Friday, June 8, 2012

20120608 1817 FCPO EOD Daily Chart Study.

FCPO closed : 2973, changed : -1 points, volume : lower.
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 1 tick lower with declined volume transacted. Soy oil price currently trading lower by more than 1% after overnight closed rallied higher by 2% while crude oil price currently trading substantially lower after yesterday rebound.
Price traded mostly in the negative territory today as 2 industry experts giving negative price outlook for crude palm oil for this year due to weaker crude oil price development at a conference in Mumbai, India.
Technical chart reading remained suggesting a downside biased market development with immediate support near 2970 level still in defending.
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.

20120608 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1573.5 changed : +2.5 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 little higher with drying out volume changed hand doing 3 points premium compare to cash market that closed lower. Overnight U.S. markets closed mixed and today Asia markets ended lower while European markets currently registering loss by more than 1%.
Regional markets surrendered yesterday gains despite China cuts its benchmark interest rate and after Federal Reserve chairman statement refraining from discussing steps to protect growth amid Europe’s worsening debt crisis and concern that central banks are struggling to reinforce global demand.
Daily chart study remained 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.

20120608 1713 Regional Markets EOD Daily Chart Study.

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

20120608 1555 Global Market & Commodities Related News.

Asian shares tumbled, after Federal Reserve Chairman Ben Bernanke disappointed investors looking for a clear signal of further U.S. monetary stimulus. The S&P 500 ended barely changed on Thursday as optimism about China's interest-rate cut was offset by Federal Reserve Chairman Ben Bernanke's comments that dimmed hopes for more U.S. stimulus.

The euro and commodity currencies dropped, having seen gains sparked by a surprise Chinese interest rate cut quickly evaporate after the U.S. central bank offered no hint of imminent monetary stimulus.

FOREX-Euro, Aussie slip as Fed disappointment outweighs China surprise
TOKYO, June 8 (Reuters) - The euro and commodity currencies dropped on Friday, having seen gains sparked by a surprise Chinese interest rate cut quickly evaporate after the U.S. central bank offered no hint of imminent monetary stimulus.
Hedge funds were selling these currencies, with traders also citing talk that Chinese economic data due at weekend could be weak and that Beijing's easing might have been aimed at pre-empting the grim news.

Chicago wheat slid 1.2 percent , while corn fell around 1 percent, weighed down by economic uncertainty as Federal Reserve Chairman Ben Bernanke gave no clues on whether a U.S. easing was in the offer.

Russia's grain market debates impact of drought
Russia's Agriculture Ministry sought to assuage market concerns about potential drought damage to the grain harvest, putting it at odds with leading grain market players who see a smaller crop and reduced exports for the 2012/13 marketing campaign.

Argentine grains sale freeze cuts Rosario traffic
A sales freeze by farmers angry over government policies sharply cut the flow of corn and soy into Argentina's main export hub on Thursday, boosting global prices as traders factored in the risk of supply interruptions.

Top wheat buyer Egypt embraces Russia-linked Soyuz
Soyuz Commodities, which has links to Moscow's state grain exporter, has won recognition as an official supplier to the world's largest wheat importer Egypt, positioning the year-old firm to become a major player in grains markets.  

USDA likely to shift to later ag report releases
The U.S. Department of Agriculture is likely to put back the release of its agricultural reports until later in the day following a move by leading exchanges to extend their trading days, USDA chief economist Joseph Glauber said in an interview.

Brent crude prices fell below $99, pressured by uncertainty about the fragile economic recovery in top oil consumer the United States after its central bank chief offered few clues about more stimulus measures.


Euro Coal-Prices slip by $1/T to nudge 2-year low
LONDON, June 7 (Reuters) - European prompt physical coal prices dropped by around $1 a tonne for a second day running, touching the two-year low of $85.00 reached in May, on expectations for more delays and price renegotiations by Chinese buyers in coming weeks.
A July delivery DES ARA cargo was bid at $83.00 and offered at $85.00 a tonne, down $3.00 on the offer from Wednesday's level.

