Thursday, June 7, 2012

20120607 1843 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : pullback correction downside biased.
 Hang Seng chart reading : pullback correction downside biased with MACD crossed up.
KLCI chart reading :  side way range bound.

20120607 1836 FCPO EOD Daily Chart Study.

FCPO closed : 2974, changed : -29 points, volume : higher.
Bollinger band reading : downside biased.
MACD Histogram : recovering, seller taking profit.
Support :  2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded loss with increased volume traded. Soy oil price currently trading little higher after overnight closed recorded gains of more than 1.5% while crude oil price currently trading lower.
Overnight soy oil rally and firmer crude oil price resulted FCPO to opened gap up higher but slide downwards all the way into negative zone followed by last 30 minutes partial recovery to closed off the low of the day as traders decided to square off intraday positions awaits clearer market condition (possible stimulus, official MPOB data).
Daily chart study suggesting a downside biased market development possibly testing previous low support near 2925 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.

20120607 1720 FKLI EOD Daily Chart Study.

FKLI closed : 1571 changed : -1.5 point, volume : lower.
Bollinger band reading : side way range bound.
MACD Histogram : rising, buyer seller battling.
Support : 1570, 1565, 1550, 1540 level.
Resistance : 1580, 1590, 1600, 1610 level.
Comment :
FKLI closed small loss with slower volume transacted doing 2 points discount compare to cash market that closed higher. Overnight U.S. markets closed rallied higher and today Asia markets ended higher while European markets currently recording small gain.
World  markets traded higher on speculation bet that global policy maker will take steps to stimulate global economy growth and China move delayed tightening banks rules.
Daily technical chart analysis suggesting a side way range bound market development testing support and resistance.
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.

20120607 1616 Global Commodities Related News.

Asian shares hit one-week highs and commodity prices and the euro firmed, on signs that Europe was dealing urgently with Spain's banking crisis and that the United States could embark on fresh monetary stimulus. U.S. stocks jumped on Wednesday, giving the S&P 500 its best day since December, as talk of a rescue of Spain's troubled banks and hopes for more monetary stimulus sparked a rebound from recent selling.

The euro held firm against the dollar as vague hopes of more policy action, both in Europe and the United States, led short-term players to wind back their bets against the currency.

FOREX-Euro firm on policy hopes, Aussie jumps on jobs data
TOKYO, June 7 (Reuters) - The euro held firm against the dollar, as vague hopes of more policy action, both in Europe and the United States, led short-term players to wind back their bets against the currency.
Also boosting risk sentiment in general, the Australian dollar shot up to a three-week high following surprising strength in Australian employment data.

U.S. corn edged up to a two-week high gaining for three out of four sessions, while soy rose for a third consecutive day as growing hopes for monetary easing and the rescue of Spain's troubled banks boosted risk sentiment.

Argentine farmers begin anti-government strike
Argentine farmers halted grains sales on Wednesday at the start of a one-week strike over government farming policy that has revived long-standing tensions in the countryside and raised global supply concerns.

Ghana cocoa crop likely well below target-Cocobod
Ghana's cocoa production is likely to be around 850,000 tonnes this season, well below its target of 950,000 tonnes, due to dry weather and a fall in prices, the head of regulator Cocobod said in an interview.

Brazil expects clearance soon to export corn to China
Brazil should soon secure clearance to ship corn to China, which is expected to become one of the world's biggest importers of the grain, Brazil's agriculture ministry said.

Rains improve crops in Russia's parched south
Heavy rains in Russia's southern breadbasket in the past two weeks have halted damage to crops from a late spring drought and the yield outlook could improve if favourable weather lasts through the harvest, the state crop weather forecaster said.

Brent crude rose holding above $100 per barrel on expectations the United States will introduce measures to boost its economy and European policymakers may rescue ailing Spanish banks - both reviving hopes oil demand growth would recover.

Copper rose 0.6 percent on cautious optimism that European leaders were seeking a solution for ailing Spanish banks and as hopes rise for that the U.S. central bank will introduce measures to boost its economy.

China suspends plan to export refined copper -sources
HONG KONG, June 6 (Reuters) - Chinese smelters and merchants have suspended a plan to export 200,000 tonnes of refined copper cathode to LME warehouses in Asia, after just over half that amount was shipped out in recent weeks, sources at smelters said on Wednesday, in a move likely to ease pressure on copper prices.  Traders had flagged that the rare hefty exports from the world's top copper consumer would boost copper stocks in warehouses monitored by the London Metal Exchange (LME) in Asia in June after thousands of tonnes were landed there in May.

Gold inched up and hovered near one-month highs, with investors hoping the U.S. central bank will take action to stimulate the world's biggest economy and shield it from the fallout of the euro zone debt crisis.

METALS-Copper rises on hopes of Spain rescue, US stimulus
SHANGHAI/SINGAPORE, June 7 (Reuters) - Copper rose, spurred by optimism that Europe is seeking a way to solve Spain's banking crisis and that the United States will launch measures to boost its economy, helping brighten the outlook for raw material demand.
Copper has fallen 15 percent from this year's peak of $8,765 touched in February because economic worries from China to Europe and the United States have raised concern that demand for commodities such as copper would drop.

PRECIOUS-Gold edges up ahead of Bernanke testimony
SINGAPORE, June 7 (Reuters) - Gold inched up and hovered near one-month highs, with investors hoping the U.S. central bank will take action to stimulate the world's biggest economy and shield it from the fallout of the euro zone debt crisis.
Spot gold  gained 0.2 percent to $1,620.16 an ounce by 0302 GMT, not too far off the one-month high of $1,640.50 reached in the previous session.

20120607 1128 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares rise on hopes for Spanish banks, policy stimulus
TOKYO, June 7 (Reuters) - Asian shares rose on Thursday on signs European policymakers were seeking a solution for ailing Spanish banks and amid growing expectations for additional monetary stimulus if major  economies deteriorate further.
"Although there were no overt hints of immediate action from the European Central Bank, investors feel that the overall tone of global policymakers is accommodative of a breakthrough at the U.S. FOMC and EU leaders' summit scheduled later in the month,"

COMMODITIES-Biggest jump since Feb on hopes over Europe, Fed
NEW YORK, June 6 (Reuters) - Commodities posted their biggest rebound in more than three months o n W ednesday as growing hopes for a solution to the euro zone crisis and a stimulus for the U.S. economy sent prices of oil to copper and corn surging.
"These markets have exhausted the selling interest. There's  not a lot going on from a fundamental perspective," said Shawn McCambridge, an analyst at Jefferies Bache in Chicago.

OIL - Brent crude above $100 on euro zone hopes, Fed
NEW YORK, June 6 (Reuters) - Crude oil futures rallied on  Wednesday, with Brent returning above $100 a barrel on growing hopes for a rescue of Spain's troubled banks to ease the euro zone debt crisis, and as a U.S. Federal Reserve official hinted at more monetary easing.
"Crude futures are undergoing a technical correction and ... getting support from the rising stock market due to euro zone hopes and a lower dollar (as the euro rallied)," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

NATURAL GAS - US natgas futures end down, 1st loss in 3 sessions
NEW YORK, June 6 (Reuters) - U.S. natural gas futures ended lower on Wednesday after two straight session gains, but a tightening supply and demand balance and warmer Northeast and Midwest weather forecasts for later this week and next helped limit the downside.
"The market's in a sideways pattern, trading between $2.20 and $2.80. We need more AC (air conditioning) demand," said Tom Saal, senior vice president at INTL Hencorp Futures in Miami.

EURO COAL-Prices dip, mood bearish at Bali conference
LONDON, June 6 (Reuters) - European prompt physical coal prices slipped by around $1.00 a tonne on Wednesday in quiet trade.
"There are a lot of the usual people missing this week but overall it's a little softer again and all the news looks bearish," one European trader said.

20120607 1048 Malaysia Corporate Related News.

