Friday, May 18, 2012

20120518 1818 FCPO EOD Daily Chart Study.

FCPO closed : 3096, changed : +1 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : turned upward, seller lock in profit.
Support :  3070, 3050, 3020, 2970 level.
Resistance : 3100, 3150, 3200, 3250 level.
Comment :
FCPO closed 1 tick higher with improved volume exchanged. Soy oil price currently trading lower after overnight closed rebounded little higher while crude oil price continue to trade side ways.
Price traded lower through out the day after overnight weaker U.S. economy data sent most commodities lower followed by last hour recovery back into positive zone as seller decided to lock in profit reducing exposure ahead of the weekend and Monday export figures.
Daily chart reading still suggesting a pullback correction downside biased market development.
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.

20120518 1809 FKLI EOD Daily Chart Study.

FKLI closed : 1526.5 changed : -7.5 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : falling lower, seller in control.
Support : 1515, 1500, 1485, 1470 level.
Resistance : 1530, 1540, 1550, 1565 level.
Comment :
FKLI closed weaker with slowing down volume distributed doing 6 points discount compare to cash market that also closed 12 points lower. Overnight U.S. markets closed lower by more than 1% and today Asia markets ended lower while European markets currently trading weaker.
Missed forecast U.S. economic data and already bearish market sentiment due to European turmoil development sent global markets to trade weaker. Meanwhile tonight main focus will be on FACEBOOK debut.
Daily chart study remained unchanged suggesting a pullback correction downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120518 1718 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 .

20120518 1656 Global Market & Commodities Related News.

Stocks, Euro Fall on Europe Risk; Dollar, German Bonds Gain
By Sungwoo Park and Kana Nishizawa
May 18 (Bloomberg) -- Stocks fell and the euro slipped to a four-month low as Europe’s debt crisis worsened and a U.S. factory gauge contracted. The Dollar Index extended its longest rally and German bond yields dropped to all-time lows.
The MSCI All-Country World Index lost 0.8 percent at 8:04 a.m. in London, the Stoxx Europe 600 Index slid 1 percent and Standard & Poor’s 500 Index futures fell 0.2 percent. The euro declined to the lowest in four months, heading for a third weekly loss. German two- and 10-year bond yields dropped with benchmark bunds heading for a fifth weekly advance. The Dollar Index rose 0.4 percent in a 15-day rising streak. Oil slid for a sixth day in New York.
Almost $4 trillion has been wiped from global equity markets this month as Europe’s deepening crisis threatens the global recovery. Moody’s Investors Service lowered debt ratings at 16 Spanish banks, while Fitch Ratings cut Greece’s credit rating on concern the country may not be able to sustain euro membership. The Federal Reserve Bank of Philadelphia’s general economic index slid to minus 5.8 in May. Data today showed China’s home prices fell in a record number of cities in April.
“Investor sentiment is at its worst,” said Masaru Hamasaki, the chief strategist at Toyota Asset Management Co., which oversees the equivalent of about $23.8 billion. “We don’t know what will happen with Greece, and when something does happen, we don’t know what impact that will have. All people can do is escape from risks, a so-called panic.”

Greece Downgrade
Greece had its credit rating downgraded by one level to CCC from B- by Fitch yesterday after political leaders failed to  form a government in the wake of a May 6 election. The ratings for Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s biggest lenders, were reduced three levels by Moody’s.
In Spain, the cost of insuring against a default jumped to a record after the nation sold January 2015 bonds at an average yield of 4.375 percent, compared with 2.89 percent when they were last auctioned in April. German 10-year yields fell 2 basis points, or 0.02 percentage point, to 1.396 percent, the first time the rate has dropped to less than 1.40 percent. The two-year note yield slid 1 basis point to 0.031 percent, also a record.
The euro touched $1.2642. The 17-nation currency has fallen 2 percent since May 11, set for its third weekly loss, the longest string of declines since the period ending Jan. 13.

Asian Stocks
The MSCI Asia Pacific Index slipped 2.8 percent, its biggest drop since November, erasing the year’s gains. Almost 16 stocks declined for each that rose in the MSCI Asia Pacific index, which yesterday entered a so-called correction after falling more than 10 percent from a peak on Feb. 29. All 10 industries in the gauge declined with technology shares slumping the most. Hong Kong’s Hang Seng Index dropped 2.2 percent to a four-month low and the Shanghai Composite Index slid 1.6 percent. South Korea’s Kospi index lost 3.4 percent.
Asia’s regional benchmark has fallen 5.4 percent this week, poised for the biggest drop since September. Japan’s Topix Index is headed for a seventh weekly retreat, the longest stretch since the Sept. 11 attacks in 2001.
In the U.S., economic reports yesterday showed jobless claims were unchanged at 370,000 in the week ended May 12. That compares with the median forecast of 48 economists surveyed by Bloomberg News for a drop in claims to 365,000.
“Investors are taking money out from riskier assets given the lingering concerns about Europe’s debt problem and the economic recovery outlook,” said Shigehisa Shiroki, a chief trader on the Asian and emerging-markets team in Tokyo at Mizuho Corporate Bank Ltd. “It’s a double-whammy for Asian currencies as many countries depend on exports for growth.”

Won, Aussie
South Korea’s won touched 1,175.30 per dollar earlier today, the weakest level since December, as central bank Governor Kim Choong Soo said the nation’s financial markets are more vulnerable to European risk than those elsewhere in Asia.
India’s rupee sank to an all-time low, while Malaysia’s ringgit dropped 1.0 percent and Indonesia’s rupiah fell 0.6 percent. The Australian dollar touched a more than five-month low, extending declines to a third-straight week.
The cost of insuring Japanese corporate debt from default surged to the highest in more than seven months, according to traders of credit-default swaps. The Markit iTraxx Japan index increased 7 basis points to 218.5 basis points, according to Citigroup Inc. prices. The benchmark is on course for its highest level since Oct. 5, according to data provider CMA.
The S&P GSCI spot index of 24 commodities fell 0.4 percent, bringing this year’s losses to 2.6 percent amid speculation a global economic slowdown may hurt demand for raw materials. Crude oil in New York dropped 0.4 percent to $92.18 a barrel, heading for the third weekly decline. Soybeans in Chicago dropped 0.7 percent and gold lost 0.2 percent, while rubber futures in Tokyo fell 1.4 percent.

Asian shares tumbled and were set for their worst weekly showing since September, amid signs of growing instability among Spanish banks and political turmoil in Greece, with investors adding the la.test weak U.S. data to the list of risk factors. U.S. stocks hit a four-month low on Thursday as rising Spanish bond yields increased investor anxiety over that country's banks and another round of weak data undermined hopes for U.S. economic recovery. (Reuters)

The euro hit a four-month low, extending declines prompted by fears Greece may leave the euro zone and on contagion jitters after Moody's downgraded 16 Spanish banks. (Reuters)

FX COLUMN-Bank downgrades could rock forex players' world
- Neal Kimberley is an FX market analyst for Reuters. The opinions expressed are his own -
LONDON, May 17 (Reuters) - Foreign exchange traders must be considering the practical implications for their counterparty lists if a Moody's review of 114 European institutions, due by end-June, results in widespread downgrades.
Some banks may lose business, a smaller number could gain. Client exposures and risk may become even further concentrated amongst a limited number of market participants.

FOREX-Greek, Spanish woes push euro towards 2012 low; yen off highs
TOKYO, May 18 (Reuters) - The euro hit a four-month low on Friday, extending declines prompted by fears Greece may leave the euro zone and on contagion jitters after Moody's downgraded 16 Spanish banks.
"I get a sense that for now traders would want to square their positions heading into a news-packed weekend with G8 as the main event," said Sumino Kamei, senior currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

U.S. wheat fell 0.7 percent as the market took a breather after climbing to a six-week high in the previous session on fears that dry conditions in the United States and Russia could curb global supply. (Reuters)

Mix of rain, drought threaten Brazil's sugar cane (Reuters)
Excess rain is slowing the progress of Brazil's cane harvest and could threaten output if the winter turns out wetter this year as expected, forecaster Somar said this week, while the opposite problem of drought is now afflicting the country's northeast.

Argentine govt cuts soy view, eyes new wheat area (Reuters)
Argentina cut its 2011/12 soy forecast to 41.5 million tonnes from 42.9 million last month and predicted 2012/13 wheat area would shrink nearly 14 percent from last season, the government said on Thursday.

Heat, wind sap wheat crop's potential in key grower Kansas (Reuters)
The promise of a bumper U.S. hard red winter wheat crop is eroding by the hour as scorching temperatures and high winds in key growing areas of the U.S. Plains sap soils of needed moisture, wheat experts said on Thursday.

Syria sugar refineries paralysed, smuggling seen soaring
LONDON, May 16 (Reuters) - Escalating violence in Syria has slowed sugar refining to a virtual standstill, with smuggling set to rise as Western sanctions hobble trade finance and disrupt imports of the staple sweetener, trade sources said.
The European Union, the United States and other Western countries have imposed sanctions on President Bashar al-Assad's government in response to the bloody crackdown on a revolt that has cost more than 9,000 lives.  

Euro Coal-Stable despite oil fall
LONDON, May 17 (Reuters) - European prompt physical coal prices were little changed on Thursday, hovering at around $88.00 a tonne, despite oil's fall to its lowest level since the start of the year, traders said.
The mood in the coal market has become gloomier during the past month, with fewer players optimistic that there will be a demand-driven rise in prices in the second half.

Brent crude held steady above $107 per barrel, but prices were headed for a third straight weekly drop as a worsening euro zone crisis and weak U.S. economic data raised fears of a global slowdown that could dent oil demand. (Reuters)

Aluminium premiums hit China imports -trade (Reuters)
China, the world's top aluminium consumer, is cutting purchases of the metal after premiums for spot primary aluminium over London Metal Exchange prices hit a record in Asia, traders said on Thursday, adding to pressure on global prices.