Indonesia says no plan to tax coal exports
JAKARTA, June 7 (Reuters) - Indonesia, the world's top exporter of thermal coal, has no intention of imposing export duties on the power plant fuel, the energy minister said on Thursday, after officials had said this week curbs were being planned.
At a coal conference earlier this week, officials from the same ministry said they were looking to impose controls on the industry to safeguard domestic supplies, and that an export tax for coal was under consideration.

Copper fell after the U.S. Federal Reserve's chairman gave no hint that further monetary easing was imminent, disappointing those hoping for more stimulus by the world's largest economy to boost global commodity prices.


Gold fell more than 1 percent , extending a sell-off from the previous session when the U.S. central bank chief gave no hint on imminent stimulus, disappointing investors and dampening the appeal of gold as a hedge against monetary easing.

China daily steel runs drop below 2 mln T in late May -CISA
China's daily crude steel output at the end of May fell below 2 million tonnes for the first time in two months, industry data showed on Friday, with mills finally cutting output in response to weak demand and the threat of losses.

S. Copper, Cerro Verde say mining normal after Peru quake
Southern Copper  and Cerro Verde said their mining operations in southern Peru were not affected by an earthquake that struck on Thursday.

China May crude, copper imports to dwindle on weak demand
BEIJING, June 8 (Reuters) - China's imports of copper are expected to drop for a third straight month in May as unfavourable prices and high stockpiles of the metal at the world's top consumer continues to erode demand, while oil shipments are also likely to move south.
With copper prices on the London Metal Exchange  much higher than domestic prices in May, data later this month is also expected to show exports of the metal jumping as the country's top smelters and traders sold to overseas markets to help ease the glut at home.

Southern Copper argues to overturn $2 bln judgment
June 7 (Reuters) - A $2.03 billion judgment in a lawsuit brought by shareholders of Southern Copper Corp should be overturned because a key witness from deal adviser Goldman Sachs Group Inc  was excluded from the trial, lawyers challenging the ruling argued in Delaware's Supreme Court on Thursday.
The judgment was awarded by Delaware Chancery Court Judge Leo Strine in October 2011 in a case brought by investors who accused Southern Copper  of overpaying in the 2005 takeover of privately held Minera Mexico.

Chinese banks ordered by Beijing to cut lending to steel traders
SHANGHAI, June 7 (Reuters) - Chinese banks, facing mounting bad loans from the property market and local governments, were ordered by Beijing to clamp down on new lending to steel traders, further weighing on a sector that has racked up $400 billion in debt.
While the lending curb seems at odds with Beijing's pledge to speed up infrastructure building and stimulate a slowing economy, it is the government's way of righting previous excesses, analysts say.

London Metal Exchange mulls best and final offers
LONDON, June 7 (Reuters) - The London Metal Exchange's (LME) board is considering re-submitted takeover offers for the world's biggest metals market place from Hong Kong Exchanges and Clearing Ltd (HKEx)  and the IntercontinentalExchange (ICE) , sources close to the situation said.
A decision on which bid to recommend to its shareholders could come as early as Monday, one source with knowledge of the situation said.

China daily steel runs drop below 2 mln T in late May -CISA
SHANGHAI, June 8 (Reuters) - China's daily crude steel output at the end of May fell below 2 million tonnes for the first time in two months, industry data showed on Friday, with mills finally cutting output in response to weak demand and the threat of losses.
Steel mills produced an average 1.96 million tonnes of crude steel a day over the May 21-31 period, down 3.9 percent from the preceding 10 days, according to data released by the China Iron and Steel Association (CISA).

Steelmakers say top EU court rejects carbon case
BRUSSELS, June 7 (Reuters) - European steelmakers said the European Union's top court had thrown out their case seeking to change the rules on free carbon allowances in the next phase of the Emissions Trading Scheme (ETS).
Steel industry body Eurofer confirmed the case had been declared inadmissible by the Luxembourg-based European Court of Justice.