MMHE plans RM1.9bn capex on yard optimization project
Malaysia Marine & Heavy Engineering (MMHE) is embarking on a RM1.9bn capital expenditure over the next four years on a yard optimization programme, to increase efficiency. For this year, MMHE plans to spend RM300m on the optimization programme. In addition, MMHE is also planning on topping up its orderbook to RM4bn, taking into account its bid for contracts in Turkmenistan, the Thai-Malaysia Joint Development Area and Kebabangan, East Malaysia. (Malaysian Reserve)

MISC ‘not exiting’ NCB Holdings
MISC president and CEO Datuk Nasarudin Md Idris said the national carrier is not looking to sell its 15.7% stake in port operator NCB Holdings. Speculation of MISC selling its block has been rife, especially after the shipping giant announced its intention to exit the liner business in late November last year. (Financial Daily)

Catalytic growth – UEM Land’s Nusajaya to be driven by new projects
For UEM Land Holdings’ fledgling Nusajaya region, the next stage in its growth will be driven by new catalyst projects that are expected to be unveiled soon. “We have concocted and put on the ground the initial catalysts, but we cannot live on what has been successful in the past, so new projects will be developed,” managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim told StarBiz. (StarBiz)

Atlan to dispose of property for RM12.5m
Atlan Holdings Bhd’s (AHB) wholly-owned subsidiary, United Sanoh Industries SB has entered into a sale and purchase agreement to dispose of a piece of freehold industrial land comprising a single-storey warehouse in Klang, Selangor to Vibrant Advanced Products SB for RM12.5m. In an exchange filing on Tuesday, the company said that the gross proceeds arising from the proposed disposal will be utilized for security for banking facilities and working capital. (Malaysian Reserve)

Guan Chong one step closer to SGX secondary listing
Regional cocoa processor Guan Chong is nearing its goal of secondary listing on the Main Board of the Singapore Exchange (SGX) after it received the necessary approvals from the relevant authorities in Malaysia. In a statement yesterday, Guan Chong said the group obtained the green light for its corporate exercise from the Securities Commission Malaysia and Singapore Exchange last week. (Malaysian Reserve)

Magna Prima plans MYR832m mixed property project in Shah Alam. Magna Prima Bhd's unit is acquiring 20 acres of land in Bandar Shah Alam for MYR100m for a proposed mixed residential and commercial project with a total gross development value (GDV) of MYR832m. It said on Tuesday that Magna Ecocity Sdn Bhd (MESB) had signed a conditional sale and purchase agreement with PCM Bina Sdn to purchase the land. (Source: The Star)

Oil & Gas: Petronas awards contract for fist floating LNG facility. Petroliam National Berhad (Petronas) has awarded a contract for the engineering, procurement, construction, installation and commissioning (EPCIC) for its first commercial floating liquefied natural gas (FLNG) facility in Malaysia to a consortium of companies, comprising Technip France S.A., Technip Geoproduction (M) Sdn Bhd and Daewoo Shipbuilding & Marine Engineering Co. (Source: The Edge)

BToto to spin off Sports Toto in MYR6b deal. Berjaya Sports Toto Bhd (BToto) is proposing to spin off its 100% stake in Sports Toto Malaysia Sdn Bhd (STM) and list it as a business trust on the Singapore Exchange. BToto said on Tuesday that it would divest STM to the STM-Business Trust for MYR6b (SGD2.43b). (Source: The Star)

The full start-up Gumusut-Kakap deepsea oilfield has been delayed to 2H13 from 2012, an official at Petronas said yesterday. Construction of the floating production facility for the field has taken longer than expected, said Datuk Wee Yiaw Hin, executive vice-president for exploration and production at Petronas. "There has been some delay because we want to get fabrication complete so that when we roll out we are not faced with a lot of offshore work," Wee told reporters on the sidelines of an industry event. "Therefore I think 2013 instead of 2012 ... sometime in the third or fourth quarters." The company aims for 25,000 to 30,000 bpd early production from the field in the fourth quarter 2012 through linking some wells already drilled to another platform, Wee said. Royal Dutch Shell operates the project and holds a 33% stake. ConocoPhillips has a 33% stake, Petronas holds 20% and Murphy Oil 14%. (Reuters)

United Malayan Land Bhd (UMLand) has appointed Chia Lui Meng as its new group CEO with effect from Monday, succeeding Pee Tong Lim, whose tenure ended in February when he retired. Chia, who was the CEO of Malton Bhd and adviser to the group managing director of Naza TTDI Sdn Bhd, will be responsible for the strategic direction and overall management and operations of the UMLand group. (BT)

MISC CEO Datuk Nasarudin Md Idris said the national carrier is not looking to sell its 15.7% stake in port operator NCB Holdings. Speculation of MISC selling its block has been rife, especially after its intention to exit the liner business. There has been widespread speculation that Tan Sri Syed Mokhtar Al-bukhary is looking at taking control of NCB Holdings, but this remains unsubstantiated. The port operator’s largest shareholder is Permodalan Nasional Bhd. (Financial Daily)

Malaysia Airports (MAHB) has appointed Tan Sri Dr Wan Abdul Aziz Wan Abdullah as its new chairman effective June 7. The new chairman, who is currently holding directorships in 10 public companies and institutions, has been also appointed chairman of the Board Procurement Committee, Board Finance and Investment Committee and Board Risk Management Commiittee of MAHB. (Bernama)

The Penang Municipal Council should revise its guidelines on hillslope development and land usage, said Tanjung Bungah residents association member Datuk Dr Leong Yueh Kwong. This was in view of the many landslides on the island lately, he said. "Until the guidelines are revised, there should be temporary halt on all hillslope projects," said Dr Leong. He said the guidelines on land use should also be reviewed. "There are many development projects in the north-east district covering areas like Paya Terubong, Air Itam and Tanjug Bungah, which cause daily traffic congestion,. Very soon, we will reach a point where it will not be possible to travel to Batu Ferringhi because it will take too long to get there," he said. (The Star)

Firefly will introduce weekly scheduled charter service between Kuala Lumpur and Christmas Island in Australia from July 7 this year. The airline said the services will be available every Saturday, departing Kuala Lumpur at 9.20am and arriving in Christmas Island at 10.55am, while the return flight leaves Christmas Island at 11.55am and arrives in Kuala Lumpur at 3.30pm. Firefly will utilise its B737-400 aircraft, which has a seating capacity of 162, on this route. The new services are a collaboration between the airline and Sunwise Nominees Pty Ltd doing business as Christmas Island Air. Besides the new services to Christmas Island, Firefly said it is also operating twice weekly scheduled charter services between Malacca and Penang utilising its ATR72-500 turboprop aircraft and weekly charter services to Nanning direct from Kuala Lumpur and via Penang utilising its B737-400 aircraft. The airline also offers ad-hoc charters. Clients are mainly from corporate companies who book the entire aircraft for their company outings and corporate incentive programmes. (Bernama)

Masterskill Education Group Bhd (MEGB) has denied that it is a takeover target of two government-linked funds, but hinted that it may consider selling stakes in its campus branches to interested parties. Discussions with at least two parties had begun for such a collaboration but they were not Khazanah Nasional Bhd or Ekuiti Nasional Bhd, said group CEO Datuk Seri Edmund Santhara. “We do not see anything wrong in owning just 51% of our Kuching branch or 70% of the Johor Baru branch. This is a partnership or collaboration that we may just consider,” he said. Speaking after the company’s annual general meeting at the group’s main campus in Cheras here yesterday, Edmund added that the new partners must add value to its business.(BT)

UDA Holdings Bhd is seeking an initial RM100m in compensation from the Treasury or MRT Corp Bhd for the 150 tenants of Bukit Bintang Plaza (BB Plaza) who will be affected by the construction of the Bukit Bintang underground station. UDA chairman Datuk Nur Jazlan Mohamed said while it is willing to "sacrifice" for the MRT project, it would hamper the company's business and its agenda to provide space for bumiputra retailers in the city. On plans to sell BB Plaza to MRT Corp or to redevelop the mall, Jazlan said: "We are in discussions now, but it doesn't mean we'll sell. UDA's managing director Ahmad Abu Bakar said company's recurring revenue from BB Plaza is RM20m to RM25m per year, or 25% of the its total revenue. (The Sun Daily)

Keretapi Tanah Melayu (KTMB) hopes to increase its six-car trains from the present 17 to 38 by September this year as part of its efforts to bolster its commuter service, KTM Commuter services general manager Mohd Hider Yusoff said. "This would further reduce the 'waiting time' for passengers from the present 15 minutes during peak times to 10 minutes and would enhance customer satisfaction is our main priority, he said. (Malaysian Reserve)

20120607 1045 Local & Global Economy Related News.

