. (PRQ) for C$4.8 billion ($4.6 billion), in its biggest deal as it moves to export Canadian gas to Asia. Petronas, as the Kuala Lumpur-based company is known, offered C$20.45-a-share for Progress Energy, 77 percent more than its close before the deal. Including convertible debentures, the deal is valued at about C$5.5 billion, Calgary- based Progress Energy said in a statement yesterday. Buying the company gives Petronas Chief Executive Officer Shamsul Azhar Abbas ownership of the largest holder in the Montney shale-gas area of British Columbia and full control of the three Progress Energy fields it bought a stake in last year as it explores development of a liquefied natural gas export terminal. Asian buyers have been lured to North America by gas prices that are about 88 percent cheaper.
“The proposed transaction will combine Petronas’s significant global expertise and leadership in developing LNG infrastructure with Progress’s extensive experience in unconventional resource development,” Datuk Anuar Ahmad, executive vice president of Petronas’s gas and power business, said in the statement.

Mongolian Mining Bets China Will Double Coal Imports (Source: Bloomberg)
Mongolia Mining Corp. is betting there’s enough demand from China to support the construction of an $800 million railway that will double export capacity to the nation that counts Mongolia as its biggest coal supplier. Expanding transportation links between the adjacent countries “will improve the position of Mongolia as the leading coking coal supplier to China,” Battsengel Gotov, chief executive officer of MMC, as the company is known, told reporters in the Mongolian capital of Ulan Bator. Mongolia, the world’s fastest growing economy, overtook Australia as China’s biggest coking coal supplier last year, exporting 20 million metric tons of the raw material used to make steel. MMC is building a 250 kilometer (155 mile) rail to add 30 million tons of export capacity direct to China. “There’s still room for everybody in Mongolia” to mine and sell commodities, Gotov said from the company’s head office.
MMC shares have fallen 28 percent this year in Hong Kong as coal prices declined. Chinese demand has been curbed by slower global growth and coking coal prices have fallen as much as 15 percent in the first half from the previous six months, Gotov said.

Gold Traders Extend Bullish Streak as Debt Crisis Deepens (Source: Bloomberg)
Gold traders are bullish for a sixth week on speculation that Europe’s debt crisis will boost demand from investors seeking to protect their wealth and drive prices higher after the biggest quarterly slump in eight years. Sixteen analysts surveyed by Bloomberg said they expect a rally next week and 10 were bearish. Another five were neutral. Investors added about $1.9 billion to holdings in gold-backed exchange-traded products this month, the most since November, according to data compiled by Bloomberg. Hedge funds and other speculators have increased bets on a rally for four consecutive weeks, U.S. Commodity Futures Trading Commission data show.
Spain formally asked for a bailout for its banks on June 25 and Cyprus that day became the fifth member of the 17-nation euro zone to ask for outside help. European leaders are scheduled to complete a two-day summit in Brussels today. Gold fell to within 1 percentage point of a bear market in May as investors favored the dollar and some sold bullion to cover losses in stock markets as $7 trillion was wiped off the value of global equities in about two months. “While demand has been weaker for bullion in recent months, it has picked up in the last month,” said Mark O’Byrne, the executive director of Dublin-based GoldCore Ltd., a brokerage that sells and stores everything from quarter-ounce British Sovereigns to 400-ounce bars. “A resolution to the crisis is not going to be seen in the short term. A lot more speculators could pile back into the market.”