Europe steel body asks EU to safeguard scrap imports
LONDON, June 7 (Reuters) - Europe's steel industry association Eurofer has asked the EU's executive Commission to monitor and possibly act against countries outside the bloc that restrict exports of raw materials such as scrap, saying such barriers are unfair.
"We have recently sent a letter to the Commission saying that they should monitor those countries who are restricting exports of scrap and other raw materials and then possibly apply some measures against this," Eurofer's Axel Eggert told Reuters.

METALS-Copper falls on US stimulus uncertainty, China data worries
SHANGHAI, June 8 (Reuters) - Copper fell on Friday after the U.S. Federal Reserve's chairman gave no hint that further monetary easing was imminent, disappointing those hoping for more stimulus by the world's largest economy to boost global commodity prices.
Investors also began to worry that a decision on Thursday to cut rates in China, the world's top metals consumer, signalled grim economic data is on the cards.

PRECIOUS-Gold extends sell-off after Fed disappoints
SINGAPORE, June 8 (Reuters) - Gold fell more than 1 percent on Friday, extending a sell-off from the previous session when the U.S. central bank chief gave no hint on imminent stimulus, disappointing investors and dampening the appeal of gold as a hedge against monetary easing.
COMEX gold led the decline as stop-loss selling kicked in when prices traded lower to around $1,580 level, after the most-active contract for August delivery tumbled more than 2 percent in the previous session, traders said.


Iron Ore-Few bids as Chinese mills see further price drop
SINGAPORE, June 8 (Reuters) - Spot iron ore prices were steady to lower amid few bids on Friday, with Chinese steel producers hesitant to pick up fresh cargoes as weaker steel demand curbed output.
China's first interest rate cut in nearly four years, announced late on Thursday, was unlikely to spur demand significantly, given the modest quarter-percentage point reduction and the country's steel overcapacity. Shanghai rebar futures were only up slightly.
 
Europe steel body asks EU to safeguard scrap imports
LONDON, June 7 (Reuters) - Europe's steel industry association Eurofer has asked the EU's executive Commission to monitor and possibly act against countries outside the bloc that restrict exports of raw materials such as scrap, saying such barriers are unfair.
"We have recently sent a letter to the Commission saying that they should monitor those countries who are restricting exports of scrap and other raw materials and then possibly apply some measures against this," Eurofer's Axel Eggert told Reuters.

Australia's Port Hedland iron ore shipments climb 17 pct in May
SYDNEY, June 7 (Reuters) - Iron ore shipments to China from Australia's Port Hedland rose by 17 percent in May from the previous month, according to port authority data released on Thursday.
Demand for imported iron ore in China has softened due to slowing domestic economic growth although some steel producers were still willing to buy cargoes to replenish restock inventories, according to commodities analysts.

Baltic index falls on low activity, China woes
June 7 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Thursday due to weakness in dry bulk shipments, while analysts said a rebound was unlikely in the near term.
The overall index, which reflects the daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 6 points or 0.68 percent to 872 points.

Iran buys Indian bulk raw sugar, whites
LONDON, June 6 (Reuters) - Iran has bought 21,000 tonnes of Indian bulk raw sugar and 7,800 tonnes of Indian whites in containers, with shipment expected to take place this month, European traders said on Wednesday.
The Islamic Republic has faced hurdles in buying food staples including sugar due to payment freezes caused by Western sanctions. Trade sources say Iran is increasingly getting round the issue.

Asia Dry Bulk-Rates to hit 15-month lows on weak demand
SINGAPORE, June 7 (Reuters) - Rates for capesize dry bulk carriers on key Asian freight routes are expected to decline to fresh 15-month lows next week, pressured by an economic slowdown in China that has sapped iron ore and coal demand, ship brokers said.
Benchmark capesize fixture rates from Australia to China plunged to a 15-month low of $7.046 a tonne on Wednesday from $7.371 last week due to slowing iron ore shipments to the world's top importer of the steel-making ingredient.

20120608 1119 Global Economy Related News.