Malaysia: April exports stumble as overseas demand stutters
Malaysian exports experienced a slight decline in April for the second consecutive month due to weakening demand. Exports fell 0.1% y-o-y to RM57.7bn due to lower exports to the EU and most East Asia countries. The country also saw its trade surplus slump 31.8% from RM11.0b a year ago to RM7.5bn. (Malaysian Insider)

The staggering RM109.67bn in taxes collected by the Inland Revenue Board (IRB) last year is unlikely to be repeated this year, said IRB CEO Tan Sri Dr Mohd Shukor Mahfar. The collection was extraordinary and was RM23bn more than what was collected in 2010 (RM86bn), he said. “If indeed it is, it could mean something was wrong with the collection in the previous years,” he said. Nevertheless, the board aims to collect around RM110bn in taxes this year. (The Star)

China's overseas investment surged in the first quarter to US$21.4bn as state-owned companies snapped up resource-related assets around the globe. That figure includes mergers and acquisitions as well as greenfield investments, or construction of new plants and facilities. (WSJ)

Sales in 34 out of 40 large Chinese cities monitored across the country have seen a month-on-month increase from Apr to May, according to the SouFun report. (China Daily)

China is likely to announce a cut in gasoline and diesel prices for a second time this year as early as Friday after a fall in global fuel prices passed the 22-working-day review period. (Global Times)

China's banking regulator has noticed a contradiction between a surge in some categories of problematic loans on the one hand and a decline in non-performing loan ratios over the past few months, and it is taking a closer look at lenders' loan classification. (China Daily)

China: Services industry expanded at a faster pace in May, according to a survey of purchasing managers released by HSBC Holdings Plc and Markit Economics. The PMI rose to a 19-month high of 54.7 in May from 54.1 in April, HSBC and Markit said. (Source: Bloomberg)

India: Service-industry growth quickens to a three-month high in May. The purchasing managers' index climbed to 54.7 from 52.8 in April, HSBC Holdings Plc and Markit Economics said. A number above 50 indicates growth. (Source: Bloomberg)

Taiwan: Inflation accelerated for a third month in May on higher food prices, reducing room to cut interest rates and support a slowing economy. The consumer-price index climbed 1.74% YoY, compared with a 1.44% YoY increase in April, the statistics bureau said. (Source: Bloomberg)

Thailand: Confidence falls in May on inflation, political concerns. An index measuring sentiment fell to 67.1 from 67.5 in April, the University of the Thai Chamber of Commerce said. The gauge is based on a survey of 2,241 respondents. (Source: Bloomberg)

Philippines: Inflation eased in May, giving the central bank room to cut interest rates should Europe's debt crisis worsen and threaten the nation's growth. Consumer prices rose 2.9% YoY, after a 3% YoY advance reported earlier for April, the National Statistics Office said. (Source: Bloomberg)

Vietnam: Growth may be as low as 5.2% in 2012, official says. The economy has been buffeted this year by a credit crunch after the central bank pushed up interest rates last year to fight the fastest inflation in Asia, and with some Vietnamese banks' ability to lend constrained by a lack of capital amid concern about the health of the financial system. (Source: Bloomberg)

Australia: RBA lowers key rate as Europe, China growth risks mount. Governor Glenn Stevens and his board lowered the overnight cash rate target by a quarter percentage point to 3.5%. (Source: Bloomberg)    

E.U: Manufacturing, services shrink as crisis worsens in May. A composite index based on a survey of purchasing managers in both industries dropped to 46 from 46.7 in April, London-based Markit Economics said. While above an initial estimate of 45.9, the May reading is the lowest since June 2009. The indicator has remained below 50 - indicating contraction - for four months. (Source: Bloomberg)

Moody's Investor Service downgraded the credit ratings of six German banks, including the country's number two Commerzbank in view of "the increased risk of further shocks emanating from the euro area debt crisis, in combination with the banks' limited loss-absorption capacity." (AFP)

EU: German, Spanish factory output drops more than forecast
German industrial output fell more than economists forecast in April and Spanish production had the biggest drop in more than two years, adding to signs of a deepening economic slump across the euro area. German production declined 2.2% from March. Economists had forecasted a drop of 1%, according to the median of 37 estimates in a Bloomberg News survey. In Spain, output fell 8.3% from a year earlier, when adjusted for work days, a separate report showed. (Bloomberg)

EU: Edges towards banking union, too late for Spain
The European Commission proposed far-reaching powers for regulators to take control of failing banks on Wednesday, a step towards the banking union wanted by the ECB, which will come too late to help Spain. The plans, which spell out an insolvency regime for banks and empower regulators to intervene to prevent a collapse from triggering panic, first need to be approved by EU countries and the European Parliament and may not take effect until 2015. This would be far too late for Spain, which could be forced to seek a bailout for its banks if it cannot support lenders saddled with bad property loans and other debt. (Reuters)

EU: ECB holds fire; Draghi ups pressure on politicians
ECB President Mario Draghi made no major changes to monetary policy and putting added pressure on European leaders to address the euro-zone’s escalating debt crisis. “Some of the problems in the euro area have nothing to do with monetary policy. It’s not appropriate for ECB policy to take the place of other players’ lack of actions,” Draghi said. The ECB left its key lending rate unchanged at 1%. (MarketWatch)

Spain: EU, Germany exploring rescue but no request yet
Germany and EU officials are urgently exploring ways to rescue Spain's debt-stricken banks although Madrid has not yet requested assistance and is resisting being placed under international supervision, European sources said. Spain was effectively losing access to credit markets due to prohibitive borrowing costs and appealed to European partners to help revive its banks. (Reuters)

Global: Obama calls Merkel, Monti ahead of G-20 summit
President Barack Obama on Wednesday spoke with German Chancellor Angela Merkel and Italian Prime Minister Mario Monti, and agreed that steps are needed to bolster growth in Europe. "The leaders agreed on the importance of steps to strengthen the resilience of the euro zone and growth in Europe and globally, and agreed to remain in contact as they prepare for the 18-19 June G-20 Summit in Los Cabos, Mexico," a White House statement said. (MarketWatch)

U.S: Service industries sustained growth in May. The Institute for Supply Management's index of non- manufacturing businesses, which covers about 90% of the economy, unexpectedly rose to 53.7 last month from April's 53.5. Readings above 50 signal expansion. (Source: Bloomberg)

US: Productivity falls 0.9% in first quarter
The productivity of US workers and businesses fell more sharply in the first three months of 2012 than originally reported, based on an updated reading. The Labor Department initially estimated that productivity fell 0.5% the first quarter, but newly revised numbers put the decline at 0.9%. (Bloomberg)

US: Fed survey finds growth, hiring mostly steady
The US economy grew moderately in most regions of the country this spring and companies kept hiring, according to a Federal Reserve survey released Wednesday. The mostly upbeat survey offered a hopeful sign after last week's more dismal data on hiring and manufacturing. The Fed survey shows growth in each of its 12 bank districts from 3 April through 25 May. Hiring

US Stocks – Wall St climbs 2% on talk of Spain solution
US stocks jumped on Wednesday, giving S&P 500 its best day since December, as talk of a rescue of Spain’s troubled banks and hopes for more monetary stimulus sparked a rebound from recent selling. After a 6% fall by the S&P 500 in May that took the index below its key 200-day moving average on Friday, the market was ripe for a rebound, analysts said. Buying was strong across the broad market, with all 10 S&P 500 sectors gaining ground. The Dow Jones Industrial Average (DJIA) was up 286.84 pts, or 2.37%, at 12,414.79. The S&P 500 Index was up 29.63 pts, or 2.30%, at 1,315.13. (Financial Daily)

20120607 1042 Global Market Related News.

Asian Stocks Gain as Policy Makers Signal More Stimulus (Source: Bloomberg)
Asian stocks climbed, with the benchmark regional gauge heading for its biggest three-day gain this year, as global policy makers signaled they may take steps to stimulate economic growth. Mitsubishi Corp. (8058), the No. 1 Japanese trading house, rose 2 percent and Komatsu Ltd., a mining-equipment maker, gained 2.2 percent in Tokyo as investors bought shares of companies with profits closely tied to economic growth. BHP Billiton Ltd. (BHP), the world’s largest mining company, advanced 2.2 percent in Sydney as metals prices climbed. The MSCI Asia-Pacific rose 1 percent to 112.71 as of 9:41 a.m. in Tokyo, poised for its biggest three-day gain since December 5, with more than six shares advancing for every one that fell. The Asian benchmark gauge has dropped 13 percent from its peak this year on Feb. 29. amid concern growth is slowing in China and the U.S. as Europe’s debt crisis deepens.
“Any time central bankers give us a promise that they’re going to inject some more liquidity into the markets, risk assets start to rally, and that’s precisely what’s happened,” Arjuna Mahendran, the Singapore-based head of Asia investment strategy at HSBC Private Bank, which manages about $556 billion in client assets, said in a Bloomberg TV interview. “We could have a risk rally going on for a while.”

China’s Stock Futures Rise on Bank Rules Delay, Policy Outlook (Source: Bloomberg)
China’s stock-index futures rose after the government signaled it will delay tightening bank capital rules and investors speculated monetary policy will be eased to prevent Europe’s debt crisis from harming the economy. Futures on the CSI 300 Index (SHSZ300) expiring in June, the most active contract, gained 1 percent to 2,573.80 as of 9:17 a.m. local time. Industrial & Commercial Bank of China Ltd. and China Vanke Co. may lead gains for lenders and developers after regulators postponed tighter capital rules until the beginning of next year in a move that may bolster loan growth. The Shanghai Composite Index (SHCOMP) fell 0.1 percent to 2,309.56 at yesterday’s close, with about 5.9 billion shares changing hands, 26 percent lower than the daily average this year. The CSI 300 Index lost 0.1 percent to 2,557.40. The Bloomberg China- US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, climbed 2.7 percent at the close in New York.
“It’s a decent opportunity to accumulate Chinese stocks as most of them have been soft,” Adrian Lim, a senior investment manager at Aberdeen Asset Management Plc, who helps oversee $102 billion in the Asia-Pacific region, said in an interview at Bloomberg’s headquarters in New York yesterday. “The region as a whole remains fundamentally very attractive. There’s still a very fat amount of demand.”

