Wednesday, May 23, 2012

20120523 1807 FCPO EOD Daily Chart Study.

FCPO closed : 3019, changed : -91 points, volume : higher.
Bollinger band reading : downside biased.
MACD Histogram : resume falling, seller still in control.
Support :  2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100, 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed severely lower with better volume transacted. Soy oil price currently trading lower by more than 1.5% after overnight closed recorded loss while crude oil price currently trading weaker.
FCPO Price tested 5 month low on concern over Europe dent and political development will further drag down global economy growth resulted most commodities price trading lower.
Technical chart reading revised back to suggesting a downside biased market development possibly testing lower support level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120523 1740 GLOBAL MARKETS: Doubts over EU crisis deal send shares, euro lower - REUTERS

GLOBAL MARKETS: Doubts over EU crisis deal send shares, euro lower - RTRS
23-May-2012 16:37
Scepticism rises over outcome of EU Leaders summit
European shares fall 1 pct and commodities retreat
Dollar index hits highest level since September 2010
By Richard Hubbard

LONDON, May 23 (Reuters) - European shares ended a two-day rally and safe-haven assets such as the dollar rose on Wednesday, as investors doubted any new measures to tackle the euro-zone debt crisis would emerge from a European leaders summit and on renewed talk of a Greek exit. The euro hit a 21-month low and commodities and commodity-linked currencies all slid, while safe-haven demand lifted the dollar index .DXY measured against major currencies to 81.84, its highest level since September 2010. An informal European leaders summit later on Wednesday is expected to discuss growth-boosting proposals and the idea of a joint euro-zone bond. French President Francois Hollande supports the bond plan, but German Chancellor Angela Merkel is opposed.
"Most are expecting no concrete solution out of the meeting, just a few ideas discussed on how to boost growth with no real commitment to carry them out, while Angela Merkel is almost certain to reject any proposal by Francois Hollande in relation to euro bonds," Craig Erlam, market analyst at Alpari, said. The single currency EUR= fell to $1.2615, below the 2012 low of $1.2624 set in January and its lowest level since August 2010. Sentiment across the markets was also hit late on Tuesday when former Greek Prime Minister Lucas Papademos was quoted saying Greece had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but was real. "The (Papademos) comments were like very strong poison, and the market got flung around by them," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.
The comments came after U.S. markets had closed but knocked Asian shares, leaving the MSCI world equity index .MIWD00000PUS down around 0.8 percent at 300.83 points. The FTSE Eurofirst .FTEU3 index of top European shares fell 1 percent to 983.81 in early trading after on Tuesday recording its biggest daily gain in a month.

A lot of market attention will on Wednesday be focused on Germany's auction of up to 5 billion euros ($6.4 billion) of two-year bonds, which will gauge how investors view the situation in Europe, as the bonds offer a zero percent coupon. German Bund futures FGBLc1 were 35 ticks higher in early trading at 143.44, with cash 10-year yields DE10YT=TWEB 2.5 basis points lower at 1.45 percent. Also in the spotlight is the ailing Spanish banking sector after sources told Reuters the government is set to outline on Wednesday its plan to restructure the recently nationalised Bankia and will announce how much additional money it will pump into the lender. Adding to investors' concerns, Dutch right-wing populist politician Geert Wilders, who aims to turn a Sept. 12 election into a referendum on the euro and EU membership, filed a lawsuit on Tuesday aimed at postponing the Dutch parliament's ratification of Europe's permanent bailout fund until after the vote.
Earlier the Bank of Japan decided to keep its monetary policy unchanged, as widely expected, to save its ammunition in case Europe's deepening debt crisis warrants further supportive action to shield the fragile economy. The yen ticked up slightly to around 79.67 yen JPY= from around 79.81 yen just before the BoJ's policy announcement, reflecting disappointment from some speculators betting on an outside chance of a further easing, traders said. In the oil markets, signs of potential deal between Iran and the U.N.'s International Atomic Energy Agency to unblock investigations into suspected work on nuclear bombs in the oil-producing country, helped Brent crude slip below $108 a barrel to as low as $107.57. Gold fell to as low as $1,555.03 an ounce XAU=, extending sharp losses made in the previous session, on the growing scepticism that the informal European Union meeting later in the day would yield much.
Gold has lost much of its safe-haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.

20120523 1735 FKLI EOD Daily Chart Study.

FKLI closed : 1530.5 changed : -5 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : recovering, seller taking profit.
Support : 1530, 1515, 1500, 1485 level.
Resistance : 1540, 1550, 1565, 1570 level.
Comment :
FKLI closed weaker with improved volume participation doing 8.5 points discount compare to cash market that closed recorded loss. Overnight U.S. markets closed nearly unchanged and today Asia markets ended in reds while European markets currently trading lower by more than 1.5%.
Restored investor worries over European debts and political development sent global markets to trade poorly today after recent rebound.
Daily technical reading still showing a pullback correction phase within a downside biased market development possibly testing previous low support level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120523 1716 Regional Markets EOD Daily Chart Study.

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

20120523 1657 Global Market & Commodities Related News.

Riskier assets retreated broadly as hopes for fresh measures to tackle the euro zone debt crisis faded and caution set in ahead of a meeting of European leaders, with renewed fears that Greece would leave the bloc dampening investor sentiment. U.S. stocks closed mostly flat after volatilility late in the session, with weakness in materials and energy shares offsetting strength in financials.

The euro edged ever closer to hitting a 21-month low while the safe haven dollar reached a 20-month peak against a basket of currencies on fears of a messy Greek exit from the euro zone.

FOREX-Dollar hits 20-mth high, Greece exit fears dent euro
SINGAPORE, May 23 (Reuters) - The safe haven dollar climbed to a 20-month high against a basket of currencies on Wednesday as fears of a messy Greek exit from the euro zone weighed on the euro and kept the single currency pinned near a recent four-month low.
"The (Papademos) comments were like very strong poison, and the market got flung around by them," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

Chicago soy lost more ground sliding to its lowest since March 30, while wheat dropped for a second straight session on forecasts of rain in parts of Russian and U.S. grain producing regions.

US corn, soy farmers plant in record time
U.S. farmers planted corn and soybeans in record time last week as they took advantage of the warm, dry weather throughout the U.S. Midwest, Monday's weekly  U.S. Agriculture Department planting data showed.

Brazil's coffee crop seen 52.2 mln bags -Reuters poll
World top coffee grower Brazil will produce 52.2 million bags in the 2012/13 crop, a Thomson Reuters survey of participants at a Sao Paulo coffee seminar showed on Tuesday, below most analyst estimates but higher than the government's official estimate.

Rubber industry hopes China demand will offset Europe woes
China's strong appetite for rubber could help the market stave off pressure from a worsening debt crisis in Europe that threatens commodities demand while Thailand's move to prop up prices will aid the tyre industry, industry officials said.

Indonesia group downgrades 2012 rubber output forecast on rains
Rubber output this year in Indonesia, the world's second-biggest producer, is likely to be around 5 percent below a forecast in January to stand flat with 2011 after heavy rains, a senior official at the Indonesian Rubber Association said on Wednesday.

Indonesia may scrap import duties on soybean
Indonesia may scrap its 5 percent tariff on soybean imports as it seeks to combat higher global prices and boost domestic processing, an industry ministry official said on Tuesday.

Brent crude slipped around 0.4 percent as a potential deal between Iran and the U.N. nuclear watchdog eased fears of oil supply disruptions, while concerns over the debt crisis in the euro zone and a slowing Chinese economy weighed on demand.

Europe awash with quality oil as U.S. imports fall
Europe is facing a glut of high quality crude oil grades, only a year after war in Libya created a serious shortage, as the continent's demand falls and the United States cuts imports due to greater availability of domestic supply.

Japan April LNG imports climb over year after Fukushima
Japan, the world's top importer of liquefied natural gas, imported 6.9 million tonnes of LNG in April, up 14.9 p e rcent from the previous year, reflecting a rise in gas-fired power generation after the Fukushima nuclear crisis

Iran's oil exports halt decline in May
Iranian oil exports have not dropped further in May after falling sharply since March, industry sources said on Tuesday, because core customers in Europe and Asia continue to buy ahead of European sanctions aimed at slowing Tehran's nuclear programme.

India, China, Taiwan lead S.Africa Apr coal imports
LONDON, May 21 (Reuters) - Asia absorbed most of South Africa's 5.2 million tonnes of coal exports in April, led by India, China and Taiwan, exporters said.
Almost all of South Africa's thermal coal is exported from the private Richards Bay Coal Terminal (RBCT) in Kwazulu Natal, which is owned by mining majors Anglo Coal, BHP Billiton, Xstrata, Glencore, Exxaro, Total and Optimum Coal Holdings.

Euro Coal-ARA dips $1, China cargoes depress prices
LONDON, May 22 (Reuters) - Prices for European delivered DES ARA thermal coal fell by $1.00 on Tuesday to yet another fresh two-year low with a bid of $78.00 for June as distressed cargoes as a result of Chinese defaults dragged the market lower.
"We've heard of at least 10 cargoes either defaulted on or deferred, of Colombian, South African and Indonesian origin rather than U.S.," one European trader said.

Consumers swoop on Malaysian tin after price plunge
LONDON/HONG KONG, May 22 (Reuters) - Consumers pounced on inventories of tin in Malaysia as prices of the metal plunged this month, making it more attractive to Chinese importers, and as they sought to avert any developing bottlenecks at warehouse gates, trade and industry sources said.
Orders for tin from London Metal Exchange (LME) warehouses in Johor have surged more than five-fold or 4,660 tonnes so far in May, tying up 43 percent of stocks in sheds monitored by the LME, the market of last resort.

Chinese buyers default on coal, iron ore shipments-trade
SHANGHAI/SINGAPORE, May 21 (Reuters) - Chinese buyers are deferring or have defaulted on coal and iron ore deliveries following a drop in prices, traders said, providing more evidence that a slowdown in the world's second-largest economy is hitting its appetite for commodities.
China is the world's biggest consumer of iron ore, coal and other base metals, but recent data has shown the economy cooling more quickly than expected, with industrial output growth slowing sharply in April and fixed asset investment, a key driver of the economy, hitting its lowest in nearly a decade.

