Friday, May 4, 2012

20120504 1806 FCPO EOD Daily Chart Study.

FCPO closed : 3358, changed : -19 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : falling lower, seller in control.
Support : 3350, 3330, 3300, 3270 level.
Resistance : 3380, 3420, 3450, 3470 level.
Comment :
FCPO closed weaker with rising volume changed hand. Soy oil price currently rebounding little higher after overnight closed lower by nearly 1% while crude oil price also trading weaker.
Concern on slowing world economy triggered selldown in most commodities including soy oil and crude oil resulted FCPO to trade weaker.
Technical chart study remained suggesting a downside biased market development with possible pullback correction.
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.

20120504 1744 FKLI EOD Daily Chart Study.

FKLI closed : 1583 changed : +1 point, volume : higher.
Bollinger band reading : pullback correction little downside biased.
MACD Histogram : recovering, seller reducing position.
Support : 1580,1570, 1565, 1550 level.
Resistance : 1590, 1595, 1600, 1605 level.
Comment :
FKLI closed 1 point higher with little improved volume distributed doing 8 points discount compare to cash market that closed recorded gain. Overnight U.S. markets closed lower and today Asia markets ended mixed while European markets currently trading lower.
Rising concern over slowing global economy growth after lower than forecast manufacturing and services industry data from U.S. and Europe triggered investor to reduc eexposure and stay sideline ahead of U.S. jobless data, France presidential election and Greece parliment election.
Technical chart reading still suggesting a pullback correction little downside biased market development testing resistance near middle Bollinger band level.
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.

20120504 1728 Regional Markets EOD Daily Chart Study.

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

20120504 1628 Global Market & Commodities Related News.

Asian shares fell for a second successive day as another batch of lacklustre U.S. data stoked concerns that the recovery in the world's biggest economy is faltering.  U.S. stocks fell on Thursday as economic data sent mixed signals on the recovery a day before the April payrolls report, while shares of Green Mountain plunged after poor results.

The dollar held steady versus the yen and euro, but could face downside risks if U.S. jobs data disappoints and stirs renewed speculation about further monetary easing from the U.S. Federal Reserve.

FOREX-Dollar steady before US jobs; euro above 2-week low
SINGAPORE, May 4 (Reuters) - The dollar held steady versus the yen and euro on Friday, but could face downside risks if U.S. jobs data disappoints and stirs renewed speculation about further monetary easing from  the U.S. Federal Reserve.
"We've gone back to that situation where when the weaker data comes out, we start to price in more chance of QE3 and therefore the dollar goes weaker," said Rob Ryan, FX strategist at BNP Paribas in Singapore, referring to the possibility of the Fed launching another bond-buying programme.

Chicago wheat rose for a second day with support from short covering, but the market is on track for its biggest weekly loss since February on expectations of near-record U.S. yields adding to ample global supply.

Brazil cane crush starts slow in rainy harvest
Cane crushing in world top sugar producer Brazil reached 4.74 million tonnes by April 15, cane industry association Unica said on Thursday, behind the 6.99 million tonnes crushed by this time last year due to a late start to the harvest.

Argentina exchange chops soy view to 41 mln tonnes
A leading Argentine grains exchange slashed another 2 million tonnes off its forecast for 2011/12 soy production on Thursday due to the impact of bad weather including a sharp drought that has battered yields.

Algeria buys 120,000 tonnes U.S. HRW wheat -trade
Algeria bought four cargoes, or a total of about 120,000 tonnes, of U.S. hard red winter wheat on Thursday for shipment this month, U.S. traders said.

Brent crude held above $116 ahead of a key U.S. payrolls report, with the benchmark poised for its steepest weekly fall since December due to concerns over the health of the global economy and easing supply disruption fears.  

OPEC says pumping hard to bring oil price down
OPEC is working hard to bring down oil prices that jumped towards $130 a barrel earlier this year, its secretary general said on Thursday, and is pumping much more than its official target even as exports from cartel-member Iran dwindle.

LME to invest in Asia, expand Singapore office-CEO
The London Metal Exchange (LME), the world's biggest marketplace for industrial metals, will invest heavily in Asia and is planning to expand its Singapore office, Chief Executive Martin Abbott said.  

Indonesia to impose tax, curbs on raw metal exports
Indonesia will impose a new export tax on metal ores and prohibit the shipment of raw minerals unless miners submit plans to build smelters, in a decision likely to shake up mining in one of the world's major metals exporters.

London copper edged up, after touching one-week lows in the previous session, although the modest gains reflect caution ahead of a key U.S. jobs report after a recent spate of soft data underscored the fragility of the U.S. recovery.

Gold held near its weakest in a week as cautious investors and jewellers stayed on the sidelines ahead of the release of a U.S. payrolls report, which could revive hopes of a third round of U.S. Federal Reserve bond buying.  

METALS-LME copper edges off 1-week low ahead of US data
SHANGHAI, May 4 (Reuters) - London copper edged up on Friday, after touching one-week lows in the previous session, although the modest gains reflect caution ahead of a key U.S. jobs report after a recent spate of soft data underscored the fragility of the U.S. recovery.
"Copper remains bound in small ranges as we await clearer trading cues. While ShFE copper's upside is limited by high stockpiles in China, LME copper's upside is capped by fears of a tightening squeeze in the LME cash-to-three-months premium," Great Wall Futures analyst Li Rong said.
PRECIOUS-Gold near 1-week low ahead of U.S. jobs data
SINGAPORE, May 4 (Reuters) - Gold held near its weakest in a week on Friday as cautious investors and jewellers stayed on the sidelines ahead of the release of a U.S. payrolls report, which could revive hopes of a third round of U.S. Federal Reserve bond buying.
"Whether or not the data is going to be bad, the market is still in a range trade. The upside is a bit limited for a little while. Nobody wants to enter the market, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

20120504 1400 Bumi Armada Daily Chart Study.

Bumi Armada :
Pullback correction downside biased.
Crucial support near RM3.85 level.

20120504 1132 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian shares fall after data, ECB disappoint
SINGAPORE, May 4 (Reuters) - Asian shares fell for a second successive day on Friday as another batch of lacklustre U.S. data stoked concerns that the recovery in the world's biggest economy is faltering.
"Investors were hoping to see stronger hints of further easing from the (European Central Bank) to offset the weak data, but came out empty-handed," said Kwak Jung-bo, an analyst at Samsung Securities in Seoul.

COMMODITIES-Markets down broadly; oil, cocoa take heavy hit
NEW YORK, May 3 (Reuters) - Commodities fell broadly for a second day on Thursday, with U.S. crude oil posting its biggest one-day loss in more than four months, after weak U.S. economic data sparked concern about the outlook for demand.
"Crude prices hit the top of their trading range recently and so people are selling and are also being cautious ahead of the U.S. jobs data on Friday," said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis, Missouri.

OIL-Oil drops sharply on US economic data, technicals
NEW YORK, May 3 (Reuters) - Crude oil futures dropped for a second straight day o n T hursday as more signs of slowing U.S. economic growth and swelling U.S. inventories sparked a wave of selling that sent prices crashing through key support levels.
"Crude prices hit the top of their trading range recently and so people are selling and are also being cautious ahead of the U.S. jobs data on Friday," said Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis, Missouri.

NATURAL GAS-US natgas futures end up 4 pct on storage data
NEW YORK, May 3 (Reuters) - Front-month U.S. natural gas futures ended higher o n T hursday for the fourth time in five sessions, backed by a weekly government report showing inventories climbed less than expected last week.
"Demand increases due to coal to gas switching have been helping injections underperform so far this season. However, the market will need to see some significant production cuts in the near future for the rally to continue," Energy Management Institute's Dominick Chirichella said in a report, noting the weekly inventory report was slightly bullish.