Japanese Stocks Advance Amid Global Stimulus Speculation (Source: Bloomberg)
Japanese stocks rose, with the Topix (TPX) Index headed for the biggest three-day advance since March 2011, amid speculation policy makers in the U.S., China and Europe will take action to spur growth amid a deepening debt crisis. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 3.6 percent after the yen weakened, lifting overseas earnings prospects. Inpex Corp. (1662), the nation’s top energy explorer, advanced 2.8 percent as oil climbed for a fourth day. Ricoh Co. gained 4.8 percent after the office automation company was raised to “buy” at Deutsche Bank AG. The Topix gained 1.3 percent to 727.51 as of 10:03 a.m. in Tokyo, with 30 of its 33 industry groups climbing. The Nikkei 225 Stock Average (NKY) rose 1.1 percent to 8,629.76 after rising the most in seven weeks yesterday. About seven stocks gained for each that slid. Shares advanced ahead of Federal Reserve Chairman Ben S. Bernanke’s testimony later today to the U.S. Congress on the economic outlook.
“Investors have enough reasons to believe that policy makers will act,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “U.S. officials sound a bit more dovish lately, and similarly in China. China may be getting close to easing. All of those things have led to a degree of confidence.”

U.S. Stocks Cap Biggest Rally in 2012 on Stimulus Bets (Source: Bloomberg)
U.S. stocks rallied, giving benchmark indexes their biggest gains in 2012, on speculation global policy makers will take steps to stimulate economic growth. Bank of America Corp. surged 7.6 percent to pace gains among financial shares. Caterpillar Inc. (CAT) and Exxon Mobil Corp. (XOM) increased at least 3.3 percent. Home Depot Inc. (HD), the largest U.S. home-improvement retailer, climbed 3.4 percent after raising its stock repurchase plan by $500 million for fiscal 2012. Facebook Inc. (FB) added 3.6 percent, following a 32 percent decline since the biggest social-networking company went public. The Standard & Poor’s 500 Index advanced 2.3 percent to 1,315.13 at 4 p.m. New York time. The Dow Jones Industrial Average increased 286.84 points, or 2.4 percent, to 12,414.79. About 7.3 billion shares changed hands on U.S. exchanges today, or 8.3 percent above the three-month average.
“People are viewing central banks as very aware of the weakness of the global economy and looking for ways to deal with that,” said Michael Holland, chairman of New York-based Holland & Co. His firm oversees more than $4 billion. “In addition to that, we’ve had a major selloff, valuations are low and that certainly helps to lift the market on a day like today.”

European Stocks Gain After ECB Keeps Rate at Record Low (Source: Bloomberg)
European stocks surged the most in six months after the European Central Bank held its benchmark interest rate at a record low and said it’s ready to act if necessary as the growth outlook dims. Diageo Plc, the maker of Johnnie Walker, J&B and Buchanan’s Scotch whiskys, climbed 4.3 percent after saying it will invest 1 billion pounds ($1.54 billion) in production. Petropavlovsk Plc (POG) gained 9.7 percent after UBS (UBSN) AG recommended increasing holdings of the stock. UBS and Credit Suisse Group AG (CSGN), Switzerland’s largest lenders, also advanced. The Stoxx Europe 600 Index (SXXP) added 2.3 percent to 239.95 at the close of trade, the biggest gain since Nov. 30. The gauge has declined 12 percent from its 2012 high on March 16 amid growing concern that Greece will be forced to leave the euro currency union.
“While not cutting rates or setting up a new bazooka, the ECB keeps the door open for further measures if warranted, confirming what investors consider the most likely scenario,” said Witold Bahrke, a senior strategist at PFA Pension A/S in Copenhagen, where he helps oversee $55 billion. “The bank is keeping its gunpowder dry for now and sustains the pressure on euro-zone politicians.”

Facebook is Top Short-Seller Target Among Large Stocks (Source: Bloomberg)
No large U.S. company is attracting more attention from short sellers than Facebook Inc. (FB), amid bets the world’s biggest social-networking company will keep falling after losing $27 billion since its initial public offering. Short interest on the Menlo Park, California-based company reached 5.9 percent of shares outstanding, according to data compiled by Bloomberg and Data Explorers Ltd., a New York-based research firm. None of the Standard & Poor’s 500 Index companies with at least $50 billion in market capitalization has short interest higher than 3 percent, the data show. Facebook, which has a market value of about $63.8 billion, isn’t in the S&P 500. Shares of Facebook have slumped 29 percent since they began trading on May 18 amid concern that the IPO was overvalued and the company will struggle to increase profit from its 901 million users.
At the time of its debut, underwriters led by Morgan Stanley set a price that valued Facebook at 107 times reported earnings in the past 12 months, more than eve ry S&P 500 stock except two. “Facebook is one of those companies whose future potential is unknown and unknowable,” said Robert Stimpson, a money manager at Akron, Ohio-based Oak Associates Ltd., which oversees about $900 million and doesn’t own Facebook. “The stock is expensive. The short interest might also reflect a bet that there is more bad news to come and Facebook will be punished.”

Treasuries Rise After Yellen Says Fed Has Scope to Act (Source: Bloomberg)
Treasuries rose, snapping a three-day decline, as Federal Reserve Vice Chairman Janet Yellen said a “vulnerable” U.S. economy gives the central bank scope to do more to spur growth. The 10-year yield slid one basis point, or 0.01 percentage point, to 1.65 percent as of 9:30 a.m. in Tokyo, according to Bloomberg Bond Trader data. The 1.75 percent note maturing in May 2022 advanced 3/32, or 94 cents per $1,000 face amount, to 100 31/32. Fed Chairman Ben S. Bernanke is scheduled to testify on the outlook for the economy in Congress today. The policy-setting Federal Open Market Committee meets June 19 to June 20. The economy “remains vulnerable to setbacks,” Yellen said in the text of remarks given in Boston yesterday. “I am convinced that scope remains for the FOMC to provide further policy accommodation.” Yellen said the Fed could boost the economy “either through its forward guidance or through additional balance-sheet actions.”
The U.S. central bank may also undertake another round of asset purchases or continue its Operation Twist program, set to expire this month, to lengthen the maturities of bonds on its balance sheet, Yellen said.

Dollar Is Near Week-Low Before Bernanke Speaks on Economy (Source: Bloomberg)
The dollar was within 0.1 percent of a more than one-week low against the euro on bets Federal Reserve Chairman Ben S. Bernanke today may signal more stimulus is needed to spur a recovery in the world’s largest economy. The yen declined versus most of its 16 major counterparts as Asian stocks extended a global rally, damping demand for lower-yielding currencies. The euro remained higher after its biggest gain in three months against the greenback yesterday amid speculation the European Central Bank will act to rein in the region’s debt crisis after leaving benchmark interest rates at a record low. “The U.S. dollar is certainly susceptible to indications that the Fed is looking at QE3, considering that long positions have been built up to near-record levels,” Mike Jones, a Wellington-based currency strategist at Bank of New Zealand Ltd, said referring to a third round of debt purchases known as quantitative easing. “It’s the rhetoric that really matters for markets.”
The dollar traded at $1.2572 per euro as of 9:12 a.m. in Tokyo from $1.2582 at the close in New York yesterday, when it sank 1 percent and touched $1.2586, the weakest since May 28. The U.S. currency added 0.2 percent to 79.32 yen. The 17-nation euro rose 0.1 percent to 99.73 yen.

Aussie Weakens Against All Major Peers Before Jobs Report (Source: Bloomberg)
Australia’s dollar weakened against all of its 16 major counterparts before a government report forecast to show an increase in the country’s unemployment rate. New Zealand’s dollar, known as the kiwi, remained higher after gaining yesterday by the most this year, as Asian stocks extended a global rally, bolstering investor appetite for riskier assets. Demand for the South Pacific nations’ currencies was supported amid speculation Federal Reserve Chairman Ben S. Bernanke will reiterate Vice Chairman Janet L. Yellen’s view that the U.S. economy may warrant more monetary stimulus. “The pullback that’s seen today can be a bit of profit- taking ahead of the Australian employment report,” said Khoon Goh, a senior foreign-exchange strategist in Singapore at Australia & New Zealand Banking Group Ltd.
Australia’s dollar lost 0.3 percent to 98.93 U.S. cents as of 11:20 a.m. in Sydney after advancing 1.9 percent yesterday. New Zealand’s currency fetched 76.88 U.S. cents after rising 1.9 percent to 77.08. Yesterday’s gains in both currencies were the biggest since Nov. 30.