Some Chinese steel mills defer iron ore shipments -sources (Reuters)
Some Chinese steel mills have postponed delivery of iron ore from miners including top supplier Vale as a slow steel market cuts demand for the raw material and producers expect a further drop in prices, sources at mills and traders said on Thursday.

China daily crude steel output at record in early May-CISA (Reuters)
China's daily crude steel output hit a fresh record of 2.045 million tonnes in the first 10 days of May, up 0.5 percent from the last 10 days of April, data from the China Iron & Steel Association showed.

Indonesia extends export duty to 21 metal ores
JAKARTA, May 16 (Reuters) - Indonesia will apply an export duty of 20 percent to 21 metal ores and concentrates, the finance minister said on Wednesday, extending a list of 14 metals proposed earlier this month to be subject to the duty.
In total 65 mineral categories will be affected by the new regulation, effective immediately, finance minister Agus Martowardojo said. This did not include coal.

Iron Ore-Shanghai rebar in 5th weekly loss, ore at 5-mth low
SINGAPORE, May 18 (Reuters) - China steel futures fell for a fifth time in six sessions on Friday and were on track for their worst week in three months, dogged by weak demand in the world's biggest consumer that has pushed down iron ore prices to 5-month lows.
A sustained fall in spot prices of iron ore has prompted some Chinese steel mills to delay deliveries of shipments from miners and also limited the chances of marginal suppliers eyeing a slice of the Chinese market.

London copper peeked above four-month lows on short-covering and signs that Greeks are warming to pro-austerity parties, allaying some fears the country could leave the euro zone. (Reuters)

China exports 110,000 T of refined copper -trade
HONG KONG, May 17 (Reuters) - China's smelters and merchants are delivering around 110,000 tonnes of refined copper cathode to London Metal Exchange (LME) warehouses in South Korea, traders said on Thursday, in a rare hefty outflow of inventories that could pressure copper prices.
Four large Chinese smelters have each exported about 20,000 tonnes of cathode under a duty-free tolling scheme and the rest was re-exported from duty-free bonded warehouses in Shanghai by merchants, a trading manager at a large Chinese smelter said.

China increases rare earths export quota-MOC
SHANGHAI, May 17 (Reuters) - China has issued an additional 10,680 tonnes of rare earths export quotas for this year, bringing the total amount issued so far to 21,226 tonnes, the Ministry of Commerce (MOFCOM) said on Thursday.
Baotou Steel Group, the parent of Baotou Steel Rare-Earth Hi-Tech , China's top producer of the minerals, has been given a quota for 1,447 tonnes, while the Aluminum Corp of China (CHINALCO) has received a quota for 970 tonnes, MOFCOM said.

Prices cool India's love affair with gold (Reuters)
Gold demand in India, one of the world's leading buyers, is likely to moderate in 2012 as higher inflation trims disposable income at a time prices are stubbornly high on a weak rupee, the head of the World Gold Council in the country told Reuters.

Gold rose, after posting its largest one-day gain in more than three months in the previous session, but prices were on track to drop for a third straight week on mounting worries over the euro zone debt crisis.  (Reuters)

METALS-London copper inches above 4-mth lows; euro zone weighs
SHANGHAI, May 18 (Reuters) - London copper peeked above four-month lows on Friday on short-covering and signs that Greeks are warming to pro-austerity parties, allaying some fears the country could leave the euro zone.
"LME copper started rising after bouts of short-covering on the ShFE this morning ... I think this triggered the metal's upward momentum and helped lift London prices," said a Shanghai-based trader with an international firm.

PRECIOUS-Gold extends gains, but heads for 3rd straight weekly drop
SINGAPORE, May 18 (Reuters) - Gold rose on Friday, after posting its largest one-day gain in more than three months in the previous session, but prices were on track to drop for a third straight week on mounting worries over the euro zone debt crisis.
"With the reduction in net long positions, the risk of further downside diminishes," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.

Baltic sea index flat on moderate activity
May 17 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, remained flat on Thursday on moderate chartering.
The overall index, which reflects the daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, was at 1,137 points.

Asia Dry Bulk-Rates to fall on ample ship supplies
SINGAPORE, May 17 (Reuters) - Rates for panamax dry bulk carriers on key Asian freight routes are expected to fall next week as freight demand fails to keep up with the increasing global fleet expansion, ship brokers said on Thursday.
The rate for panamax vessels travelling via the transpacific route dropped to a five-week low of $8,519 a day on Wednesday from $9,795 last week, pressured by ample vessel supplies.

20120517 1206 Global Market & Commodities Related News.

GLOBAL MARKETS-Asia shares fall steeply on worries over Spain banks, growth
TOKYO, May 18 (Reuters) - Asian shares fell steeply on Friday after more signs emerged of growing instability among Spanish banks and political turmoil in Greece, with the latest sluggish economic data from the United States adding to the list of risks for investors.
"The shrinking pool of available higher-rated assets suitable for central bank reserves suggests that the EUR's weighting in reserves is likely to be questioned," it said.
That would imply that the motivation to buy the euro for purposes of diversification is declining, leaving the single currency increasingly vulnerable, Morgan Stanley said.

COMMODITIES-Gold, wheat rally; Europe fears hit other markets
NEW YORK, May 17 (Reuters) - Gold on Thursday posted its biggest daily gain since January, recouping most of this week's losses, and wheat extended its rally as buyers returned to some commodity markets cheapened by worries over Europe and the world economy.
"If anything, things seem to be getting worse (in Europe), as the focus now seems to be reverting away from the political deadlock in Greece and towards the deteriorating rate situation in Spain," said INTL FC Stone analyst Ed Meir.

OIL-Oil skids on euro zone woes, weak economic data
NEW YORK, May 17 (Reuters) - Brent crude oil slumped more than 2 percent on Thursday to end at the lowest level since December, as investors avoided risky assets due to mounting fears that turmoil in Greece could spread to other stressed euro zone economies.
"The oil market, like other risky assets, is within the grips of uncertainty surrounding the euro zone," said Harry Tchilinguirian, BNP Paribas head of commodities strategy.

OPEC exports to fall in 4 weeks to June 2-analyst
LONDON, May 17 (Reuters) - Seaborne oil exports from OPEC, excluding Angola and Ecuador, will fall by 420,000 barrels per day (bpd) in the four weeks to June 2, an analyst who estimates future shipments said on Thursday.        
Exports will reach 23.88 million bpd on average, up from 24.30 million bpd in the four weeks to May 5, UK consultancy Oil Movements said in its latest weekly estimate.  

NATURAL GAS-US natgas retreats from 3-mth high, ends down
NEW YORK, May 17 (Reuters) - Front-month U.S. natural gas futures ended lower on Thursday, retreating from a three-month high hit overnight, under pressure from profit taking on recent gains and a government report showing a weekly inventory build above market expectations.  
"I view today's downward move as nothing other than a correction of the market moving closer to its true value trading area. I still expect natural gas to trend higher over time, but ... we will need to see more significant production cuts to bring the market back to a more manageable balance," Energy Management Institute's Dominick Chirichella said in a report.

EURO COAL-Stable despite oil fall
LONDON, May 17 (Reuters) - European prompt physical coal prices were little changed on Thursday, hovering at around $88.00 a tonne, despite oil's fall to its lowest level since the start of the year, traders said.
"It's all dependent upon macros, and there's not that much hope of improvement in the Euro zone economies or that Asia will take all the surplus coal," one trader said.

20120518 1047 Malaysia Corporate Related News.

JobStreet Corp Bhd is set to widen its portfolio in Southeast Asia with Vietnam as its latest addition. JobStreet said it has entered into a memorandum of understanding (MoU) with a Vietnamese entrepreneur to set up an 80:20 joint-venture company in Singapore, which in turn will hold a 100% stake in the proposed venture in Vietnam. The initial contribution from JobStreet for the Vietnam venture will amount to US$800,000 (RM2.48m), to be funded by internal sources, while the partner will be contributing US$200,000. (Financial Daily)

Malaysia needs to reform the industry’s tax structure to counter new rates in Indonesia that improved the competitiveness of refiners there, according to a trade group. Without changes to create a so-called level playing field, there will be “a slow death of the refining industry when the independent refiners move away,” said Mohammad Jaaffar Ahmad, chief executive of the Palm Oil Refiners Association of Malaysia. (Bloomberg)

VADS, a wholly-owned unit of Telekom Malaysia, expects data centre business to emerge the biggest contributor to the company's ICT operations. CEO Ahmad Azhar Yahya said the demand for data centres is driven by rising number of businesses adopting cloud computing. VADS currently has 14 data centres nationwide with total space of 150,000 sq ft. Ahmad Azhar said the company was looking at the possibility of building up to five large data centres over the next three years. (Bernama)

The HSBB network being built by Telekom Malaysia has outpaced other similar national initiatives in the region, according to Informa Telecoms and Media (ITM). ITM said HSBB deployment has done so well that there is now talk of extending the network beyond its original target of 20% of the total homes in the country. There are also plans to go outside the Klang Valley, with strong interest from several state governments. “The HSBB’s progress is way in front of Singapore’s next generation national broadband network, which has only around 130,000 subscribers so far and, although deployed to nearly 90% of buildings in the city-state, is still not available to the majority of households because of delays in completing the in-building wiring,” it said in a report. “There is no doubt that Malaysia’s decision to stick with the incumbent, TM, in deploying its next-generation broadband networks is definitely bearing fruit at the moment,” senior analyst Tony Brown said in the statement. (BT)

U Mobile Sdn Bhd has reached 2m paying subscribers, nine months after the 3G service provider announced it had 1m registered users. U Mobile CEO Dr Kaizad Heerjee attributed the achievement to the introduction of its 42 Mbps mobile broadband service last September 2011. (SunBiz)