China: Rate cut counters slowdown as PBOC eases loan rules. The one-year lending rate declines by a quarter percentage point to 6.31%, the People's Bank of China said in a statement. The one-year deposit rate drops the same amount, to 3.25%. (Source: Bloomberg)

Taiwan: Exports fell for a third straight month in May, increasing pressure on the central bank to hold interest rates to support a slowing economy. Shipments abroad slipped 6.3% YoY, compared with a 6.4% YoY decline in April, the Ministry of Finance said. (Source: Bloomberg)

Vietnam: To cut deposit rate cap to encourage loans to companies. The cap will be 9% from 11% currently and will take effect June 11, State Bank of Vietnam Governor Nguyen Van Binh told the National Assembly. The reduction will support companies and is in line with easing consumer price gains that are at their lowest since 2010, Binh said. Declines in borrowing costs still don't "meet the needs of businesses," he said. (Source: Bloomberg)

Australia: Unexpectedly added workers last month, capping the best January-to-May period of hiring in five years. The number of people employed rose by 38,900 in May, after a revised 7,000 gain in April that was lower than previously reported, the statistics bureau said. The jobless rate rose to 5.1% from a revised 5% in April as participation increased. (Source: Bloomberg)                                                                                  

France: Unemployment rate rose in 1Q12 as companies eliminated jobs in the face of faltering economic growth, posing a challenge to newly elected President Francois Hollande. About 10.0% of the population was unemployed, up from 9.8% in the previous three months, according to International Labour Organization standards, national statistics office Insee. (Source: Bloomberg)

U.S: Bernanke sees easing options and he described risks ranging from Europe's crisis to fiscal tightening in the U.S. "If we decide that further action is required, then of course we have to decide what action is appropriate or what communications are appropriate," Bernanke said to the Joint Economic Committee. "We do have options that we can consider." (Source: Bloomberg)

U.S: Consumer credit rose in April for eighth month boosted by financing for education and automobiles. The USD 6.51b increase followed a USD 12.4b gain in the previous month, the Federal Reserve said. Non-revolving credit, which includes student loans and automobile lending, climbed by the most in three months. (Source: Bloomberg)

U.S: Initial jobless claims fell last week to 377,000. First,time claims for jobless benefits fell by 12,000 in the week ended June 2 from a revised 389,000 the prior week that was higher than initially estimated. The number of people receiving extended payments plunged. (Source: Bloomberg)

U.S: Household worth rises most since 2004, bolstered by a jump in stock prices and more stable home values. Net worth for households and non-profit groups increased by USD 2.83t from January through March to USD 62.9t, the Federal Reserve said in its flow of funds report from Washington. (Source: Bloomberg)

U.K: Services unexpectedly sustains pace of expansion in May. A gauge based on a survey of purchasing managers remained at 53.3 from April, Markit Economics and the Chartered Institute of Purchasing and Supply said in a report in London. Confidence weakened because of concerns related to the euro-area debt crisis, Markit said. (Source: Bloomberg)

20120608 1118 Malaysia Corporate Related News.

GAB: To cut FY13 budget by 30%. Guinness Anchor Bhd (GAB) is reducing its investment budget for financial year 2013 (FY13) by 30% due to economic uncertainties. MD Charles Ireland said this year, the capex (capital expenditure) is more than MYR75m. Next year, it will be a little bit less, about 70% of this year's capex. (Source: The Sun Daily)

Kenanga: To pay MYR890m for ECM Libra's IB. K&N Kenanga Holdings Bhd could fork out as much as MYR890m to acquire ECM Libra Financial Group Bhd's investment banking and stock broking business, sources said. The two companies yesterday received the requisite regulatory approvals from the Minister of Finance eight months after Bank Negara Malaysia gave them the green light to commence merger talks, in October 2011. (Source: The Edge Daily, Bursa Malaysia)

IPO: FGVH shares for institutions oversubscribed. Sources said Felda Global entures Holdings Bhd (FGVH) drew orders from institutional investors for more than 15 times in its USD3.2b (MYR10b) initial public offering (IPO). (Source: The Star)