FOREX-Russia capital outflow at $5.8 bln in May -
ST PETERSBURG, June 6 (Reuters) - Capital flight from Russia reached $5.8 billion in May, Central Bank Chairman Sergei Ignatyev said, citing preliminary data.
"It would be wrong to sell (the stake) at current prices," Ignatyev told journalists during a briefing at a sidelines of a banking conference in the Russian northern city of St. Petersburg.

Fed’s Yellen Says More Easing May Be Warranted (Source: Bloomberg)
Federal Reserve Vice Chairman Janet Yellen said slowing job growth and deteriorating financial- market conditions show the U.S. economy “remains vulnerable to setbacks” and may warrant additional monetary stimulus. “I am convinced that scope remains for the FOMC to provide further policy accommodation,” Yellen said in the text of remarks given in Boston today. “It may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest.” The policy-setting Federal Open Market Committee meets June 19-20 to consider whether to add to its record easing after the economy created the fewest jobs in a year in May. Two regional Fed bank presidents who vote on policy this year, San Francisco’s John Williams and Atlanta’s Dennis Lockhart, said today the central bank should be prepared to take action if the economy deteriorates further.
Yellen’s speech “is a prelude to the Fed clearly considering additional easing,” said Diane Swonk, chief economist in Chicago at Mesirow Financial Inc., which oversees about $61.7 billion in assets. “The Fed is keeping its powder dry, but is at least signaling that it’s willing to act.”

U.S. Seen Weathering Blows From Europe to Budget: Economy (Source: Bloomberg)
The weakest employment gain in a year, slumping stocks and the European crisis won’t stop the U.S. economy from maintaining its expansion this year and next, according to a Bloomberg News survey. Gross domestic product will increase by 2.2 percent in 2012 and by 2.4 percent in 2013, the median of 70 economists surveyed from June 1 to June 5 shows. The estimates are down 0.1 percentage point from those issued last month. “We have to bet the economy will continue to be the way it’s going, which is slow growth,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. Among the biggest positives is that consumer spending, which accounts for about 70 percent of the economy, will hold up, the survey showed, as households make progress in repairing finances and rising bank profits help increase access to credit. The rate of economic growth will still not be enough to reduce unemployment, which is projected to end the year at 8 percent.
“It won’t be a recession, but what we have is not OK,” Silvia said. “We don’t have the kind of growth we expect at this stage of the business cycle.”

China Delays Tighter Bank Capital Rules to 2013 (Source: Bloomberg)
China plans to start tightening bank capital rules at the beginning of next year, further delaying the requirements to ensure lending support to a slowing economy. The China Banking Regulatory Commission had said in August the standards would begin Jan. 1 this year. New draft rules seek to set “reasonable” schedules for banks to meet capital targets in a way that helps “maintain appropriate credit growth,” the government said on its website yesterday, without giving a deadline for full compliance with the standards. “Chinese banks are under a lot of pressure,” Chen Xingyu, an analyst at Phillip Securities in Shanghai, said by phone. The delay is “not a surprise,” as the government is “helping banks ease the pressure to raise capital again,” Chen said.
China’s economy, the world’s second largest, expanded 8.1 percent in the first three months of this year, the slowest pace in 11 quarters. The nation’s biggest banks may fall short of loan targets for the first time in at least seven years, three bank officials with knowledge of the matter said last month. Systemically important banks must have a capital-adequacy ratio of 11.5 percent while others need to maintain a level of 10.5 percent, the government said.

Japan Confronts Flight to Quality With Brutal Yen (Source: Bloomberg)
Investors seek the yen as a haven from turmoil sparked by a debt crisis, sending it to a postwar high against the dollar and threatening to deepen Japan’s economic stagnation. The year: 1995. It’s deja-vu for Japanese policy makers, who 17 years ago countered the surge in the yen with record intervention in the foreign-exchange market, driving it down by about 30 percent within five months. Like then, the currency is again trading at postwar highs, undermining Japan’s recovery from last year’s earthquake and tsunami as investors seek refuge from Europe. The one difference is intervention may not be effective, as U.S. opposition contrasts with the American and European cooperation in yen sales that helped make the 1995 operations a success. Also making the task tougher is a strengthening in Japan’s status as the world’s largest net creditor, bolstering the yen’s allure in times of global financial stress as investors gird for a potential Greek exit from the euro.
“It’s very, very difficult for the authorities in Japan to dilute the currency as a safe-haven instrument,” said Paul Mackel, head of Asia-Pacific currency research at HSBC Holdings Plc in Hong Kong. “The periodic moves to create shock and awe have only worked very temporarily.”

South Korea GDP Expands 0.9%, Unchanged From Initial Estimate (Source: Bloomberg)
South Korea’s economy expanded at the same pace as the central bank initially estimated in the first quarter as corporate investment and government spending rose amid Europe’s debt crisis. Gross domestic product grew 0.9 percent over the three months through March from the previous quarter, unchanged from an April estimate, the Bank of Korea said in Seoul today. The economy expanded 2.8 percent from a year earlier, also matching the bank’s April estimate. South Korea is bracing for falling demand for its automobiles and electronics as Europe’s debt crisis threatens to accelerate a global slowdown. The Bank of Korea is expected to keep interest rates unchanged for a 12th month tomorrow as Greece prepares for elections later this month and Spain calls for outside funds to prop up its banks.
“What’s happening in Greece and Spain threatens an economic recovery here,” Kim Nam Hyun, a Seoul-based fixed income analyst at Eugene Investment & Futures, said before today’s release. “All BOK board members will vote for no rate change this week, opting to wait and see how the euro-zone debt crisis unfolds.”

Singh Vows to Add Roads, Ports and Plants to Revive India Growth (Source: Bloomberg)
Indian Prime Minister Manmohan Singh pledged to revive growth in Asia’s third-largest economy as he outlined port, rail and road projects and a push to expand power generation capacity. “In these difficult times we must do everything possible to revive business and investor sentiment,” Singh said in a statement in New Delhi yesterday. “We must work to create an atmosphere which is conducive to investment and to removing any bottlenecks that may be hurting the growth process. We as a government are committed to taking the necessary measures to reverse the present situation.” The government is under increased pressure to support an economy expanding at the weakest pace in almost a decade as policy gridlock deters investment and Europe’s debt crisis hampers exports. Gross domestic product rose 5.3 percent last quarter from a year earlier, compared with India’s goals of 9 percent annual expansion and investment of $1 trillion in infrastructure from 2012 to 2017.
The government yesterday outlined port projects worth an equivalent of $6.3 billion for the financial year through March 2013, an investment target of $3.6 billion for Mumbai’s elevated rail corridor and plans to add airports. It also set a goal of building 9,500 kilometers (5,904 miles) of roads in the 12-month period, up 18.7 percent from last year, and adding about 18,000 megawatts of power generation capacity.

Finnish Leader Says U.S. Worried About Europe Banks (Source: Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner and Federal Reserve Chairman Ben S. Bernanke are concerned about the European banking industry, Finnish Prime Minister Jyrki Katainen said after meeting the two U.S. officials. “They were very worried about what was going on,” Katainen said in a Bloomberg News telephone interview yesterday. Katainen said he discussed with Geithner and Bernanke the options for recapitalizing banks in trouble. European Union leaders, including European Central Bank President Mario Draghi and European Commission President Jose Barroso, have called for a banking union with more coordination of regulation, as lawmakers seek to bolster confidence damaged by debt turmoil. EU President Herman Van Rompuy plans to report on proposed “building blocks” for deeper integration in the 17-nation euro area at the next summit of EU leaders on June 28- 29 in Brussels.
“One of the issues which we talked most was how to deal with the banking sector in Spain or in some other European countries because we should avoid a new banking crisis,” Katainen said. “This is an issue which we are considering right now.”

Draghi Stresses Limits of ECB Tools as Pressures Mount (Source: Bloomberg)
The European Central Bank may be running out of options it can stomach. With the euro area assailed by spreading recession, financial-market instability and political impasse over the direction the single currency should take, ECB President Mario Draghi yesterday stressed the limitations of his current policy tools, from standard interest-rate cuts to bond-buying and liquidity injections. Moves such as quantitative easing or capping bond yields to calm markets remain taboo for the ECB, which says its main job is to ensure stable prices. “It’s clear that they are very low on, if not completely out of, ammunition,” said Nick Kounis, head of macro research at ABN Amro in Amsterdam. “There are options that would have a more significant effect, but they’re outside of the ECB’s comfort zone. There’s an element of helplessness.”
Having already cut its benchmark rate to a record low of 1 percent, injected more than 1 trillion euros ($1.2 trillion) of three-year loans into the banking system and bought 212 billion euros of government bonds, the ECB is reluctant to do more heavy lifting as governments procrastinate over the reforms it deems necessary to put the monetary union on a sustainable footing. Draghi questioned the effectiveness of cutting rates further and flooding financial market with even more liquidity.