SapuraKencana shares closed 14 sen lower at RM2.10 in a higher broader market after the stock opened six sen higher over its reference price of RM2.24. Earlier, it had touched an intra-day high of RM2.30. “The (opening) price was what we had projected it to be, more importantly today marks the start of our journey as a entity offering a full suite of oil and gas services,” said president and group CEO Dato’ Seri Shahril Shamsuddin. (Star)

AMMB Holdings Bhd (AmBank Group) is planning to spend RM600m over the next three years, about double the amount spent in the last four years, to boost its core financial services. Out of the amount, some RM300m will be channelled into changing its core banking platform, said AmBank Group managing director Ashok Ramamurthy. The remainder will be invested in expanding and upgrading infrastructure, increasing manpower, improving efficiency and productivity, as well as increasing the number of branches in its network. (Malaysian Reserve)

The Employees Provident Fund (EPF) is joining Johor Corporation (JCorp) as shareholders of Massive Equity Sdn Bhd (MESB). MESB is a special purpose vehicle formed to buy QSR Brands Bhd and KFC Holdings (M) Bhd. In a statement, JCorp said with the signing of the shareholders' agreement, JCorp maintains its 51% stake in MESB, while the EPF-led consortium makes up the remaining 49% via Melati Asia Holdings Limited (MAHL). It said MAHL is 51% owned by EPF, while Britain-based CVC Capital Partners holds the rest. Consequently, 76% of MESB is in Malaysian hands, it added. Kamaruzzaman Abu Kassim, president and chief executive officer (CEO) of Johor Corporation said, "We are heartened by EPF's confidence and are honoured to have them as our partner at this juncture in JCorp's journey." Datuk Shahril Ridza Ridzuan, EPF deputy CEO for Investment said the EPF is confident that this investment in a highly cash generative business will meet its long term goals of providing sustainable financial growth coupled with accretive yields. "The KFC and Pizza Hut brands have been a market leader in Malaysia for decades and we look forward to enhancing the brands and their market share even further in future," he said. (Bernama)

Gas Malaysia Bhd said it expects a double digit growth in gas volume supplied for 2013 to drive the company’s revenue going forward. In Feb 2012, Gas Malaysia signed a supply agreement with Petronas for 492 mmscfd, a 29% increase from its previous supply of 382 mmscfd. The new agreement will last for 10 years with an option to renew for another five years. For FY11, Gas Malaysia’s revenue hit RM2bn (FY10: RM1.8bn) but net profit was 23% lower yoy to RM229m (FY10: RM298m) due to a 49% decline in gross spreads to RM2.20/mmbtu. The company intends to pay out 100% of its net profit for FY12 and subsequently targets a payout ratio of 75% moving forward. (Star Biz)

Malaysian Airlines System (MAS) will sponsor Queen Park Rangers (QPR) Football Club jerseys for RM10.3m to achieve greater brand visibility. The sponsorship provides strong exposure of the brand globally as its logo has been featured in QPR's home jersey, which they used in more than 75% of all their matches throughout the season. (Malaysian Reserve)

Zelan Bhd is expected to make a sizeable write back in its fourth quarter (4Q) ended March 31, 2012, for provisions in previous projects such as power plant in Indonesia. The company has already written back some RM85.2m in the 3Q ended Dec 31, 2011, from provisions made for the coal fired steam power plant in Rembang, Central Java. "The company has decided on the size of write back on provisions it will make in the coming final quarter numbers ended March 31, 2012, but the company is set to return to the black for the year," a source said. (Malaysian Reserve)

Scomi Group has sold its last machine shop assets for US$39.77m. Its entire stake in Scomi Nigeria Pte Ltd and 2% stake in Oiltools Africa Ltd were sold to AOS Orwell Ltd. The sale officially completes its exit from machine shop business. (BT)

Fajarbaru Builder Group Bhd's wholly owned unit has won a RM13.65m contract from Malaysia Airports Holdings Bhd in relation to works at KLIA2. The 11-month contract will start on May 30, and is expected to contribute to the company's earnings in FY2013 ending June 30. (Financial Daily)

State government-owned company TDM Bhd remains positive on its plantation division's performance this year despite the lower forecast for crude palm oil (CPO) production and CPO prices compared to last year, said chief executive officer Badrul Hisham Mahari. "In line with overall market expectation also, we forecast CPO prices for this year to be lower compared to 2011, but the impact on earnings would be cushioned by our transformation programme initiated in 2004", he said. (Bernama)

Crest Builder: Proposes share placement, bonus issue of new warrants
Crest Builder has proposed a corporate exercise involving a share placement of up 10% of its paid-up share capital and a bonus issue of new warrants. It said on Thursday the proposed placement would involve issuing up to 12.38m new shares which would see it raising RM12.38m. The proceeds would be used for working capital. The five-day volume weighted average price (VWAP) of the shares up to and including May 16 was 99.8 sen. If the indicative issue price of the placement shares is RM1, this would be a premium of 0.2% or 0.2 sen to the five-day VWAP of the shares. Crest Builder said the proposed bonus issue of warrants would be implemented after the completion of the proposed placement. The exercise would involve an issuance of up to 53.64m warrants (warrants B) on the basis of three warrants for every 10 existing shares. It said if the indicative exercise price of the warrants B was RM1, this was a premium of 0.2% or 0.2 sen to the five-day VWAP of the shares. (StarBiz)

JCY: Profit soars on better deals
JCY International has posted a 1,209% spike in its  2QFY13 net profit to RM163.09m, compared with RM12.46m a year earlier, fueled by better average selling price of its products, favourable exchange rates and higher volume shipped. Its revenue rose from RM19.97m in the previous corresponding quarter to RM325.544m. The average selling price of hard disk-drive (HDD) mechanical components, which JCY produces, rose as a result of supply shortage after manufacturing facilities were destroyed during the October floods in Thailand. While many other companies in the same line were negatively impacted by the floods last year, JCY was not, giving it an advantage over its competitors. Finance director James Wong said that the industry supply chain is recovering and it would need another two quarters for the total addressable market to catch up to its pre-flood demand of 180m units. The company has spent RM37.7m on capital expenditure year-to-date, with RM29.2m more to be invested in equipment.  JCY aimed to increase its global market share of HDD components to 40% from 25% currently, Wong said. On its dividend policy of 50% net earnings, he said the company would consider dishing out higher yields for shareholders if it did well. For the reporting quarter, JCY has announced a 3 sen per share interim dividend, slightly more than the 2 sen interim dividend distributed in the first quarter. (StarBiz)

KHSB: Ties up with HK’s Lohas Group
Kumpulan Hartanah Selangor (KHSB) and Hong Kong-incorporated Sun Lohas Group Ltd yesterday signed a MoU to explore an eco-development concept on 2,013ha in Bestari Jaya, Kuala Selangor. The MoU is to allow due diligence as well as a feasibility study on the proposed Sun Lohas City Development. The gross development value of the 10-year project is estimated at some RM8bn, Bernama quoted Sun Lohas chairman Chen Ping as saying. (Bernama)

AsiaEP: Becomes GN3 firm
AsiaEP Resources said it has been classified as a Guidance Note 3 (GN3) company by Bursa Malaysia. Bursa said that the company has triggered the criteria pursuant to GN3 of the ACE Market listing requirements of Bursa Securities.  Bursa Securities would like to emphasise that (it) will continue to monitor the progress of AsiaEP in respect of its compliance with the listing requirements. It triggered Bursa Malaysia’s Guidance Note 3 2.1 (j) which states that the listed corporation has an insignificant business or operations. Currently, there are a seven companies under Guidance Note 3, or about 0.75% of the total 931 companies listed on Bursa. The companies are AsiaEP,  BCT Technology,  Fotronics Corp,  HDM-Carlaw Corp, Ideal Sun City Holdings, Intelligent Edge Technologies and Tricubes. (StarBiz)

20120518 1046 Local & Global Economy Related News.

Bank Negara Malaysia’s (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz said that interest rate policy should be based on the outlook for inflation and growth. “We need to assess this very carefully in deciding the future direction. There should not be an overreaction and over-adjustment because this would result in an over-adjustment in the economy,” she said. “Right now, we have a moderation in the rate of inflation. We have interest rates at a point where they are accommodative. At this point in time, I believe that unless inflation does begin to again rise, it does not merit consideration of raising rates.” The central bank does not see a need to revise 2012’s GDP growth at this point of time as that 4-5% is mainly driven by domestic demand. BNM already priced in the prospect of significantly lower export growth, she said. BNM’s 2012 inflation estimate of 2-3% is intact. The only risk to that range of inflation is commodity prices, she said. On risk concerns over rising property prices and household debt, Zeti said BNM has already put in place pre-emptive, wide-ranging measures to address this issue. Zeti also said that there is no need for the central bank to ask lenders to set aside more reserves against property lending at this point as banks are well-positioned to withstand any set-back in terms of growth or volatility. (Bloomberg)

Bank Negara Malaysia’s (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz warned that Greece exiting the euro would have “unimaginable” consequences for Europe and that she expects a solution will be reached to prevent a departure. Measures to prevent a Greek departure from the common currency should also be accompanied by a plan to boost growth in the region, Zeti said. “Structural adjustments” being imposed in Greece and on other economies such as fiscal austerity need to be done gradually, she said. “The worst-case scenario is what we saw in Asia when one economy collapses, the market usually goes on to focus on the next one, and there will be contagion that will affect different countries probably that don’t deserve those kinds of consequences,” Zeti said. Growth prospects for Asian nations may falter as Greece’s failure to form a government could reverse progress made in resolving Europe’s debt turmoil, with a China slowdown and an uneven US recovery adding to risks. (BT)