Iron Ore-China steel at 6-mth low, demand weak
SHANGHAI, May 23 (Reuters) - Shanghai steel futures fell more than 1 percent to a six-month low on Wednesday, hit by a shaky demand outlook in the world's top steel producer, while risk aversion ahead of a meeting of European leaders to tackle the mounting euro zone debt crisis also kept traders at bay.
Although a state-backed newspaper has said that China would fast track approvals for infrastructure, investors are wondering if that move alone would help counter falling demand from the property slowdown.

Copper retreated from a one-week high hit in the previous session ahead of a meeting of European leaders, with investors wary that a failure to tackle the region's debt crisis will hit global demand for industrial metals just as China is slowing and a U.S. recovery is fragile.

Gold eased extending sharp losses made in the previous session as investors were sceptical that an informal European Union meeting later in the day would yield steps to help solve the region's debt crisis.

METALS-Copper comes off one-week high on Europe caution
SHANGHAI, May 23 (Reuters) - Copper retreated on Wednesday from a one-week high hit in the previous session ahead of a meeting of European leaders, with investors wary that a failure to tackle the region's debt crisis will hit global demand for industrial metals just as China is slowing and a U.S. recovery is fragile.
"There are more reasons to stay wary than to cheer. All signs point to Chinese copper demand being sluggish, with downstream orders still weak. China's economy is slowing, the euro zone crisis remains an issue while a U.S. recovery is still uncertain," said CIFCO analyst Zhou Jie.

PRECIOUS-Gold slumps on scepticism of EU meeting
SINGAPORE, May 23 (Reuters) - Gold eased on Wednesday extending sharp losses made in the previous session as investors were sceptical that an informal European Union meeting later in the day would yield steps to help solve the region's debt crisis.
"Can it solve the debt crisis? No," said Dick Poon, manager of precious metals at Heraeus in Hong Kong, "Everyone is worried about Greece withdrawing from the euro zone and the global economy, and would rather keep cash on hand than buying anything."

Dry bulk shipping rates to rebound in 2013-Global Hunter
May 22 (Reuters) - Daily rates for dry bulk vessels could rebound by the middle of next year due to an easing of oversupply as companies scrap older ships and cut back on new orders, Global Hunter Securities said.
Rates for dry bulk vessels, which transport commodities such as coal, iron ore and grain, crashed in the last four years as the delivery of a large number of new ships coincided with a global economic downturn.

Baltic sea index drops on weak freight demand
May 22 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, fell on Tuesday due to weaker freight demand in both capesize and panamax segments.
The overall index, a gauge of the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, fell 14 points or 1.23 percent to 1,127 points.

20120523 1126 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares retreat as caution replaces hopes before EU summit
TOKYO, May 23 (Reuters) - Asian shares retreated on Wednesday as hopes for fresh measures to tackle euro zone debt
faded and caution set in ahead of a meeting of European leaders, with renewed fears Greece would leave the euro bloc dampening appetite for riskier assets. "We doubt that Wednesday evening's EU summit will result in many ground-breaking concrete agreements," Barclays Capital analysts said in a research note, adding that European policymakers have agreed to put more weight on growth but have not formed a consensus on how to achieve it.

Commodities will take time to respond to China growth
(Clyde Russell is a Reuters market analyst. The views expressed are his own)
LAUNCESTON, Australia, May 22 (Reuters) - Can the disappointment over China's softening commodity demand in April be simply washed away with a few comments that the authorities intend to bolster infrastructure spending?
It would seem simplistic to think so but commodity prices have generally responded favourably, or for the most part stopped declining, after a state-backed newspaper said the world's largest commodity buyer will fast track project approvals

COMMODITIES-Corn, other crops tumble; CRB near 20-month low
NEW YORK, May 21 (Reuters) - Commodities resumed their sharp fall on Tuesday, with a key sector index nearing 20-month lows, as agricultural futures chalked up huge declines and oil and metals sagged due to a strong dollar and weakened demand outlook. "We are pressured by currency weakness in producing countries and the stronger dollar," said James Kirkup, head of sugar brokerage at ABN AMRO Markets in London.

OIL-Oil falls as Iran talks progress, euro worries continue
NEW YORK, May 22 (Reuters) - Oil prices fell on Tuesday as signs of a deal between the U.N. nuclear watchdog and Iran on Tehran's nuclear program eased fears of oil supply disruptions, while the euro zone debt crisis continued to threaten economic growth."There is perception that Iranians are more agreeable at this point to slowing down its nuclear efforts, but they still have to show some concrete action regarding their nuclear program to justify such hopes," said Gene McGillian analyst at Tradition Energy.

US crude stocks rise, gasoline falls - API
NEW YORK, May 22 (Reuters) - U.S. crude stocks rose last week but gasoline inventories fell sharply, data from the American Petroleum Institute (API) showed on Tuesday.
U.S. crude oil inventories rose 1.5 million barrels in the week to May 18, compared with analyst expectations in a Reuters poll for a rise of 1 million barrels, the API said.

Japan April LNG imports climb over year after Fukushima
TOKYO, May 23 (Reuters) - Japan, the world's top importer of liquefied natural gas, imported 6.9 million tonnes of LNG in April, up 14.9 p e rcent from the previous year, reflecting a rise in gas-fired power generation after the Fukushima nuclear crisis.
Customs-cleared crude oil imports rose 12.9 percent from the same month a year earlier to 19.2 million kilolitres (4.0 million bpd), preliminary data from the Ministry of Finance showed on Wednesday.

NATURAL GAS - Weather support lifts US natural gas futures 4 pct
NEW YORK, May 22 (Reuters) - U.S. natural gas futures ended sharply higher on Tuesday, boosted by signs of a tighter supply-demand balance and warmer weather forecasts into early June that should force homes and businesses to crank up air conditioners."I think people are lowering expectations for (Thursday's EIA) inventory build, and there's some (warm) weather coming," Gelber & Associates analyst Pax Saunders told Reuters.

Euro Coal-Prices dip, Jly S.African trades at $93.10
LONDON, May 18 (Reuters) - European prompt physical coal prices dipped again by $1-2 on Friday, drawing some buying interest although most market participants are increasingly bearish about coal's near-term price outlook. "There is still U.S. coal being offered but the last thing anybody wants is more coal because who would you sell it to?," one European trader said.

20120523 1109 Local & Global Economy Related News.

GDP growth for 1Q12, which will be announced today, is expected to be around 4-5%, said Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop. Data collected over several months also suggest positive results for 2Q12, he said. However, he said, the current economic crisis in Europe was a bit worrying and could have an impact on Malaysia’s economic growth. (Bernama)

Malaysia will find it “very tough” to meet its initial 6-7% GDP growth target this year as top trade partners for its export-oriented economy continue to struggle, Second Finance Minister Datuk Seri Husni Hanadzlah said yesterday. The government would instead focus on the central bank’s revised target of 4-5%, which is lower than the growth of 7.2% in 2010 and 5.1% in 2011, he said. He also said that China’s growth suddenly cooling amid stuttering recovery in the US and the persistent euro-zone crisis will affect Malaysia’s trade but the quantum is not yet known. He added that projections for 2012 had already factored in the possibility of a Greek default which will send shockwaves throughout Europe. Besides that, he has called for a study on the impact of the eurozone debt crisis on Malaysia's GDP. He said there is a need to review current global developments. (Malaysian Insider, Bernama)

Japan: April exports rise less-than-forecast 7.9% on year earlier
Japan’s exports rose a less-than-estimated 7.9% in April from a year earlier, underscoring the risk that weakness in global demand may limit the rebound in the world’s third-biggest economy. Imports gained 8%, leaving a trade deficit of JPY520.3bn (USD6.5bn), the finance ministry said. The median forecast in a Bloomberg News survey of 27 analysts was for exports to increase 11.8%. (Bloomberg)

Japan’s supermarket sales fell 1.9% yoy in Apr (-2.4% in Mar). (Bloomberg)

Japan’s investments abroad grew 3.3% to ¥582tr in 2011, the second-highest level on record and the third year of increase as companies used the strong yen to make acquisitions abroad, the Finance Ministry said. (Bloomberg)

Fitch Ratings downgraded Japan two notches to A+ and issued a negative outlook on the country's credit rating, citing rising public debt levels. Japan's long-term foreign rating had stood at AA and its local currency issuer default rating was previously at AA-. (Business Insider)

China’s Conference Board leading index rose 0.8% mom to 232.4 in Apr (0.8% in Mar; 1.0% in Feb), with four of the six components contributing positively to the index. (RTTNews)

China will fast track approvals for infrastructure investment to combat a slowdown in the economy, state-backed newspaper China Securities Journal reported. (Reuters)

China: Leading economic index rose 0.8% in April, same as March
A leading index for China rose at the same pace in April as the prior month, offering investors some comfort that the world’s second-biggest economy may avoid a deeper slowdown. The gauge increased 0.8% from March to 232.4, the New York-based Conference Board said, citing a preliminary reading. That compares with a 0.8% gain in March and 1% in February. (Bloomberg)

India's government needs to make tough decisions on spending and tax generation to boost foreign and local investment, Prime Minister Manmohan Singh said. (WSJ)

The Reserve Bank of India will have limited room to relax its tight monetary stance and boost a slowing economy as inflation remains generalised and above its comfort level, according to the OECD. (WSJ)

South Korea is seeking an exemption from a European Union embargo that would effectively halt shipments of Iranian oil to South Korea from 1 Jul, officials said. (AFP)

Deposit interest rates offered by Vietnamese commercial banks are likely to come down to between 9 and 10% per annum by the year end, says State Bank of Viet Nam governor Nguyen Van Binh. (Vietnam News)

FDI is still flowing into Thailand even though foreign investors had turned from Thai shares to long-term bonds to limit investment risks, Bank of Thailand assistant governor Pongpen Ruengvirayudh said. The BoT’s Office of Macroeconomics director Songtham Pinto added that the Thai economy is thriving beyond expectation, citing domestic demand as a major drive to the growth. (Bangkok Post)

Indonesia's domestic cement sales rose 12% yoy in Apr (16.2% in Mar) to4.2m tons. (Reuters)

Taiwan: Jobless rate unexpectedly climbed as economy eased
Taiwan’s unemployment rate unexpectedly rose in April as China’s growth slowdown and Europe’s debt woes hurt hiring by the island’s manufacturers. The seasonally adjusted rate rose to 4.19% from 4.14% in March, the statistics bureau said. That compares with the 4.13% median estimate of nine economists surveyed by Bloomberg News. (Bloomberg)