Draghi Says ECB is Ready to Act as Growth Outlook Worsens (Source: Bloomberg)
European Central Bank President Mario Draghi said policy makers discussed cutting interest rates to a record low today, fueling expectations they will act as soon as next month as the worsening debt crisis curbs economic growth. “We monitor all developments closely and we stand ready to act,” Draghi told reporters in Frankfurt after the ECB left its benchmark rate at 1 percent. Downside risks to the economic outlook have increased and “a few” of the ECB’s Governing Council members called for rate cut at today’s meeting, he said. The ECB is under pressure to lower rates and introduce more liquidity support for banks as governments struggle to fix a crisis that’s engulfing Spain and could force Greece out of the euro. While the ECB extended into next year its policy of lending banks as much money as they want for periods of up to three months, Draghi indicated another round of three-year loans is not imminent, keeping the pressure on governments to step up their response to the crisis.
“I don’t think it would be right for the ECB to fill other institutions’ lack of action,” he said.

Summers Says ECB, Governments Must Restore Confidence (Source: Bloomberg)
Former U.S. Treasury Secretary Lawrence Summers said that the European Central Bank and the region’s governments must do more to restore confidence amid the euro-area sovereign debt crisis. “The situation is very difficult,” Summers said in an interview on Bloomberg Television today. “They are discovering ways in which they did not expect that the single currency is brittle. The risks, it seems to me, are all on the side of lack of confidence and self-fulfilling fear.” European Central Bank President Mario Draghi said officials are ready to add more stimulus to the euro region’s economy if necessary, while damping expectations that another round of three-year funding for banks is imminent. The ECB is under pressure to lower rates and introduce more liquidity support for banks as governments struggle to fix a crisis that’s engulfing Spain and could force Greece out of the euro.
“A central bank wants to bend over backwards to be reassuring, to reassure people that liquidity is there and that’s the perspective that needs to inform the central bank,” he said. “The overwhelming imperative of the situation is to instill more confidence than there is today, and I certainly hope that’s going to inform the policy makers of Europe.”

20120607 1042 Global Commodities Related News.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
By Pro Farmer - Wed 06 Jun 2012 15:15:15 CT
Chicago wheat ended 7 1/2 to 11 cents higher, Kansas City wheat was 9 3/4 to 19 1/2 cents higher and Minneapolis wheat closed 8 to 15 1/4 cents higher. Price action in after-hours trade was choppy, as some contracts gained and others softened from the settlement levels. Sharp weakness on the U.S. dollar index due to expectations the Federal Reserve would announce some kind of stimulus sooner rather than later resulted in a risk-on attitude in commodities.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 11 at 624 1/4, 4 1/2 off the high and 11 1/2 up from the low. December Wheat closed up 8 at 665. This was 7 1/2 up from the low and 3 3/4 off the high. July wheat was trading near 9 cents higher on the session late in the day which was about 5 cents off of the early highs which were posted near the pit opening. Short-covering emerged after the surge in the US stock market and a sharp break in the US dollar. Gold, energy and other commodity markets such as sugar and cotton where fund traders were pressing the short-side of the market helped to support the buying. A private forecast that winter wheat production could come in near 18 million bushels below last month's USDA forecast as compared with trade expectations which suggest a larger cut may have limited the advance. Cash dealers, however, see harvest yields coming in a bit higher than expected. News from the USDA attache in Russia of a drop in production of just 2 million tonnes as compared with expectations for a 4-6 million tonne drop was also seen as a factor which may have slowed the buying. Talk of the oversold condition and a shift in trader's attitude to "risk on" were seen as supportive forces. Some rain in the forecast for the plains may help to slow the harvest but harvest is still running 2-3 weeks ahead of normal and on a record fast pace. July Oats closed up 5 1/4 at 294 1/4. This was 6 1/4 up from the low and 4 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
By Pro Farmer - Wed 06 Jun 2012 15:14:02 CT
Corn futures rallied into the close of pit trade to finish at or near session highs, with gains of 18 3/4 cents in July contract while other contracts were around 11 to 13 cents higher. Futures mildly trimmed gains in after-hours trade. A sharply lower dollar thanks to speculation another round of quantitative easing may lie ahead gave traders reason to cover short positions today.

Corn Market Recap for 6/6/2012 (Source: CME)
July Corn finished up 18 3/4 at 586 1/4, 1/4 off the high and 17 1/4 up from the low. December Corn closed up 11 3/4 at 519 1/2. This was 9 3/4 up from the low and 1 off the high. July corn was trading near 17 cents higher late in the session with December up 11 cents. The weather forecast has a bit of news for all traders with dry weather and increasing temperatures for the next 4-5 days, cooler and wetter weather in the 6-10 day forecast and hot weather emerging in the 11-15 day models. This increases the importance of good rains next week to avoid stress on crops; especially for southern Iowa, Illinois and Indiana, Missouri and the northern delta. Talk that the market is oversold after the poor close yesterday for December corn and short-covering from fund traders helped to support. Ethanol production for the week ending June 1st averaged 904,000 barrels per day. This is up 0.22% vs. last week and down 1.2% vs. last year. Corn used in last week's production is estimated at 96.3 million bushels as compared with 93.3 million bushels necessary each week to reach the USDA forecast for the year. Stocks were 21.188 million barrels, down 1.5% vs. last week and up 7.8% vs. last year. Rumors of sharply higher basis for central Illinois corn trades from yesterday and a lack of producer selling continues to support the July contract. Brazil's Agricultural ministry indicated that the country should soon secure clearance to ship corn to China. July Rice finished up 0.265 at 14.065, 0.035 off the high and 0.045 up from the low.

Corn Set to Recapture Feed Demand From Wheat as Output Gains (Source: Bloomberg)
Corn may recapture demand from the livestock industry after losing out to wheat because of slumping prices spurred by record world production, according to the International Grains Council. July-delivery corn was as much as $1.015 a bushel cheaper than wheat last month on the Chicago Board of Trade, the biggest discount since March 2011, Bloomberg data show. In June 2011, hot, dry weather sent corn to a 40.5-cent premium over wheat, the highest for a most-active contract since 1959. The two grains averaged near parity for the eight months through the end of April, before corn resumed a discount in May and closer to the price relationship it’s had with wheat in the past 10 years. Cheaper corn costs in the 2012-13 crop year may spur livestock producers worldwide to feed 515.4 million metric tons of the grain, the most on record and 5.3 percent more than a year earlier, according to the IGC, which hosts its annual outlook conference tomorrow in London.
The group expects wheat feed use to be 128.8 million tons in  the upcoming crop, down 9.2 percent from a record this year. The 2012-13 crop starts July 1. “There will be a lot more corn in the world in the coming year, so corn may recapture some of the demand wheat has taken,” Amy Reynolds, an IGC senior economist, said by phone from London last week. “We’re assuming a fall in feed wheat use and a relatively large increase in use of corn as feed.”

GRAINS-Soy up for 2nd day on tight supply; wheat rebounds
SINGAPORE, June 6 (Reuters) - Chicago soybeans gained more than 1 percent, rising for a second straight session, with support from tightening South American supplies and a lower-than-expected rating for the U.S. crop.
"Soybeans are up as USDA's first crop condition ratings were lower and I think there are some adjustments being made in South American crop," said Brett Cooper, senior manager of markets at FCStone Australia. "For wheat, it is a bit of bargain hunting after the selloff last night and the U.S. dollar weakness is supportive for all commodities."

Algeria to halt durum, barley imports until year-end
ALGIERS, June 6 (Reuters) - Algeria will import no more durum wheat or barley for the rest of 2012 because of a strong harvest and stock-building earlier in the year, the head of the state grain agency said on Wednesday.
"We can say we now have enough quantities of durum wheat and barley to meet our needs, so we will import only soft wheat for the rest of this year," Nouredine Kahel, head of the OAIC state grain agency, told Algerian radio.

Argentine grain farmers call national sales freeze
BUENOS AIRES, June 5 (Reuters) - Argentine farmers announced a one-week nationwide halt to grain sales o n T uesday to protest higher taxes in key farming province Buenos Aires, a move that lifted U.S. soy futures as traders braced for tight supplies.
Already upset about the national government's policy of wheat and corn export curbs that hurt profits, growers say the tax increase will force some of them to sell their fields.