Malaysia and Australia will sign a free trade agreement (MAFTA) in Malaysia next Tuesday. It will be Malaysia's sixth bilateral FTA. MAFTA was successfully concluded on 30 Mar 2012. (Bernama)

Bank Negara Malaysia has signed a Memorandum of Understanding (MoU) with the Central Bank of the Republic of Turkey to foster strategic cooperation between both countries. The MoU is also aimed at promoting bilateral investments and liquidity arrangements, to support the development of the financial services sector in both countries, and enhance economic and financial linkages. It includes building the required financial infrastructure, payments and settlements arrangements to facilitate bilateral trade in the respective local currencies of the two countries. (Bernama)

Europe's debt crisis, higher oil prices and the year-end budget cuts and tax increases still remain risks to the US economy, Treasury Secretary Timothy Geithner said, adding that raising the debt ceiling “does not have to be a crisis” as it was last year. He also reiterated that the US “can’t afford” to extend the Bush-era tax cuts for the upper-income when they expire later this year. (Reuters, WSJ)

The size of the US commercial paper market grew by US$27.2bn to US$993.6bn on a seasonally adjusted basis in the week ended 16 May from a seasonally adjusted US$966.4bn outstanding a week earlier, the third straight week of increase. (Reuters)

US jobless claims were unchanged in the 12 May week at 370,000, the third consecutive week of improvement. The four-week moving average eased to 375,000 from a revised 379,750 in the earlier week. (Bloomberg)

US leading indicators fell 0.1% mom in Apr (+0.3% in Mar), exactly the opposite of consensus expectations of a 0.1% gain. (Bloomberg)

US factory activity in the mid-Atlantic region unexpectedly contracted in May to its weakest in eight months as new orders and employment measures slowed.The Philadelphia Federal Reserve Bank said its business activity index dropped to minus 5.8 from positive 8.5 in Apr. The reading was the lowest since Sep 2011 and missed consensus forecasts for a positive reading of 10. (Bloomberg)

US foreclosure filings fell to a five year low in Apr totalling 188,780, down 14% yoy and 5% mom, according to RealtyTrac Inc. It was the lowest tally since Jul 2007. Meanwhile, the mortgage delinquency rate fell in the first quarter to 7.4%, the lowest level in more than three years, the Mortgage Bankers Association said (Bloomberg)

Japan’s economy grew 1.0% qoq in 1Q12 (a revised 0.0% in 4Q11) on account of rising domestic demand and a boost in exports, exceeding expectations for a 0.9% rise. On an annualised basis, the measure grew 4.1% (a revised 0.1% in 4Q11), also exceeding the median estimate of a 3.5% growth. (AFP)

Japanese banks’ new loans for housing grew 10.0% yoy in 1Q12 (2.9% in 4Q11), whilst new loans for the purchase of consumer goods and services grew 16.4% yoy in 1Q12 (19.3% in 4Q11). (Bloomberg)

Japanese capacity utilisation grew 1.3% mom in Mar (-1.7% in the earlier estimate), whilst industrial production grew 14.2% yoy (13.9% in the earlier estimate). Machine tool orders grew 0.4% yoy in Apr (0.5% in the earlier estimate). (Bloomberg)

Singapore’s non-oil domestic exports rose 8.3% yoy in Apr (-4.3% in Mar), faster than the 5.9% growth predicted by analysts on the back of stronger performances from petrochemicals and pharmaceuticals. Electronic exports grew 1.0% yoy (2.8% in Mar), a quarter of the 4.0% expected by economists. (Bloomberg)

Singapore GDP grew 10.0% qoq in 1Q12 (9.9% in 4Q11), close to expectations of a 10.6% rise. On a yoy basis, the measure grew 1.6%, matching 4Q11 but falling short of analysts’ forecast of a 1.8% rise. (Bloomberg)

Singapore stuck to its economic growth projections of 1-3% for 2012 but warned there was a chance of a "disorderly sovereign debt default" in the eurozone that could hit exports. (AFP)

South Korea is prepared to take “prompt” action to stabilize markets “with a comprehensive action plan” should it be needed as Europe’s sovereign debt crisis deepens, vice finance minister Shin Je Yoon said. (Bloomberg)

India's economic growth story is intact and the current account deficit under control, senior Finance Ministry officials told a team from Fitch Ratings, weeks after Standard & Poor's (S&P) cut its outlook for Asia's third largest economy. (Reuters)

The Thai industries sentiment index went up to 104.0 in Apr (102.1 in Mar), the third straight month of increase, according to the Federation of Thai Industries. (Bangkok Post)

Thai car exports rose 6.21% yoy in Apr to 55,433 units but was down 38.28% mom with the export value for the month standing at THB26.52bn, an increase of 14.29% yoy. (Bangkok Post)

Thailand’s Board of Investment revealed that 407 investment projects, worth THB155bn altogether, have been carried out in Thailand by foreign investors during the first four months of 2012. (Thai Financial Post)

The Bangko Sentral ng Pilipinas reported that the net inflow of foreign portfolio investments reached US$333.43m in Apr, falling by 51% yoy from the US$673.8m reported in the same month last year as global risk aversion rose. (Business Inquirer)

The Philippines can still attain its 2012 growth target of 5-6% and improve its medium- to long-term growth potential to 7-8% per year, according to new National Economic and Development Authority head Arsenio M. Balisacan. (Business Inquirer)

US President Barack Obama extended US sanctions against Myanmar, warning that despite progress on human rights and governmental reform, a political opening in the country remained "nascent." (Bangkok Post)

Greece’s credit rating was downgraded one level to CCC from B- by Fitch Ratings on concerns the country won’t be able to muster the political support needed to sustain its membership in the euro area. (Bloomberg)

20120518 1028 Global Market Related News.

Asian Stocks Poised to Erase 2012 Gains on U.S., Greece (Source: Bloomberg)
Asian stocks fell, with the regional benchmark index poised to erase this year’s gains, after U.S. economic data missed estimates and ratings agencies downgraded Spanish banks and Greece as Europe’s debt crisis deepens. Samsung Electronics Co. (005930), a consumer-electronics maker that gets about a fifth of its revenue in America, dropped 3.3 percent in Seoul. Japanese machinery makers plunged in Tokyo after sales growth slowed at Caterpillar Inc., the largest maker of construction and mining equipment. GCL-Poly Energy Holdings Ltd. (3800), a maker of polysilicon used in solar panels, may be active today in Hong Kong after saying its production volume more than doubled in the first-quarter. “If policy makers don’t step in, the costs will be even higher to find a real solution in Europe,” said Diane Lin, a fund manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Sydney. “We remain very cautious. The politicians have still not got the message.”
The MSCI Asia Pacific Index (MXAP) slid 1.5 percent to 113.71 as of 9:54 a.m. in Tokyo, with only 20 stocks rising on the 1005- member gauge. The index is headed for a 4.1 percent drop for the week, its third-straight week of declines and the longest streak since November. The gauge fell before markets in Hong Kong and China open.

Japan Stocks Poised for Longest Loss Streak Since 2001 (Source: Bloomberg)
Japanese stocks fell, with the Topix Index headed for the longest streak of weekly losses since 2001, after U.S. economic data missed estimates and a rating cut of Spanish banks fueled concern Europe’s debt crisis is deepening, clouding the outlook for exporters. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics that depends on Europe and the U.S. for 38 percent of its revenue, fell 3.9 percent. Hitachi Construction Machinery Co. (6305) led machinery makers lower after industry bellwether Caterpillar Inc. said its sales growth slowed. Mizuho Financial Group Inc. (8411), Japan’s third-largest bank by market value, paced losses among banks, dropping 2.5 percent. The Topix index dropped 2.4 percent to 729.32 as of 9:32 a.m. in Tokyo, having fallen 3.8 percent this week, its seventh week of decline. The measure has dropped for seven consecutive weeks only twice since November 1977, in 2001 and 1995.
The Nikkei 225 Stock Average (NKY) lost 2.2 percent to 8,681.27. The measure is down 3 percent on the week, also heading for a seven-week loss.

S&P 500 Tumbles to Four-Month Low Amid Economic Reports (Source: Bloomberg)
The Standard & Poor’s 500 Index (SPX) tumbled to a four-month low on disappointing economic data and concern that credit ratings for Spanish banks would be cut. Nine out of 10 S&P 500 groups fell amid weaker-than- forecast data on manufacturing in the Philadelphia region and U.S. leading indicators. Caterpillar Inc. (CAT) and JPMorgan Chase & Co. slid at least 4.3 percent to pace losses in the largest companies. Apple Inc. (AAPL) sank 2.9 percent, sending its market value below $500 billion. Facebook Inc. (FB) raised $16 billion in the biggest initial public offering by a technology company in history, pricing shares at the top end of an increased range.
The S&P 500 fell 1.5 percent to 1,304.86 at 4 p.m. New York time. The Dow Jones Industrial Average slid 156.06 points, or 1.2 percent, to 12,442.49. The Nasdaq-100 Index sank 2.1 percent to 2,509.05, falling for an eighth day in the longest slump since 2010. The Russell 2000 Index (RTY) of small companies slipped 2.3 percent to 754.33. About 8.3 billion shares changed hands on U.S. exchanges, or 24 percent above the three-month average. “Investors are de-risking,” said Tim Hoyle, the director of research at Radnor, Pennsylvania-based Haverford Trust Co., which manages about $6.5 billion. “They look at a global situation that appears to be degrading, not improving.”