Australia: Jobless rate to reach highest since 2009, OECD says
Australia’s unemployment rate will rise to the highest level since 2009 as industries outside of mining struggle with an elevated currency, the Organization for Economic Cooperation and Development said. The nation’s jobless rate will climb to 5.7% in 2013 from 5.4% this year, the OECD said in its economic outlook released. That would match a level reached in September 2009 and is higher than the average in the past decade of 5.2%. (Bloomberg)

Greece's former Prime Minister Lucas Papademos warned that Greeks have no choice but to stick with a painful austerity program dictated by its lenders or face an exit from the euro zone that would devastate the economy, boost inflation and generate new social strains. (WSJ)

Greece would remain in the eurozone if the radical left were to win upcoming elections, Greek anti-austerity leftist leader Alexis Tsipras said. (AFP)

Eurozone consumer confidence rose to -19.3 in May (a revised -19.9 in Apr), according to the European Commission’s flash estimate. In the wider European Union, consumer sentiment improved to -19.4 from -20.2. (Reuters)

The ECB should cut interest rates further and the EU take bloc-wide measures to boost growth and ease the fiscal adjustment in the eurozone where crisis risks are intensifying, the OECD said, adding that the ECB may need to intervene again to stabilize banks and government bond markets. (AFP)

Youth joblessness is almost back at its peak following the outbreak of the global economic crisis and is unlikely to ease until at least 2016, the International Labour Organization warned. Nearly 75m youths or 12.7% of people aged 15 to 24 will be out of work this year, up from 12.6% in 2011. (AFP)

US: Existing home sales rise as market stabilizes
Sales of existing US homes rose in April, driven by broad-based gains in demand that signal the market is stabilizing. Purchases, tabulated when a contract closes, increased 3.4% to a 4.62m annual rate, figures from the National Association of Realtors showed. The median price jumped by the most in six years. (Bloomberg)

The US ICSC-Goldman Store Sales index fell 1.7% wow in the week ended 19 May (-0.8% in the prior week), whilst on a yoy basis, the measure rose 3.8% (4.5% in the earlier week). (Bloomberg)

Directors at the US Federal Reserve’s regional banks saw a pickup in the pace of economic growth last month as housing, motor vehicle sales and consumer spending gained strength. (Bloomberg)

20120523 1108 Malaysia Corporate Related News.

Loss-making MAS outlines new RM9bn funding plan
As it continued to record quarterly losses, MAS has proposed a new three-pronged funding plan to meet its capital and operational expenditure requirements. The national flag carrier said it will tap avenues including the Islamic debt market, bridging loans and implement a leasing exercise, totaling RM8.8bn. (Malaysian Reserve) Please see accompanying report

SapuraKencana secures RM157m Aussie project
SapuraKencana Petroleum’s wholly-owned subsidiary in Australian, SC Projects Pty Ltd, has been awarded a AUD51m (RM157.26m) Origin Otway Phase 3 development project from Origin Energy Resources Ltd on 26 April. The oil and gas firm said the project will be developed and operated by Origin together with its JV partners Toyota Tsusho (Australasia) Pty Ltd and Benaris International Pty Ltd. (Malaysian Reserve)

TM’s broadband subscriber base hits 2m mark
TM’s subscriber base has reached the 2m mark, reflecting the increased adoption of broadband in the country. TM said this was another significant milestone, after achieving 300k subscribers for its UniFi service two months earlier. To date, TM has more than 1.64m customers for its broadband for general population under the brand Streamyx, while its high speed broadband service, UniFi, has recorded more than 359k subscribers. (Malaysian Reserve)

MPHB to spin off non-gaming assets
Multi-Purpose Holdings (MPHB) is planning a major restructuring that will feature the creation of a new entity to house its non-gaming assets, a move that will turn the group into a pure proxy for the gaming sector. Under the plan, MPHB is proposing to inject its interests in properties, hotels and financial services into a special purpose vehicle and leave the group with one asset, Magnum Corp, the profitable numbers forecast operator. (Financial Daily)

Ekuinas expands education portfolio further
Ekuiti Nasional (Ekuinas) further expanded its education portfolio by taking up a 90% stake in Unitar Capital SB (UCSB). UCSB is the owner and operator of University of Management and Technology (UMTECH), whose main facility is at Leisure Commerce Square, PJ. It has an enrolment of about 9k students. Ekuinas and Bumiputera private equity firm Shoraka Square Ltd have, through their 90:10 special purpose investment vehicle Nilam Suria SB, acquired a 100% stake in UCSB for RM65m. (Financial Daily)

Harvest Court minorities agree to diversification
The minority shareholders of Harvest Court Industries have given their nod for the company’s intention to diversify its business and plans to embark on construction works worth RM808.1m by June. “It went very well, all the resolutions were carried unanimously, and the substantial contracts would keep us busy for the next few years,” said Harvest Court director Datuk Raymond Chan Boon Siew after the company’s EGM yesterday. (StarBiz)

The Sarawak Corridor of Renewable Energy (Score) has secured investments totalling RM24.63bn from 17 projects, which are expected to create more than 14,000 employment opportunities. State Minister of Industrial Development Datuk Amar Awang Tengah Ali Hassan said in addition to the 17 projects, negotiations are ongoing with 16 other investors for a potential investment of RM13bn. (Financial Daily)

The book-building process of Felda Global Ventures Holdings' (FGVH) over US$3bn listing will begin on May 31 and end on June 15, a source said. Another source said the price range for institutional investors had not been fixed yet, but the maximum would be RM4.65 a share, the indicative price at which cornerstone investors were offered. The second source said AIA Group, Kumpulan Wang Amanah Pencen, and Lembaga Tabung Haji would also be cornerstones in the IPO. (Reuters, Starbiz)

The Government must speed up the nationwide coverage of the B5 programme as the current take-up rate of about 100,000 tonnes of biodiesel is still insufficient to support the ailing local biodiesel sector, an industry body says. The B5 programme is a blend of 5% biodiesel and 95% fossil fuel. "The biodiesel take-up rate must quickly reach 500,000 tonnes per annum this year to ensure the survivability of biodiesel players in the country," said Malaysian Biodiesel Association (MBA) vice-president U.R.Unnithan. An industry source said that the Government's target for the biodiesel consumption to go nationwide would only be hit at the earliest by late 2013 or early 2014. (Starbiz)

Boustead Holdings announced that its subsidiary, Boustead Petroleum Marketing Sdn Bhd, intends to undertake the following: Land disposal to Platinum Flamingo Sdn Bhd for a cash consideration of RM9.0m Land disposal to Ming Heng Motor Sdn Bhd for a cash consideration of RM30.8m; and Compulsory land acquisition by the government of Malaysia for a cash consideration of RM16.5m. The disposal will add RM48m to its FY12 PBT. (BMSM)

Ekovest and Malaysian Resources Corp Bhd (MRCB), project delivery partners acting on behalf of the government, plan to call for some RM4bn worth of tenders by as early as next year to help clean and beautify the Klang and Gombak rivers. The work is part of the River of Life project. Minister of Federal Territories and Urban Wellbeing Datuk Raja Nong Chik Raja Zainal Abidin said the cleaning tenders will be out first. "We have set aside a total of RM3bn for cleaning and RM1bn for beautifying. We expect the rivers to be cleaned and certified as Class B (where it is safe to touch) within the next five years," Raja Nong Chik told reporters after launching the Asian Strategy and Leadership Institute (Asli)'s Second National Conference on Greater Kuala Lumpur/ Klang Valley - Towards a World Class Sustainable City here yesterday. He said at present the river was "toxic". "Both rivers are at Class 3 or 4, which is very bad," he added. (BT)

Telekom Malaysia’s (TM) subscriber base has reached the two million mark, reflecting the increased adoption of broadband in the country. To date, TM has more than 1.64m customers for its Streamyx, while its high speed broadband service, UniFi, has recorded more than 359,000 subscribers. (Bernama)

Intense lobbying for the takeover of Jaring Communications Bhd can be expected as newcomer Asian Broadcasting Network (ABN) joins the fray with its last-mile proposal that it hopes to give Jaring the country's first Internet service provider (ISP) a new avenue to reach out to new users. ABN is joining three other parties in the tussle for control of Jaring. The three are Puncak Semangat Sdn Bhd, CMC Engineering Sdn Bhd and a consortium of four players that submitted their bid via Optinet Technology Sdn Bhd. ABN is said to have put in its bid to the Finance Ministry this week while Puncak did the same about a month ago and the other two much earlier in the year. “All four have their own reasons as to why they want to partner Jaring but any decision made to sell Jaring should be made based on the value that can be created for Jaring and its users,'' said a source. Apart from entertainment, information and education offerings, ABN also plans to offer data services to users. Hence the reason why it wants to partner Jaring so that it can ride on Jaring's network to offer data services and its proposal also allows Jaring to expand its reach to homes with the last-mile connectivity via fibre which it really does not have currently,'' said a source, It is not known why Puncak Semangat would want to buy Jaring, but a simple analysis is that it would need a network infrastructure and a skilled team, which Jaring has, to kick-start its journey into the telecoms world since it is slated to get a block of the LTE 4G spectrum sometime this year. As for CMC Engineering, it wants to ride on Jaring's network to set up a syariah-compliant data centre for the Asean region, among other things. In the case of Optinet, it has big plans to provide broadband services to consumers and get into the content business. Melaka ICT Holdings is a shareholder in Optinet and it is now rolling out fibre in Malacca. The other shareholders of Optinet are Ersatech Sdn Bhd, Dignity First Sdn Bhd (in which blogger Rocky Bru or Datuk Ahirudin Attan) is a shareholder and director) and Jom Mobile. All four companies hold 25% equity stake each in Optinet (Starbiz)

Axiata Group associate company, Idea Cellular, today brought down its 3G tariffs by up to 70% after the market leader Bharti Airtel's surprise move to slash rates of its 3G services. The company decided to cut 3G tariffs to widen the new-age offering by making it accessible to one and all, it said in a statement here. Under the new plan, Idea's pre-paid and post-paid customers will pay three paise for 10 KB of data, a reduction of 70% from the earlier levels of 10 paise, it said. According to the statement, Idea's 3G services are offered in 3,207 towns across the country and it has 2.7m active users with an average usage of 330 MB per month. Additionally, to cater to different consumer segments, Idea has launched its new pricing in sachet packs, regular packs and unlimited packs, it said. The lowest of the sachets will be sold for Rs 10 and offer 30 minutes of high speed internet surfing on 3G enabled handsets. The move by Idea comes within a week of a similar announcement made by the largest mobile operator
Airtel which cut tariffs by up to 70%. (Economic Times India)