EURO COAL-Prices stabilise after 5 days of falls
LONDON, May 3 (Reuters) - European coal prices stabilised on Thursday as two-year low levels earlier in the week led to some fresh buying by utilities and traders.
"Recently, every time there's been heavy selling and prices drop, it's been the front months which have taken the hammering, which has just deepened the contango and encouraged people to buy prompt and hold it," one European trader said.

20120504 0942 Malaysia Corporate Related News.

Government to set up aviation council to tackle issues
The government has announced plans to set up a National Aviation Council to oversee and arbitrate issues relating to the sector. The council, consisting of experts, would present key issues of the industry to the National Economic Council, such as economic regulation, airspace policy, safety regulation and consumer protection. The chiefs of airlines and airports, those involved in the aviation policy making, and the tourism sector would probably be members of the council. (StarBiz)

Fajarbaru bags RM300m LRT sub-contract job
Fajarbaru has secured a RM299.8m sub-contract job to construct and commission the depot and power substation for the Ampang LRT line. The company received a letter of acceptance from MRCB Engineering for the construction, completion, testing and commissioning of the depot and traction power substation at Kampung Kuala Sungai Baru. The job includes civil works, external works and other associated works for the Ampang LRT line. The job is expected to be completed within 30 days from the date of commencement. (Financial Daily)

Berjaya Corp eyes strategic stake in Atlan
Berjaya Corp (BCorp) has proposed to raise its stake in Atlan to 24.97%, making it the second largest shareholder in the company. BCorp now owns 9.18% in Atlan after buying an additional 20m shares at RM4.25 per share yesterday. BCorp plans to buy a further 15.8% stake in Atlan from Cipta Nirwana (M) SB for RM170m, or RM4.25 per share, of which it will satisfy through the issuance of five-year 5% ICULS. The ICULS will be accompanied by 170m detachable warrants in BCorp. (Financial Daily)

TNB appoints Azman Mohd to the helm
TNB has appointed Datuk Azman Mohd, 55, as its new president and CEO, effective 1 July. The 3-year term appointment comes after current present and CEO Datuk Seri Che Khalib Mohammad Noh steps down at the end of June. Azman is currently the executive director and COO at TNB and has been attached to the company for 33 years. (Malaysian Reserve)

Scomi Marine proposes capital repayment of RM0.185 per share
Scomi Marine is proposing a cash distribution of RM135.6m or RM0.185 per share to its shareholders. The company also proposed a reduction in par value of its existing 733m shares to RM0.45 from RM1 and the reduction of its share premium account. The exercise forms part of the rationalization plan announced by parent Scomi Group in February. The capital repayment is currently half of Scomi Marine’s existing share price. (Financial Daily)

Hartalega: Prepares to reduce profit margin for market share. Group MD Kuan Kam Hon said for the new capacity coming on, a right pricing is needed to increase the companys market share. That would lead to compression in profit margins but Hartalegas earnings per share would grow. (Source: The Edge Financial Daily)

CIMB: To start business in Australia soon. CIMB Group Holdings Bhd is set to start business in Australia in the next three to four months. The group enters the Australian investment banking industry after acquiring the majority of the Royal Bank of Scotlands (RBS) Australian business. (Source: The Star)

MAHB: Airport 1Q passenger traffic up 6.5%. Passenger traffic at Malaysia Airports Holdings Bhd (MAHB) operated airports recorded a total volume of 16 million movements for the first quarter of 2012, which was a 6.5% growth from a year earlier. International and domestic passenger movements registered a growth of 6.4% and 6.5% respectively. (Source: Bursa Malaysia)

Felda Global Ventures: Fixes bumi share sale at RM4.65
Felda Global Ventures Holdings (FGVH) plans to sell 419.5m shares that have been allocated  to bumiputra investors at RM4.65 each, ahead of its IPO that aims to raise more than  RM9.09bn, according to government notice. The company plans to sell up to 2.19bn shares  and list on Bursa Malaysia by June, according to FGVH’s draft prospectus on the website of  the Securities Commission. No further details were provided in the prospectus. (StarBiz)

Proton Holdings: DRB-Hicom shakes up management, makes new appointment
DRB-Hicom stamped its mark over Proton Holdings this week by shaking up the management  in a series of new appointments. According to an internal memo reviewed by The Edge  Financial Daily, DRB-Hicom has appointed Datuk Lukhman Ibrahim as the new deputy CEO of  the company. He will lead a 5-member team which will work closely with Proton’s current  management in integrating and consolidating all relevant operational matters. The memo on  the appointments, which took effect from May 1 made no mention about the role Proton’s  group MD Datuk Seri Syed Zainal Abidin Syed Tahir will play in the company and there is  strong speculation that he will leave the company in the coming months. Industry executives  said Lukhman is already playing a hands-on role in the daily operations of the group.  (Financial Daily)

United Malayan Land: Unit leases land to Pegasus United Malayan Land (UM Land)'s wholly owned subsidiary, Seri Alam Properties Sdn Bhd,  has signed a Land Lease Agreement and Option to Purchase Property Agreement with  Pegasus Education Group (M) Sdn Bhd. Via the agreement, the company would lease a piece  of land for the development of an international school in Bandar Seri Alam by Pegasus as its  first campus in Malaysia. Seri Alam is the developer of Bandar Seri Alam, an integrated  township being developed in Iskandar Malaysia. UM Land said the agreement involved the  lease of a 4.188-hectare piece of freehold land within Bandar Seri Alam to Pegasus for 15  years at a rental rate of RM1.1m per annum for the first 3 years. Thereafter, it would be  reviewed for increase every 3 years. The school will be constructed in 5 phases over 8 years.  (Business Times)

Boustead Holdings: Units will appeal Sibu High Court ruling over NCR land
Boustead Holdings Bhd subsidiaries will appeal against a Sibu court decision, which had ruled  against an agreement over the development of native customary rights (NCR) land. Boustead  said on Thursday the Sibu High Court had on April 30 delivered its decision and had judged in  favour of two individuals who had sued on behalf of themselves and their immediate families  and who claimed NCR over a parcel of land in the Tinjar district. The plaintiffs had sought a  declaration that they had acquired and/or inherited native titles and/or NCR over three  parcels of NCR land, which affected their native titles and/or rights, damages and  costs.  (StarBiz)

Tan Chong Motor: Confident of double-digit sales
Edaran Tan Chong Motor Sdn Bhd, a wholly-woned subsidiary of Tan Chong Motor Holdings  is confident of a double-digit growth in car sales for FY2012. This comes after a shaky start  for the automotive industry where total industry volume was down 12.6% for 1Q FY2012 on  a y-o-y basis. Executive director of Edaran Tan Chong Motor said the optimistic double-digit  growth is reasonable as Nissan has fully recovered from the effects of the flood in Thailand  since Apr. Hence, he said there would not be an interruption in the supply of CKD  (completely-knocked-down)  parts for the exclusive dealer of Nissan passenger and light  commercial vehicles. (Financial Daily)

