Wednesday, May 16, 2012

20120516 1950 FCPO EOD Daily Chart Study.

FCPO closed : 3085, changed : -124 points, volume : ultra high volume.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : resumed falling, seller in control.
Support :  3050, 3020, 2970, 2930 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed recorded severe loss again with ultra high volume changed hand. Soy oil price currently trading sharply lower after overnight closed rebounded upwards slightly while crude oil price trading lower testing lower support.
Price plunge lower again hitting 3 month low as global commodities continue to fall lower after turmoil in Greece political condition.
Daily chart study revised to calling 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.

20120516 1753 FKLI EOD Daily Chart Study.

FKLI closed : 1524 changed : -25.5 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : falling lower, seller in control.
Support : 1515, 1500, 1485, 1470 level.
Resistance : 1530, 1540, 1550, 1565 level.
Comment :
FKLI closed down sharply with pilling up volume transacted doing 12.5 points discount compare to cash market that also closed significantly lower. Overnight U.S. markets continue to closed lower and today Asia markets ended poorly while European markets currently trading lower.
News on Greece move to call new election triggered regional investors to press the sell button again resulted global markets to closed poorly.
Technical chart analysis still calling a downside biased market development with possible pullback correction. Additional to that, the last 3 daily candle has formed a "Three Black Crows" candle stick formation which indicate a bearish signal.
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.

20120516 1703 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : downside biased with possible pullback.
 Hang Seng chart reading : downside biased with possible pullback correction.
KLCI chart reading :  downside biased with possible pullback correction.

20120516 1622 Global Market & Commodities Related News.

Asian shares fell after efforts to form a new government in Greece collapsed, fuelling fears that a second election in June could precipitate Athens' exit from the euro zone and deepen the bloc's debt crisis. U.S. stocks closed down as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session.

U.S. soybeans edged lower, falling for three out of four sessions, while corn lost ground amid a broadbased weakness in financial markets triggered by fears of Greece's exit from the euro zone.

US farmland stays hot at record high prices-Fed surveys
U.S. farmland prices soared to record highs in the first quarter of 2012 fueled by strong crop prices and buoyant farm income, with the pace of sales strongest in the Plains but firm also in the Midwest Corn Belt, according to two Federal Reserve bank surveys released on Tuesday.

FOREX-Greek worries push euro to 4-mth low; more losses eyed
TOKYO, May 16 (Reuters) - The euro hit another four-month low against the dollar on Wednesday and was likely to extend hefty losses sustained so far this month after Greece said it would hold new elections, boosting the risk Athens could exit the euro.
"An entry to the euro zone was supposed to be irrevocable. They tore down the bridge so people wouldn't be able to go back to the other side of river. But the Greeks seem to be starting to try to swim across," said a Japanese bank trader.

ICE defends 22-hour grain cycle, pleased with trade so far
IntercontinentalExchange on Tuesday hit back against critics of its new 22-hour grain trading cycle and said traders will benefit from having futures and options markets open during key U.S. crop reports.

China 2012 corn output seen at record 197.5 mln T, soy down -CNGOIC
China, the world's second largest corn consumer, will reap another record harvest of the grain this year as it planted more acres to meet surging demand at home, while soy output is set to drop again, according to estimates from an official think-tank.

Oil World cuts forecast of EU 2012 rapeseed crop
Hamburg-based oilseeds analysts Oil World said on Tuesday it has again cut its forecast of the European Union's 2012 rapeseed crop because of bad weather, this time by 0.1 million tonnes.

The euro hit a four-month low, coming under renewed pressure a day after Greece called a new election that may hand victory to leftists opposed to the terms of an EU bailout, and raise the risk of the country exiting the euro zone.

U.S. crude stocks seen up, Cushing stocks rise
U.S. commercial crude oil stocks likely rose for the eighth straight time last week as stockpiles at Cushing, Oklahoma, were expected to climb to a new record, an expanded Reuters poll ahead of weekly industry and government reports showed on Tuesday.

Oil was down as a rise in crude stocks in top consumer United States and fears of Greece's exit from the euro zone muddied the outlook for demand growth.

Iron Ore-Shanghai steel falls 4th day, some mills stop buying ore
SINGAPORE, May 16 (Reuters) - China steel futures fell for a fourth day running on Wednesday with a slowing economy denting the demand outlook from the world's biggest consumer and halting producers' buying interest for raw material iron ore.
Spot iron ore dropped to its weakest level since late February and has given up this year's gains to trade down nearly 2 percent year to date, as a slowing Chinese economy threatens to curb steel output further.

London copper fell to a four-month low, extending losses to a fourth consecutive session, as investors continued to shy away from riskier assets with the Greek political malaise threatening to plunge Europe into a deeper financial mess.

Freeport sees Chinese demand boosting copper
May 15 (Reuters) - The head of Freeport-McMoRan Copper & Gold  said on Tuesday that although copper markets were weaker than last year, an expected jump in Chinese consumption should boost investment to find new reserves.
President and Chief Executive Officer Richard Adkerson also told a metals and mining conference that he was concerned about violence around Freeport's vast Grasberg mine in Indonesia. But he was confident the company could resolve issues with Jakarta over moves to limit foreign miners' operations and profits.

METALS-London copper slips to 4-mth low on Greece woes
SINGAPORE, May 16 (Reuters) - London copper fell to a four-month low on Wednesday, extending losses to a fourth consecutive session, as investors continued to shy away from riskier assets with the Greek political malaise threatening to plunge Europe into a deeper financial mess.
"There is more room on the downside for copper in the next few weeks, while we wait for China data to be released in mid-June and any consequential easing acts from the central bank," said Judy Zhu, an analyst at Standard Chartered in Shanghai.

Copper miner Freeport concerned about Indonesia
The head of Freeport-McMoRan Copper & Gold said he was concerned about violence around its vast mine in Indonesia but was confident the company could resolve issues with the Jakarta government over moves to limit foreign miners' operations and profits.

German steelmakers give gloomy outlook
Germany's two biggest steelmakers, ThyssenKrupp and Salzgitter, gave a grim outlook for the rest of the year on Tuesday as the euro zone crisis crimps spending on factories and new equipment.

Gold extended losses to slip to its weakest level since late December after efforts to form a new government in Greece collapsed, prompting investors to cut their exposure to the precious metal.

PRECIOUS-Gold hits 4-1/2 month low on Greece turmoil
SINGAPORE, May 16 (Reuters) - Gold extended losses on Wednesday to slip to its weakest level since late December after efforts to form a new government in Greece collapsed, prompting investors to cut their exposure to the precious metal.
"Everybody is rushing to buy the U.S dollar. A strong dollar is negative for gold for the time being," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that demand from jewellers was limited due to volatile prices.

Baltic sea index drops on low activity
May 15 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Tuesday for a fifth day on a lack of activity in both the Atlantic and Pacific basins.
The overall index, which reflects the daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 2 points to 1,130 points.

20120516 1216 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares ease as Greek uncertainty saps risk appetite
TOKYO, May 16 (Reuters) - Asian shares fell on Wednesday after Greece failed to form a government, setting the stage for a June election that could raise the risk of Athens abandoning the euro and deepening the euro zone's debt crisis.
"The direct costs of Greek euro exit would be huge for Greece, but manageable for the rest of the euro area. Our concern is contagion," said Michala Marcussen at Societe Generale.

COMMODITIES-Markets mixed; crop prices up strongly
NEW YORK, May 15 (Reuters) - Commodities were mixed on T uesday after five days of broad declines, with agricultural markets recovering the most and oil and metals still weak, as German economic growth data offered some solace to investors still jittery about the euro zone.
"Today it's very much about the macro environment, about political uncertainty in the euro zone," said Gayle Berry, a commodities analyst with Barclays Capital in London.