Kimlun: Secures MYR48.4m MRT contract. Kimlun Corporation Bhd's unit has secured a MYR48.48m contract to supply precast concrete tunnel segment linings for the Klang Valley Mass Rapid Transit (KVMRT) project. (Source: Bursa Malaysia)          


Integrated Healthcare: Prices IPO at RM2.85 per share
IHH Healthcare  (IHH) , which is seeking dual listing in Malaysia and Singapore late next month, will offer  total of 2.23bn shares at RM2.85 per share to raise more than RM6.36bn. According to executives amiliar with the book-building exercise, the cornerstone investor tranche was priced at RM2.85 on Thursday, compared to an indicative price of RM3.15. The executives also said cornerstone investors oversubscribed their tranche by 1.31 times, applying for roughly 2bn shares against 1.53bn shares offered to them. (Financial Daily)

DRB-Hicom: Lotus CEO Bahar gets the boot
Group Lotus plc sacked its CEO Dany Bahar with immediate effect yesterday, people familiar  with the matter said. Sources close to the British sportscar maker, which is 100% owned by  Proton Holdings, said the Lotus board decided to relieve Bahar of his duties following an  emergency board meeting. Senior Proton officials could not be reached for comments but it  is understood that the board meeting was held here. Details behind Bahar’s dismissal are  sketchy but it comes on the heels of his suspension as Lotus CEO late last month. Business  Times had reported on May 21 that Bahar was suspended pending the completion of a  review of Lotus’ performance by Proton. (Business Times)

SP Setia, Sime Darby: To acquire UK Battersea power station for RM2bn
SP Setia and Sime Darby Property have emerged as the preferred bidder for the Battersea  Power Station in London. SP Setia said in a statement to Bursa Malaysia on Thursday that  they had signed an exclusivity agreement with the joint administrators and receivers Alan  Bloom  and Alan Hudson of Ernst & Young LLP. The agreement is to acquire the site for  £400m or about RM2bn. (StarBiz)

Cahya Mata Sarawak: Inks MoU for RM850m phosphate plant in Sarawak
Cahya Mata Sarawak (CMSB) is teaming up with Malaysian Phosphate Additives Sdn Bhd for  a proposed RM850m integrated phosphate plant in Samalaju, Sarawak. CMSB said on  Thursday its unit Samalaju Industries Sdn Bhd had signed an MoU with Malaysian Phosphate  Additives to hold talks about the proposed plant which would have an annual production  capacity of 500,000 tonnes. It said both parties might set up a special purpose vehicle to  undertake the project. The indicative equity structure of the project company would see  Malaysian Phosphate Additives holding a 60% stake and Samalaju Industries 40%. It said the  project company shall undertake a feasibility study in respect of the project in order for  Samalaju Industries and Malaysian Phosphate Additives to assess whether it is feasible to  proceed with the project. (StarBiz)

Boustead Holdings, Wah Seong: To form 50:50 JV in Myanmar
Boustead Holdings’ unit and Wah Seong Corporation’s subsidiary have entered into a joint  venture (JV) agreement to undertake business activities in Myanmar. In separate filings to  Bursa Malaysia on Thursday, Boustead and Wah Seong said their respective subsidiaries,  Boustead Global Trade Network Sdn Bhd (BGTN) and Wah Seong Industrial Holdings Sdn Bhd  (WSIHSB), had agreed on an equal shareholding of 50:50 basis through a joint company  namely, Passion Returns Sdn Bhd (PRSB)  as the vehicle for the JV.  The companies said the  intended business of PRSB was to undertake investment holding activities and businesses in  property development and management; provision of general fabrication, engineering and  oil and gas services; trading and marketing activities and any other businesses or projects as  shall be mutually agreed from time to time in Myanmar. (Financial Daily)

Utusan Melayu: May venture into property development
Utusan melayu may venture into property development in the future as part of its strategy  to unlock the value of its current landbank. Executive chairman, Tan Sri Hashim Makaruddin  said this would enable the company to earn recurring income in the long term. The company,  which owns 4ha of land in Chan Sow Lin, Kuala Lumpur, leased the land to the service and  manufacturing industries. He said the company can turn it into commercial buildings such as  office buildings and service apartments and condominiums in the future. (Financial Daily)