Syarikat Takaful Malaysia: Mulls M&A for market growth
Syarikat Takaful Malaysia will consider mergers and acquisitions to grow its market share if it  finds suitable partners for the exercises. However, Group MD Datuk Mohamed Hassan Kamil  said this will probably materialise after 2014 onwards when the Risk Based Capital (RBC)  framework for takaful operators is finalised by end-2013. The RBC implementation for  conventional insurance operators was currently ongoing that saw consolidation exercises  among some of the players. Companies, which failed to meet the minimum capital  requirements, have to opt to sell and look for partners or inject more capital and that is  when we will start exploring. Under the conventional framework, insurance companies are  required to have a minimum 130% supervisory capital-adequacy ratio (CAR). Mohamed  Hassan said that as the RBC for takaful operators have not been finalised, there would  unlikely be major mergers and acquisitions. (Business Times)

Aviation: National Aviation Council to be set up in 2 months The prime minister had announced  that a National Aviation Council (NAC) will be set up  within the next two months to coordinate aviation-related policies. Datuk Seri Najib Razak  said the council would deal with all policies on aviation and decide on issues arising between  national premier carrier Malaysia Airlines (MAS), low-cost carrier AirAsia, and airport  operator Malaysia Airports Holdings (MAHB). The council, he said, would also be tasked to  resolve issues affecting the industry, while any major issues can be brought to the National  Economic Council. (Business Times)

Automotive: Incentives to promote use of hybrid, electric cars
International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the soon-to-bereleased revised National Automotive Policy (NAP) will outline incentives to promote the use  of hybrid and electric vehicles on Malaysian roads. There are only 8,000 hybrid and 21  electric cars on the roads and the target is to increase the number of energy-efficient  vehicles to 10% of total industry volume (TIV) by 2020. He pointed out that the government  extends a 100% import duty waiver for electric and hybrid cars until end-2013, which lends a  big advantage in terms of prices of cars. He added that the Treasury is discussing incentives  including pioneer status for more than 10 years for the young industry and this will be  included in the NAP when it is announced. (Business Times)

Construction: Prasarana awaits government signal
Syarikat Prasarana Negara hopes the government will award soon the systems contract for  the Ampang light rail transit (LRT) line extension project to avoid further delay in completing  the job. According to Prasarana group MD Datuk Shahril Mokhtar, the Ampang line extension  project has been delayed by about two months because of the delay in awarding the systems  contract. He said the award of the systems contract for the Ampang line is in the hands of  the government and is not within  their authority. He added that they have done all the  evaluation according to the processes and procedures and presented them to the  government for their consideration and approval. (Business Times)

20120504 0942 Global Economy Related News.

Asia: Doubles reserve pool to USD 240b to shield region. Finance ministry and central bank officials from Japan, China, South Korea and 10 Southeast Asian nations agreed to boost the so-called Chiang Mai Initiative Multilateralization agreement to USD 240b, according to a statement after their meeting in Manila. The Asean+3 countries, as the group is known, will also set up a precautionary credit line to let members tap the pool to prevent a crisis, and will allow more funds to be used without being linked to an International Monetary Fund program. (Source: Bloomberg)

China: April trade surplus just over USD10bn
China had a trade surplus in April of just above USD10bn as exports and imports showed “very small growth,” Commerce Minister Chen Deming said yesterday. He added that exports and imports expanded “maybe just several percentage points.” Chinese imports in March rose 5.3% while exports increased 8.9% from a year earlier, leaving a trade surplus of USD5.35bn. The nation reported a trade deficit of USD31.5bn in February, its first shortfall in a year and the biggest since at least 1989, as Europe’s debt crisis crimped exports. (Bloomberg)

India: Service industry growth holds close to five-month low
Indian services expanded at close to the slowest pace in five months in April after economic growth eased, a private report showed. The Purchasing Managers’ Index was at 52.8, little changed from 52.3 in March, HSBC Holdings Plc and Markit Economics said in a statement yesterday. The Reserve Bank of India cut interest rates last month for the first time since 2009 to aid expansion after the government estimated 6.9% economic growth in the 12 months ended 31 March, the least in three years. (Bloomberg)

UK: Services growth slowed more than forecast in April
UK services growth slowed more than economists forecast in April as Bank of England policy makers prepare to weigh up prospects for the economy before a decision on their stimulus program next week. A gauge based on a survey of purchasing managers declined to 53.3 from 55.3 in March, Markit Economics and the Chartered Institute of Purchasing and Supply said in a report in London. (Bloomberg)

E.U: Draghi says rates accommodative as economic outlook worsens. Latest indicators "are not enough to change our baseline scenario, which foresees a gradual recovery in the course of the year," Draghi said at a press conference after the ECB held its benchmark interest rate at a record low of 1%. "We didn't discuss any specific move in interest rates but we did discuss our general monetary policy stance, which we found accommodative in view of an economic outlook that becomes more uncertain." (Source: Bloomberg)

E.U: Producer-price inflation slowed for a sixth month in March, suggesting companies were unable to pass on higher costs as the economy cooled. Factory-gate prices in the 17-nation euro region rose 3.3% YoY, the weakest annual gain since June 2010, after increasing 3.6% YoY in February. In the month, producer prices rose 0.5% MoM. (Source: Bloomberg)

US: Jobless claims decrease to lowest level in a month
Fewer Americans than forecast filed applications for unemployment benefits last week, easing concern the job market was taking a turn for the worse. Jobless claims fell by 27,000 to 365,000 in the week ended 28 April, a one-month low, from a revised 392,000 the prior period, Labor Department figures showed yesterday. The plunge in dismissals makes it more likely that the surge over the past three weeks was caused by the timing of the Easter holiday rather than deterioration in employment. (Bloomberg)

US: Services slowdown signals growth may cool
Service industries in the U.S. expanded less than projected and consumer confidence weakened, signaling the world’s largest economy may be cooling. The Institute for Supply Management said today its non- manufacturing index fell to a four-month low of 53.5 in April from 56 in March. A reading above 50 in the Tempe, Arizona-based group’s gauge signals expansion. (Bloomberg)

U.S: Productivity falls, labor costs rise less than forecast. The productivity of U.S. workers fell in the first quarter, indicating businesses are reaching the limit of how much efficiency they can wring from the workforce. The measure of employee output per hour declined at a 0.5% annual rate after a 1.2% gain in the prior three months. Expenses per worker increased at a 2% rate, less than estimated. (Source: Bloomberg)

20120504 0939 Global Market Related News.

Asian Stocks Drop 2nd Day on U.S. Data, Commodity Prices (Source: Bloomberg)
Asian stocks fell for a second day, with a regional benchmark index paring its weekly advance, as U.S. service industries expanded less than forecast and falling commodity prices weakened the earnings outlook for exporters and raw-material producers. Samsung Electronics Co. (005930), the world’s No. 1 mobile-phone maker by sales, slipped 1.6 percent in Seoul. BHP Billiton Ltd., the world’s biggest mining company, lost 0.9 percent in Sydney. Gloucester Coal Ltd. sank 2.4 percent on speculation the price of the fuel used in power stations may not recover from an 18- month low. “The U.S. data was quite disappointing and it seems like it’s now catching up with the rest of the world,” said Stan Shamu, a market strategist at IG Markets in Melbourne, a provider of trading services in stocks, bonds and commodities. “Commodities prices have weakened, so the likes of BHP will be negatively affected.”
The MSCI Asia Pacific Excluding Japan Index (MXAPJ) dropped 0.3 percent to 441.13 as of 8:30 a.m. in Hong Kong, with about nine shares sliding for every eight that rose. Japanese markets are closed today for a holiday. The regional gauge is heading for its first weekly advance in five weeks following moves to stimulate economic growth in Australia and amid signs manufacturing output in U.S. and China is improving.