OIL-Brent rise boosts premium to slumping U.S. crude
NEW YORK, May 15 (Reuters) - Brent oil edged higher on  Tuesday, snapping three days of declines and lifting its premium to slumping U.S. crude back above $18 a barrel, as supportive German economic growth helped counter political turmoil in Greece.
"The German GDP gave the market a little hope and recent problems at the North Sea Buzzard field and Europe's refineries due back from seasonal maintenance have provided Brent with support," said Andy Lebow, senior vice president for energy futures at Jeffries Bache LLC.

Brent crude to stay well supported on rising demand
SINGAPORE, May 15 (Reuters) - Tight global oil supply outside the United States and healthy demand, particularly in Asia ahead of summer, will help keep Brent crude  prices well supported, a senior trading executive at Southeast Asia's biggest bank said.
Prices have surged more than 17 percent so far this year due to supply concerns triggered by mounting Western sanctions on Iran over its nuclear programme. The U.S. and its allies suspect Iran is developing nuclear weapons, which Tehran denies.

NATURAL GAS-Low storage estimates boost US natgas futures
NEW YORK, May 15 (Reuters) - U.S. natural gas futures ended higher on Tuesday as supportive supply and demand fundamentals and expectations for another light weekly inventory build on Thursday underpinned prices despite fairly mild weather this week.
"Fundamentals have improved enough to support the lower end of the trading range ($2.20-$2.25) and as long as we see some degree of the inventory surplus narrowing the range low should hold," EMI's Dominick Chirichella said in a report.

20120516 0958 Malaysia Corporate Related News.

Petronas Gas to invest RM1bn on Sabah regas terminal
Petronas Gas will invest RM1bn in capex for its regassification plant in Lahad Datu, Sabah, and expects to call a tender for the first package of the project soon. Its CEO Samsuddin Miskon said the investment would cover land acquisition and commissioning costs to the point of plant handover. The terminal is now undergoing front-end engineering design and the company will start with site preparation very soon. (Malaysian Reserve)

IOI gets RM4.6bn funding
IOI Corp is set to establish a USD1.5bn (RM4.62bn) euro medium-term note programme (EMTN) to raise funds to fund its capex requirements, investments/acquisitions, working capital and for repayment of its existing borrowings. The integrated oil palm plantation group led by Tan Sri Lee Shin Cheng said the EMTN programme will be unconditionally and irrevocably guaranteed by IOI and may be listed on the Singapore Exchange Securities Trading Ltd. (Malaysian Reserve)

Mitrajaya bags RM111m Putrajaya project
Mitrajaya Holdings’ wholly-owned unit, Pembinaan Mitrajaya SB, has accepted a RM111.8m contract from Putrajaya Holdings SB to construct and complete the City Campus Development, at Precinct 5 in Putrajaya. The contract is scheduled to be completed in a 24-month period. (Malaysian Reserve)

Felda locks in stakeholders for IPO
French trading house Louis Dreyfus and Malaysia’s top dealmakers, tycoon Tan Sri Quek Leng Chan and former stockbroker Tan Sri Chua Ma Yu, have emerged as cornerstone investors for the USD3.3bn (RM10.16bn) listing of Felda Global Ventures Holdings (FGVH), a cast of strategic investors the Government hopes will boost sentiment for the public offering, which faces hostile market conditions. The other cornerstone investors are state-owned PNB, EPF and foreign groups which include Fidelity and Value Partners, according to financial executives involved in the listing. (Financial Daily)

SP Setia purchases land in Penang for RM186m
SP Setia’s wholly-owned subsidiary, Intra Hillside SB, has entered into a sale and purchase agreement with Penang Realty SB for the proposed purchase of 21.31 acres (8.5ha) of freehold land on Penang Island for RM185.65m or RM200/sq ft. Intra Hillside said it plans to carry out the development of terraced houses and condominium with a gross development value of RM1.1bn. (Financial Daily) Please see accompanying report

Kencana unit wins RM48.9m contract from Petrofac E&C
Kencana Petroleum’s unit, Kencana HL SB (KHL), has been awarded a contract worth RM48.9m by Petrofac E&C SB for the refurbishment, life extension and conversion of a mobile offshore production unit (MOPU). Under the contract, KHL would undertake the engineering, construction (EPC) and other works of the MOPU for the development of an oil-field off the shore of Peninsular Malaysia. (Financial Daily)

Two companies to be delisted
SapuraCrest Petroleum and Kencana Petroleum will be delisted from Bursa Malaysia from 9am tomorrow to make way for the debut of their merged entity on the same day. (StarBiz)


Royal Bank of Scotland (RBS) will continue to expand its corporate banking business across the Asia-Pacific, including Malaysia, despite having sold most of its cash equities, equity capital markets and corporate finance businesses in the region to CIMB Group for RM849.4m. The British lender has in the pipeline at least four to six sizable ringgit-denominated Islamic bond (sukuk) issuance by financial institutions and companies from Central Asia and Europe. (The Sun)

Malaysia Airports (MAHB) said MD Tan Sri Bashir Ahmad’s contract has been extended another year by the Finance Ministry, effective June 7, 2012. MAHB said Bashir was appointed MD in 2003 and has been the driving force behind its steady growth and in transforming MAHB into one of the most successful GLC in the country. (Financial Daily)

AirAsia has proposed a first and final single tier dividend of 5 sen per share for the financial year ended Dec 31, 2011 to be paid in cash on July 20, 2012. AirAsia said the dividend was subject to shareholders‟ approval at its forthcoming annual general meeting. The single-tier dividend is tax exempt in the hands of the shareholders. (Financial Daily)

Brahim Holding Bhd, an in-flight catering services provider, expect its sugar refinery plant in Sarawak to be operational by 2014 and generate about RM250m in revenue, annually. Executive Chairman Datuk Ibrahim Ahmad said the group had allocated RM130m to invest in the sugar manufacturing plant and machinery. "In line with our food portfolio, we have ventured into the sugar refinery sector and we are building our plant on a 12 hectare piece of land in Demak Laut, Sarawak, to cater for the East Malaysian market. We expect the plant to begin commercial operations by 2014 with an initial production of about 100,000 metric tonnes per annum," he told reporters after the group's annual general meeting. "Upon the completion of our Sarawak plant, we will be the first sugar producer in East Malaysia and our study shows that the demand capacity for sugar there stood at 330,000 tonnes and 1.6 million tonnes for nationwide demand," he said. (BT)

Brahim’s Holdings executive chairman Datuk Ibrahim Ahmad Badawi has sidestepped questions on a re-negotiation of its controversial catering agreement with Malaysia Airlines (MAS), while hinting at possible talks. In 2003, its subsidiary LSG SkyChefs-Brahims (LSGB) signed an agreement with MAS for the exclusive right to supply and provide in-flight catering and cabin handling services to MAS at both the Penang airport and the Kuala Lumpur International Airport in Sepang for 25 years. LSGB is 70%-owned by Brahim's-LSG Sky Chefs Holdings and 30%-owned by MAS. At the unveiling of MAS' business plan in December 2011, its management specified a re-negotiation of contracts as a component of its recovery plan. The contract between LSGB and MAS has long come under fire for the exclusivity as well as the long-term nature of the deal. (BT)

Navis Capital is not concerned if minority shareholders reject its offer to privatise SEG International (SEGi). However, Navis prefers SEGi to be taken private. “Those who want to sail along for the ride, as long as they do it with their eyes wide open and recognize the change in the strategic direction and possibly the volatility in the short-term performance of the group,” said Nicholas Bloy, managing partner of Navis. As Navis‟ plans for SEGi involve overseas expansion, which will be capital-intensive, Bloy said SEGi may see some short-term compression in terms of earnings per share. (Financial Daily)

The issuance of the temporary operating licence (TOL) to Lynas (M) Sdn Bhd has been postponed pending a decision on an appeal by Science, Technology and Innovation Minister Maximus Ongkili. Three parties has submitted their appeals to the minister on the TOL approval and pending the decision on the appeal, the minister had instructed to defer the issuing of TOL to Lynas. (Bernama)

20120516 0958 Global Economy Related News.