Integrated Healthcare: Prices IPO at RM2.85 per share
IHH Healthcare  (IHH), which is seeking dual listing in Malaysia and Singapore late next  month, will offer a total of 2.23bn shares at RM2.85 per share to raise more than RM6.36bn.  According to executives familiar with the book-building exercise, the cornerstone investor  tranche was priced at RM2.85 on Thursday, compared to an indicative price of RM3.15. The  executives also said cornerstone investors oversubscribed their tranche by 1.31 times,  applying for roughly 2bn shares against 1.53bn shares offered to them. (Financial Daily)

Gas Malaysia: 1Q FY2012 net profit at RM34.54m on margin compression
Gas Malaysia's earnings fell 53.5% to RM34.54m in 1Q FY2012 from RM74.4m a year ago as  its earnings were affected by a margin compression. Gas Malaysia, which will be listed next  Monday, said its revenue increased 9.2% to RM506.6m from RM464.1m. It said the profit  before taxation for the quarter was RM46.1m, a decrease of 53.5% compared to RM99.2m in  the corresponding period last year. Commenting on its business, Gas Malaysia said the  increase in natural gas and liquefied petroleum gas segment's revenue in 1Q FY2012 to  RM506.6m from RM464m a year ago was mainly due to higher volume of gas sold by 1.5%  and the upward revision in tariff which was effective from June 1, 2011. It added that the  lower profit before taxation for 1Q FY2012 by RM53.1m compared to the corresponding  period last year was mainly due to margin compression resulting from the revision in gas  tariff. (StarBiz)

Aviation: Passenger traffic on steady growth path as air freight continues its descent
According to Air Transport News (ATN) , passenger traffic grew almost 5% in the month of April despite on-going concerns of recessions and the sovereign debt crisis in the Eurozone  area. International traffic also increased by 6% in the same month, while global air freight  volumes declined 4%. In a statement Thursday citing the Airports Council International (ACI), ATN said that while air travel experienced an expansion in all regions, emerging markets  continued to post impressive growth figures. (Financial Daily)

Construction: MRT Corp denies plan to acquire BB Plaza but to integrate station entry
Mass Rapid Transit Corporation Sdn Bhd (MRT Corp)  has confirmed that it is in negotiations  with the government to build an underground station integrated with Bukit Bintang Plaza (BB  Plaza). The plan to integrate the station towards BB Plaza will do away with the need to  involve private properties in completing the project, and at the same time provides a golden  opportunity to reposition the almost 40-year old BB Plaza. Discussions between property  owners and traders on Jalan Bukit Bintang with Prime Minister Datuk Seri Najib Tun Razak  was held in March, after which the prime minister raised concern over the planned five-year  closure of businesses there. MRT Corp explored 3 alternative solutions but decided on the  station integration option.  MRT Corp  CEO, Datuk Azhar Abdul Hamid said it is the best  solution because it presents UDA Holdings with the opportunity to redevelop BB Plaza, with  a direct linkage to a key public transport infrastructure. (Bernama)

Plantation: Ministry to present palm oil tax plan to Cabinet
Minister of Plantation Industries and Commodities, Tan Sri Bernard Dompok said tax issue in  the palm oil industry is one of the subjects in the plan to be presented to the Cabinet but  whether there will be a change is up to the government. He said he will be presenting the  plan to the Cabinet soon, adding  that it will be a comprehensive plan to make the Malaysian  palm oil industry more competitive. Currently, Indonesia imposes 19.5% export tax for crude  palm oil (CPO) , while Malaysia's is 30% after a duty-free limit of 3.6m tonnes, putting it in a  disadvantage position. Besides this, Indonesian refiners are also getting cheaper  CPO  and  feedstock. (Business Times)