Emerging Stocks Slide From 1-Month High as Global Woes Sink Oil (Source: Bloomberg)
Emerging-market stocks slipped from a one-month high, led by energy producers, as concern a global recession will cut demand pushed oil and commodities prices lower and reduced the appeal of riskier assets. The MSCI Emerging Markets Index (MXEF) declined 0.5 percent to 1,024.27 by 4:30 p.m. in New York, after reaching the highest level since April 6 yesterday. Brazil’s Bovespa Index fell on speculation Tim Participacoes SA may lose its chief executive officer. Russia’s Micex index retreated to the lowest level in almost four months as OAO Novatek and OAO Mechel extended losses for a third day. Crude slid for a second day in New York as European Central Bank President Mario Draghi kept the region’s benchmark interest rate at a record low and said the economic outlook in the euro area had become “more uncertain.”
Non-manufacturing industries in China, where the government is predicting the slowest economic growth since 2004, expanded at a slower pace in April than in March, while service industries in the U.S. also grew less last month, data today showed. “The news flow in global markets has deteriorated sharply over the past few days, starting with the data,” Benoit Anne, the head of global emerging-markets strategy at Societe Generale SA in London, wrote in an e-mailed client note. “If this goes on, the fears of a global recession will resuscitate, and that will almost be the guarantee of a sharp sell-off in risky assets, including global emerging markets.”

U.S. Stocks Fall on Economic Data Ahead of Jobs Report (Source: Bloomberg)
U.S. stocks fell, sending the Standard & Poor’s 500 Index down a second day, amid disappointing service industries data and as investors awaited tomorrow’s jobs report to gauge the pace of growth at the world’s largest economy. Commodity and technology shares fell the most among 10 S&P 500 groups as Alcoa (AA) Inc. and Hewlett-Packard Co. (HPQ) slid at least 1.5 percent. General Motors Co. (GM) sank 2.4 percent after earnings tumbled 61 percent. Target Corp. (TGT) lost 2.5 percent as April sales missed projections. Green Mountain Coffee Roasters Inc. (GMCR) plunged 48 percent as profit will be less than it expected. Carlyle Group LP advanced 0.2 percent in its first day of trading. The S&P 500 retreated 0.8 percent to 1,391.57 at 4 p.m. New York time, dropping 1 percent in two days. The Dow Jones Industrial Average declined 61.98 points, or 0.5 percent, to 13,206.59. The Russell 2000 Index (RTY) of small companies decreased 1.5 percent to 806.59.
About 6.9 billion shares changed hands on U.S. exchanges, or 3.8 percent above the three-month average. “It’s a bump in the road,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida. His firm oversees more than $300 billion. “The economic data has turned softer. I wouldn’t be surprised to see the jobs report tomorrow disappoint. All that will do is allow the market to work off its overbought condition.”

European Stocks Are Little Changed; Transocean Advances (Source: Bloomberg)
European stocks were little changed as company earnings were offset by comments from European Central Bank President Mario Draghi who said policy makers didn’t discuss lowering interest rates this week. Porsche SE climbed 2.9 percent as the carmaker reported an 18 percent jump in first-quarter profit. Transocean Ltd. gained 2.5 percent as earnings topped analyst estimates. Banks dropped. The Stoxx Europe 600 Index rose 0.1 percent to 257.53 at the close in London, after earlier advancing as much as 1 percent and falling as much as 0.4 percent. The volume of shares changing hands on the Stoxx 600 was 1.2 percent lower than the average of the last 30 days, according to data compiled by Bloomberg. “The ECB was the main focus for many today,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “The hope would have been for some sort of quick fix, but he said nothing that suggested they would change their view. The ECB rate path appears to be firmly on hold for the forseeable future.”
The central bank kept its benchmark interest rate at a record low of 1 percent today as predicted by every economist in a Bloomberg News survey. Stocks erased gains after Draghi, speaking at a press conference in Barcelona, said the central bankers did not talk about cutting rates today.

FOREX-Euro steadies ahead of Spain auction, ECB
LONDON, May 3 (Reuters) - The euro steadied against the dollar, paring sharp losses from the previous day, but was vulnerable ahead of a European Central Bank rate decision and a Spanish bond auction set to show how worried markets are about the country's economic problems.  
"The temptation is to sell the euro because of what we saw yesterday. The Spanish auction results could cause some ripples but I think we will mainly be in a holding pattern into the ECB," said Daragh Maher, currency strategist at HSBC.

Euro Gains Versus Yen as ECB Refrains From Signaling Cut (Source: Bloomberg)
The euro strengthened versus the yen after European Central Bank President Mario Draghi said policy makers didn’t discuss cutting interest rates at their meeting this week. The 17-nation currency fluctuated against the dollar after Draghi said at a press conference in Barcelona there has been “significant progress” on the fiscal front. Higher-yielding currencies, including Mexico’s peso, declined versus the greenback as stocks and commodities fell amid lower appetite for risk. The dollar pared gains versus the yen after a gauge of U.S. service industries fell more than forecast. “The ECB was somewhat less dovish than some had expected,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc., a currency brokerage. “We saw the euro push up on that. Some market participants were looking for a hint of additional liquidity intervention, and we didn’t get that.”
The euro gained 0.1 percent to 105.59 yen at 1:58 p.m. in New York after dropping to 105.13 yesterday, the weakest level since April 16. It rose earlier today as much as 0.6 percent. The single currency was little changed at $1.3146 after falling earlier as much as 0.5 percent. The yen fell 0.2 percent to 80.32 per dollar, paring an earlier drop of 0.5 percent.

Euro Set for Biggest Weekly Decline in a Month (Source: Bloomberg)
The euro was set for the biggest weekly decline in a month amid concern leadership changes at elections in France and Greece this weekend could derail the region’s austerity efforts. The 17-nation currency was 0.2 percent from an almost two- year low versus the British pound before a private report that may confirm the region’s output of services and manufacturing shrank for a third month. The Dollar Index was poised for a weekly gain before a U.S. data forecast to show employment increased last month in the world’s biggest economy. “Markets are concerned about what new leaders will do,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. Euro demand may see “a more negative impact because of some uncertainties ahead.”
The euro was little changed at $1.3147 as of 8:48 a.m. in Singapore from the close in New York yesterday. It has lost 0.8 percent this week, the biggest slide since the period ended April 6. The common currency fell 0.1 percent to 105.40 yen. It was at 81.22 pence after falling to 81.03 yesterday, the lowest since June 2010. The dollar was little changed at 80.16 yen.

Korean Won Climbs, Bonds Fall on IMF Forecast, Spain (Source: Bloomberg)
South Korea’s won fell for a second day as a report showed service industries in the U.S. expanded less than projected, dimming the outlook for exports to the world’s largest economy. Government bonds were little changed. The U.S. Institute for Supply Management said yesterday its non-manufacturing index fell to a four-month low of 53.5 in April, while data today may show payrolls climbed by 160,000 after a 120,000 gain in March, according to the median forecast in a Bloomberg News survey. The Bank of Korea will probably keep its benchmark interest rate at 3.25 percent for an 11th month at a review next week, a separate survey showed. The Kospi Index of shares dropped for a second day. “With weak data from the U.S., the won is halting its recent appreciation,” said Yun Se Min, a Seoul-based currency trader at Busan Bank. “Investors may clear their short positions on the dollar ahead of the U.S. jobs data today.” A short position is a bet an asset will decline.
The won weakened 0.3 percent to 1,131.98 per dollar as of 9:33 a.m. in Seoul, according to data compiled by Bloomberg. For the week, it advanced 0.3 percent. One-month implied volatility for the won, a measure of exchange-rate swings used to price options, slid 11 basis points, or 0.11 percentage point, to 7.10 percent today.