Unisem (M) Bhd expects to record double-digit growth this year after its poor performance last year, as it focuses on tier-one clients and the China market. Its chairman John Chia said on Tuesday that while the company did not do well in the first quarter of this year, the "worst is over" and that the Unisem "should see successive growth in the balance of the year". "I think it would be a significant double digit growth for the full year and the forecast from our customers for the third and second quarters are strong," he said after the AGM. (StarBiz)

Maybank Investment Bank (MIB) has obtained an investment banking licence from the Hong Kong authorities. According to MIB CEO, Tengku Zafrul Aziz, the Type 6 licence issued by the Securities and Futures Commission of Hong Kong for “advising on corporate finance” would allow the group to offer corporate advisory services such as initial public offering and equity offerings, merger and acquisitions and corporate restructuring in the country. Prior to this, MIB’s operations in Hong Kong only had a full broker licence to conduct share-trading activities there. The newly-obtained investment banking licence would complement Maybank group’s plan to expand in one of the most exciting financial markets in the world. (Starbiz)

The offer price to take private QSR Brands Bhd and KFC Holdings (Malaysia) Bhd is unlikely to be revised upwards. In December 2011, Johor Corp Bhd (JCorp) and private equity firm CVC Capital Partners announced their intention to buy QSR shares at RM6.80 each and RM3.79 per warrant. They also offered RM4 per KFC share and RM1 per warrant. To a query if minority shareholders of QSR and KFC were happy with the offer prices, QSR and KFC deputy chairman Ahamad Mohamad replied, "everyone always wants higher offer prices. The advisers of this exercise; OSK Investment Bank, Am Merchant Bank and Affin Investment Bank had advised that the offer price is fair and reasonable". He then estimated that this RM3.6bn exercise will be completed by October 2012. "Judging from the recent price gain in Kulim shares, it can be inferred that many shareholders are receptive." (BT)

Nestle Malaysia's exemption application is still being assessed, Malaysian Competition Commission (MyCC) said. It said the statement by the Federation of Malaysian Consumer Association (Fomca) on Monday indicating that Nestle had been granted the exemption is not true. All exemption applications including Nestle's are at the assessment stage, MyCC said in a statement yesterday. "Exemption applicants are not automatically granted exemptions," said MyCC chief executive officer Shila Dorai Raj. She added that all applications for exemptions must undergo the necessary assessments to determine if they meet the necessary criteria. MyCC said it had received applications for block exemptions from the Malaysia Shipowners Association, Shipping Association of Malaysia and Federation of Malaysian Port Operators Council, Association of Malaysian Hauliers and Life Insurance of Malaysia. To date, Nestle Products Sdn Bhd is the sole applicant for individual exemption. Nestle on Monday dismissed accusations of anti-competitive acts by Fomca, adding that it will be "guided accordingly by any directions that the MyCC may issue in due course". (BT)

The Naza Group of Companies is looking to add two automobile and one motorcycle franchise to its wide range of transport franchises in the Malaysian market. Joint group executive chairman Datuk SM Faisal SM Nasimuddin said the three franchises are from Europe and China but declined to provide details. "One franchise is in a very preliminary stage of discussion but the other two are firm. We will make an announcement at the right time," he said. (Financial Daily)

The Star was the only English newspaper in the country to register a growth in sales in the second half of 2011, according to data by the Audit Bureau of Circulations (ABC). From July to December 2011, The Star's daily editions (Monday to Saturday) marked a year-on-year increase of 8,243 copies or 3% to 287,204 compared with 278,961 copies in the previous corresponding period. During the same period, daily copies of the New Straits Times (NST) declined 7% or 6,747 copies to 94,661 copies while The Sun, which is distributed free, saw a decline of nine copies to 300,531 copies. Meanwhile, weekly (Sunday) editions of all English dailies in Malaysia recorded a decline in the second half of 2011. However, Sunday Star marked the smallest drop of all the English weeklies, declining a marginal 1% or 2,722 copies to 289,979 copies from July to December 2011, compared with 292,701 copies in the previous corresponding period. Sunday editions of the NST meanwhile declined 8% or 9,971 copies to 110,660 copies in the second half of last year, while The Edge dropped 2% or 489 copies to 22,549 copies. The increase in The Star's circulation was enough to lift the combined circulation of the English dailies by 0.4% in the same period. This was the only market segment that saw year-on-year circulation growth between July and December 2011. The total circulation of the four Malay-language dailies and four Malay-language weeklies shrank 2% and 4% respectively. Overall, the four Chinese newspapers' circulation slipped 0.5%. (Starbiz)

REDtone International Bhd plans to invest up to RM90m over the next 3 years to expand its WiFi coverage to 20,000 hotspots, from under 4,500 currently. "Our annual capital expenditure (capex) on telecommunications services like WiFi hotspots is about RM10m to RM30m. We expect the capex to remain at the same level moving forward, even though we are ramping up our

Bank Negara Malaysia’s (BNM) international reserves amounted to US$136.1bn (RM417.5bn) as at 15 May, up slightly from US$135.9bn (RM416.9bn) as at 30 Apr. The reserves were enough to finance 9.3 months of retained imports and were 4.1 times the short-term external debt. (BNM) WiFi hotspot coverage significantly. He was speaking to the media after the signing of memorandum of understanding (MoU) between REDtone and MIMOS Bhd. The MoU allows REDtone to become a MIMOS technology recipient with the rights for MIMOS' WiWi and Intelligence Surveillance Platform technologies for 3 years. (StarBiz)

Glenn Marine Group (Asia) Sdn Bhd (GMG) has resubmitted an application to build and operate a third port in Port Klang under a private finance initiative (PFI). In the submission to the Economic Planning Unit (EPU) two weeks ago, the proposed Centralport is to be located between the two existing ports - Northport and Westport. The first phase of the port is expected to cost almost RM1.3bn, including the cost for acquiring the land, and is estimated to take four years to complete. According to port industry officials, the proposal is likely to met with resistance from the existing port operators in that area as the existing facilities still have room for expansion. (Financial Daily)

Sagajuta (Sabah) Sdn Bhd's Datuk Raymond Chan Boon Siew says he has no plans to exit Harvest Court Industries Bhd, assuring continuity of the company's contract with Sagajuta. "A contract is a contract ... if anything the question should be, I will raise my stake in Harvest Court," Chan said when asked what would happen to the contract with Sagajuta should Chan exit the company He went on to say he is looking to raise his stake in the company, but was non-committal on the quantum of the increase. Chan has a 15.9% stake in Harvest Court currently. Shareholders yesterday approved the company's plan to diversify into the construction business. They also approved related party transactions comprising of three projects namely the 1 Sulaman project, the 1Green Enviro project and the 1 Likas project. The projects were awarded by Sagajuta and 1Green Enviro Sdn Bhd to Harvest Court and are worth RM808.1m. Sagajuta, 1Green Enviro and Harvest Court share a common shareholder in Chan. (BT)

Willowglen MSC Bhd has been awarded jobs valued at RM18m for the design, manufacture, installation, testing & commissioning of SCADA and CCTV systems for a local railway project. The company, however, did not identify the said railway project. (BT)

20120523 1040 Global Market Related News.

Asian Stocks Snap Two-Day Rally on Greece, Japan Exports (Source: Bloomberg)
Asian stocks fell, with the regional benchmark index snapping a two-day rally, as concerns mounted Greece may exit the euro zone ahead of today’s European Union summit and Japan’s trade data missed estimates, dimming the outlook for exporters. Nintendo Co., a maker of video-game players that depends on Europe for a third of its sales, fell 2.3 percent in Tokyo. Mitsui & Co. (8031), a Japanese trading company, slid 1.8 percent. Woodside Petroleum Ltd. (WPL), Australia’s oil and gas producer, lost 1.5 percent as oil fell. The MSCI Asia Pacific Index fell 1.2 percent to 112.39 as of 10:03 a.m. in Tokyo before the Hong Kong market opened. About eight stocks fell for each that rose, and all 10 industry groups on the measure slid.
“If Greece goes get out of the euro, then that will be a significant event for the market,” said Andrew Pease, Sydney- based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about $150 billion. The market wants to see “a political resolution out of Europe that will either prevent Greece from exiting or, if they do exit, will put in place a strong firewall to prevent contagion effects from going to other countries.”

Japan Stocks Dropped (Source: Bloomberg)
Japanese stocks dropped, with the Nikkei 225 (NKY) Stock Average heading for its first drop in three days, as a report showed exports rose less than estimated and Fitch Ratings cut the nation’s foreign-currency rating. Kyocera Corp. (6971), an electronic components maker that derives more than half of its sales outside Japan, lost 1.3 percent. Mitsubishi Estate Co., Japan’s top developer by market value, sank 2.9 percent. JGC Corp. gained 2 percent on a report the plant builder will invest about 30 billion yen ($375 million) in an Indonesia coal plant. The Nikkei 225 lost 1.1 percent to 8,635.76 as of 9:28 a.m. in Tokyo, with volume 15 percent above the 30-day average. The broader Topix (TPX) slid 0.9 percent to 726.57, with more than three shares dropping for each that gained.
The Topix has plunged 17 percent from this year’s high on March 27 as China’s economic growth slowed and on renewed concern about Europe’s debt crisis. The political gridlock in Greece after an inconclusive election this month reignited concern the nation will renege on austerity pledges required for 240 billion euros ($304 billion) in aid and exit the euro.

U.S. Stocks Reverse Gain in Final Hour on Greece Woes (Source: Bloomberg)
U.S. stocks erased gains in the final hour of trading as concern that Greece would exit the euro and a tumble in Facebook (FB) Inc. shares overshadowed economic optimism. Commodity and technology shares in the Standard & Poor’s 500 Index fell, while financial companies gained. Facebook slumped 8.9 percent, dropping 19 percent in two days. A gauge of homebuilders in S&P indexes rose 1.9 percent amid a better-than- estimated housing report. Best Buy Co. (BBY) rallied 1.6 percent after reporting first-quarter profit that exceeded estimates. Dell Inc. tumbled 12 percent at 5:43 p.m. New York time after forecasting revenue that missed analysts’ projections. About three stocks fell for each rising on U.S. exchanges at 4 p.m. New York time. The S&P 500 added 0.1 percent to 1,316.63, almost erasing a gain of 1 percent. The Dow Jones Industrial Average lost 1.67 points, or less than 0.1 percent, to 12,502.81. About 7.3 billion shares changed hands on U.S. exchanges, or 8.2 percent above the three-month average.
“Stocks did a 180,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. “On a relative basis, the U.S. is the cleanest dirty shirt. Yet Europe is still a dominant story for the market.”