Bovespa Enters Bear Market as Global Economy Concern Deepens (Source: Bloomberg)
The Bovespa index plunged into a bear market on concern a worsening global economy will curb demand for Brazilian exports after a quarter in which most companies reported earnings that trailed estimates. The benchmark slid 3.3 percent to 54,038.20 at the close of trading in Sao Paulo, extending its drop to 21 percent from a bull-market high on March 13. The measure had jumped 41 percent from an Aug. 8 low through that day. The real fell 0.4 percent today to 2.0087 per U.S. dollar, the weakest level since July 2009. Concern that Europe’s sovereign debt crisis is deepening while economic growth slows in China is pushing stocks lower across emerging markets. MSCI Inc.’s index of the so-called BRIC countries fell 1.4 percent today, extending its drop from this year’s high to more than 20 percent as well. Russia’s Micex Index entered a bear market on May 17.
“What’s been really impacting the market in the past few weeks is Europe more than anything else,” Greg Lesko, who manages $700 million at Deltec Asset Management in New York, said in a phone interview. “There were some disappointments in first-quarter earnings, but most of what’s going on right now is related to global risk aversion.”

European Stocks Drop as ECB Pauses Greek Bank Lending (Source: Bloomberg)
European stocks declined for a fourth day as the region’s central bank paused lending to some Greek banks and speculation mounted that Spanish banks may have their credit ratings cut at Moody’s Investors Service. Bankia SA (BKIA) sank 14 percent after a report that depositors withdrew 1 billion euros ($1.27 billion) in the past week. Cookson Group Plc (CKSN) rose the most in six weeks after saying it’s considering a separation of its main divisions. The Stoxx Europe 600 Index (SXXP) dropped 1.1 percent to 241.63 at the close of trading, for the longest losing streak since March 22, even as the Federal Reserve signaled further monetary easing remains an option if the U.S. economy worsens. The gauge has retreated to the lowest level since Dec. 28 on mounting concern that Greece will leave the euro area.
“If Greece falls, we’ve got big trouble in Europe and nobody knows what will happen then with Spain, with Italy, with Portugal,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “Then it doesn’t really matter if the Fed pumps more money into the market and tries to push up the U.S. economy because the trouble in Europe will overshadow everything.”

Stocks Drop on Europe, Manufacturing Data as Gold Rallies (Source: Bloomberg)
Stocks sank, dragging the Standard & Poor’s 500 Index to a four-month low, as concern grew about the health of Spanish banks and an U.S. gauge of manufacturing trailed projections. Gold rebounded from its lowest level of the year while 10-year Treasury yields approached a record low. The S&P 500 tumbled 1.5 percent to close at 1,304.86 at 4 p.m. New York time and the Dow Jones Industrial Average slid 156 points. The Stoxx Europe 600 Index (SXXP) lost 1.1 percent, while Russian and Brazilian stocks entered bear markets. U.S. notes gained as a $13 billion auction of 10-year Treasury Inflation Protected Securities drew a record low negative yield. The Dollar Index (DXY) climbed for a record 14th straight day. Oil fell to a six-month low, while gold surged the most since October.
Concern about Europe’s debt crisis deepened as two people familiar with the situation said Moody’s Investors Service was set to downgrade the credit ratings of Spanish banks, with the ratings firm confirming the cuts after U.S. markets closed. The Federal Reserve Bank of Philadelphia’s general economic index decreased to minus 5.8 in May, indicating an unexpected contraction in manufacturing. The index of leading economic indicators dropped in April for the first time in seven months. “It’s a double whammy,” James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, said in a telephone interview. His firm oversees about $333 billion of assets. “Not only do we have continued scary European news, we’ve got weak economic data in the U.S. today. We’re going to bounce around for a while.”

GLOBAL MARKETS-Greek fears pressure shares, Spanish debt sale eyed
LONDON, May 17 (Reuters) - The euro hovered near four-month lows while European shares dipped, with investors expected to avoid riskier assets due to the deepening turmoil in Greece and fears of contagion to other stressed euro zone economies.
"There is a severe reluctance to take on additional risk in the European region, people are more likely to look at U.S. and some parts of Asia," said Neil Marsh, strategist at Newedge.

Treasury Yield Is 3 Basis Points From Low on Euro Crisis (Source: Bloomberg)
Treasury 10-year yields, the benchmark for everything from corporate bonds to mortgages, were three basis points from the record low as Europe’s fiscal crisis drove demand for the relative safety of U.S. debt. Yields indicate investors are cutting bets on inflation. The difference between two- and 10-year rates narrowed to 1.39 percentage points yesterday. It was the least since the end of 2008. The spread between rates on 10-year notes and same- maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, narrowed to 2.04 percentage points yesterday from this year’s high of 2.45 percentage points in March. “The U.S. is the favorite safe haven,” said Hiromasa Nakamura, who helps oversee the equivalent of $41.4 billion as an investor for Mizuho Asset Management Co. in Tokyo. “There’s a flight to quality. The world economy is declining. Recently the rally has gained strength.”

FOREX-Euro pauses descent, but vulnerable to fresh falls
LONDON, May 17 (Reuters) - The euro held above a four-month low, taking a breather from a sharp sell-off, although gains are likely to be checked by worries about the solvency of some Greek banks that are adding to fears the country may exit the euro zone.
"The market is pricing in a lot of bad news and weaker euro zone structural issues, so there is a chance that the euro will be taking a breather," said Geoffrey Yu, currency strategist at UBS. "Also, the Fed is split and further QE is still being considered, so that should offer some support to the euro."

Euro Touches 4-Month Low After Fitch Downgrades Greece (Source: Bloomberg)
The euro touched a four-month low, extending declines to a third-straight week, amid concern Europe’s sovereign-debt crisis is worsening. The 17-nation currency was 0.2 percent from a three-month low versus the yen after Fitch Ratings downgraded Greece’s long- term credit rating to CCC from B-, citing heightened risk that the nation may not be able to sustain membership in the monetary union. The euro also fell as rising borrowing costs in Spain spurred speculation the crisis is spreading from Greece. Japan’s currency rose against all of its most-traded peers this week as Asian stocks extended a global equity rout. “The market’s very concerned about contagion and Spain probably being the biggest focus of attention after Greece,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest-rate risk-management company. “If the euro breaks $1.26, there’s probably not a lot of stops going to the lows that we saw in 2010.”

Junk-Debt ETFs Set Markets ’Abuzz’ After Record Trades (Source: Bloomberg)
The largest trades on record in shares of two exchange-traded funds that invest in junk debt are attracting attention to the four-year-old market that allows anyone from banks to retirees fast and discreet access to speculative-grade bonds and loans. The transactions were completed hours before JPMorgan Chase & Co. disclosed $2 billion of trading losses tied to credit derivatives, an announcement that has heightened awareness of big trades in debt markets. Shares of an Invesco Ltd. ETF that invests in leveraged loans had a record one-day inflow on May 10 that boosted its shares outstanding by 25 percent, according to data compiled by Bloomberg. The same day, an investor used State Street Corp. (STT)’s ETF of junk bonds to anonymously obtain as much as $780 million of the debt by swapping shares of the fund.
“Markets are abuzz” over the State Street ETF trade that allowed an unidentified investor to avoid moving prices in the privately negotiated debt market, New York-based CreditSights Inc. analysts Chris Taggert and Nathan Wenger wrote in a report yesterday.

Facebook Raises $16 Billion in Record Technology Offering (Source: Bloomberg)
Facebook Inc. (FB) raised $16 billion in the biggest initial public offering by a technology company in history, pricing the shares at the top end of an increased range. The social network sold 421.2 million shares at $38 each, a statement today shows. That values Facebook at $104.2 billion, making it the largest company to go public in the U.S. by market capitalization, according to data compiled by Bloomberg and Dealogic. Facebook, led by 28-year-old Mark Zuckerberg, this week expanded the IPO to meet demand, allowing investors Goldman Sachs Group Inc. and Accel Partners to reap more gains. “My feeling is they could have gone higher, but they wanted to leave some room for upside tomorrow,” said Arvind Bhatia, an analyst with Sterne, Agee & Leach Inc. in Dallas. “The demand was obviously quite strong so I think it’s the right move.”
The offering marks the culmination of Facebook’s evolution in less than a decade from a Harvard University dorm-room project into a social network with more than 900 million users. While Zuckerberg persuaded investors to buy the shares at a higher price-to-earnings multiple than almost every company in the Standard & Poor’s 500 Index, he now faces stemming slowing sales growth after profit fell 12 percent last quarter.

Confidence Sinks as U.S. Job Market Progress Stalls: Economy (Source: Bloomberg)
Consumer confidence fell last week to the lowest level in almost four months and more people than forecast filed claims for unemployment benefits, showing a lack of progress in the job market is rattling Americans. The Bloomberg Consumer Comfort Index dropped in the week ended May 13 to minus 43.6, a level associated with recessions or their aftermaths, from minus 40.4 in the previous period. Jobless applications were unchanged at 370,000 in the week ended May 12, Labor Department figures showed today in Washington. Diminishing employment gains, falling stock prices and the prospect of government gridlock over the budget heading into the November presidential election may continue to hurt household sentiment. The lack of a sustained rebound in hiring damps the outlook for consumer spending, which accounts for about 70 percent of the world’s largest economy.
“A mix of policy questions and some ongoing softness in employment growth” is weighing on confidence, said Sam Coffin, an economist at UBS Securities LLC in Stamford, Connecticut. “We’re hearing more and more about fiscal negotiations. Last year that talk seemed to derail confidence, and that’s coming up as a topic again.” Coffin and the UBS team, led by Maury Harris, were the most accurate in forecasting the unemployment rate for the two years through April, according to data compiled by Bloomberg.