Aussie Set for Biggest Drop This Year on RBA Easing Bets (Source: Bloomberg)
Australia’s dollar is poised for its biggest weekly drop this year before the Reserve Bank publishes its quarterly monetary policy statement following its unexpected decision to cut interest rates by half a point on May 1. The so-called Aussie has fallen versus all but one of its 16 major peers since April 27 as investors increased bets that policy makers will push the benchmark rate to a record low. New Zealand’s dollar was 0.2 percent from its weakest level in more than three months against its U.S. peer on prospects Asian stocks will extend a global equity rout. Both South Pacific currencies fell yesterday after data showed growth slowed in U.S. services industries, curbing demand for risk assets. “The Aussie has made its move slightly lower against the U.S. dollar,” said Hans Kunnen, chief economist at St. George Bank Ltd. in Sydney. “The Reserve Bank is seeing weaker inflation and growth, and has therefore moved interest rates appropriately.”
The Australian dollar was little changed from yesterday at $1.0270 as of 9:46 a.m. in Sydney. It’s poised for a 1.9 percent drop this week, the biggest since Dec. 16. It bought 82.40 yen from 82.30, having fallen 2 percent since April 27.

Jobless Claims in U.S. Decline More Than Forecast (Source: Bloomberg)
Fewer Americans than forecast filed applications for unemployment benefits last week, easing concern the job market was taking a turn for the worse. Jobless claims fell by 27,000 to 365,000 in the week ended April 28, a one-month low, from a revised 392,000 the prior period, Labor Department figures showed today in Washington. The median forecast of 46 economists surveyed by Bloomberg News called for 379,000 applications. The plunge in dismissals makes it more likely that the surge over the past three weeks was caused by the timing of the Easter holiday rather than a deterioration in employment. Federal Reserve policy makers last week said that while labor- market conditions have improved, the unemployment rate “remains elevated,” helping explain why they stuck to a plan to hold borrowing costs close to zero through 2014.
“The numbers allay some concern that the labor market is deteriorating,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who accurately projected the decrease in claims. “The Easter argument held.” Stock futures climbed after the report. The contract on the Standard & Poor’s 500 Index maturing in June increased 0.3 percent to 1,401.8 at 8:44 a.m. in New York.

Services Slowdown Signals U.S. Growth May Be Cooling: Economy (Source: Bloomberg)
Service industries in the U.S. expanded less than projected and consumer confidence weakened, signaling the world’s largest economy may be cooling. The Institute for Supply Management said today its non- manufacturing index fell to a four-month low of 53.5 in April from 56 in March. The median forecast of economists surveyed by Bloomberg News was 55.3. A reading above 50 in the Tempe, Arizona-based group’s gauge signals expansion. The Bloomberg Consumer Comfort Index fell to a two-month low last week. Stocks extended losses as the services report added to concern global growth is slowing after European Central Bank President Mario Draghi said the economic outlook has worsened. American consumers, whose purchases rose by the most in a year in the first quarter, may find it difficult to maintain the pace of spending without faster job and wage gains, said James Shugg, a senior economist at Westpac Banking Corp. in London.
“The economy has recently lost some momentum, and a weaker services sector is completely consistent with that,” said Shugg, whose forecast for the ISM gauge was among the lowest. “Consumer spending is softening somewhat.” The Standard & Poor’s 500 Index lost 0.8 percent to 1,391.57 at the close of trading in New York. The Stoxx Europe 600 Index ended little changed, erasing an earlier earnings- driven rally of 1 percent. Ten-year Treasury yields were little changed at 1.93 percent.

Consumer Comfort in U.S. Declines to Lowest Level in Two Months (Source: Bloomberg)
Consumer confidence dropped last week to a two-month low as more Americans grew concerned about their personal finances. The Bloomberg Consumer Comfort Index fell to minus 37.6 in the week ended April 29 from minus 35.8, surrendering gains that had lifted it to a four-year high last month. Views on finances sank to the lowest point since January and more households said it was a bad time to buy needed items. A downshift in hiring and economic growth may be casting doubt on Americans’ ability to sustain spending after purchases grew last quarter at the fastest pace in more than a year. The drop in confidence indicates the run-up in gasoline prices since the start of the year may be starting to pinch even as the cost of fuel has retreated from a 10-month high.
“The reversal of gains in confidence has been particularly pronounced in middle-income groups that are likely caught between sluggish wage increases and rising inflation that has eroded their real purchasing power,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. The deterioration “does not bode well for household consumption.”

U.S. Productivity Falls, Labor Costs Rise Less Than Forecast (Source: Bloomberg)
The productivity of U.S. workers fell in the first quarter, indicating businesses are reaching the limit of how much efficiency they can wring from the workforce. The measure of employee output per hour declined at a 0.5 percent annual rate after a 1.2 percent gain in the prior three months, figures from the Labor Department showed today in Washington. Expenses per worker increased at a 2 percent rate, less than estimated. Employers had to take on more staff at the start of the year even as growth slowed, signaling they can no longer count on existing staff to meet demand. A government report tomorrow may show payrolls increased again in April, according to the median forecast of economists surveyed by Bloomberg News.
“This slowdown in productivity is a positive omen for the labor market,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said in a research note. He correctly projected the drop in productivity. “It suggests that additional increases in output will necessitate a faster pace of hiring than what has occurred thus far.”

Disabled Americans Shrink Size of U.S. Labor Force (Source: Bloomberg)
Michael White says he wishes he still could pluck the bass line to Hank Williams Jr.’s “Born to Boogie” and pay bills with money he earns himself. High unemployment -- along with ailments that he says render his fingers inoperative and make him cough up blood -- have dashed his hopes. White is among the 1.6 million Americans who’ve claimed Social Security Disability Insurance, or SSDI, since the 18- month recession began in 2007. When the slump reduced demand for tow-truck drivers, the 60-year-old Fort Myers, Florida, resident, who has also worked as a musician, lost the job he’d held for five years and started collecting unemployment benefits. Complications from chronic obstructive pulmonary disease, or COPD, diabetes and other medical problems then made it impossible for him to return to a labor market that lacks opportunities for people with health problems and those in better shape.
“I can’t stress enough that I’d rather be working, but my health has gotten the worst of me, and any place I would have applied wouldn’t have hired me,” White says. The number of workers receiving SSDI jumped 22 percent to 8.7 million in April from 7.1 million in December 2007, Social Security data show. That helps explain as much as one quarter of the decline in the U.S. labor-force participation rate during the period, according to economists at JPMorgan Chase & Co. and Morgan Stanley.

Small-Cap Tech May Lure Investors Bullish on Growth (Source: Bloomberg)
The investment outlook for small-cap technology companies is improving as cheap valuations and conservative earnings estimates make them more attractive, after being weighed down by concerns about the economy. Small-cap businesses are expanding to provide additional products and services -- including the delivery of storage, software and other computing tasks over the Internet “cloud.” This is boosting sales, as valuations and estimates for 2012 earnings remain moderate, said Steven DeSanctis, head of U.S. small-cap strategy at Bank of America Merrill Lynch Global Research in New York. With cash-flush balance sheets that account for about 20 percent of their market capitalization, tech stocks are poised for “pretty good” growth after last year’s “laggard performance,” he said. The cash hoard is attracting investors because companies may use it to pay dividends, repurchase stock or make acquisitions, he added.
The Russell 2000 Technology Index -- currently made up of 292 businesses with market cap of less than $3.45 billion -- has risen 21 percent since Sept. 6, 2011, compared with a 20 percent gain for the Russell 2000. This follows almost seven months of underperformance, when the tech stocks lagged behind the Russell 2000 by 8.9 percent.