China: FDI inflow at USD38bn in first 4 months
China’s FDI inflows dropped 2.4% in the first four months of 2012 versus last year, the longest period of declining inflows since the depths of the global financial crisis and a sign of external economic headwinds. The Commerce Ministry said yesterday the country drew USD37.9bn in FDI between January and April, drown from USD38.8bn attracted in the same period in 2011. April’s inflow alone was USD8.4bn, down from USD8.5bn a year earlier. (StarBiz)

Japan: March machinery orders fall 2.8% from previous month
Japan’s machinery orders fell less than economists forecast in March, as earthquake reconstruction helped to support the nation’s growth. Bookings decreased 2.8% from the previous month, a Cabinet Office report showed in Tokyo yesterday. The median estimate of 29 economists surveyed by Bloomberg News was for a 3.5% decline. Orders can swing between gains and declines depending on the timing of major projects. (Bloomberg)

South Korea: Adds workers as unemployment rate unchanged at 3.4%
South Korea added workers last month and the unemployment rate held at two-month low as demand increased for jobs in health, social welfare and education. The rate was 3.4% in April, Statistics Korea said yesterday in Gwacheon, south of Seoul, matching the median estimate in a Bloomberg News survey of 12 economists. The number of employed people increased 1.9% to 24.76m last month from a year earlier. (Bloomberg)

Russia: GDP grew 4.9% in first quarter, exceeding estimates
Russia’s economy grew last quarter at the fastest pace since the three months ended Sept 2011, suggesting the world’s biggest energy exporter is more resilient to Europe’s debt crisis than economists estimated. Gross domestic product expanded 4.9% from the same period last year after rising 4.8% in the fourth quarter, the Federal Statistics Service in Moscow said in an e-mailed statement yesterday. The median estimate in a Bloomberg survey of 14 economists was 4.1%. The Economy Ministry projected growth at 4%. (Bloomberg)

EU: Avoids 2nd recession
Germany helped the euro-area avoid its second recession in three years as growth in the region’s largest economy offset contractions in peripheral countries. GDP in the 17-nation euro region stagnated in the latest quarter compared with the prior three months, the European Union’s statistics office in Luxembourg said. The median forecast of economists surveyed by Bloomberg was for a 0.2% contraction. Germany’s economy expanded 0.5%, compared with the 0.1% median estimate by economists in a separate survey. (StarBiz)

US: Consumer-Price Index unchanged; core rate climbs 0.2%
A measure of the US cost of living was unchanged in April, restrained by a drop in energy prices and supporting the view of some Federal Reserve policy makers that inflation will ease. Last month’s consumer-price index matched the median forecast of economists surveyed by Bloomberg News and followed three straight gains that included a 0.3% rise in March, Labor Department data showed yesterday in Washington. The so-called core measure, which excludes more volatile food and energy costs, rose 0.2% for a second month. (Bloomberg)

US: International demand for US assets rises on Europe crisis
International demand for US financial assets rose in March as investors continued to seek safety from the debt crisis in Europe. Net buying of long-term equities, notes and bonds totaled USD36.2bn during the month, compared with net purchases of USD10.1bn in Feb, the Treasury Department said yesterday in Washington. Economists surveyed by Bloomberg News projected net buying of USD32.5bn of long-term assets, according to the median estimate. (Bloomberg)

20120516 0956 Global Market Related News.

Asian Stocks Fall as Greek Talks Fail, Heightening Euro Concern (Source: Bloomberg)
Asian stocks fell as talks to form a new government in Greece failed, increasing concern the country will be forced to leave the single European currency and derail efforts to contain the region’s debt crisis. The MSCI Asia Pacific Index (MXAP) slid 0.6 percent to 116.50 as of 9:05 a.m. in Tokyo. Almost three stocks declined for each that rose on the measure, which is poised to match its longest losing streak this year. The gauge is about 1 percent away from closing 10 percent below this year’s high on Feb. 29, a level some investors call a correction.

Japan Stocks Fall on Greek Risk; Banks Rise on Forecasts (Source: Bloomberg)
May 16 (Bloomberg) -- Japanese stocks fell, with the Topix Index declining a sixth day, as Greece decided to hold another election after failing to form a new government, raising concern the debt-stricken nation will exit the euro. Losses were limited as banks gained on improved profit outlooks. Konica Minolta Holdings Inc. (4902), a maker of photo films that gets 28 percent of its sales in Europe, lost 2.1 percent. Daikin Industries Ltd. (6367), an air-conditioning equipment manufacturer, slid 1.1 percent after data showed Japan’s machinery orders fell in March. Mizuho Financial Group Inc. (8411) led banks higher after its net-income forecast beat estimates. The Nikkei 225 Stock Average (NKY) lost 0.5 percent to 8,860.11 as of 9:19 a.m. in Tokyo, with more than two stocks dropping for each that rose. Trading volume was 8 percent below the 30-day average. The broader Topix Index fell 0.4 percent to 744.18.
“Uncertainty is what the stock market dislikes the most,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Investors will start worrying about Portugal and Spain with speculation rising about Greek’s exit from the euro.”

Japan Stock Futures Fall as Greek Impasse Talks Fail (Source: Bloomberg)
Japanese and Australian stock futures fell as talks to form a new government in Greece failed, increasing concern the country will be forced to leave the single European currency and derail efforts to contain the region’s debt crisis. American depositary receipts of Sony Corp. (6758), Japan’s largest consumer electronics exporter that gets a fifth of its sales in Europe, fell 1.1 percent from the closing share price in Tokyo. Mizuho Financial Group Inc. (8411), Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc., the three biggest banks in Japan, may be active after forecasting profit that exceeded analysts’ estimates as lending rebounds. ADRs of BHP Billiton Ltd., the world’s No. 1 mining company, declined 2.3 percent as metals prices dropped.
Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 8,845 in Chicago yesterday, down from 8,910 in Osaka, Japan. They were bid in the pre-market at 8,860 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index dropped 0.7 percent today. New Zealand’s NZX 50 Index slid 0.2 percent in Wellington. “As the pressure builds in Europe, you need to see another mini crisis before policy makers will step in, and we’re not there yet,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. “Markets and economies in Asia are at the mercy of the export story.”

Dow Falls to Four-Month Low as Greece Overshadows Economy (Source: Bloomberg)
The Dow Jones Industrial Average (INDU) fell to an almost four-month low as Greece’s failure to form a new government offset better-than-estimated American economic data. Commodity (SPXL1) shares tumbled as the Dollar Index extended its longest rally ever, reducing the appeal of raw materials. Avon Products Inc. (AVP) slumped 11 percent as Coty Inc. withdrew its $10.7 billion offer for the biggest door-to-door cosmetics seller. Home Depot Inc. (HD), the largest U.S. home-improvement retailer, slid 2.4 percent as it forecast slowing sales gains. Lennar Corp. (LEN) and D.R. Horton Inc. (DHI) jumped at least 2.5 percent as homebuilder confidence climbed to the highest level since 2007. The Standard & Poor’s 500 Index fell 0.6 percent to 1,330.66 at 4 p.m. New York time, dropping 2 percent in three days. The Dow lost 63.35 points, or 0.5 percent, to 12,632, the lowest since Jan. 19. About 7.3 billion shares changed hands on U.S. exchanges, or 9 percent above the three-month average.
“It’s fear of European drama,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management. His firm oversees $160 billion. “It seems obvious that leaving the euro would be a disaster for Greece and very costly to its economy. Yet they seem to be on a path where that could happen. We’ve had some good U.S. economic data, but people are afraid to hold equities. It’s extremely frustrating.”