U.S. Solar Tariffs on Chinese Cells May Boost Prices (Source: Bloomberg)
The U.S. yesterday imposed tariffs of as much as 250 percent on Chinese-made solar cells to aid domestic manufacturers beset by foreign competition, though critics said the decision may end up raising prices and hurting the U.S. renewable energy industry. The U.S. Commerce Department ruled that Chinese manufacturers sold cells in the U.S. at prices below the cost of production and announced preliminary antidumping duties ranging from 31 percent to 250 percent, depending on the manufacturer. The decision is meant to provide a boost to the U.S. solar manufacturing industry, where four companies filed for bankruptcy in the past year. The tariffs will probably inflame trade tensions and drive up prices for solar projects in the U.S., according to Shyam Mehta, an analyst with GTM Research in Boston. The duties may prompt Chinese companies to shift production to other countries to evade the duties.
“China-based manufacturers would certainly have to raise U.S. prices to turn a profit,” Mehta said in a statement. “This is likely to lead to module price increases in the U.S., which would serve to dampen demand and installation growth.” The Commerce Department sided with companies including the U.S. unit of SolarWorld AG (SWV), which had argued that Chinese companies benefit from government subsidies, allowing them to sell solar products below cost.

Fed Board Nominees Powell, Stein Win Senate Confirmation (Source: Bloomberg)
The U.S. Senate today confirmed President Barack Obama’s two nominees to the Federal Reserve Board with both receiving the support of at least 70 senators. The Senate voted 70-24 to confirm the nomination of Jeremy Stein, a Harvard University professor and 74-21 to confirm Jerome Powell, an attorney and private equity investor who was a Treasury undersecretary for President George H.W. Bush. Senate Majority Leader Harry Reid, a Democrat from Nevada, said the $2 billion trading loss announced last week at JPMorgan Chase & Co. (JPM) prompted his decision to push the nominations through and bolster the Fed’s regulatory expertise with the nominees, experts in financial markets.
Powell and Stein won approval in March from the Senate Banking Committee over the opposition of Republican Senators James DeMint of South Carolina and David Vitter of Louisiana. Vitter demanded a vote on the nominees in the full chamber, saying today on the Senate floor that Powell and Stein would probably back the “very dangerous” Fed policy of keeping interest rates near zero.

Mortgage Rates in U.S. Fall to Record Lows With 30-Year at 3.79% (Source: Bloomberg)
Mortgage rates in the U.S. fell to a record for a third straight week, reducing borrowing costs as the housing market improves and home-loan defaults decline. The average rate for a 30-year fixed loan dropped to 3.79 percent in the week ended today from 3.83 percent, Freddie Mac said in a statement. It was the lowest in the McLean, Virginia- based mortgage-finance company’s data dating to 1971. The average 15-year rate decreased to 3.04 percent, also a record, from 3.05 percent. Record-low mortgage rates, combined with job gains and lower-priced homes, are helping to lift housing demand and stabilize the real estate market. Housing affordability reached a new high in the first quarter and sales of previously owned homes rose 5.3 percent from a year earlier, data from the National Association of Realtors show. The share of home loans at least 30 days late dropped to 7.4 percent, the lowest since 2008, the Mortgage Bankers Association said yesterday.
Low borrowing costs are encouraging homeowners to reduce their monthly bills. The mortgage bankers’ measure of refinancing applications jumped 13 percent in the week ended May 11, the mortgage-banking group said yesterday. The gauge of purchases declined 2.4 percent.

Consumer Comfort in U.S. Drops to Nearly a Four-Month Low (Source: Bloomberg)
Consumer confidence dropped last week to the lowest level since the end of January as slower U.S. job growth contributed to pessimism about personal finances and spending. The Bloomberg Consumer Comfort Index fell in the week ended May 13 to minus 43.6, a level associated with recessions or their aftermaths, from minus 40.4 in the previous period. The monthly expectations measure was little changed as Americans see scant improvement in the world’s largest economy. The fourth straight decline in weekly confidence comes even as gasoline prices have retreated from an 11-month high reached in early April. The figures underscore the need for stronger job and wage gains that would help propel household spending, which accounts for about 70 percent of the economy.
“The lagged impact of rising food and fuel prices early in 2012 and a slower pace of hiring amid a decelerating economy are the likely culprits behind the near reversal of gains in consumer comfort observed through the first quarter,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “The ability of the household to reassert its place as the primary driver of growth during the current business cycle remains limited due to modest job growth and incomes.”

Japan Housing Finance Sells 45 Billion Yen 10, 15-, 20-Year Debt (Source: Bloomberg)
Japan Housing Finance Agency sold 45 billion yen of bonds, according to an e-mailed statement from Nomura Holdings Inc. The offering includes 10 billion yen of 0.887 percent 10- year notes, 15 billion yen of 1.441 percent 15-year debt and 20 billion yen of 1.747 percent 20-year bonds, it said.

H.K. Should End Bourse Monopoly If LME Won, Rival Says (Source: Bloomberg)
Hong Kong Exchanges & Clearing Ltd., one of three remaining bidders for the London Metal Exchange, should lose government protections against competition if it begins commodities trading, Hong Kong Mercantile Exchange Chief Operating Officer William Barkshire said. Hong Kong Exchanges, Intercontinental Exchange Inc. and CME Group Inc. are the remaining contenders for the LME, which handles more than 80 percent of global metals futures, after NYSE Euronext, the biggest U.S. exchange owner, was removed from the bidding. The Chinese bourse was overtaken as the world’s largest market company by CME Group this year and is seeking to broaden its business as the pipeline of large initial public offerings from the mainland slows.
“In the event that HKEx competes with others in commodities and other asset classes either via the potential acquisition of the LME or organic growth, it is only right that as a condition the authorities should remove its favored nation status,” said Barkshire, who was previously director of strategy at the London Stock Exchange. No other bourses or alternative venues may compete with Hong Kong’s main public exchange without government approval, according to the city’s Securities and Futures Ordinance. The only approved equity platforms have been so-called dark pools, trading venues that don’t display prices and in Hong Kong exclude retail investors.

Thai GDP Contraction Eased on Post-Flood Recovery, Survey Shows (Source: Bloomberg)
Thailand’s economic contraction probably eased in the first quarter as factories resumed production and tourists returned after the worst floods in almost 70 years, adding scope for interest-rate increases. Gross domestic product shrank 0.9 percent in the three months through March from a year earlier, according to the median of 15 estimates in a Bloomberg News survey. That compares with a 9 percent contraction in the previous quarter. The report is due May 21 in Bangkok. The Bank of Thailand last week raised its economic growth forecast for 2012 to 6 percent, and Governor Prasarn Trairatvorakul said earlier the monetary authority will refrain from further rate cuts because the pace of recovery is exceeding its expectations. Honda Motor Co. on March 31 said its plant in Ayutthaya province, which was shuttered after last year’s floods, will now run at full capacity to meet market demand.
“Thailand’s V-shaped economy is proceeding nicely,” said Frederic Neumann, Hong Kong-based co-head of Asian economic research at HSBC Holdings Plc. “Growth will be powered by rebounding investment and industrial activities, as well as consumption. All this comes at a cost. Inflation pressures are inevitably rising and we expect the central bank to hike the rate in the fourth quarter.”

Euro Falls to Four-Month Low as Spain’s Debt Costs Rise (Source: Bloomberg)
The euro fell to a four-month low as Spain’s borrowing costs rose at an auction, stoking concern that the region’s financial contagion is spreading from Greece. Europe’s shared currency remained lower against most of its major counterparts after Fitch Ratings downgraded Greece’s long- term credit rating to CCC from B-, citing heightened risk that the nation may not be able to sustain membership in the monetary union. The yen extended its gain against the dollar after data showed U.S. jobless claims for unemployment benefits were unchanged last week and another report showed Philadelphia-area manufacturing decreased in May. “There’s a lot of uncertainty about where Europe is headed on the political front, and markets are trading the uncertainty, which means that risky asset prices will fall,” said Aroop Chatterjee, a currency strategist at Barclays Plc’s Barclays Capital unit in New York. “There are some headwinds for dollar- yen, given that the U.S. economy has been giving mixed signals.”
The euro fell 0.1 percent to $1.2698 at 5 p.m. New York time after touching $1.2667, the weakest level since Jan. 17. The shared currency declined 1.4 percent to 100.68 yen. It earlier fell to 100.56 yen, the lowest since Feb. 7. The yen strengthened 1.3 percent to 79.28 per dollar after reaching 79.14, the strongest since Feb. 17.

Greece Heads to Elections With Euro, Bailout at Stake (Source: Bloomberg)
The leaders of Greece’s two biggest parties clashed over how the country could stay in the euro, underscoring the political deadlock that triggered the decision to hold a second national vote in six weeks. The conflict between Syriza leader Alexis Tsipras, who opposes the austerity demanded by the European Union bailout, and Antonis Samaras, leader of New Democracy, points to the June 17 vote as a referendum on Greece staying in the 17-nation currency bloc. Nobody knows exactly what will be unleashed when Greece does default and exit,” Megan Greene, an economist at Roubini Global Economics LLC said on Bloomberg TV today. “We’re already seeing deposits flee from Greece. When Greece does exit, we’ll see bank runs in Portugal and Spain, and I think that the ECB is poised to step in and try to plug that gap.”
The new vote follows inconclusive elections on May 6 that propelled Syriza into second place. Opinion polls say Syriza may come in first next time, complicating Greece’s efforts to avoid running out of cash by early July.

20120518 1028 Global Commodities Related News.

CME Amends Grain-Trading Plan After Industry Complained (Source: Bloomberg)
CME Group Inc. (CME), the world’s largest futures exchange, amended a proposal for expanded trading in grains to 21 hours a day after withdrawing an earlier plan for 22 hours that drew complaints from clients. Trading on CME Group’s Chicago Board of Trade will be from 5 p.m. to 2 p.m. Sunday through Friday, the company said today in a statement. The CBOT currently allows trading 17 hours a day. No date was set for the transition, which will occur “as soon as possible” and no later than June 4, said Chris Grams, a spokesman for the Chicago-based company. CME originally planned to expand access to markets including corn, soybeans and wheat on May 14 to thwart new competition from IntercontinentalExchange Inc. (ICE), the energy and agriculture market known as ICE, which began offering grain contracts for the first time this week. CME delayed its changes until May 20, after traders including R.J. O’Brien & Associates objected.
Yesterday, CME withdrew its 22-hour plan in a filing with the U.S. Commodity Futures Trading Commission. “I don’t think they’re confused, I just don’t think CME wants to do it, but ICE is forcing their hand,” said Dan Kuechenmeister, the manager of the commodities department at RBC Wealth Management in Minneapolis. “They were getting a lot of push-back from the clearing firms.”