Draghi Leaves Door Open For More ECB Action if Needed (Source: Bloomberg)
European Central Bank President Mario Draghi left open the option of further stimulus if the economy continues to deteriorate as investors await the outcome of elections in Greece and France. While policy makers didn’t discuss lowering interest rates at a meeting in Barcelona yesterday, Draghi pointed to new growth and inflation forecasts next month that may change the ECB’s policy stance. Uncertainty about the commitments of future leaders in Greece and France to fiscal reforms, paired with worsening economic data and renewed tensions in financial markets, may force the ECB’s hand. “There are significant downside risks to the ECB’s growth outlook,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. “Draghi indirectly hinted at next month’s ECB meeting when the bank will publish its new projections. Since the ECB may lower its growth forecasts, the rate-cut discussion will stay with us.”
Austerity measures aimed at stemming the debt crisis have pushed euro-area economies from the Netherlands to Spain back into recession and may embolden Greek politicians who are challenging the country’s commitment to spending cuts. ECB officials, who have flooded financial markets with more than 1 trillion euros ($1.3 trillion) to avert a credit crunch, have signaled they’re reluctant to do more for now as they press governments to enact reforms.

Draghi Says Rates Accommodative as Economic Outlook Worsens (Source: Bloomberg)
European Central Bank President Mario Draghi said interest rates remain supportive and policy makers still expect a gradual economic recovery this year even as recent data cloud the outlook. Latest indicators “are not enough to change our baseline scenario, which foresees a gradual recovery in the course of the year,” Draghi said at a press conference in Barcelona today after the ECB held its benchmark interest rate at a record low of 1 percent. “We didn’t discuss any specific move in interest rates but we did discuss our general monetary policy stance, which we found accommodative in view of an economic outlook that becomes more uncertain.” Austerity measures aimed at stemming the debt crisis have pushed euro-area economies from the Netherlands to Spain back into recession. While the ECB is reluctant to add to stimulus as it presses governments to enact reforms, Draghi left open the possibility of further action when policy makers have updated economic projections in June.
“By highlighting prevailing major economic uncertainties, acknowledging that the risks to the euro-zone growth outlook are slanted to the downside and indicating that risks to the inflation outlook are now broadly balanced, the ECB does appear to be leaving the door open to an eventual further interest-rate cut,” said Howard Archer, chief European economist at IHS Global Insight in London.

EU Ministers Fail to Reach Deal on Bank Capital Rules (Source: Bloomberg)
European Union finance ministers failed to reach an agreement to toughen bank capital rules in the face of British resistance and now aim for a deal at their next meeting on May 15. Sixteen hours of talks in Brussels that ended early today snagged on when countries can tighten domestic banking regulations and add to EU minimum requirements on how much capital banks must hold. A compromise proposal from Denmark, which holds the EU’s rotating presidency, would allow governments to force their banks to add risk buffers of as much as 5 percent against their domestic and non-EU exposures. U.K. Chancellor of the Exchequer George Osborne was one of the loudest voices calling for member states to gain the additional flexibility. He said the U.K. will also press for discretion on so-called macro-prudential oversight tools, such as when regulators can rein in housing markets.
Ministers will try to bridge differences during the next two weeks, defying a warning yesterday by German Finance Minister Wolfgang Schaeuble that failure to reach decision at this meeting “will be dangerous.” If no consensus is achieved, a decision could be taken through a majority vote. Agreement among finance ministers will serve as a basis for negotiations with the European Parliament, which could begin later this month. The EU faces a Jan. 1, 2013, deadline for adopting rules agreed on by the Basel Committee on Banking Supervision.

Banks May Have to Disclose Profits From ECB Emergency Loans (Source: Bloomberg)
Banks may have to disclose profits from carry trades derived from 1 trillion euros ($1.3 trillion) in European Central Bank loans and exclude the money from bonus pools, under draft proposals from European Union lawmakers. Profit from carry trades, where investors borrow money at a low interest rate to buy higher yielding securities, “should not count toward computation of remuneration and bonus pools” at banks, under plans being weighed by European Union lawmakers, according to a document obtained by Bloomberg News. The measure is one of dozens of proposed amendments to legislation to implement global capital and liquidity rules for EU lenders. The ECB began two rounds of extraordinary three-year loans at an interest rate of 1 percent in December in its longer-term refinancing operations to ease funding conditions for European banks. ECB President Mario Draghi today left open the option of further stimulus if the region’s economy continues to deteriorate.
Banks should disclose “profit made from the ECB LTRO through carry trades” according to proposed amendments from members of the EU parliament contained in the document.

Krugman Wishes He Were Wrong Amid EU Austerity Backlash (Source: Bloomberg)
Europe’s shifting emphasis from enforcing austerity to seeking economic growth marks a hollow victory for Nobel laureate Paul Krugman. “I wish I’d been wrong for the sake of the world,” Krugman said in an interview with Bloomberg Television’s Carol Massar. “You can see that there has been a definite shift in opinion.” The euro area’s push to revive confidence in its economy and financial markets by attacking budget deficits will be challenged at the ballot boxes of France and Greece on May 6 as the region’s economy skids toward its second recession in three years and unemployment nears 11 percent.
Leading demands for a revised strategy, French Socialist Francois Hollande, a reader of Krugman, tops President Nicolas Sarkozy in the polls with the warning that putting debt-cutting over expansion is “bringing desperation to people.” Elsewhere, Greeks are turning to anti-austerity parties, recession-wracked Spain and Italy are relaxing deficit targets, the Dutch government is splintering and European Central Bank President Mario Draghi is calling for a “growth compact.”

20120504 0939 Global Commodities Related News.

GRAINS-Wheat, corn tick up after selloff; soy falls for 3rd day
SINGAPORE, May 3 (Reuters) - Chicago corn and wheat rose around half a percent, as grain markets took a breather after suffering their biggest decline in more than three months in a selloff sparked by prospects of bumper U.S. crops.
"I think wheat was hit hard yesterday, so it is a bit of buying on the setback," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne. "There are nervous longs around in soybeans and corn, as you see a bit of a selloff, everyone hits the panic buttons."

Vietnam cuts 2012 rice export forecast to 5.4 mln T
HANOI, May 3 (Reuters) - Vietnam's 2012 rice exports will decline by a quarter from last year to 5.4 million tonnes, the Agriculture Ministry said, basing its forecast on lower first-quarter sales, but added that final volumes could be higher thanks to regional buying demand.
The amount was lower than last month's full-year export forecast of 6.1 million tonnes, which in turn was nearly 14 percent less than last year's record exports of 7.2 million tonnes.

FAO CUTS 2012/13 outlook for wheat output
MILAN, May 3 (Reuters) - The UN's food agency on Thursday cut its 2012/13 outlook for  world wheat output to 675 million tonnes from an earlier forecast of 690 million tonnes last year, citing output falls in Ukraine, Kazakhstan, China, Morocco and the European Union.
The UN's Food and Agriculture Organisation (FAO) said international wheat prices in 2012/13 are expected to average lower than in the previous crop year, despite smaller crops and shrinking stocks, due to a fall in consumption and large export supplies.

Kansas wheat yield best since at least 2003; rain needed
WICHITA, Kansas, May 2 (Reuters) - Wheat fields scouted on the first two days of an annual crop tour in Kansas had the potential for the best yields in at least nine years but the drought conditions that devastated the crop last year still persist, crop scouts found on Wednesday.
Yields across the northern, western and central parts of Kansas, the largest wheat growing state, averaged 48.5 bushels per acre, above the two-day average last year of 36.7 bpa and the largest since at least 2003, which is as far back as the tour provided historical data.