Emerging-Market Stocks Drop to Four-Month Low on Greek Elections (Source: Bloomberg)
Emerging-market stocks fell to a four-month low as Greek Pasok party leader Evangelos Venizelos said the country will hold elections, deepening concern Europe’s debt crisis will worsen and curbing demand for riskier assets. The MSCI Emerging Markets Index (MXEF) lost 0.6 percent to 946.10, the lowest level since Jan. 9. Brazil’s Bovespa index fell, erasing this year’s gain, while Mexico’s IPC benchmark slipped 1.1 percent. MRV Engenharia & Participacoes SA (MRVE3), a home developer in Brazil, tumbled 15 percent after saying first-quarter net income declined 24 percent. A second election in less than two months threatens to extend the political deadlock that has left Greece without a government since the last vote on May 6, and fuels concern that the country may exit the euro. Presidency official Costas Bitsios said a meeting will be held tomorrow to form a caretaker government to run the country.
“The more this political impasse lasts, the bigger are the chances of Greece leaving the euro zone,” Luciano Rostagno, chief strategist at WestLB AG’s Brazilian unit in Sao Paulo, said by phone. “Nobody knows how that would affect big countries that are also in trouble, such as Spain. That’s pushing risk aversion to high levels, making investors turn away from equities.”

European Stocks Retreat as Greece Will Hold New Election (Source: Bloomberg)
European stocks dropped for a second day, pushing the Stoxx Europe 600 Index to its lowest level since December, as Greece called a new election after the country’s politicians failed to form a government. Banks (SXXP) posted the biggest contribution to the Stoxx 600’s decline. Julius Baer Group Ltd. (BAER) plunged 6.1 percent, its biggest slide in almost eight months, as revenue from assets under management fell in the first four months of the year. The Stoxx 600 retreated 0.7 percent to 245.76 at the close in London, extending its drop from this year’s peak on March 16 to 9.8 percent. The gauge swung between gains and losses at least nine times earlier today. The Stoxx 600 slid to its lowest level since Dec. 30.
“Equities look cheap, but we all know why,” Didier Saint- Georges, a member of the investment committee at Carmignac Gestion, which oversees about 50 billion euros ($64 billion), said at a presentation in London today. “Valuations are not necessarily pointing to any clear direction. For Europe, you just don’t need growth, but also very profound adjustments both fiscal and external, and that won’t happen quickly.”

Aussie Near 2012 Low Amid Concern Greece May Leave Euro (Source: Bloomberg)
Australia’s dollar traded close to its weakest level this year as Greece’s failure to form a new government spurred speculation it may leave the euro area, sapping demand for riskier assets. The so-called Aussie was near a four-month low against the yen as Asian stocks fell for a sixth-straight day, extending a global equities rout. The New Zealand dollar maintained three days of losses after Auckland-based Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, said whole-milk powder prices continued their slide, falling to the lowest level in more than 2 1/2 years. “It’s just a general bout of risk aversion around the globe,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency risk management company. “It’s not just Greece, it’s the whole European situation. The Aussie is certainly under pressure.”
Australia’s dollar traded at 99.46 U.S. cents as of 10:53 a.m. in Sydney from 99.37 in New York yesterday, when it slid as low as 99.22, the weakest since Dec. 20. The currency bought 79.94 yen from 79.67 yesterday when it touched 79.39, the lowest since Jan. 17. The New Zealand dollar bought 76.92 U.S. cents, having declined 0.9 percent to 76.93 cents yesterday. It was at 61.83 yen from 61.68.

Asia-Pacific Bond Risk Rises, Credit-Default Swap Prices Show (Source: Bloomberg)
The cost of insuring Asia-Pacific corporate and sovereign bonds from default increased, according to traders of credit-default swaps. The Markit iTraxx Australia index climbed 7 basis points to 194 basis points as of 10:01 a.m. in Sydney, Westpac Banking Corp. (WBC) prices show. The gauge is set for its highest close since Dec. 20, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose 5 basis points to 192.5 as of 8:08 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The index is poised to close at the highest level since Jan. 19, CMA data show. The Markit iTraxx Japan index increased 4 basis points to 212 as of 9:01 a.m. in Tokyo, according to Deutsche Bank AG prices. The benchmark is on course for its highest close since Oct. 7, according to CMA prices.

Facebook Increases IPO Price Range to $34-$38 a Share (Source: Bloomberg)
Facebook Inc. (FB) boosted the price range on its initial public offering to seek as much as $12.8 billion, signaling that Chief Executive Officer Mark Zuckerberg expects demand for the social network to withstand recent market turmoil. The new range is $34 to $38 a share, a regulatory filing today shows, indicating a market value of as much as $104.2 billion. That would make Facebook, co-founded in 2004 by Zuckerberg, worth more than Citigroup Inc. (C) and McDonald’s Corp. Facebook, which has spent more than a week pitching the IPO to investors across the U.S., raised the range even after the Standard & Poor’s 500 Index yesterday slumped to the lowest level since February. That may spell disappointment for investors if the slump persists, said Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp.
“They get more money upfront if they can make it go, but if the enthusiasm is weak out of the gate, it makes it that much more difficult for the company going forward,” said McCain, who helps oversee more than $20 billion for the Cleveland-based bank. “You would think they would be a little more cautious.”

Treasury Yield Is 10 Basis Points From Low on Greece (Source: Bloomberg)
Treasury 10-year yields were 10 basis points from the record low after German Finance Minister Wolfgang Schaeuble said a Greek election will be a referendum on whether the country retains the euro. Seven-year yields fell to the least ever on the first two days of this week. Europe’s fiscal crisis and Greece’s struggle to combat a recession while staying in the currency union increased demand for the relative safety of U.S. debt. The Standard & Poor’s 500 Index slid to the lowest level since February. “Bond sentiment is very strong,” said Tsutomu Komiya, who helps oversee the equivalent of $111 billion as an investor in Tokyo at Daiwa Asset Management Co., a unit of Japan’s second- biggest brokerage. “Stock market sentiment has collapsed. This will continue. The flight to quality isn’t over.”
Benchmark 10-year yields were little changed at 1.77 percent as of 9:28 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.75 percent security due in May 2022 was 99 27/32. The record low was 1.67 percent set Sept. 23. Seven-year notes yielded 1.19 percent, versus the all-time low of 1.1679 percent.

Euro Trades Near 4-Month Low With No Greek Government (Source: Bloomberg)
The euro was less than 0.1 percent from the lowest level in almost four months after Greece’s political leaders failed to form a ruling coalition, deepening speculation the country will have to leave the currency bloc. Demand for the euro was damped before Greek leaders seek agreement today on an interim government that will schedule new elections. The U.S. dollar traded 0.1 percent from its strongest this year versus its Australian peer as Asian stocks extended a global equity rout and ahead of the release of minutes from the Federal Reserve’s April meeting. The yen weakened versus most of its 16 major peers after a report showed Japan’s machinery orders fell in March. “Risk off has done a lot of damage to the euro,” said Gavin Stacey, chief interest-rate strategist at Barclays Capital in Sydney. “If we are to see Greece leave the euro, I suspect the initial reaction will be even more catastrophic.”
The 17-nation euro was little changed at $1.2731 as of 9:30 a.m. in Tokyo from $1.2729 yesterday, when it touched $1.2722, the lowest since Jan. 17. The shared currency rose 0.2 percent to 102.27 yen. The greenback added 0.2 percent to 80.33 yen. It fetched 99.33 cents per Australian dollar after reaching 99.22 cents yesterday, the strongest since Dec. 20.

FOREX-Euro dips to 4-month low as Greek impasse fans exit worry
TOKYO, May 15 (Reuters) - The euro slipped to a four-month low against the dollar as a political stalemate in Greece stoked fear the country may renege on bailout pledges made to international creditors and exit the currency bloc.  
"Another election is likely to make fiscal rebuilding less likely," Daisuke Karakama, market economist at Mizuho Corporate Bank, said.  