U.S. Stocks Retreat With Euro as Treasuries Trim Drop (Source: Bloomberg)
U.S. stocks erased gains and the euro extended losses versus the dollar, while Treasuries trimmed earlier declines, on concern that Greece was making preparations to exit the euro. Facebook Inc. tumbled 8.9 percent. The Standard & Poor’s 500 Index closed up less than 0.1 percent at 1,316.63 at 4 p.m. in New York after rallying as much as 1 percent. The euro slid 1 percent to $1.2689 and 10-year Treasury yields increased three basis points to 1.77 percent after surging as much as six points earlier. Crops led commodities lower while oil retreated as Iran agreed to let Western nuclear inspectors into the country.
U.S. equities reversed gains in the final hour of trading and the euro sank to its low of the day after Dow Jones reported that former Greek Prime Minister Lucas Papademossaid the nation is considering preparations to leave the shared currency. The comments wiped out an earlier rally in stocks triggered by an increase in U.S. home sales and speculation leaders in Europe and China will step up efforts to bolster economic growth. “We went from risk-on to risk-off pretty quickly,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “Greece is not a major economy, but there’s obviously fear of contagion in case it exits the euro. These outside factors will weigh on the market even as economic numbers are good.”

Emerging Stocks Extend Rally on China Spending, Europe Stimulus (Source: Bloomberg)
spending, European leaders will take action to stimulate economic growth and sales of U.S. homes rose. The MSCI Emerging Markets Index (MXEF) advanced 0.6 percent to 919.28 by 4:33 p.m. in New York, extending yesterday’s 0.7 percent rebound from the lowest close in five months. Russia’s Micex Index rose as OAO Mechel (MTLR), the nation’s largest producer of coal for steelmakers, climbed 5.3 percent. Brazil’s Bovespa tumbled 2.7 percent as homebuilder PDG Realty SA Empreendimentos & Participacoes plunged 11 percent. China plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth, the China Securities Journal reported. European leaders will do “everything necessary” to keep Greece in the 17-nation euro and focus on steps to aid economic expansion, German Finance Minister Wolfgang Schaeuble said yesterday.
“Investors are comforted by developments in Europe and expectations of more spending and policy easing” in China, said Chen Liqiu, a strategist at Jianghai Securities Co. in Shanghai. Sales of existing U.S. homes rose 3.4 percent to a 4.62 million annual rate in April, figures from the National Association of Realtors showed today in Washington. Emerging-market equities have added 0.3 percent in 2012 and trade at a multiple of 9.8 times estimated earnings, compared with the average of 11.7 for developed nations, which have advanced 1.5 percent this year.

European Stocks Rise the Most in a Month; Vodafone Climbs (Source: Bloomberg)
European stocks climbed the most in a month amid speculation that China and the euro area will do more to stimulate global economic growth. Vodafone Group Plc (VOD) gained 4.2 percent after posting quarterly service revenue that exceeded analysts’ estimates. Accor SA (AC) surged after saying it will sell its budget Motel 6 chain for $1.9 billion. Sonova Holding AG (SOON) plunged 9.9 percent, its biggest decline in more than a year, after reporting full- year earnings that fell short of analysts’ forecasts. The Stoxx Europe 600 Index (SXXP) gained 1.9 percent to 244.7 at the close, its biggest rally since April 17. The gauge has still fallen 10 percent from this year’s high on March 16 amid mounting concern that Greece will elect a government opposed to implementing pledged austerity measures.
“The rally is mostly technically driven after we became quite oversold last week,” said Raimund Saxinger, a fund manager at Frankfurt-Trust Investment GmbH, which oversees about $22 billion. “The worries that we have seen, they still persist. The next thing that the markets are really focusing on are the Greek elections and in essence if Greek voters will vote to stay in the euro or not.”

U.K. Stocks Rise on China Demand Prospects; Xstrata Gains (Source: Bloomberg)
U.K. stocks climbed the most in more than three months, led by a rally in mining companies, amid a report China is seeking to speed up construction projects spurring demand for industrial metals. Xstrata (XTA) Plc rose as the company forecast Chinese demand for copper will recover in the second half of the year. Vodafone Group Plc (VOD) gained after reporting revenue growth that beat analyst estimates. Barclays Plc (BARC) and Royal Bank of Scotland Group Plc (RBS) led an advance in lenders’ shares. The FTSE 100 Index added 1.9 percent to 5,403.28 at the close in London, the biggest increase since Feb. 1. The gauge lost 5.5 percent last week and has tumbled 9.4 percent from its 2012 high on March 16 amid mounting concern Greece may be forced leave to the euro area. The FTSE All-Share Index rose 1.8 percent today, while Ireland’s ISEQ Index climbed 1.9 percent.
“Murmurings from China of it sustaining growth is helping to underpin sentiment,” said David Jones, chief market strategist at IG Index in London. “Movements in the mining sector always have a disproportionate effect on the FTSE 100. (UKX)” Stocks rose yesterday, snapping a five-day selloff, after Chinese Premier Wen Jiabao said his government will focus more on bolstering economic growth.

Treasuries Snap Three-Day Decline on Demand for Safety (Source: Bloomberg)
Treasuries snapped a three-day decline on concern Greece will abandon the euro as its currency, increasing demand for the relative safety of U.S. securities. Five-year yields were five basis points from the record low before the U.S. sells $35 billion of the securities today. Demand rose at a two-year auction yesterday. Market participants are cutting their yield forecasts. The 10-year rate will be 2.45 percent by year-end, a Bloomberg survey of banks and securities companies shows. The projection declined from last month’s high of 2.58 percent. “If the European Union breaks up and the U.S. has a hard time with its economy, yields will go down,” said Youngsung Kim, the head of fixed income in Seoul at Samsung Asset Management Co., South Korea’s largest private bond investor with the equivalent of $96.4 billion in assets. Demand for safety may drive 10-year rates to a new low of 1.5 percent, he said. Ten-year yields were little changed at 1.76 percent as of 9:53 a.m. in Tokyo, Bloomberg Bond Trader data show.  The price of the 1.75 percent security due in May 2022 was 99 7/8. The record low rate was 1.67 percent set Sept. 23. Five-year notes yielded 0.75 percent, versus 0.6960 percent set Feb. 3, which was the least ever.

FOREX-Euro steadies vs dlr as focus shifts to EU summit
LONDON, May 22 (Reuters) - The euro steadied against the dollar as its rebound from a recent four-month low stalled, although traders said selling was likely to be limited in the run-up to an informal meeting of European leaders this week.
"I doubt any news out of the meeting tomorrow will be able to create a positive environment, but people booked some profit at the end of last week and may be waiting for better levels to sell the euro," said Niels Christensen, FX strategist at Nordea.

Dollar Remains Higher on Haven Demand Before EU Summit (Source: Bloomberg)
The Dollar Index (DXY) climbed to a 20- month high before European Union leaders meet today amid concern Greece will exit the euro bloc, boosting demand for the U.S. currency as a haven. The 17-nation euro was 0.1 percent from a four-month low as Greek elections loom on June 17 that may determine whether it stays in the currency union. The yen held a two-day drop after Japan posted a wider-than-estimated trade deficit and before the nation’s central bank concludes a meeting today. “It’s hard to see what will come out of the EU meeting that would stimulate markets anymore,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “We have election risks ahead of us for Greece and its potential exit from the euro zone, and that’s what markets are dwelling on and that will support the U.S. dollar as a safe haven for the next few weeks.”
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, reached 81.830, the highest since September 2010, before trading at 81.817 as of 9:37 a.m. in Tokyo, up 0.2 percent from the close in New York yesterday. The euro retreated 0.3 percent to $1.2650 after touching $1.2642 on May 18, the least since Jan. 16. The currency slid 0.2 percent to 101.22 yen. The yen lost 0.1 percent 80.01 per dollar, set for a third-straight decline.

OECD Sees Risk of Europe Crisis Hurting World Economy (Source: Bloomberg)
The Organization for Economic Cooperation and Development said Europe’s debt crisis risks spiraling and seriously damaging the world economy. “The risk is increasing of a vicious circle, involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth,” OECD Chief Economist Pier Carlo Padoan wrote in the organization’s semi- annual report on the global economy. Such a downside scenario “may materialize and spill over outside the euro area with very serious consequences for the global economy,” he said. The remarks amount to a warning to European Union leaders who are preparing to gather in Brussels tomorrow to discuss how to revive growth and grapple with a political impasse in Greece, where voters rejected austerity measures in elections on May 6. The euro has dropped more than 3 percent this month on concern that Greece may opt to leave the 17-nation monetary union.
The OECD, which advises its 34 member governments on economic policy, left its 2012 growth forecast for the group unchanged at 1.6 percent as the gloomier picture in the euro area was offset by improving prospects in the U.S. Gross domestic product in the euro region will shrink 0.1 percent this year and expand 0.9 percent in 2013 instead of posting growth of 0.2 percent and 1.4 percent as predicted last November, the Paris-based OECD said today.

Sales of Existing Homes in U.S. Rise as Market Stabilizes (Source: Bloomberg)
Sales of existing U.S. homes rose in April, driven by broad-based gains in demand that signal the market is stabilizing. Purchases, tabulated when a contract closes, increased 3.4 percent to a 4.62 million annual rate, figures from the National Association of Realtors showed today in Washington. The median price jumped by the most in six years. Owner-occupied properties are taking over from all-cash deals by investors snapping up distressed houses, the agent’s group said. Employment gains, depressed prices and record-low mortgage rates may bring more dwellings within reach of Americans, eliminating a source of weakness for the world’s largest economy just as risks from Europe’s debt crisis climb. “We are making incremental progress,” said Millan Mulraine, a senior U.S. strategist at TD Securities Inc. in New York, who correctly forecast the sales pace. “People are becoming more confident about job prospects and about taking on mortgages. This is all positive for the economy.”