Brazil key ag exports fall on yr in April
BRASILIA, May 2 (Reuters) - Brazil's shipments of its most valuable agricultural exports -- including soybeans, sugar and coffee -- all fell in April from a year earlier, Trade Ministry data showed on Wednesday.
Soy output has been hit by a severe drought in the south of the country, which is days from finishing up this year's harvest.Meanwhile, sugar cane output from the main center-south crop dipped last year for the first time in more than a decade due to poor weather and aging cane plants.

Brazil corn output seen 64.5 mln tonnes-US attache
May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Brazil:
"Post raises its 2011/12 corn production estimate to 64.5 million tonnes, due to favorable weather and last-minute decisions to increase planted area to second-crop corn. New allocations of government support are bolstering 2011/12 rice exports. The anticipated short supply and high level of exports should stabilize rice prices. Wheat exports have continued strong, also thanks to government support programs."

India grain output seen at 252.6 mln tonnes-attache
May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in India:
"The Ministry of Agriculture's third advance estimate has raised India's food grain production for the Indian crop year 2011/12 to a record 252.6 million tonnes on record production of rice and wheat. Post's MY 2012/13 wheat production has been raised to a record 91 million tonnes and MY 2011/12 rice production to a record 103.4 million tonnes. With the government already holding 'burdensome' grain stocks, expected record government wheat and rice procurement in the coming months will lead to serious storage challenges."

Wheat Market Recap Report (Source: CME)
July Wheat finished up 1 at 615 1/2, 6 1/4 off the high and 2 1/4 up from the low. December Wheat closed up 3 at 656 3/4. This was 4 1/4 up from the low and 3 3/4 off the high. July wheat gave back the early gains to close near unchanged. July KC wheat held on to gain a few cents on the day and Minneapolis July wheat fell to new lows for the move and to the lowest level since November of 2010. On top of reports from Kansas of good yield potential, traders also view the outlook for more rain in the plains in the next week and a lack of cold weather as a bearish influence. However, talk that the sharp sell-off yesterday was a bit overdone helped to support a bounce early today. Weekly export sales for wheat came in at 256,700 metric tonnes for the current marketing year and 454,800 for the next marketing year for a total of 711,500. As of April 26th, cumulative wheat sales stand at 100.2% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 96.4%. European milling wheat futures pushed to a two-week low pressued by talk of improving weather in France. July Oats closed up 7 1/4 at 344 1/2. This was 15 1/2 up from the low and 2 1/2 off the high.

Market Recap: Wheat Futures (Source: CME)
Chicago and Kansas City wheat futures trimmed gains into the close to finish mostly 1 to 3 cents higher, with Minneapolis ending mostly 1 1/2 to 5 1/2 cents lower. Chicago and Kansas City futures benefited from short-covering following yesterday's late-session decline, with much of the support coming from concerns hot and dry weather this weekend will stress the hard red winter wheat crop.

Corn Market Recap for 5/3/2012 (Source: CME)
July Corn finished up 3 at 614 1/2, 2 1/4 off the high and 7 up from the low. December Corn closed down 1 1/2 at 529 1/2. This was 5 1/2 up from the low and 2 3/4 off the high. May corn closed 8 1/2 cents higher, July up 3 and December down just 1 1/2 cents with a strong recovery late in the day. The old crop tightness, a very strong cash market and ideas that the USDA will need to raise exports and tighten old crop ending stocks further in next week's Supply/demand update has helped to support the nearby contracts. An excellent weather outlook plus the early plantings has traders inching up their yield projections for the new crop season. After a few more days of warm and wet weather across the heart of the Midwest, the weather looks cooler and warmer for several days before more rains move in. This should help keep planters moving but just not at the record-setting pace of early spring. The weather is also considered favorable for the crops which have been planted. Net weekly export sales for corn, came in at 1.332 metric tonnes for the current marketing year and 2.14 million for the next marketing year for a total of 3.472 million tonnes. Cumulative corn sales stand at 86.4% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 82.0%. Sales of 321,000 metric tonnes are needed each week to reach the USDA forecast. Traders indicated that the combined sales for the week were at the highest weekly total since 1991. The lack of deliveries and news that Argentina will not export corn to China until more of the GMO details are worked out helped to support the nearby contracts. July Rice finished up 0.33 at 15.185, 0.035 off the high and 0.205 up from the low.

Market Recap: Corn Futures  (Source: CME)
Corn futures staged a split finish, with old-crop futures 8 1/2 and 3 cents firmer and September through July 2013 contracts mostly around a penny lower. Futures finished in the upper half of today’s trading range. Bull spreading activity dominated activity in the corn pit today. This was encouraged by USDA’s Weekly Export Sales Report, which showed 1.3319 million metric tons (MMT) in sales for 2011-12 and 2.1403 MMT for 2012-13. This is yet another sign that price rationing needed to make U.S. carryover supplies last is not occurring.

SOFTS-Sugar, cocoa consolidate, coffee eases
LONDON, May 3 (Reuters) - ICE raw sugar futures steadied above a 1-year low, with prospects for further exports from key producer India weighing on prices, while cocoa was also near unchanged as the market consolidated after choppy trading in recent sessions.  Raw sugar futures on ICE  hovered above a 1-year low, as India's decision to remove export restrictions, combined with the global surplus, was bearish for prices.

Vietnam ups 2012 coffee export f'cast to 1.25 mln T
HANOI, May 3 (Reuters) - Vietnam is expected to export 1.25 million tonnes, or 20.83 million bags, of coffee in 2012, up from a previous forecast of 1.15 million tonnes, the farm ministry said.
Coffee export revenues for Vietnam - the world's largest robusta coffee producer - will hit $2.66 billion, down around 3 percent from 2011, the Agriculture Ministry said in a monthly report on Thursday.

India's Oct-April coffee exports down 2 pct-Board
MUMBAI, May 3 (Reuters) - Indian coffee exports dropped 2 percent on year to 196,496 tonnes in the first seven months of the coffee year that started in October, the state-run Coffee Board said.
However, in value terms, coffee exports during the period rose $586 million compared with $573 million a year earlier.

Brazil mid crop cocoa starts flowing early
SAO PAULO, May 2 (Reuters) - Deliveries of cocoa to warehouses in Brazil rose in the past week as harvesting of the May-September mid crop got underway, according to comments from a Bahia-based cocoa analyst and data from Bahia Commercial Association.
That cocoa would count toward the 2011/12 season which ended on April 30, helping its main crop achieve a forecast 950,000 bags (57,000 tonnes). The 2011/12 season ended 2 percent shy of the output achieved in the prior year, at 3.04 million bags or 183,000 tonnes, excluding imports. Final figures for the 2011/12 crop could still undergo minor adjustments.

Colombia mid-crop coffee harvest bodes ill for 2012 output
BOGOTA, May 2 (Reuters) - Colombia's mid-crop coffee harvest may be so weak this year that total 2012 output could be dragged to a four decade low, hobbling the Andean nation's bid to recoup historic production levels within four years, growers said.  Colombia, the world's top producer of high-quality Arabica beans, has seen its coffee crop crippled in recent years by torrential rains, which prevented flowering and sparked an increase in coffee tree diseases.