U.S. Retail Sales Cool After Warm-Weather Spree: Economy (Source: Bloomberg)
Retail sales rose in April at the slowest pace of the year as Americans took a break from a shopping spree induced by unseasonably warm weather in prior months and an earlier Easter holiday. The 0.1 percent gain followed a 0.7 percent increase in March, Commerce Department figures showed today in Washington. The April advance matched the median forecast in a Bloomberg News survey. Sales of clothing declined, while purchases excluding cars, building materials and service stations -- the category used to calculate gross domestic product -- rose more than forecast. Other reports today showed manufacturing in the New York region accelerated more than projected, and confidence among U.S. homebuilders jumped to a five-year high.
“Consumers overall are still pretty much engaged,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, the most-accurate forecaster of retail sales in the two years through April, according to data compiled by Bloomberg News. “Manufacturing is still a solid contributor to growth. It is growing with the pace of demand.”

International Demand for U.S. Assets Rises (Source: Bloomberg)
International demand for U.S. financial assets rose in March as investors continued to seek safety from the debt crisis in Europe. Net buying of long-term equities, notes and bonds totaled $36.2 billion during the month, compared with net purchases of $10.1 billion in February, the Treasury Department said today in Washington. Economists surveyed by Bloomberg News projected net buying of $32.5 billion of long-term assets, according to the median estimate. “The continued buoyancy in foreign demand for U.S. Treasuries is consistent with the preeminent safe-haven appeal of these securities to global investors,” Millan Mulraine, a senior U.S. strategist at TD Securities in New York, said. “We expect the souring in global risk sentiment in recent months, as concerns about the deteriorating European debt crisis and slowing global growth momentum intensifies, to continue to bolster foreign investors’ appetite for U.S. Treasury securities.”
The report showed that net foreign purchases of U.S. Treasuries totaled $20.5 billion in March, compared with net buying of $15.4 billion the month before. U.S. assets maintained their attraction as the European debt crisis mounted on concerns that Greece may leave the euro area. Greece’s impasse over forming a government has raised the possibility of another election to be held as early as next month, threatening the implementation of austerity pledges under the international financial rescue plan.

Farmland Values Advance in U.S. as Crop-Price Spur Income (Source: Bloomberg)
Farmland values surged during the first quarter from Kansas to Indiana as gains in crop prices during the past two years bolster income, according to a survey of lenders by regional Federal Reserve banks. Midwest farmers in a five-state region saw an increase of 19 percent as of April 1 from a year earlier, including a 27 percent increase in Iowa, the largest U.S. corn and soybean grower, the Chicago Fed said in a report today. Great Plains states posted a 25 percent increase, led by a 39 percent jump in Nebraska and 24 percent in Kansas, the Kansas City Fed report showed. Corn and soybean futures last year reached the highest averages ever, while wheat was 34 percent higher than in 2009. Net farm income for domestic growers will reach $91.7 billion this year, second only to last year’s $98.1 billion, the U.S. Department of Agriculture said on Feb. 13.
“We have had two years of exceptional farm income, historically low interest rates and a lack of alternative investments driving farmland prices,” Mike Walsten, the editor of Land Owner Newsletter, a unit of Pro Farmer publications, said by telephone from Cedar Falls, Iowa. “Farm income in 2011 was $30 billion higher than the 10-year average, and that’s what’s increasing farmer purchases.”

U.S. Retail Sales Cool After Warm-Weather Spree: Economy (Source: Bloomberg)
Retail sales rose in April at the slowest pace of the year as Americans took a break from a shopping spree induced by unseasonably warm weather in prior months and an earlier Easter holiday. The 0.1 percent gain followed a 0.7 percent increase in March, Commerce Department figures showed today in Washington. The April advance matched the median forecast in a Bloomberg News survey. Sales of clothing declined, while purchases excluding cars, building materials and service stations -- the category used to calculate gross domestic product -- rose more than forecast. Other reports today showed manufacturing in the New York region accelerated more than projected, and confidence among U.S. homebuilders jumped to a five-year high.
“Consumers overall are still pretty much engaged,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, the most-accurate forecaster of retail sales in the two years through April, according to data compiled by Bloomberg News. “Manufacturing is still a solid contributor to growth. It is growing with the pace of demand.”

Japan’s Growth Seen Peaking as BOJ Pressed to Stimulate (Source: Bloomberg)
Japan’s economic growth probably peaked in the first quarter and analysts forecast the pace of expansion will halve by year-end as the boost from earthquake reconstruction fades. Gross domestic product rose an annualized 3.5 percent, compared with a 0.7 percent contraction in the final three months of 2011, according to the median estimate of 27 economists surveyed by Bloomberg News. The Cabinet Office will give the number at 8:50 a.m. in Tokyo tomorrow. Persistent deflation and the yen’s 5 percent climb against the dollar since mid-March may encourage politicians to keep pressing the Bank of Japan to add more stimulus to support growth in the world’s third-biggest economy. As the boost from rebuilding wanes, the nation will increasingly depend on exports just as Europe’s sovereign-debt crisis and a slowdown in China cloud the outlook for global demand.
“The pace of a slowdown later this year will depend on how the European debt crisis will affect the yen and exports,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. in Tokyo and a former BOJ official. “The Bank of Japan (8301) may have little choice but to ease more -- once every three months.”

Japanese Machinery Orders Fall 2.8% From Previous Month (Source: Bloomberg)
Japan’s machinery orders fell less than economists forecast in March, as earthquake reconstruction helped to support the nation’s growth. Bookings decreased 2.8 percent from the previous month, when they rose by the same amount, a Cabinet Office report showed in Tokyo today. The median estimate of 29 economists surveyed by Bloomberg News was for a 3.5 percent decline. Orders can swing between gains and declines depending on the timing of major projects. Japan’s government may report tomorrow that the world’s third-biggest economy returned to growth in the first quarter after shrinking in the final three months of last year, a Bloomberg News survey of analysts shows. Europe’s sovereign-debt crisis and gains by the yen against the dollar may limit the full-year expansion by capping exports.
“The recovery in business investment is good news, but it’s unlikely to be strong enough to help accelerate growth,” said Hidenobu Tokuda, an economist at Mizuho Research Institute Ltd. in Tokyo. “Companies are reluctant to increase spending because of the strong yen.”

South Korea Adds Workers as Unemployment Rate Unchanged at 3.4% (Source: Bloomberg)
South Korea added workers last month and the unemployment rate held at two-month low as demand increased for jobs in health, social welfare and education. The rate was 3.4 percent in April, Statistics Korea said today in Gwacheon, south of Seoul, matching the median estimate in a Bloomberg News survey of 12 economists. The number of employed people increased 1.9 percent to 24.76 million last month from a year earlier. South Korea’s gross domestic product expanded at the fastest pace in a year last quarter, mostly boosted by government spending and investments by semiconductor chipmakers. Now, the sovereign-debt crisis in Europe threatens to curb the nation’s exports. “We expect Korea’s GDP growth to be sub-trend this year as a whole, which suggests that the unemployment rate will drift upwards,” Sukhy Ubhi, an economist at Capital Economics Ltd. in London, said before the release. “Renewed concerns over the euro-zone debt crisis suggest that business sentiment may already be turning for the worse.”
The won declined 0.4 percent to 1,154 per dollar in Seoul yesterday, according to data compiled by Bloomberg. The benchmark Kospi stock index fell 0.8 percent. The Bank of Korea is likely to keep the key interest rate unchanged this year, setting a record for the longest stretch that the benchmark has stayed on hold, an adviser to the government said last week.

Italy Economy Contracts Most in Three Years on Recession (Source: Bloomberg)
Italy’s economy contracted for a third quarter in the three months through March as the nation’s recession deepened amid an intensifying euro-area debt crisis. Gross domestic product declined 0.8 percent, the most in three years, Rome-based national statistics institute Istat said in a preliminary report today. The contraction was more than the median forecast of 0.7 percent in a survey of 14 economists by Bloomberg News. GDP fell 1.3 percent from a year earlier. Prime Minister Mario Monti’s government is implementing 20 billion euros ($26 billion) in austerity measures that helped push Italy into its fourth recession since 2001 in the fourth quarter of last year. Monti is now lobbying European leaders to craft policies to boost economic growth without widening budget deficits as spending cuts and the debt crisis cloud prospects for euro-region expansion.
“Today’s GDP outcome is particularly disappointing,” UniCredit SpA economists including Milan-based Chiara Corsa wrote in a note to investors today. “It seems that the picture won’t improve substantially in the second quarter of the year.”