Russia 2012 grain output seen 88 mln tonnes-attache
June 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Russia:
"FAS/Moscow forecasts grain production in Russia in 2012 at 88 million tonnes. This includes a forecast of 54 million tonnes for wheat, 16 million tonnes for barley and 6.5 million tonnes for corn. Wheat production is expected to fall from last year as a result of spring dryness in key producing regions.

Bulgaria wheat crop to drop 10 pct in 2012
SOFIA, June 5 (Reuters) - Bulgaria will reap about 10 percent less wheat this year compared with a year ago, mainly due to a dry autumn and winter frosts, Agriculture Minister Miroslav Naidenov said on Tuesday, while farmers brace for bigger crop fall.
"The wheat harvest will be around 3.8-3.9 million tonnes," Naidenov said in a statement.

Cotton market ripe for a good short squeeze
(Gavin Maguire is a Reuters market analyst. The views expressed are his own)
CHICAGO, June 5 (Reuters) - Bloated inventories and waning demand amid fresh global economic concerns have helped steer cotton prices to multi-year lows lately, and encourage traders to rack up hefty short-sided exposure to cotton futures and options.
But the fact that most trader positions in the U.S. market are now more skewed to the short side than to the long leaves the market vulnerable to a short squeeze on any hints of either an upturn in demand or potential production problems.

SOFTS-ICE sugar, coffee rise, weaker dollar supports
LONDON, June 6 (Reuters) - Raw sugar and arabica coffee futures on ICE rose slightly, trading above 22-month lows earlier in the week, as a weak dollar supported dollar-priced commodities, while investors awaited the results of a European Central Bank meeting.
Cocoa futures on Liffe were higher after ICE cocoa moved higher on Monday and Tuesday, when London markets were closed.

Global 2012 rubber output forecast revised up -ANRPC
SINGAPORE, June 6 (Reuters) - Global natural rubber output is seen at 10.475 million tonnes in 2012, nearly 2 percent above an April estimate of 10.297 million tonnes, on higher first-quarter Thai production, the Association of Natural Rubber Producing Countries said on Wednesday.
While total consumption by members of the ANRPC was likely to rise this year, the debt crisis in Europe and its possible impact on Asia cast a shadow over the demand prospect for natural rubber, the group said in a statement.  

Indonesia coffee output seen up 17 pct-attache
June 5 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Indonesia:
"Indonesian coffee production will grow by 17 percent to 9.7 million 60-kg bags green bean equivalent in marketing year 2012/2013 due to more supportive weather conditions.

Ghana cocoa purchases hit 775,761 T by May 24
ACCRA, June 5 (Reuters) - Official cocoa purchases in Ghana reached 775,761 tonnes by May 24 since the start of the season in October, down 11.3 percent from the 874,291 tonnes recorded in the same period a year ago, according to data from regulator Cocobod seen by Reuters on Tuesday.
The purchase figures - the best indication of output from the world's second-largest cocoa grower  - covered the first 32 weeks of the 33-week main crop. Ghana grew a record over 1 million tonnes of cocoa last season, but is expected to fall well-short of that this year.

Mauritius 2012 sugar output seen down 6 pct
PORT LOUIS, June 5 (Reuters) - Sugar output from Mauritius is expected to fall 5.8 percent to 410,000 tonnes this year from 435,309 tonnes in 2011 due to lower rainfall, the Chamber of Agriculture said on Tuesday.
Sugar, a centuries-old pillar of the island's $10 billion-a-year economy, accounts for roughly 1.2 percent of gross domestic product.

Oil Gains a Fourth Day Amid Economic Stimulus Speculation (Source: Bloomberg)
Oil advanced for a fourth day in New York amid speculation policy makers in the U.S. and Europe will take steps to revive the slowing economy, boosting fuel demand. Futures increased as much as 0.7 percent for the longest run of gains since April. Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday a fragile recovery may require more stimulus while European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s expansion outlook worsens. U.S. crude stockpiles fell for the first time in eleven weeks, a government report showed. Oil for July delivery increased as much as 62 cents to $85.64 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.46 at 9 a.m. Sydney time. The contract yesterday rose 0.9 percent to $85.02, the highest close since May 31. Prices are 14 percent lower this year.
Brent oil for July settlement climbed $1.80, or 1.8 percent, to $100.64 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $15.62. U.S. crude inventories dropped by a less-than-expected 111,000 barrels last week, a report from the Energy Department showed yesterday. They were forecast to decline 500,000 barrels, according to the median of 12 analyst estimates in a Bloomberg News survey.

Saudi Arabia Achieving $100 Oil Signals Output Reversal (Source: Bloomberg)
Saudi Arabia is poised to rein in oil sales after it achieved a $100-a-barrel target by cutting the price of its crude and pumping at the highest rate in at least three decades. The world’s biggest crude exporter started to scale back shipments this month, Vienna-based researcher JBC Energy GmbH said, citing tanker fixtures. Three days ago the desert kingdom raised the July official selling price to Asia of its main crude grade, Arab Light, for the first time in three months, another sign that it is reducing production, according to the Centre for Global Energy Studies in London.
Saudi Arabia has been trying to lower the international price of oil to about $100 as slowing global economic growth counters concern of a supply shortage following a ban by western nations on imports from Iran. Brent crude, used to price more than half the world’s oil, fell to a low of $95.63 a barrel on June 4 amid Europe’s debt crisis, brimming supplies and weaker- than-expected Chinese manufacturing. Prices were as high as $128.40 in March. “The downward pressure on prices will continue until they reduce supply,” said Manouchehr Takin, an analyst at CGES, which predicted last month that the Saudis would attain their $100 target. “OPEC’s doves have said $100 is their target, so they have to defend it.”

Resource giants turn up the heat on regulation
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
KUALA LUMPUR, June 6 (Reuters) - The world's resource companies have a message for governments, and they are starting to deliver it more forcibly: regulation, taxes and subsidies are placing at risk the projects needed to fuel global growth.
Exxon Mobil  Chief Executive Rex Tillerson become the latest head of a major resource company to fire a broadside, telling the World Gas Conference on Tuesday that if the situation persists, governments will find their economies "walking backwards."

Indonesia 2012 crude output to fall 20,000 bpd on yr
KUALA LUMPUR, June 6 (Reuters) - Indonesia's crude output in 2012 will fall 20,000 barrels per day (bpd) on the year to 910,000 bpd, a senior energy official said on Wednesday.
The country is aiming to boost oil output to around 1 million bpd over the next two years, R Priyono, chairman of Indonesia's oil and gas regulator BPMigas told reporters on the sidelines of an industry event in Malaysia.

Time running out for Asian buyers of Iran oil
BEIJING/TOKYO, June 6 (Reuters) - Iran's top crude oil buyers in Asia have just weeks to come up with ways to keep imports flowing without falling foul of the toughest Western sanctions to date against Tehran's oil trade. Solutions have proved elusive so far.
A year ago, Iran was selling around two-thirds of its crude exports, or roughly 1.45 million barrels per day, to China, Japan, India and South Korea, securing vital flows of foreign exchange for a government many Western nations accuse of running a secret nuclear weapons programme.

OIL-Oil rises toward $100 on US data, eyes ECB
LONDON, June 6 (Reuters) - Oil rose toward $100 a barrel as supportive economic and crude stocks data from the United States outweighed pressure from Europe's lingering debt crisis.
"We probably need to see a more significant rally out of this level to be more confident we have a corrective rally going on," said Ric Spooner, chief market analyst at CMC Markets.

Coal share of U.S. generation lowest since 1973-EIA
June 5 (Reuters) - Coal's share of U.S. power generation dropped to 34 percent in March 2012, the lowest level since at least January 1973, due to low natural gas prices and the warmest March ever recorded in much of the country, according to federal energy data.
Despite the low demand for power due to the unseasonably warm weather, the U.S. Energy Information Administration (EIA) said natural gas generation jumped to 30 percent of overall generation in March.

Asia coal prices fall close to output costs
NUSA DUA, Indonesia, June 5 (Reuters) - Asian coal prices have fallen close to the production costs of some miners and prolonged weakness will force some high-cost producers in Indonesia, the world's top exporter of thermal coal, to shut and reduce supplies about 10 percent, industry experts said on Tuesday.
A supply glut in Asia, along with weaker demand from China, has dragged coal prices to their lowest in nearly two years, squeezing producer margins.

Indonesia eyes coal export curbs, tax
NUSA DUA, Indonesia, June 4 (Reuters) - Indonesia plans to curb coal exports and is considering a tax on shipments of the mineral, government officials said on Monday, pushing shares in the country's leading coal miners down by more than 13 percent.
The world's top thermal coal exporter has introduced a series of regulations aimed at squeezing extra state revenue from the mining industry, including limiting foreign ownership and a 20 percent tax on exports of unprocessed minerals.