Thailand's Mitr Phol sees more sugar sales in Asia
BANGKOK, May 3 (Reuters) - Mitr Phol Sugar , Thailand biggest sugar miller, plans to boost domestic production by at least 5 percent to 1.9 million tonnes in the next crop year, mainly to serve growing demand in Asia, its president said on Thursday.
Krisda Monthienvichienchai said the company would continue to produce 1.8 million tonnes from its milling houses in China and Australia, as well as increase production in its Laos plant, to provide sugar for its Asian customers.

OIL-Brent holds above $118, caution ahead of US data
SINGAPORE, May 3 (Reuters) - Brent crude steadied above $118 a barrel, reflecting caution among investors ahead of a key U.S. employment report after dismal data from the United States and Europe renewed doubts about the state of the global economy.
"Risk markets are overall very cautious ahead of this nonfarm payroll data, that's why we're seeing reduced volumes and a few bets being taken off the table," said Ben Le Brun, market analyst at OptionsXpress in Sydney.

China to employ 1st deep-sea rig in South China Sea
BEIJING, May 3 (Reuters) - China will formally employ its first home-made, deep-sea semi-submersible drilling platform in the east part of South China Sea on May 9, marking the beginning of the country's deepwater oil strategy, the National Energy Administration said.
Ocean Oil 981 will be used to drill the Liwan 6-1-1 well, which has water depth of 1,500 metres (5,000 feet) and designed well depth of 2,371 metres (7,780 feet), the administration said in a report on its website dated April 28.

Oil Trades Near Two-Week Low on U.S., Europe Economic Concern (Source: Bloomberg)
Oil traded near a two-week low in New York, heading for a weekly decline, as worse-than-forecast U.S. economic data and concern that Europe’s outlook is faltering boosted speculation that demand for fuel may ease. Futures were little changed after dropping 2.6 percent yesterday, the most since December. European Central Bank President Mario Draghi said the region’s economic prospects had downside risks while reports showed service industries in the U.S. grew less than projected and consumer confidence weakened. “Some of the recent U.S. and European data has been a little bit weaker, a little bit on the soft side,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said by telephone today. “The central assumption is that we’ll see moderate growth across the world, patchy in places.”
Crude for June delivery was at $102.55 a barrel, up 1 cent, on the New York Mercantile Exchange at 10:08 a.m. Sydney time. The contract yesterday slid $2.68 to $102.54, the lowest close since April 19. Prices are 2.3 percent lower this week, heading for the first weekly decline in three.

LME Wants to Push Warehouse Network Into China, Abbott Says (Source: Bloomberg)
The London Metal Exchange, the biggest marketplace for industrial metals that’s considering takeover offers next week, wants to expand its warehouse network into China, the largest user of base metals including copper. “We would love to be able to put LME delivery points, LME warehouses into China, which we think would be a big benefit to the Chinese industry and LME,” Chief Executive Officer Martin Abbott said in a Bloomberg Television interview today. The LME is anticipating a number of approaches next week, Abbott said. The exchange licenses a network of more than 600 storage sites around the world where users can deposit metals, with Asian locations in Japan, South Korea, Malaysia and Singapore. Metals demand in Asia will continue to expand, Abbott said.
“What’s going on in China, what’s going on in the whole of Asia, it’s a whole multi-generational structural change, it’s not a flash in the pan,” said Abbott. “It’s structural, it’s not cyclical. So we’re not going to be fazed by short-term adjustments to forecasts.”

20120504 0938 Soy Oil & Palm Oil Related News.

Soy Traders Most Bullish Since March as Drought Cut Crops (Source: Bloomberg)
Soybean traders are the most bullish in seven weeks as drought damage to crops in Argentina and Brazil boosts demand for supplies from the U.S., the biggest producer of the oilseed. Sixteen of 24 analysts surveyed by Bloomberg expect prices to gain next week and one was neutral, the highest proportion since March 16. Soybeans futures reached $15.125 a bushel this week, the highest since July 2008. Hedge funds are making the biggest bet on rising prices since at least June 2006, data from the Commodity Futures Trading Commission show. The U.S. Department of Agriculture has announced daily sales of at least 100,000 metric tons of soybeans 10 times since the start of April, dominated by purchases from China. Archer Daniels Midland Co., the largest grain processor, told analysts this week that it would be “difficult to buy beans going forward” because of declining South American exports.
“As the soybean supply in Brazil is running out, that is forcing the Chinese to return to the U.S.,” said Chris Gadd, an analyst at Macquarie Group Ltd. in London. “You’d expect to see continued strength in U.S. exports.”

Soybean Complex Market Recap  (Source: CME)
July Soybeans finished down 11 1/2 at 1473 1/2, 15 1/4 off the high and 8 up from the low. November Soybeans closed down 1/2 at 1367 3/4. This was 5 3/4 up from the low and 6 off the high. July Soymeal closed down 3.3 at 426.4. This was 2.0 up from the low and 4.7 off the high. July Soybean Oil finished down 0.55 at 54.16, 0.7 off the high and 0.14 up from the low. July soybeans closed moderately lower while November closed just a bit lower on the session. Long liquidation selling from fund traders was active for much of the session with plenty of talk that fund traders own a record high net long position in both soybeans and meal by a significant margin. This, along with the key reversal yesterday has attracted profit-taking ahead of next week's Supply/demand update. After a very bullish weekly sales report, the market was expected to open higher but ideas that the China buying is near complete for now and a negative tilt to outside market forces and weather helped to pressure the market early. December meal recovered from lower on the session to close near unchanged as well while December oil pushed sharply lower on the day to experience the lowest close since March 29th. Palm oil futures in Malaysia were down 2.4% overnight to help pressure oil. Weekly export sales for soybeans came in at 598,000 metric tonnes for the current marketing year and 1.134 million for the next marketing year for a total of 1.732 million tonnes. Traders expected near 1.3-1.5 million. Cumulative old crop soybean sales stand at 96.9% of the USDA forecast versus a 5 year average of 95.4%. Sales of 60,000 tonnes are needed each week to reach the USDA forecast. Meal sales were 59,000 metric tonnes for the current marketing year and 92,700 for the next marketing year for a total of 151,700. Cumulative soybean meal sales stand at 78.6% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 75.7%. Sales of 76,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 14,900 metric tonnes for the current marketing year and none for the next marketing year for a total of 14,900. Ideas that China could soon shift to using more government-own reserves helped to pressure the market some today. Private exporters reported the sale of 232,000 tonnes of US soybeans to China for the 2012/13 season.

Market Recap: Soybean Futures  (Source: CME)
Soybean futures were choppy amid bull spread unwinding. Old-crop futures ended around 11 to 13 cents lower, with September down 9 3/4 cents. November closed 1/2 cent lower, with 2013 contracts closing 1 1/4 to 10 cents higher. Meal finished mostly weaker, with soyoil lower on spillover from sharp losses in crude oil futures. Old-crop soybean futures saw spillover from yesterday's losses, with July posting a downside day of trade following yesterday's key bearish reversal, although it finished off the daily low.

VEGOILS-Palm oil touches 6-week low on global economic woes
SINGAPORE, May 3 (Reuters) - Malaysian palm oil futures extended losses to a 6-week low, as disappointing economic data from the United States and Europe cast doubts on global economic recovery and commodity demand.
"It's very much the global sentiment. Fundamentally palm oil is still bullish because supply is still facing issues. The tree stress is already confirmed, so the next catalyst will be the Malaysian Palm Oil Board numbers," said Alan Lim, research analyst with Kenanga Investment Bank in Malaysia.

Indonesia soybean output seen down next 2 yrs-attache
May 2 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"Indonesia's soybean self sufficiency program has been challenged by limited yield improvements and decreased harvesting area in the past three years. Soybean production is expected to continue declining over the next two marketing years.