Greek Leaders Meet on Election After European Stocks Drop (Source: Bloomberg)
Greek leaders seek agreement today on an interim government that will schedule new elections as early as June 10, after government-formation talks collapsed amid concern the country will abandon the euro common currency. “The country is once again headed to elections in a few days under adverse conditions,” said Evangelos Venizelos, the head of the socialist Pasok party. “The Greek people told us they didn’t want elections but a coalition government, that they want Greece in the euro.” The new voting will follow inconclusive May 6 elections that pushed a political party opposed to Greece’s international bailout into second place. Public opinion polls say that party, Syriza, may come in first next time, complicating Greece’s efforts to avoid running out of cash by early July.
President Karolos Papoulias failed to broker a governing coalition in meetings yesterday with Venizelos and other party leaders in Athens. The euro plummeted to an almost four-month low, while the Stoxx Europe 600 Index fell to its lowest level since December.

Greek President Told Banks Anxious as Deposits Pulled (Source: Bloomberg)
Greek President Karolos Papoulias was told by the central bank chief this week that financial institutions are becoming anxious about their prospects as Greeks pull out cash after inconclusive May 6 elections. “Provopoulos told me that of course there’s no panic but there’s great fear which can evolve into panic,” according to a transcript of the president’s meeting with party leaders on May 14 that was published yesterday. Central bank head George Provopoulos told Papoulias that Greeks have withdrawn as much as 700 million euros ($893 million) and the situation could worsen, according to the transcript. Greece’s future in the euro has been thrown into doubt by the failure of political leaders to agree on a new government after the vote, forcing the president to call new elections yesterday. The danger is that the next vote will again fail to produce an administration capable of pushing through the austerity measures needed to keep the country in the euro.
Greece’s benchmark ASE Index fell to its lowest since 1992 yesterday.

Greece Makes Repayment on 435M Euro Bond Coming Due Today (Source: Bloomberg)
Greece is to repay 435 million euros ($556 million) of bonds falling due today as the nation faces new elections after leaders failed to form a government. Greece will pay the principal and interest on foreign law notes which weren’t tendered into the country’s debt restructuring, the Athens-based Finance Ministry said in an e- mailed statement. The repayment won’t prejudice future decisions on other untendered bonds, the ministry said. Greece swapped about 200 billion euros of its sovereign debt in March and April in the world’s biggest debt restructuring, forcing holders of notes issued under domestic law to accept a 53.5 percent loss on the face value of the bonds. The May 15 redemption is the first out of about 6.4 billion euros of notes issued under foreign law that investors refused to tender into the swap.
Prime Minister Lucas Papademos called elections after completing the restructuring and securing a 130 billion-euro Greek bailout from the European Union and International Monetary Fund, the country’s second. The May 6 poll yielded no clear winner and the country will hold repeat elections after President Karolos Papoulias failed in a last-ditch attempt to broker an agreement on a new government today.

Greek Vote Escalates Crisis as Schaeuble Raises Euro-Exit (Source: Bloomberg)
Greece’s decision to return to the ballot box in the search for a government unleashed a hazardous new phase in Europe’s debt crisis, with German Finance Minister Wolfgang Schaeuble calling the vote a referendum on whether the country stays in the euro. Post-election attempts to form a ruling coalition in Athens broke down today after nine days, sending Greeks back to the polls next month with surveys giving the lead to an anti-bailout party that would tear up the conditions attached to 240 billion euros ($307 billion) of aid. “If Greece -- and this is the will of the great majority - - wants to stay in the euro, then they have to accept the conditions,” Schaeuble told reporters at a meeting of European finance ministers in Brussels. “Otherwise it isn’t possible. No responsible candidate can hide that from the electorate.”
The euro tumbled to a four-month low, European stocks dropped and investors sought the safety of German bonds amid speculation that Greece would be forced out and pull other countries with it, doing untold damage to the European financial system. The Greek quagmire raised the tension for a meeting in Berlin tonight between German Chancellor Angela Merkel, the dominant figure in euro crisis management, and Francois Hollande, who took office as French president today in the first power shift to the Socialists in France since 1981.

20120516 0955 Global Commodities Related News.

Market Recap: Wheat Futures (Source: CME)
Wheat futures closed 4 1/2 to 10 1/4 cents higher in Chicago, 7 to 13 cents higher in Kansas City and mostly 9 1/4 to 24 3/4 cents higher in Minneapolis. The winter wheat markets finished mid-range, while Minneapolis futures closed just off session highs. Fundamentally, wheat futures were supported by weather/crop concerns today.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 10 1/4 at 608 1/2, 8 3/4 off the high and 11 up from the low. December Wheat closed up 8 1/2 at 643 3/4. This was 8 3/4 up from the low and 8 1/2 off the high. July wheat opened closed moderately higher on the session but did not take out the mid-day highs. A hot weather forecast for western Kansas just ahead and ideas that recent rains may not have been enough to avoid some further deterioration of winter wheat crop conditions helped to support the strong gains early in the session today. Crops rated good to excellent in Kansas slipped to 52% from 60% last week and traders see this as a factor which might have sparked active short-covering early in the session today. Spring wheat plantings reached a record fast 94% from 64% on average. Short-covering seemed to be the primary bullish force today as some potential weather issues in the Black Sea region, China and Kansas have helped to support. July Oats closed up 1 3/4 at 330 1/4. This was 3 1/4 up from the low and 4 1/2 off the high.

Market Recap: Corn Futures  (Source: CME)
Corn futures were stronger throughout the day and rallied into the close to test the mid-morning highs. Corn finished 5 to 14 1/4 cents higher with the July contract leading gains. While the U.S. dollar was quiet overnight, it rallied sharply today, pressuring crude oil and gold futures.

Soybeans, Wheat, Corn Called to Open Higher on Weather (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Soybean futures may open 16 cents to 20 cents a bushel higher on the Chicago Board of Trade on speculation that warmer, drier weather than normal this month will deplete U.S. soil moisture and hurt crop yields, Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. Soybean-oil futures are expected to open 0.4 cent to 0.5 cent a pound higher, and soybean-meal futures may open $7 to $8 higher per 2,000 pounds.
-- Wheat futures may open 7 cents to 10 cents a bushel higher on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange after a government report yesterday showed a drop in U.S. crop conditions, while dry weather threatens crops in parts of Russia and the Ukraine, Grow said.
-- Corn futures are called to open 4 cents to 6 cents a bushel higher in Chicago after last week’s drop to the lowest in seven months spurs increased demand for the grain, Grow said.

Wheat Jumps Most in Two Weeks as Dry Kansas Weather Curbs Yield (Source: Bloomberg)
Wheat rose the most in more than two weeks on speculation that dry weather will curb yields in Kansas, the biggest U.S. producer of winter varieties. About 52 percent of the Kansas crop was in good or excellent condition as of May 13, down from 60 percent a week earlier, the U.S. Department of Agriculture said in a report yesterday. Most of the state has received little or no rain in the past week, National Weather Service data show. Wheat prices have dropped 6.8 percent this year as favorable weather sped crop development. “We’re getting anecdotal evidence” from west-central Kansas that the crop potential is declining, Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said in a telephone interview. “The drop in the good-to-excellent conditions support that anecdotal evidence that we’re losing yield in Kansas.” Wheat futures for July delivery advanced 1.7 percent to $6.085 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest jump since April 27.
Dry weather in parts of Ukraine and Russia also will boost prices, Zuzolo said, although east Ukraine and the North Caucasus region of Russia may get some precipitation in the next week, forecaster Telvent DTN said today in a report.