Fed Regional Bank Directors Saw Improvement in Economy (Source: Bloomberg)
Directors at the Federal Reserve’s regional banks saw a pickup in the pace of economic growth last month as housing, motor vehicle sales and consumer spending gained strength. “Directors noted further improvement in economic activity, and they anticipated growth would continue at a moderate pace,” according to minutes released today in Washington summarizing discussions of meetings in April. Board members of the 12 banks “saw the incoming data on consumer spending as a bit more robust than they had expected but cautioned that these gains might be attributable to unseasonably warm winter weather,” the minutes said.
The minutes covered meetings on April 2 and April 23 by the Fed’s Board of Governors to discuss the discount rate, which the central bank charges on emergency loans to banks. The Fed kept the rate unchanged at 0.75 percent. A different Fed panel, the Federal Open Market Committee, met April 24-25 and affirmed a plan to hold interest rates near zero at least through late 2014 to spur growth and reduce unemployment. The minutes of the FOMC meeting in April were released last week. Policy makers next gather in Washington on June 19-20.

JPMorgan's Losses Become Tool in Dodd-Frank Rules Debate (Source: Bloomberg)
U.S. lawmakers and regulators are seizing on the more than $2 billion in losses disclosed by JPMorgan Chase & Co. (JPM) to bolster their positions in the nearly two-year-old debate over Wall Street’s rules. The Senate Banking Committee was the flash point for the debate yesterday, as Democrats and the chairman of the Commodity Futures Trading Commission used the losses to argue for the strict implementation of the 2010 Dodd-Frank Act rules, including a ban on proprietary trading by banks. That argument may shift to lawmakers and regulators pushing to go beyond President Barack Obama’s financial regulatory overhaul. “In the short run, pressure is on regulators to at least look tough in implementing the Volcker Rule,” Brian Gardner, senior vice president at investment bank Keefe Bruyette & Woods Inc., said. “Over longer run, I believe the bigger impact will be on the move to break up or downsize the largest banks.”
JPMorgan’s May 10 disclosure of losses tied to structured derivatives products came at a key point in the debate over the future of the Dodd-Frank Act. Agencies including the CFTC and Securities and Exchange Commission are still in the process of writing and implementing some of the most controversial rules required by the law.

Barclays to Sell Entire BlackRock Stake For $5.5 Billion (Source: Bloomberg)
Barclays Plc (BARC), the U.K.’s second- largest bank by assets, said it will receive net proceeds of $5.5 billion from the sale of its entire stake in BlackRock Inc. (BLK) The lender sold about 26.2 million shares to money managers for $160 each, London-based Barclays said in a statement yesterday. Underwriters have the option to purchase an additional 2.6 million. New York-based BlackRock will buy back a further 6.38 million shares at $156.80 per share, about 8.8 percent less than the stock’s $171.91 close on May 18, the last trading day before the deal was announced. The British bank took the 19.6 percent holding when it sold Barclays Global Investors to BlackRock in December 2009 for about $15.2 billion. The sale turned BlackRock into the world’s biggest asset manager and added passive products such as the iShares exchange-traded funds to its offerings.
Barclays is selling as the latest rules from the Basel Committee on Banking Supervision will force the lender to set aside capital against the stake to cushion itself against any decline in the value of the holding. The Barclay’s offering was priced 2.1 percent below BlackRock’s shares which fell 2.6 percent to $163.37 yesterday in New York.

Japan Rating Cut Rings Alarm on Tax Gridlock (Source: Bloomberg)
Japan’s sovereign-rating cut by Fitch Ratings escalated pressure on lawmakers to double the sales tax, with the Organization for Economic Cooperation and Development warning the nation’s debt is heading into “uncharted territory.” The local-currency rating was reduced one step, and foreign-currency grade two levels, to A+, the fifth-highest ranking, Fitch said in a statement yesterday. The Paris-based OECD said separately that boosting the 5 percent consumption levy is a “top priority.” A surge in demand for Japanese government bonds that sent 10-year yields to the lowest level since 2003 this month is masking the risks from rising debt. Prime Minister Yoshihiko Noda has failed to persuade opposition lawmakers to support his legislation, leaving gross public debt poised to reach 223 percent of gross domestic product next year, the OECD said.
“It’s an alarm bell for Japanese politics and the slow progress in Japan’s fiscal consolidation,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo and a former central bank official. “There’s no commitment to fiscal consolidation -- in the long run, Japan’s creditworthiness and fiscal sustainability aren’t looking good.”

Japan April Exports Rise Less-Than-Forecast 7.9% (Source: Bloomberg)
Japan’s exports rose a less-than- estimated 7.9 percent in April from a year earlier, underscoring the risk that weakness in global demand may limit the rebound in the world’s third-biggest economy. Imports gained 8 percent, leaving a trade deficit of 520.3 billion yen ($6.5 billion), the finance ministry said in Tokyo today. The median forecast in a Bloomberg News survey of 27 analysts was for exports to increase 11.8 percent after rising 5.9 percent in March. Earthquake reconstruction work and gains in consumer spending helped to drive an annualized 4.1 percent expansion in the first quarter after a 0.1 percent gain in the final three months of 2011. Japan’s debt-rating downgrade by Fitch Ratings yesterday signaled the importance of the economy maintaining momentum to limit a deterioration in the nation’s finances.
“The overall picture for exports looks dull,” said Kiichi Murashima, chief economist at Citigroup Global Markets Japan Inc. in Tokyo. “If exports stay flat when the effect of post- quake reconstruction is likely to peak out in the latter half of the year, there’s a possibility Japan’s economy will fall into a lull.”

North Korea Denies Nuclear Test Plan as It Upgrades Rocket Site (Source: Bloomberg)
North Korea denied planning a nuclear weapons test while a report indicated it’s upgrading a rocket launch site, conflicting signs that underscore the challenge of gauging the intentions of new leader Kim Jong Un. The totalitarian regime is building a new launch pad for firing larger long-range rockets at its Musudan-ri site in the northeast, according to a U.S. university monitoring project on North Korea. The report came after North Korea’s Foreign Ministry said last month’s botched long-range rocket launch was intended “for peaceful purposes and we never anticipated military measures like a nuclear test.” Kim has shown no sign of abandoning his country’s nuclear ambitions five months after succeeding his late father Kim Jong Il. U.S. and South Korean officials have said Kim’s government may soon detonate an atomic weapon to rebound from the embarrassment of the failed rocket launch.
“North Korea is trying to transition the current state of tensions toward one of dialogue,” said Koh Yu Hwan, a professor of North Korean studies at Dongguk University in Seoul. “By saying that they’ve never planned a nuclear test and turning that around as a theory espoused by the U.S., they are de facto saying they won’t conduct one.”

War-Gaming Greek Euro Exit Highlights Hazards in 46-Hour Weekend (Source: Bloomberg)
Greece may have only a 46-hour window of opportunity should it need to plot a route out of the euro. That’s how much time the country’s leaders would probably have to enact any departure from the single currency while global markets are largely closed, from the end of trading in New York on a Friday to Monday’s market opening in Wellington, New Zealand, based on a synthesis of euro-exit scenarios from 21 economists, analysts and academics. Over the two days, leaders would have to calm civil unrest while managing a potential sovereign default, planning a new currency, recapitalizing the banks, stemming the outflow of capital and seeking a way to pay bills once the bailout lifeline is cut. The risk is that the task would overwhelm any new government in a country that has had to be rescued twice since 2010 because it couldn’t manage its public finances.
“Leaving is difficult and messy, so anyone who thinks it’s easy is just wrong,” said Lorenzo Bini Smaghi, who left the European Central Bank’s executive board last year, in a phone interview. “The Greeks must be rational and protect themselves from rash decisions that they will live to regret. Leaving the euro is not the answer to their problems.” He declined to say whether he thought an exit would occur.

Merkel Faces Hollande Pleas to Shed Taboos at 18th Crisis Summit (Source: Bloomberg)
A plea to shed “taboos” may put German Chancellor Angela Merkel in a corner today as she digs in against joint debt sales to counter Europe’s financial crisis. Merkel, the dominant figure in more than two years of crisis-fighting, heads to a Brussels summit unable to stifle calls for measures she opposes, including euro bonds, the use of European money to recapitalize banks, a bigger rescue fund and extra time for debt-swamped countries to cut spending. “Policy makers across the euro area continue to act in their own interest,” said David Song, a currency analyst in New York at, the research unit of FXCM Inc. (FXCM) “We may see a growing rift between France and Germany as the anti-austerity movement gathers pace.” The summit, the 18th since Greece was convulsed by debt and the first since an anti-austerity campaign carried Francois Hollande to France’s presidency, takes place with market indicators showing mounting stress on banks.
European Union officials damped expectations for the 27- nation summit starting at 7 p.m., eying the next meeting on June 28-29 as the time to take pro-growth steps. The crisis in the 17 euro countries will come up tonight only “at the very end,” EU President Herman Van Rompuy said in a pre-summit letter.

Merkel Pressed to Share German States’ Debt Costs (Source: Bloomberg)
Chancellor Angela Merkel is being pushed by German states to ease their budget squeeze by sharing borrowing costs, a policy she has opposed in confronting the financial crisis in the rest of the euro region. The opposition Social Democrats plan to press Merkel on so- called Deutschland bonds at a meeting on May 24, Norbert Walter- Borjans, finance chief of North Rhine-Westphalia, the nation’s biggest state, said in an interview. She needs their support to win parliamentary backing for the tougher European fiscal rules she championed. “The parallel between efforts to push euro bonds and Deutschland bonds is remarkable: the motivation for the push, the timing and the risks,” Thilo Schaefer, an analyst at the IW economic institute in Cologne, said by phone. “We know her position on euro bonds. If states open a new offensive for Deutschland bonds, then she faces the same pressure from a different angle.”
German borrowing costs plunged as investors sought a haven from the doubts that Greece can remain in the 17-nation currency zone. The yields on German two-, five-, 10-and 30-year bonds have declined to the lowest on record. States have benefited as well, with five-year debt from North-Rhine Westphalia dropping to as low as 1.5 percent last week from more than 3 percent in 2011. The federal government pays 0.5 percent to borrow for five years.

U.K. Needs More BOE Stimulus and Possible Tax Cuts, IMF Says (Source: Bloomberg)
Britain requires further monetary easing to aid the economy and Chancellor of the Exchequer George Osborne should prepare for temporary tax cuts, the International Monetary Fund said. With the economy mired in its first double-dip recession since the 1970s, the Bank of England and the Treasury should introduce policies to underpin demand and unclog the financial system, the Washington-based lender said in its annual review of the U.K. published today. The central bank needs to inject further stimulus through bond purchases or by cutting interest rates, with tax cuts following as soon as the fall. “If the economy turns out to be significantly weaker than forecast fiscal easing should be considered,” IMF Managing Director Christine Lagarde said at a press conference in the Treasury in London.
The call for action was accompanied with praise for existing deficit-cutting plans, which the IMF said had gained the credibility of investors and lowered government borrowing costs. Should monetary tools fail, Osborne should look at temporary cuts in sales and payroll taxes and more spending on infrastructure, it said.