China’s $23 Billion Steel Push Seen Igniting Iron Ore (Source: Bloomberg)
China is set to jolt iron ore off a six-month low after approving an estimated $23 billion of steel projects that will use the raw material produced by mining companies such as Rio Tinto Group (RIO) and BHP Billiton (BHP) Ltd. The commodity will climb to $152 a metric ton in the second half, according to the average of five analyst estimates compiled by Bloomberg. The price advanced to $135 on June 1 from a six-month low of $129.90 set on May 23, according to The Steel Index Ltd. Coking coal, another key ingredient in making steel, may gain 7 percent to about $220 a ton, analysts forecast. “Commodity prices are already close to the bottom and are set to rebound,” Henry Liu, an analyst at Mirae Assets Securities Co., said by telephone from Seoul. “Prices will get a boost in the short term on speculation China will stimulate the economy. Real demand for steel depends on what incentives the government gives to drive investments.”
China approved new steel mills in the past two weeks as it tries to sustain economic growth after April industrial output rose the least since 2009. New plants of Baosteel Group Corp. and Wuhan Iron & Steel Group were among the 228 billion yuan of projects approved by China’s main planning agency, of which 65 percent are in the steel industry, worth the equivalent of $23 billion, Bank of America Merrill Lynch said in a May 30 report. Iron ore generates the most revenue for both London-based Rio Tinto and BHP of Melbourne. China is the largest customer for both companies, providing 31 percent of sales to Rio and 28 percent to BHP in their most recent financial years, according to data compiled by Bloomberg.

Iron Ore-Chinese buyers in no rush, seek cheap cargoes
SINGAPORE, June 6 (Reuters) - Spot iron ore and steel prices in main market China steadied on Wednesday as demand stayed largely weak, although some steel producers were keen on buying iron ore cargoes to replenish supplies but were seeking low prices.
Chinese steel mills are not rushing to purchase iron ore given a blurry outlook for steel demand, but are not shutting their doors as well for bargains as miners, led by top producer Vale , continued to push cargoes into the spot market.

Codelco Opens Door to Settlement in Anglo Copper Feud (Source: Bloomberg)
Codelco, the world’s largest copper producer, said buyers are delaying metal purchases amid concern that Europe’s debt crisis will slow global growth. Declining prices, including a 12 percent slump last month, reflect global demand that is falling short of Codelco’s estimated 3 to 3.5 percent annual growth rate, said Thomas Keller, the state-owned company’s chief executive officer. “Everybody is more cautious about making decisions both on the demand and supply side,” Keller said in an interview in Santiago yesterday. “The somewhat lower copper price these days is a reflection of that situation.” Copper traded at an almost six-month low on June 5 as signs of faltering growth in countries using the euro adds to concern that the region’s fiscal woes will hamper global metals demand. The benchmark futures contract rallied 2.7 percent yesterday after European Central Bank President Mario Draghi said officials stand ready to add economic stimulus.
Keller, who took over this month as CEO of Chile’s state- owned copper company, said a continuing supply shortage will help mitigate the price decline.

METALS-Copper edges up, ECB meeting eyed
SHANGHAI, June 6 (Reuters) - London copper rose slightly on Wednesday on a weaker dollar in its first trading session this week with investors playing it safe ahead of a European Central Bank meeting that may offer a solution to the euro zone debt crisis.
The ECB meeting comes a day after finance ministers from the world's seven major economies discussed financial and fiscal union in Europe and agreed to work together to deal with the problems in Spain and Greece, but took no joint action.

PRECIOUS-Gold rises as investors await ECB action
SINGAPORE, June 6 (Reuters) - Gold firmed on Wednesday, rising in tandem with the euro and risky assets ahead of a European Central Bank policy meeting as investors watch for more action from policymakers to contain the euro zone debt crisis.
The ECB is expected to indicate a readiness to cut interest rates as soon as next month but hold back from policy moves, after a Group of Seven emergency conference call on Tuesday failed to produce any concrete solution.

FOREX-Euro gains on short-covering as Australia GDP boosts sentiment
TOKYO, June 6 (Reuters) - The euro gained on short-covering on Wednesday after riskier assets rose on strong growth data from Australia, recouping some of the losses sustained on Spain's warning it was losing access to credit markets.
G7 finance ministers took no immediate steps to soothe fears over Europe's debt woes on Tuesday, while European Union leaders appeared to be working towards a plan for deeper political integration to underpin the future of the euro.

20120607 1041 Soy Oil & Palm Oil Related News.

Palm-oil inventories in Malaysia probably dropped to lowest level in more than a year in May, potentially curbing a slump in prices. Stockpiles fell 3.8% to 1.78m tonnes, the lowest since April 2011, from 1.85m tonnes a month earlier, according to the median in a Bloomberg survey of three plantation companies and two analysts. (Bloomberg)

Pro Farmer: After the Bell Soybean Recap (Source: CME)
By Pro Farmer - Wed 06 Jun 2012 15:14:38 CT
Soybean futures posted strong gains today, settling 9 to 36 3/4 cents higher with old-crop contracts leading gains. Gains were mildly trimmed in after-hours trade. Funds bought an estimated 8,000 contracts (40 million bu.) of soybeans today. Outside markets were supportive as were weather concerns and news of a daily bean sale to China for 2011-12.

Soybean Complex Market Recap (Source: CME)
July Soybeans finished up 36 3/4 at 1386 1/4, 5 3/4 off the high and 33 1/2 up from the low. November Soybeans closed up 22 1/4 at 1299 1/4. This was 23 3/4 up from the low and 7 1/4 off the high. July Soymeal closed up 14.6 at 414.6. This was 14.7 up from the low and 1.9 off the high. July Soybean Oil finished up 0.75 at 49.25, 0.4 off the high and 0.65 up from the low. July soybeans were trading near 36 1/2 cents higher late in the day and off just 6 cents from the mid-session peak. A major shift in risk attitudes from global money managers, increased demand signs, a strong cash market and questionable weather for the next two weeks are factors which encouraged short-covering and new buying early in the session. Private exporters reported a sale of 120,000 tonnes of US soybeans to China for the 2011/12 season and this helped to support the July contract. Cash markets are already pushing higher in the past couple of days as exporters attempt to fill previous export orders with slow producer selling. Initial crop conditions are favorable for the US crop but mostly dry weather in May leaves topsoil conditions exceptionally dry and this increases the need for better rains next week and the following week to expect favorable early growth. Rain events late in May missed southern Illinois, southern Indiana, Missouri and Arkansas and these areas could see a significant drop in crop condition ratings if timely rains do not emerge. Short to very short topsoil conditions (upper 6 inches of soil) exist for 56% of Indiana, 54% of Illinois, 82% for Missouri and 74% of Arkansas as of June 3rd. These four states represented 31.7% of the US soybean crop production last year. Ideas that the market is oversold after recent losses added to the positive tone into the mid-session with a surge higher in the stock market and weakness in the dollar helping to support. Some traders see several rain events next week which could push rain totals to 1/2 to 1 1/2 inches and the high end estimates would ease dryness concerns which 1/2 inch or less in some areas may not be enough to avoid a quick return to stress "if" temperatures heat up the following week. Argentina producers will halt grain sales for the next week in protest of higher taxes.

VEGOILS-Palm gains on firm demand; euro zone fears linger
SINGAPORE, June 6 (Reuters) - Malaysian palm oil futures extended gains, as investors bet on rising Asian demand for the edible oil although caution prevailed due to concerns the euro zone crisis will crimp economic growth and commodity demand.  
"After the shock on Monday, for the past two days prices have recovered lost ground. But on the backdrop, the euro zone problem is still not solved," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.

Brazil gov't cuts soy estimate, raises corn view
SAO PAULO, June 5 (Reuters) - Brazil's government trimmed its 2011/12 soybean crop estimate on Tuesday after drought ravaged output in the world's second biggest producer this season, but raised its forecast of corn output to a record.
U.S. soybean futures  rose after Brazil's food supply agency Conab cut its production forecast and U.S. crop ratings disappointed.

Oil World sees US soy exports up 40 pct in 2012/13
AMSTERDAM, June 5 (Reuters) - US soybean exports will increase by nearly 40 percent from September 2012 to February 2013 to compensate for the shortfall in the South American crop which has been hit by drought, German-based analyst Oil World said on Tuesday.
"Insufficient South American export supplies of soybean, soymeal and oil will shift world demand to US origin in Sept-Feb 2012/2013," Oil World said.

ITS CPO export up 2.4% to 1,382,091 tonnes for the period of 1~31 May 2012.
SGS CPO export down 0.25% to 1,333,869 tonnes for the period of 1~31 May 2012.