GRAINS-U.S. soybean futures rebound, wheat firms on Kansas weather worries
SYDNEY, May 15 (Reuters) - U.S. soybean futures rose after two straight days of losses, driven by fund liquidation of long positions and a risk-off phase that propelled the July oilseed contract to the lowest level in six weeks on Monday.
"Obviously we've had a massive selloff in the last few days, but ultimately we are going to see buyers back in this market, its just a matter of when," the trader said. "The fundamentals around soybeans haven't changed."

Kazakhstan eyes record grain exports, cuts rail costs
ASTANA, May 15 (Reuters) - Kazakhstan expects to ship a record 13 million tonnes of grain this season after agreeing to subsidise rail transport fees to give exporters better access to ports on the Black and Baltic Seas, Agriculture Minister Asylzhan Mamytbekov said on Tuesday.
Kazakhstan, which ranks among the world's top 10 wheat exporters, should export 5 million tonnes of grain between May and September, adding to the 8 million tonnes already shipped since September last year, Mamytbekov told reporters.

Corn, soy planting pace ahead of analysts view
CHICAGO, May 14 (Reuters) - U.S. farmers seeded corn and soybeans faster than analysts were expecting last week and their momentum was expected to continue amid calls for good weather around the Midwest.
The U.S. Agriculture Department said on Monday afternoon corn planting was 87 percent complete as of May 13 and soybean planting was 46 percent complete. The soybean planting pace matched farmers' efforts in 2005 while corn planting was in line with 2010.

Farms in main Argentina grains province to strike
BUENOS AIRES, May 14 (Reuters) - Farmers in Argentina's main agricultural province will call a strike this week against a proposed tax increase, but the planned five-day halt in crop sales should have little impact on exports.
Growers in Buenos Aires province - which produces most of  Argentina's corn, soy and wheat - say a land tax hike proposal expected to be approved on We dnesday by local lawmakers will hurt already precarious profits and drive some out of business.

India's May 1 grain stocks sharply above targets
NEW DELHI, May 14 (Reuters) - India's wheat stocks at government warehouses on May 1 were 38.2 million tonnes, more than nine times the official target of 4.0 million tonnes for the quarter ending June 30, government sources said on Monday.
Rice inventory for the same period was 32.9 million tonnes against a target of 12.2 million tonnes.

Thailand pushes regional rice pact again as exports slump
BANGKOK, May 14 (Reuters) - Thailand, the world's biggest rice exporter, is trying to reach a deal on rice cooperation with Vietnam and Cambodia as Thai  government stocks are at record highs, but similar efforts have failed in the past and traders expect little success this time.
"We are to hold a meeting in Bangkok by the end of May and there will be senior officials from those countries at the meeting," said Manat Soiploy, who oversees the rice trade at the Commerce Ministry. He had no precise date for the meeting.

SOFTS-Sugar near 20-month low, coffee edges up
LONDON, May 15 (Reuters) - ICE sugar consolidated near a 20-month low, in line with steady commodity markets after a sell-off on Greece's uncertain euro zone future in the previous session dragged the CRB commodities price index to a 19-month low.
"The markets are now almost discounting a Greek exit from the currency and is more worried about knock-on effects on other indebted Eurozone countries," said Nick Penney of brokerage Sucden Financial.

Thailand may export record volume of sugar in 2012
BANGKOK, May 15 (Reuters) - Thailand, the world's second-biggest sugar exporter, has ended its 2011/12 crushing season and produced a record 10.2 million tonnes of sugar, the Office of Cane and Sugar Board (OCSB) said on Tuesday, adding that might lead to record exports this year.
Output was up from 9.6 million tonnes in the previous crop and higher than the forecast of 10.0 million tonnes.

El Salvador coffee exports drop 50 pct in April
MEXICO CITY, May 14 (Reuters) - Coffee exports from El Salvador fell 50 percent in April compared with the same month a year earlier, reaching 114,704 million 60-kg bags in the month, the country's coffee association CSC said on Monday.
CSC said exports through the first seven months of the 2011/2012 harvesting season totaled 693,061 bags.

Ghana cocoa purchases down 6.7 pct in year so far-data
ACCRA, May 14 (Reuters) - Cocoa purchases declared to Ghana's industry regulator Cocobod reached 744,298 tonnes by May 3 since the start of the season, down 6.7 percent on the same period last year, according to Cocobod data seen by Reuters on Monday.
Cocobod said in mid-April it might not meet a 950,000-tonne output target this season due to dry weather that has hampered growing. The world's second largest cocoa grower after Ivory Coast produced more than one million tonnes last year.

Cuban raw sugar output up 11.7 percent
HAVANA , May 14 (Reuters) - Cuban raw sugar production rose 11.7 percent, or an estimated 140,000 tonnes, this year over 2011's 1.2 million tonnes, with 29 of 46 mills still grinding, the state-run Trabajadores newspaper said on Monday.
According to the paper, the mills will continue grinding "until rains and industrial yields permit in an effort to come close to reaching the plan now at 92 percent."

Rains raise farmer hopes for ICoast cocoa mid-crop
ABIDJAN, May 14 (Reuters) - Abundant rains across most of Ivory Coast's main cocoa producing regions well into last week are helping create ideal conditions for the development of the mid-crop, farmers and analysts said on Monday.
The mid-crop in the world's top cocoa producer is marketed from April to September, but a five-month dry spell that carried into March has delayed the start of harvesting.  

India's April natural rubber imports surge
May 14 (Reuters) - India's natural rubber imports in April nearly tripled from a year ago to 17,509 tonnes, state-run Rubber Board said on Monday, reflecting deals signed by local tyre makers earlier this year to cash in on lower prices overseas.
However, imports have fallen from March when they stood at 19,199 tonnes.  

India issues formal order freeing up sugar exports
NEW DELHI, May 14 (Reuters) - India has issued a formal order freeing up sugar exports, a government statement said, after ministers agreed to permit shipments without any cap on May 2 to help mills clear some dues they owe to cane growers.  
Exporters would not need permission for shipments from the food ministry but they must disclose the quantities sold overseas, said the statement issued late on Friday.

China's Sinopec launches first shale gas project
BEIJING, May 15 (Reuters) - Sinopec Group, China's second largest oil and gas producer, has launched its first shale gas project and plans to develop production capacity of 300-500 million cubic metres a year by the end of this year, it said on Tuesday.
Production capacity at the Fuling block in the gas-rich southwestern city of Chongqing is expected to reach 1 billion cubic metres by 2013, Sinopec said on its website.

India targets 11 pct Iran oil import cut in 2012/13-minister
NEW DELHI, May 15 (Reuters) - India aims to cut imports of Iranian crude by 11 percent to 15.5 million tonnes in 2012/13, Junior Oil Minister Dharmendra Pradhan told parliament on Tuesday, equivalent to about 310,000 barrels per day (bpd).
Pradhan said India imported 17.44 million tonnes of oil in 2011/12, down 5.7 percent from the year earlier. Japan secured a waiver from U.S. sanctions with cuts of 15-22 percent in its imports.

POLL-US crude stocks seen higher, Cushing stocks up
May 14 (Reuters) - U.S. crude oil stockpiles were forecast higher for the eighth straight week last week as stockpiles at Cushing, Oklahoma, likely climbed to a new record, a preliminary Reuters poll ahead of weekly inventory reports showed on Monday.
Averaging the estimates from five analysts, crude inventories were forecast to have risen by 1.5 million barrels in the week to May 11, the survey showed.

Brent crude to stay well supported on rising demand
SINGAPORE, May 15 (Reuters) - Tight global oil supply outside the United States and healthy demand, particularly in Asia ahead of summer, will help keep Brent crude  prices well supported, a senior trading executive at Southeast Asia's biggest bank said.
Prices have surged more than 17 percent so far this year due to supply concerns triggered by mounting Western sanctions on Iran over its nuclear programme. The U.S. and its allies suspect Iran is developing nuclear weapons, which Tehran denies.