U.K. Inflation Slows as IMF Sees Need for More Stimulus (Source: Bloomberg)
U.K. inflation slowed more than economists forecast in April, cooling to a level that relieves Bank of England Governor Mervyn King of the task of writing a letter to the government. Consumer prices rose 3 percent from a year earlier, down from 3.5 percent in March, the Office for National Statistics said today in London. The median forecast of 30 economists in a Bloomberg News survey was 3.1 percent. The rate is within the government’s boundaries for the first time since February 2010. The inflation slowdown came as the International Monetary Fund said the Bank of England should add to stimulus for the economy. While the central bank halted its so-called quantitative-easing program this month, King left the door open to more bond purchases at a press conference last week as the central bank lowered growth forecasts.
“These figures give the Monetary Policy Committee slightly more leeway to undertake more QE to cushion the U.K. economy from the euro-zone turmoil,” said Vicky Redwood, an economist at Capital Economics Ltd. in London. “We expect core price pressures to ease further in response to contracting output and weak pay growth.”

Osborne Under Pressure as U.K. Budget Deficit Widens (Source: Bloomberg)
Britain had an underlying budget deficit of 13.8 billion pounds ($21.8 billion) in April, the first month of the fiscal year. The figure, which excludes support for banks, compared with 9.1 billion pounds a year earlier, the Office for National Statistics said in London today. Revenue rose 1.3 percent in April from a year earlier and spending increased 3.8 percent. The public finances received a one-time boost of 30.3 billion pounds from the transfer of Royal Mail Group Ltd. pension assets to the public sector and the impact of the central bank’s Special Liquidity Scheme. This left a budget surplus of 16.5 billion pounds last month. Prime Minister David Cameron has said there can be no retreat from his plan to erase a deficit of 8 percent of gross domestic as the deepening euro-region crisis intensifies pressure for a relaxation of his austerity policies.

20120523 1040 Global Commodities Related News.

Market Recap: Wheat Futures (Source: CME)
Nearby wheat futures in Chicago, Kansas City and Minneapolis ended with double-digit losses in all but some far-deferred contracts. Chicago wheat was the downside leader with losses of 12 3/4 to 18 1/2 in 2012 contracts. "After hours" trade was choppy with most contracts settling within pennies of the pit close. Futures enjoyed early gains thanks to continued deterioration in the quality of the winter wheat crop, but the market softened as the day progressed thanks to harvest pressure as well as better chances of rain for areas of the dry Former Soviet Union.

Wheat Market Recap Report (Source: CME)
July Wheat finished down 17 1/2 at 686 1/2, 15 3/4 off the high and 4 3/4 up from the low. December Wheat closed down 13 1/2 at 715 3/4. This was 2 3/4 up from the low and 14 3/4 off the high. The market sold off fairly sharply led by more active fund trader selling. Rumors of China canceling corn and soybean cargoes could not be confirmed by commercial traders but fund traders were aggressive sellers in many commodity markets on news of iron ore and coal cancellations. Improving weather also hit the other grains and this bleed over to the wheat market to pressure. July wheat took out yesterday's lows before a bounce and was trading near 16 cents lower near 1:30 cst. While the weekly crop update showed a sharp drop in Kansas crop ratings, traders believe that the current rally already priced-in the weather. Outside market forces plus the overbought technical condition of the market were seen as reasons for the selling. The US dollar is higher again today and there is some rain for the dry areas of Russia. The Kansas crop dropped to 43% good/excellent from 52% last week and this was seen as the largest one-week drop in 4 1/2 years. The crop rating is down 17 points in two weeks and down 26 points from 69% good to excellent since April 15th. The weekly Spring Wheat Planting report showed a record fast 99% of the crop is planted compared to 50% last year. The weekly Spring Wheat Conditions report showed 74% was rated good/excellent. Traders see continued moisture in spring wheat areas just ahead which should help keep crop growing conditions favorable. July Oats closed down 8 1/4 at 333 3/4. This was 1/2 up from the low and 10 1/4 off the high.

Market Recap: Corn Futures (Source: CME)
Corn closed 16 1/4 to 36 cents lower, with nearbys leading losses. Funds sold an estimated 25,000 contracts today. Futures trimmed losses in after-hours trade. Pressure was tied to negative outside markets and yesterday's crop condition ratings from USDA. The U.S. dollar index surged today after Fitch Ratings downgraded Japan's credit rating and hinted another could be on its way.

Corn Market Recap for 5/22/2012 (Source: CME)
July Corn finished down 31 3/4 at 601 1/4, 33 1/2 off the high and 6 1/4 up from the low. December Corn closed down 15 3/4 at 524 3/4. This was 4 3/4 up from the low and 20 1/2 off the high. July corn was trading down 31 cents on the session late in the day and the market has given back much of the gains of the past four trading sessions. Talk of improving weather for the Midwest for much of next week and an aggressive selling trend from fund traders in a wide range of other agricultural markets helped to pressure. Rumors of weaker basis at the gulf and reports that fund traders were sellers of near 25,000 contracts helped to encourage the selling. As of May 20th, a record 96% of the corn crop was planted and the crop was rated 77% good to excellent which was much higher than expected. Ideas that Midwest rain coverage might improve if the ridging pattern breaks down early next week helped to spark some fund trader selling. Other traders see the market as overbought after the six-day surge and this added to the selling pressure this morning after the hook reversal yesterday. Some traders see the weather outlook suggesting lower crop ratings ahead with too much heat and not enough rain for the southern half of the Corn Belt. July Rice finished down 0.185 at 15.245, equal to the high and equal to the low.

GRAINS-Wheat eases after 6-day rally, soy firm on weather
SINGAPORE, May 22 (Reuters) - U.S. wheat slid 1.2 percent on Tuesday, coming off an 8-1/2 month high hit in the previous session, as the market took a breather from a six-day rally sparked by crop-threatening dry weather in the United States and Russia.
"The rally has certainly priced wheat out of the feed rations, also the market will be looking for the extent of losses in the Black Sea region and Europe before another run," said Brett Cooper, a senior manager of markets at FCStone Australia.

Thailand aims to step up govt rice sales as exports slow
BANGKOK, May 22 (Reuters) - Thailand will step up efforts to sell rice in government-to-government deals over the rest of the year, senior Commerce Ministry officials said on Tuesday, after uncompetitive high prices caused shipments to drop sharply.  
"We are in talks with several foreign governments about rice sales and we expect to sell a significant amount of rice in the second half to boost exports to the target of 9 million tonnes," said Manat Soiploy, who oversees rice trade at the Commerce Ministry.

Egypt buys 1.1 mln tonnes of local wheat -official
ABU DHABI, May 22 (Reuters) - Egypt has bought 1.1 million tonnes of local wheat so far in the 2011/2012 season despite diesel shortages that have hampered harvesting, an official at the Ministry of Supply and Domestic Trade said late on Monday.
"The diesel shortages meant that farmers couldn't operate their machinery to harvest the crops properly, but the prices we are offering were very tempting for farmers so we managed to procure a good amount so far," Yehia Mahmoud, spokesperson for the ministry, said over the telephone.

Manila says seeks 100,000 T rice from Vietnam or Thailand
MANILA, May 22 (Reuters) - The Philippines' National Food Authority (NFA) said it would buy 100,000 tonnes of rice from either Vietnam or Thailand, and may open a tender later this year for 20,000 tonnes more to complete the country's import requirements.
The state grains procurement agency would seek offers on Tuesday from the world's two biggest rice exporters to ensure the shipment arrives before the start of the lean harvest season in July, NFA Administrator Angelito Banayo said.

Dry fields slash Kansas wheat ratings
CHICAGO, May 21 (Reuters) - Wheat in Kansas, the largest U.S. wheat producer, deteriorated this past week by the biggest ratings margin in 4-1/2 years as dry weather continued to grip the state, government data showed on Monday.
The U.S. Department of Agriculture rated 43 percent of the Kansas crop good to excellent as of Sunday, down 9 percentage points from the previous week and the steepest ratings decline since November 2007.

US corn, soy farmers plant in record time
CHICAGO, May 21 (Reuters) - U.S. farmers planted corn and soybeans in record time last week as they took advantage of the warm, dry weather throughout the U.S. Midwest, Monday's weekly  U.S. Agriculture Department planting data showed.
That progress puts farmers within striking distance of finishing all their planting tasks this week, particularly since dry weather is forecast to continue for much of the region. Showers are expected in northwestern areas of the Corn Belt.

Drought concerns lift Russia wheat prices
MOSCOW, May 21 (Reuters) - Russian wheat prices gained ground last week as concerns about the severity of a spring drought in key southern regions lifted global prices and as the weakening rouble boosted export profits in local currency terms, analysts said.
U.S wheat prices approached nine-month highs on Monday after dry weather stoked fears about losses in both the United States and Russia.

SOFTS-Robusta coffee off 8-1/2 month high, sugar dips
LONDON, May 22 (Reuters) - Robusta coffee futures on Liffe steadied on Monday after correcting below an 8-1/2 month high, while raw sugar and cocoa on ICE eased, under pressure from Europe's worsening debt crisis.
Boosting market regulation will be a priority for France when it negotiates the European common farm policy later this year, the country's newly appointed farm and agribusiness minister Stephane Le Foll said on Monday.

Ivorian cocoa arrivals seen at 1,126,000 T by May 20
ABIDJAN, May 21 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached around 1,126,000 tonnes by May 20, exporters estimated on Monday, compared with 1,103,169 tonnes in the same period of the previous season.
Exporters estimated around 16,000 tonnes of beans were delivered to the West African state's two ports between May 14 and May 20, down from 34,241 tonnes in the same week a year ago.

Ivorian rains, sun to improve cocoa volume, quality
May 21 (Reuters) - Abundant rains and sunshine that spread last week across most of Ivory Coast's main cocoa regions will ensure larger volumes of good quality beans in the coming weeks, farmers and analysts said on Monday.  
The mid-crop in the world's top cocoa producer is marketed from April to September, but harvesting is off to a slow start due to a five-month dry spell that carried into March.  