Market Recap: Wheat Futures (Source: CME)
Chicago wheat futures finished 15 1/2 to 19 cents higher; Kansas City was 13 1/2 to 16 cents higher; and Minneapolis wheat ended steady to 9 cents higher. Wheat futures saw strong followthrough buying today thanks to ongoing concerns about dryness in winter wheat country, as well as fresh demand news. On the weather front, the Climate Prediction Center today released its extended weather forecasts which included expectations for above-normal temps for the southern half of the country through August.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 19 at 657 3/4, 3/4 off the high and 20 up from the low. December Wheat closed up 17 3/4 at 688 3/4. This was 18 1/2 up from the low and 1/2 off the high. July wheat closed sharply higher on the day and is up now as much as 66 1/4 cents from Monday lows. A lack of rain in the forecast for the western plains in the next week or more and a heat-up in temperatures plus increased crop concerns for the Black Sea region wheat producers helped to drive the market moderately higher on the day. Hot and dry weather is in the forecast for this region and has traders nervous over lower production estimates ahead. Talk that Russia is likely to drop their grain production forecast by 2-3 million tonnes soon helped to support. Dry Australia weather is keeping the planting pace slow and also has provided some support. Net weekly export sales for wheat came in at 321,800 metric tonnes for the current marketing year and 389,600 for the next marketing year for a total of 711,400 which was well above trade expectations near 550,000. As of May 10th, cumulative wheat sales stand at 99.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 97.6%. Sales of 23,000 metric tonnes are needed each week to reach the USDA forecast. On top of the weekly exports, the USDA reported a sale of 100,000 tonnes of US hard red winter wheat to Iraq for the 2012/13 season. Argentina officials pegged the 2012/13 wheat planted area at just 4 million hectares and some private traders see even lower plantings. For 2011/12, the USDA had 5 million hectares harvested. July Oats closed up 1 at 338 1/2. This was 8 1/2 up from the low and 5 1/2 off the high.

Market Recap: Corn Futures (Source: CME)
Corn futures finished mid- to high-range with July futures 5 cents higher and the rest of the market 1 to 3 cents higher. Futures benefitted from short-covering, encouraged by strength in the soybean market and ideas old-crop supplies need to be rationed. A very strong cash market serves as a reminder of strong demand and limited supply availability until the 2012 harvest begins.

Corn Market Recap for 5/17/2012  (Source: CME)
July Corn finished up 5 at 625, 1 1/2 off the high and 9 up from the low. December Corn closed up 2 at 528 1/4. This was 5 1/4 up from the low and 2 3/4 off the high. July corn closed higher and saw the highest close since May 1st as strength in the other grains and a bounce in gold was enough to offset another weak session for US equity markets. The market saw choppy and two-sided trade early in the session attempting to consolidate yesterday's strong gains. July corn is up as much as 54 1/4 cents from Friday's lows finding support from a surge in wheat prices and continued strong cash markets. Weather concerns for wheat seemed to be the main driver from buyers in grains today. Traders believe there are improving chances of better rain coverage for the central Midwest in the extended forecast models so weather was considered more negative today for corn than yesterday's forecast. Producer selling is still light in spite of historically high basis levels and a strong premium of old crop to new crop corn. Net weekly export sales for corn came in at 339,400 metric tonnes for the current marketing year and 525,700 for the next marketing year for a total of 865,100 tonnes which was well below expectations for near 1.1 million. As of May 10th, cumulative old crop sales stand at 87.7% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 85.7%. Sales of 326,000 metric tonnes are needed each week to reach the USDA forecast. Argentina officials pegged the 2011/12 corn production at 20.1 million tonnes from 20.3 million as their previous estimate and compared with 21.5 million as the recent USDA forecast. July Rice finished up 0.15 at 15.265, equal to the high and equal to the low.

Corn Traders Most Bullish Since March on U.S. Heat: Commodities (Source: Bloomberg)
Corn traders are the most bullish since March on mounting concern that hot and dry weather will curb U.S. yields at a time of accelerating demand from China, the second largest buyer of U.S. farm goods. Nineteen of 27 analysts surveyed by Bloomberg expect prices to gain next week and three were neutral, the highest proportion since March 30. Iowa, Illinois and Indiana, which produce 40 percent of the U.S. crop, are poised for a seventh consecutive month of above-normal temperatures, the most since 1895, T-Storm Weather LLC said yesterday. U.S. export sales of corn surged 83 percent in the week ended May 10, from a week earlier, U.S. Department of Agriculture data show.
Corn jumped 7.3 percent since May 11, heading for the best week since July and rebounding from a slump caused by the USDA predicting a record crop a day before. Hedge funds and other speculators have raised bets on higher prices for two consecutive weeks, according to the Commodity Futures Trading Commission. Parts of the Midwest got 25 percent of normal rain in the past two weeks, National Weather Service data show. “People are starting to get worried about new crop yields,” said Nick Higgins, an analyst at Rabobank International in London. “We won’t really have a good idea until we see the late June and early July temperatures, because that’s when the majority of yields are really decided.”

GRAINS-Wheat at 2-week top on dry weather; corn, soy rise
SINGAPORE, May 17 (Reuters) - U.S. wheat jumped more than 1 percent , rising for a fourth straight session to its highest since May 1, as concerns over dry weather in top exporters the United States and Russia prompted short covering.  
"We saw strong gains largely on short covering, which appears to be continuing this morning, led by wheat," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.  

China sees tighter corn supply, imports to rise
BEIJING/SINGAPORE, May 17 (Reuters) - China's corn supply is expected remain tight in the year to September 2013, leading to higher imports, an official think-tank said, with a likely record harvest still falling short of a rapidly growing domestic demand.
China is estimated to consume 199 million tonnes of corn in 2012/2013, the China National Grain and Oils Information Center (CNGOIC) said on Thursday. Domestic production was projected at a record 197.5 million tonnes.

Morocco to keep low import duty regime for wheat
RABAT, May 16 (Reuters) - Morocco will keep import duties on soft wheat suspended until the end of May before raising them to 17.5 percent in the June 1 to end-December period as it braces for higher imports, official and trade sources said on Wednesday.
A combination of dry weather and long cold spells reduced the north African country's cereals crop to 4.8 million tonnes this year, down 43 percent from the previous season.

Exporters sell 900,000 T US corn to China-USDA
May 16 (Reuters) - China purchased 900,000 tonnes of U.S. corn in the eighth largest one-day corn sale ever, with most of the supplies for shipment in the next marketing year that begins Sept. 1, the U.S. Agriculture Department said on Wednesday.
Corn futures  late last week plunged to a 14-month at the Chicago Board of Trade. China, the No. 2 global corn producer, likely took advantage of the drop in prices to augment domestic supplies, said Jefferies Bache analyst Shawn McCambridge.

Ukraine grain stocks may hit record-lobby
KIEV, May 16 (Reuters) - Ukraine's grain stocks could reach a record 12 million tonnes at the beginning of the new 2012/13 season due to a slow pace of exports, Ukrainian Agrarian Confederation (UAC) grain lobby said on Wednesday.
Ukraine had 5.1 million tonnes of grain in stocks as of July 1, 2011.

China 2012 corn output seen at record 197.5 mln T, soy down -CNGOIC
BEIJING, May 16 (Reuters) - 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.
China, traditionally a net corn exporter, has become a major importer of the grain in recent years as Beijing strives to supply livestock feed to meet fast-growing demand for meat amid near-record domestic corn prices.

SOFTS-ICE sugar steady near 20-month low, coffee flat
LONDON, May 17 (Reuters) - ICE sugar inched higher, and arabica coffee and cocoa futures were little changed early , weighed by soft financial markets linked to the deepening crisis in the euro zone.  U.S. commodity company Cargill Inc said on Wednesday it has not changed its trading strategy despite its recent absence in the delivery of the sweetener to the raw sugar market, a process it dominated over more than a decade.

Mali sees higher cotton output despite instability
BAMAKO, May 16 (Reuters) - Mali confirmed on Wednesday its forecast for a strong rise in local cotton production for the 2012/2013 season despite unrest that included a March 22 military coup and a rebellion that has since gained control of the northern part of the country.
"The forecast is for 500,000 tonnes against 445,143 tonnes (for 2011/2012)," Ousmane Cisse, head of statistics for the CMDT cotton company told Reuters, adding that favourable rainfall plus steady local farmgate cotton prices would buoy output.

Russia sugar sowing goes well despite drought-lobby
MOSCOW, May 16 (Reuters) - Sugar beet sowings in most Russian planting areas were proceeding well, despite a drought in the country's Southern regions, the chairman of the industry lobby group and a sugar market analyst said on Wednesday.
Russia, formerly the third-largest sugar importer, produced a record 5.05 million tonnes of sugar last year. But this spring a  drought in parts of Russia's southern sugar regions has raised concerns about the condition of the forthcoming crop.

Datagro sees cuts in Brazil CS sugar output, exports
NEW YORK, May 16 (Reuters) - The lingering impact of drought and weaker yields will cut sugar output and exports from top producer Brazil's new 2012/13 center-south cane crop, analysts Datagro said on Wednesday in their second update on the harvest.
Datagro President Plinio Nastari told the annual International Sugar Organization/Datagro sugar conference in New York that Brazil's center-south sugar production would hit 32.71 million tonnes in 2012/13, down 3.45 percent from a March forecast of 33.88 million tonnes.