OIL-Brent falls towards $111 on Greece jitters
SINGAPORE, May 15(Reuters) - Brent crude futures fell towards $111 a barrel as Greece's political and economic turmoil deepened and worries that the debt-laden country could leave the euro zone sparked a sell-off in dollar-denominated commodities.
"The risk-off turn in the market over the last week is due to a re-evaluation of global growth, particularly in China and Europe, which has been weighing on the market," said Natalie Robertson, an analyst at ANZ.

Oil Drops a Fourth Day on Rising U.S. Supplies, Greek Elections (Source: Bloomberg)
Oil dropped for a fourth day in New York after U.S. crude stockpiles increased and Greek talks to form a coalition government collapsed, raising concern the nation will exit the euro and worsen the region’s debt crisis. Futures slipped as much as 1 percent from the lowest settlement in almost five months yesterday. U.S. inventories rose 6.6 million barrels last week, American Petroleum Institute data showed. A government report today is forecast to post a gain of 1.8 million, according to a Bloomberg News survey. Greece will schedule new elections as early as June 10, which German Finance Minister Wolfgang Schaeuble called a referendum on whether the country stays in the euro. “Demand destruction is back on the agenda,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney. “The market is going to remain weak over the next month or so until we get some clarity of what’s happening in the world. Greek turmoil is a problem.”
Crude for June delivery decreased as much as 93 cents to $93.05 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.37 at 11:14 a.m. Sydney time. The contract yesterday fell 0.8 percent to $93.98, the lowest close since Dec. 19. Prices are 5.5 percent lower this year.

Lead Shortage Looms in ’13 on Record Demand for Batteries (Source: Bloomberg)
Lead is poised to rally after erasing this year’s gains with the market returning to shortages following a five-year glut as miners fail to keep pace with record demand for batteries. Stockpiles monitored by the London Metal Exchange dropped 7.6 percent from the all-time high reached in October. Demand will exceed supply by 150,000 metric tons next year, equal to about six months of U.S. mine production, Macquarie Group Ltd. estimates. Prices will average $2,273 a ton in the fourth quarter, 13 percent more than now, according to the median of 18 analyst estimates compiled by Bloomberg. Consumption is being driven by industrialization and new technology, with lead usage in batteries for everything from fork-lift trucks to mobile phone towers growing at more than twice the speed of overall demand, BNP Paribas SA estimates.
Mine supply will expand at the slowest pace in three years in 2012 as producers fail to develop new deposits, Macquarie predicts. Xstrata Plc (XTA) will shut a Canadian mine next year after a half-century of digging exhausted all profitable ores. “If you’re adding demand you need new supply,” said Duncan Hobbs, an analyst at Macquarie in London. “In the next two, three years at least, on the supply side, there is no new primary mine lead supply coming to the market anywhere in the world outside China.”

Gold Eclipsed by Dollar Haven as Goldman Sees Rally (Source: Bloomberg)
Investors are reducing gold holdings for a third month, the longest stretch since 2004, and favoring the dollar as a haven from Europe’s debt crisis, even as Goldman Sachs Group Inc. predicts record prices for the metal. Bullion erased its gains for 2012 this week as the dollar rose against a basket of currencies for a record 12 straight days. Gold held in exchange-traded products fell 30.8 metric tons since reaching a record 2,410.2 tons on March 13, data compiled by Bloomberg show. Royal Bank of Scotland Plc, ABN Amro Bank NV and Barclays Plc cut their forecasts in May, though Goldman expects prices to rise 25 percent to $1,940 an ounce in 12 months. Gold rallied for 11 consecutive years and prices rose more than sevenfold, with demand accelerating in 2008 amid the global recession. Now, mounting concern that Greece may exit the 17- nation euro and prospects for faster U.S. growth are boosting the dollar, making it more attractive than bullion to some investors seeking to protect their wealth.
Hedge funds are the least bullish on the metal since December 2008. “Gold is just another risk asset,” said Michael Aronstein, the president of Marketfield Asset Management in New York, who predicted the 2008 slump that drove commodities down 66 percent in seven months and then the rebound in 2009. “It made you a lot of money if you took the risk eight or 10 years ago. A real safe haven would be a pile of high-denomination Swiss franc or dollar notes, stored in a safety deposit box.”

20120516 0955 Soy Oil & Palm Oil Related News.

Market Recap: Soybean Futures  (Source: CME)
Soybean futures finished high-range with old-crop futures 21 to 26 cents higher and new-crop contracts 5 to 13 1/4 cents higher. An easing of euro-zone concerns thanks to flat GDP for the region (most had expected a decline) allowed bean traders to engage in some corrective short-covering on ideas the downside had been overdone.

Soybean Complex Market Recap  (Source: CME)
July Soybeans finished up 26 at 1413, 2 3/4 off the high and 33 up from the low. November Soybeans closed up 10 1/4 at 1305. This was 14 1/2 up from the low and 7 1/4 off the high. July Soymeal closed up 13.7 at 417.2. This was 15.0 up from the low and 0.5 off the high. July Soybean Oil finished up 0.17 at 51.47, 0.27 off the high and 0.6 up from the low. July soybeans closed sharply higher on the session and near the highs of the day. Rumors that China was still in the market for old crop soybeans helped tio spark the late buying. July meal led the whole complex higher late in the day closing $13.70 higher. The market setback after the strong opening to trade slightly lower on the day before a move back up to moderately higher on the day into the mid-session. Outside market forces are mixed and this helped to spark some of the volatile trade. Talk of a six year low in rapeseed production in Europe helped to provide some support but a lack of new export news on the daily wire and a fast start to the planting season helped to limit the advance. The soybean crop is 46% planted from 24% as the 5-year average. With a dry weather outlook for the next week, many traders see a surge in plantings into late May. The excellent weather outlook for planting helped to limit the buying in new crop November soybeans.

Soybeans Rise From Six-Week Low as Biggest Growers’ Exports Gain (Source: Bloomberg)
Soybeans rebounded from a six-week low as export sales from the U.S. and Brazil climbed, draining supply in the world’s two largest growers. The amount of soybeans inspected for U.S. export almost doubled in the week to May 10 to 20.3 million bushels from the prior seven days, the Department of Agriculture said yesterday. In Brazil, growers had sold 83 percent of the harvest as of May 11, up from 63 percent a year ago, according to researcher Celeres. “In the oilseed market, global stocks will tighten considerably over the next 12 months, leaving this market still susceptible to a large rally in prices,” Australia & New Zealand Banking Group Ltd. (ANZ) analysts including Paul Deane in Melbourne said in a report e-mailed today. Soybeans for July delivery rose 1.3 percent to $14.05 a bushel on the Chicago Board of Trade by 1:15 p.m. London time. The oilseed yesterday reached $13.76, the lowest price since March 30.
Rising demand for U.S. supplies will probably cut the nation’s inventories by 31 percent from a year ago to 145 million bushels (3.94 million metric tons) before the 2013 harvest, the USDA said May 10. Wheat for July delivery advanced 1.4 percent to $6.065 a bushel. In Paris, November-delivery milling wheat gained 0.6 percent to 196.75 euros ($252.55) a ton on NYSE Liffe. Wheat was supported after the USDA cut condition ratings for the country’s winter crops yesterday, Rory Deverell, a risk- management consultant at INTL FCStone in Dublin, said in a report. About 60 percent of the crop was in good or excellent condition as of May 13, down from 63 percent a week earlier that received the top ratings, the USDA said. Corn for July delivery climbed 0.9 percent to $5.885 a bushel in Chicago.

VEGOILS-Palm oil rebounds on bargain hunting, Europe caps
SINGAPORE, May 15 (Reuters) - Malaysian palm oil futures rebounded, supported by bargain hunting after prices fell to a three-month low in the previous session, although concerns remained that demand could be hit if Greece exits the euro zone.
"We see a small recovery today because selling was a bit overdone yesterday and exports were also slightly better," said a trader with a foreign commodities brokerage in Malaysia.
"But sentiment is still weak because of external factors, especially when we talk about Greece and the revival of uncertainty in Europe."