Italy 2012 wheat output seen up-ISMEA
MILAN, May 21 (Reuters) - Soft wheat output in Italy, a major grain importer in the European Union, is expected to jump 17.5 percent due to a considerable increase in planted areas, while maize output is seen flat on 2011, Italy's farm research centre ISMEA said on Monday.
Soft wheat plantings have risen 17 percent to 620,000 hectares (ha) and yields improved slightly, ISMEA said in a statement without providing an absolute figure for production.

Ukraine says Saudi Arabia to buy 4 mln T barley
KIEV, May 21 (Reuters) - Saudi Arabia is likely to buy 4 million tonnes of Ukrainian barley in the 2012/13 season, Ukraine's Farm Minister Mykola Prysyazhnyuk was quoted as saying on Monday.
"Representatives of Saudi agrarian sector are going to visit Ukraine at the beginning of June. A forward agreement on (buying) 4 million tonnes of barley is likely to be signed," the ministry quoted Prysyazhnyuk as saying.

India likely to take call on wheat exports this wk-source
NEW DELHI, May 21 (Reuters) - Indian ministers are likely to meet this week to decide whether to export wheat from bulging government stocks to countries such as Iran, a government source on Monday.
The ministers will also discuss the need to give incentives to exports due to lower global prices, the source said.

Rubber Seen Poised for Glut on Weaker Chinese Growth (Source: Bloomberg)
Supplies of rubber, used in tires and gloves, are set to exceed demand in the second half, reversing a shortage and pressuring global prices, as growth slows in Europe and China, the biggest consumer. Output may top consumption by 400,000 metric tons in the six months to December after a seasonal deficit of 150,000 tons in the first half, said Chris Pardey, chief executive officer of RCMA Commodities Asia, a Singapore-based trading company. A surplus will persist through 2014, said Prachaya Jumpasut, managing director of industry adviser The Rubber Economist. Futures have plunged 48 percent from a record in February 2011 as Europe struggled with its debt crisis and China expanded last quarter at its slowest pace in almost three years. Chinese vehicle sales dropped 1.3 percent in the first four months, the worst performance since 1998, according to industry data.
Price declines will threaten farmer incomes in Thailand, the biggest producer and exporter, and cut costs for tire makers such as Bridgestone Corp. (5108) and Michelin & Cie. “The market is still bearish because of Europe’s problems and as China’s economy slows,” said Kazunori Kokubo, managing director at Yutaka Shoji Singapore Pte., a commodities broker. The contract for October delivery gained 0.6 percent to 280.4 yen a kilogram ($3,517 a ton) on the Tokyo Commodity Exchange yesterday, the highest close in more than a week.

OIL-Brent rises above $109 ahead of EU summit, Iran talks
SINGAPORE, May 22 (Reuters) - Brent crude gained slightly above $109, as markets awaited the results of two meetings to tackle Europe's debt crisis and Iran's nuclear programme, which could affect global oil demand and supply.
"Prices just got to such a depressed point where there could be some speculative or technical buying," said Ben Le Brun, a Sydney-based markets analyst at OptionsXpress.

Less Iranian oil passing through the Suez Canal
DUBAI, May 22 (Reuters) - The number of Iranian crude vessels pasing through Egypt's Suez Canal has dropped this year as Western sanctions bite, an official from the Suez Canal Authority said on Tuesday.
"I can say there's been a 5-6 percent drop in Iranian crude ...since the first of January," Sayed Mariee, deputy director of planning, research and studies at Suez Canal Authority told Reuters on the sidelines of an industry event on Tuesday.

US Senate approves new Iran sanctions bill
WASHINGTON, May 21 (Reuters) - The U.S. Senate gave unanimous approval on Monday to a package of new economic sanctions on Iran's oil just days ahead of a meeting between major world powers and Tehran.
The West suspects Iran is working to build a nuclear bomb and the sanctions are meant to strip Tehran of revenue by shutting down financial deals with Iran's powerful state oil and tanker enterprises. Iran has said its nuclear program is for civilian purposes.

POLL-US crude stocks seen rising for 9th straight week
May 21 (Reuters) - U.S. commercial crude oil supplies were expected to have risen last week for a ninth straight week on higher imports, a preliminary Reuters poll showed on Monday.    
On average, domestic crude oil inventories were forecast up 1 million barrels in the week to May 18, according to the poll of seven analysts, with five out of seven projecting a build in inventories.

Oil Trades Near Two-Day Low on Iran Deal, Rising Supplies (Source: Bloomberg)
Oil declined for a second day in New York after Iran agreed to grant access to United Nations nuclear inspectors and U.S. crude stockpiles increased. Futures slid as much as 0.7 percent. UN atomic inspectors and Iran broke a five-year stalemate with a deal that gives the International Atomic Energy Agency access to the nation’s Parchin military complex, IAEA head Yukiya Amano said yesterday. Oil prices advanced in the first four months of this year on concern sanctions against Iran will disrupt supplies. U.S. crude inventories rose 1.5 million barrels last week, the American Petroleum Institute said. A government report today may show they gained 1.7 million barrels, a Bloomberg survey shows. “The agreement by Iran to let the inspectors in is a small step in potentially reducing the supply risk,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “That feeds into the overall situation where demand is steady to somewhat soft against a background of more than adequate supplies.”
Crude for July delivery declined as much as 60 cents to $91.25 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.27 at 10:55 a.m. Sydney time. The contract slid 1.1 percent to $91.85 yesterday, the lowest close since May 18. The June future, which expired, fell 91 cents to $91.66. Front-month prices are 7.6 percent lower this year. Brent oil for July settlement dropped 81 cents, or 0.8 percent, to $107.60 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $16.33, from $16.56 yesterday.

Mining Slump Feeds M&A as Projects Overrun Budgets: Commodities (Source: Bloomberg)
The world’s largest mining companies led by BHP Billiton Ltd. (BHP) are struggling with higher costs to complete $200 billion in new projects, prompting them to slow work and turn instead to acquisitions and asset sales. BHP and Rio Tinto Group (RIO), ranking first and third by sales, this month said they’ll ration capital spending because of escalating costs and a slower-than-expected global economy. “It’s been ‘build’ for quite some time, and now it’s pushing much more in favor of potentially ‘buy’ because there are bargains out there,” Michael Elliott, Sydney-based global mining and metals leader at Ernst & Young LLP, said by phone. Lower metals prices have made targets cheaper and spurred mining companies globally to announce $91 billion of deals in the year to date, up from $71.2 billion in the same period of 2011, according to data compiled by Bloomberg. First Quantum Minerals Ltd. (FM), African Minerals Ltd. (AMI) and Coal of Africa Ltd. are potential takeover candidates, Liberum Capital Ltd. said.

Two Parties Left in Race for LME as CME Said Removed (Source: Bloomberg)
IntercontinentalExchange Inc. (ICE) and Hong Kong Exchanges & Clearing Ltd. are the two companies left bidding for the London Metal Exchange, the world’s biggest metals market, after the CME Group Inc. (CME) was said to be removed. CME, the world’s biggest futures exchange, is no longer in the running to buy the LME, according to two people with direct knowledge of the matter, who declined to be identified because the information isn’t public. Two parties are still in the bidding process, according to an e-mailed statement from the bourse today, which didn’t name any companies. Discussions with the two remaining bidders will “involve obtaining a detailed understanding of their plans for the future governance and operation of the market and the deliver-ability of their respective proposals, as well as the value offered,” the LME said in the statement. The process will continue over the coming weeks, the bourse said.
The LME, which traded $15.4 trillion of industrial metals contracts last year, received multiple proposals by the May 7 deadline for a takeover, the bourse said May 8. CME Group, NYSE Euronext, ICE and Hong Kong Exchanges made offers for the exchange, said seven people who declined to be identified. NYSE Euronext, the biggest U.S. exchange owner, said last week it was removed from the list of bidders.

Fonterra expects dairy demand to keep growing
WELLINGTON, May 22 (Reuters) - New Zealand's Fonterra, the world's largest dairy exporter, said an 8 percent cut in its forecast payout for the next season is the best it could offer in the current market, but it was confident demand in the vital developing markets will keep growing.
The co-operative, which is New Zealand's biggest company, on Tuesday cut its forecast payout for the coming season because global prices have fallen sharply on oversupply.

20120523 1029 Soy Oil & Palm Oil Related News.

Market Recap: Soybean Futures (Source: CME)
Soybean futures settled 30 1/4 to 31 cents lower in the July through September contracts. November soybeans settled 24 cents lower, with slightly lesser declines in far-deferred contracts. Losses were mildly extended from those levels in "after-hour" trading. Futures were initially pressured by the fast start to the growing season after USDA reported 76% of the crop was planted and 35% had emerged as of Sunday.

Soybean Complex Market Recap (Source: CME)
July Soybeans finished down 31 1/2 at 1381, 36 3/4 off the high and 6 up from the low. November Soybeans closed down 25 at 1281 1/4. This was 10 1/4 up from the low and 29 3/4 off the high. July Soymeal closed down 10.5 at 406.0. This was 2.0 up from the low and 13.0 off the high. July Soybean Oil finished down 0.49 at 50.43, 0.85 off the high and 0.08 up from the low. July soybeans pushed sharply lower on the session and pushed to the lowest level since March 30th and was trading 32 cents lower on the day late in the trading session. Traders believed that the warm and dry weather for the Midwest into next week is already priced but that the ridge may break down and allow more widespread rains into next week. Mid-day weather models helped confirm this idea with rain events in the 6-10 day and the 11-15 day models for the central and southern Midwest and the eastern Corn Belt; areas which have been dry. This, along with a negative tilt to outside markets due to a strong US dollar and weakness in gold and crude may have helped spark the long liquidation selling seen from fund traders. The sharp drop in corn and wheat plus news of record fast soybean planting pace added to the negative tone early. As of May 20th, a record 76% of the soybean crop was planted. Some traders remain concerned with uneven emergence and crusting issues for parts of the Midwest which have not seen rain in the past week or more. The wetter forecast might reduce these concerns. December meal closed sharply lower on the session as well and pushed under last weeks lows to move to the lowest level since March 30th.

VEGOILS-Palm oil rises in thin trades on Europe hopes
SINGAPORE, May 22 (Reuters) - Malaysian palm oil futures edged up in thin trades , as hopes grew that Europe would take steps to tackle its debt crisis that has triggered a massive sell-off in the global financial markets.
"Market is stil stuck within yesterday range, it's a continuation of the consolidation phase. No one wants to do anything as market sentiment is still rather mixed," said a dealer with a foreign commodities brokerage in Malaysia.