Cameroon cocoa exports down 11 pct by end-April
YAOUNDE, May 16 (Reuters) - Cameroon's cocoa exports hit 167,944 tonnes by the end of April since the season began in August, putting them nearly 11 percent below the 188,163 tonnes shipped during the period a year ago, according to data from the National Cocoa and Coffee Board released on Wednesday.
Cocoa exports from the central African state, the world's fifth largest grower of cocoa, totalled 4,492 tonnes in April, roughly double the 2,282 tonnes exported during the same month last year, the NCCB figures showed.

Uganda sees May coffee exports falling 29 pct yr/yr
KAMPALA, May 16 (Reuters) - Uganda's coffee exports in May are projected to fall 29 percent compared to the same month a year ago, depressed by slow bean drying and transportation due to heavy rains, a state agency said on Wednesday.  
Uganda was likely to export 180,000 60-KG bags of coffee in May, down from 253,270 bags in the same month last year, the state-run Uganda Coffee Development Authority (UCDA) said in a statement.

India set to ease new curbs on sugar mill exports
NEW DELHI, May 16 (Reuters) - India will allow sugar mills to apply for exports of up to 25,000 tonnes in one application, government sources said on Wednesday, easing a directive a day earlier that prohibited mills from seeking approval for more than 10,000 tonnes.
Ministers had agreed to lift all restrictions on sugar exports on May 2 and the food ministry on Friday issued a formal order removing the need for its permission for shipments. It asked millers only to disclose the quantities they sold overseas.

Syria sugar refineries paralysed, smuggling seen soaring
LONDON, May 16 (Reuters) - Escalating violence in Syria has slowed sugar refining to a virtual standstill, with smuggling set to rise as Western sanctions hobble trade finance and disrupt imports of the staple sweetener, trade sources said.
The European Union, the United States and other Western countries have imposed sanctions on President Bashar al-Assad's government in response to the bloody crackdown on a revolt that has cost more than 9,000 lives.

Oil Near Six-Month Low on Economy; Brent Premium Narrows (Source: Bloomberg)
Oil traded near the lowest price in six months after a U.S. manufacturing gauge trailed estimates and Moody’s Investors Service downgraded 16 Spanish banks. Brent crude’s premium to West Texas Intermediate narrowed. Futures were little changed in New York, heading for the third weekly decline. Manufacturing in the Philadelphia region unexpectedly shrank in May, a report showed yesterday. Debt ratings at nine Spanish lenders were cut three notches and seven were kept on review for further reductions, Moody’s said. London-traded Brent’s premium to New York crude narrowed to the lowest since May 3 as Enbridge Inc. (ENB) and Enterprise Products Partners LP (EPD) prepared to reverse flows on the Seaway pipeline. Crude for June delivery was at $92.57 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 9:34 a.m. Sydney time. The contract yesterday fell 25 cents to $92.56, the lowest close since Nov. 2. Prices are 3.7 percent lower this week and down 6.3 percent this year.
Brent oil for July settlement slid $2.26, or 2.1 percent, to $107.49 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month price for the European benchmark contract closed at a premium to West Texas Intermediate of $14.55.

OIL-Brent crude steady ahead of Seaway pipeline reversal
SINGAPORE, May 17 (Reuters) - Brent crude held steady above $109, supported by a rebound in U.S. oil prices on hopes that a reversal in oil flow for the Seaway pipeline will reduce a supply glut in the U.S. Midwest.
"The Seaway pipeline reversal starts today and this could support WTI," said Yusuke Seta, a commodity sales manager at Newedge Japan.

Pakistan cuts oil product requirements for May-July
SINGAPORE, May 17 (Reuters) - Pakistan State Oil  has cut its total oil product requirements for May to July by 20 percent, after dropping plans to buy a jet fuel cargo and three low sulphur fuel oil cargoes, industry sources said on Thursday.
The company was seeking 1.17 million tonnes of oil products, including 910,000 tonnes of fuel oil, 210,000 tonnes of gasoline and 50,000 tonnes of jet fuel, for delivery over May to July through a tender.

US Senate to consider new Iran sanctions Thursday
WASHINGTON, May 16 (Reuters) - U.S. Senate Democratic leader Harry Reid will ask the chamber to approve a new package of oil and economic sanctions on Thursday aimed at further pressuring Iran to abandon its nuclear program, a Democratic leadership aide told Reuters.
The politically popular sanctions are focused on foreign banks that handle transactions for Iran's national oil and tanker companies, and include measures to close loopholes in existing sanctions.

Italy Iran oil imports edge up, Libya top supplier
MILAN, May 16 (Reuters) - Italy raised crude oil imports from Iran by about 6 percent in March from February ahead of the planned new sanctions against Tehran, while total crude import fell amid weak demand for refined oil products, according to oil industry body Unione Petrolifera (UP).  
Italy, which relies on Iran to cover 10.4 percent of its   crude oil import needs, raised oil purchases from the Islamic   Republic to 425,200 tonnes in March from 401,600 tonnes in February, the UP data showed on Wednesday.

Japan Aluminum Buyers Said to Face Highest Premiums Since 1996 (Source: Bloomberg)
Aluminum buyers in Japan, Asia’s biggest importer, were asked to accept a 57 percent increase in fees starting in July, as supply decreased after smelters cut output and China boosted purchases. A producer offered to sell aluminum at $200 a metric ton over the London Metal Exchange cash price for the three months through September, an increase from the $127 surcharge this quarter, said three executives involved in the negotiations. They declined to be identified because the talks were private. Other producers have yet to make offers, they said. If agreed, the fee would be the highest since Japanese buyers began meeting the bulk of their needs through long-term contracts in 1996, surpassing the previous record of $125 to $130 for the first quarter of 2010.

Gold Rebounds as Slump to Year’s Low Prompts Purchases (Source: Bloomberg)
Gold jumped the most since October as a four-day slump and speculation that the Federal Reserve will announce more stimulus for the U.S. economy boosted demand for the precious metal. The metal tumbled 3.7 percent in the past four sessions as Greek politicians prepared for a second election, raising concern that the country may exit the euro bloc. The Philadelphia Fed’s general economic index, a gauge of regional manufacturing, fell to minus 5.8 in May, signaling contraction. Economists in a Bloomberg survey were expecting a rise to 10. “People are coming back to gold as prices have fallen very sharply,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Murmurs about the Fed looking at some kind of easing because of soft U.S. data are gaining momentum, and that’s good for gold as any kind of easing is inflationary.”
Gold futures for June delivery rose 2.5 percent to $1,574.90 an ounce at 1:47 p.m. on the Comex in New York. That’s the biggest gain for a most-active contract since Oct. 25. Yesterday, prices retreated to $1,526.70, the lowest since Dec. 29.

20120518 1027 Soy Oil & Palm Oil Related News.

Market Recap: Soybean Futures (Source: CME)
Soybean futures trimmed gains heading into the close and finished 10 and 16 cents higher in old-crop futures while deferred months were fractionally to 5 1/4 cents higher. Soybean traders paid negative outside markets little attention for much of the trading session, though risk aversion and dollar strength came into play as the market pared gains heading into the close.

Soybean Complex Market Recap (Source: CME)
July Soybeans finished up 16 at 1438, 12 off the high and 17 3/4 up from the low. November Soybeans closed up 4 1/4 at 1306 1/2. This was 6 3/4 up from the low and 11 1/2 off the high. July Soymeal closed up 3 at 428.0. This was 4.6 up from the low and 6.6 off the high. July Soybean Oil finished up 0.29 at 50.72, 0.27 off the high and 0.31 up from the low. July soybeans closed moderately higher today led by continued strong gains in meal which moved to the highest level since May 2nd. More China buying of old crop soybeans and a little less pressure from outside market forces helped support strong buying support early in the session with the market already up as much as 74 cents from Monday's lows. Weekly sales were slow but a bulk of the sales were for old crop and this was seen as positive. On top of the weekly sales report, the USDA announced a sale of 480,000 tonnes of US soybeans to China for the 2011/12 season. Net weekly export sales for soybeans came in at 616,300 metric tonnes for the current marketing year and 57,100 for the next marketing year for a total of 673,400 which was well below trade expectations near 1.2 million tonnes. As of May 10th, cumulative soybean sales stand at 98.1% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 96.8%. Old crop sales of only 42,000 metric tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 114,300 metric tonnes for the current marketing year and 81,300 for the next marketing year for a total of 195,600. Cumulative old crop sales stand at 79.9% of the USDA forecast versus a 5 year average of 78.3%. Sales of 81,000 metric tonnes are needed each week to reach the USDA forecast. Oil sales came in at 8,100 metric tonnes for the current marketing year and 40,000 for the next marketing year for a total of 48,100 which was well above estimates for ear 30,000. Cumulative old crop sales stand at 76.1% of the forecast versus a 5 year average of 69.1%. Sales of 6,000 metric tonnes are needed each week to reach the USDA forecast. Solid gains in wheat and some light concerns for a drying trend in the delta and southern Mid-west for the next few weeks helped to support. Argentina officials pegged the 2011/12 soybean production at 41.5 million tonnes from 42.9 million as their previous estimate and compared with 42.5 million as the recent USDA forecast.

VEGOILS-Palm oil rebounds after sell-off; Greece woes weigh
SINGAPORE, May 17 (Reuters) - Malaysian palm oil futures regained ground  after steep losses the previous day, but traders remained cautious on concerns a possible Greek exit from the euro zone could heighten risk of a global recession and hurt commodity demand.
"This is some sort of a replication of what happened in May last year when the whole commodities market was going through a very volatile session," said Ker Chung Yang, an analyst with Phillip Futures in Singapore.