Economy: BNM's reserves up slightly at RM417bn
Bank Negara Malaysia's international reserves rose marginally to RM417bn (equivalent to  US$136bn) as at May 31, 2012, against the reserves of RM416.9bn, recorded as at April 30,  2012.  The central bank said the reserve position was sufficient to finance 9.3 months of  retained imports and was 4.1x the short-term external debt. (Bernama)

WCT: Highway sale proceeds to fund WCT capex and property operations
WCT will utilize the estimated RM40m proceeds from the proposed sale of its 21.6% stake in  India-based highway concessionaire Swarna Tollway Pte Ltd (STPL) to finance capex and  property business expansion. WCT corporate affairs manager Kenny Wong said the planned  transaction is still on-going and is due for completion in the near future. (Financial Daily)

20120608 1106 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares weaker despite China rate cut, Bernanke weighs
TOKYO, June 8 (Reuters) - Asian shares edged lower on Friday, hurt by disappointment that Federal Reserve Chairman Ben Bernanke gave no clues on whether a U.S. easing was in the offer, outweighing any positive effect from China rate cuts.
"We believe that the closing of short USD positions by the private sector, driven either by a rise in risk aversion or by a shift in investment sentiment in favour of U.S. assets, will push the USD higher," said Morgan Stanley in its research note.

COMMODITIES-Soy jumps on China rate cut; oil, gold down on Fed
NEW YORK, June 7 (Reuters) - Soybeans had their largest rally in two months o n Thursday after China cut interest rates, but oil returned to below $100 a barrel and metals mostly fell as U.S. Federal Reserve Chairman Ben Bernanke disappointed investors expecting a stimulus.
"We're still bearish in the short term," Guy Wolf, a macro strategist at Marex Spectron and a commentator on metals, said.  

OIL - Brent crude falls $1 on US stimulus uncertainty
SINGAPORE, June 8 (Reuters) - Brent crude prices fell by more than a $1 to below $99 a barrel, pressured by uncertainty about the fragile economic recovery in top oil consumer the United States after its central bank chief offered few clues about more stimulus measures.
Federal Reserve Chairman Ben Bernanke said on Thursday the U.S. central bank was ready to shield the economy if financial troubles mount but offered few hints that further monetary stimulus was imminent.

NATURAL GAS - US natgas futures end down 6 pct after EIA data
NEW YORK, June 7 (Reuters) - Front-month U.S. natural gas futures ended down sharply on Thursday, sinking to their lowest in five weeks after a government report showed a weekly inventory build well above market expectations.  
"Today's EIA report was bearish from the perspective that the injection was above the consensus level," Energy Management Institute's Dominick Chirichella said in a report.

EURO COAL-Prices slip by $1/T to nudge 2-year low
LONDON, June 7 (Reuters) - European prompt physical coal prices dropped by around $1 a tonne for a second day running, touching the two-year low of $85.00 reached in May, on expectations for more delays and price renegotiations by Chinese buyers in coming weeks.
"This is China, this is not new. All these problems and games have been seen before whenever the price crashes," said one trader with a prompt cargo of South African coal destined for China.

20120609 1030 Global Market Related News.

Asian Stocks Snap Three-Day Gain on Bernanke Commentary (Source: Bloomberg)
Asian stocks fell, paring the first weekly advance in six weeks, amid concern that central banks are struggling to reinforce global demand amid Europe’s worsening debt crisis. Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, slid 3.8 percent. BHP Billiton Ltd. (BHP), the world’s largest mining company, gained 1.5 percent in Sydney and Jiangxi Copper Co., China’s biggest producer of the metal, rose 1.8 percent in Hong Kong pre-market trade after China cut the benchmark interest rate for the first time since 2008 and metals prices climbed. The MSCI Asia-Pacific (MXAP) slid 0.7 percent to 112.33 as of 10:23 a.m. in Tokyo, snapping three days of gains, before Hong Kong and Chinese markets open. The gauge dropped 12 percent from its peak this year on Feb. 29. through yesterday amid concern growth is slowing in China and the U.S. as the debt crisis deepens in the euro zone.
“There simply is nothing more of any great significance that the U.S. Federal Reserve could be doing,” said Lincoln Ellis, the chief investment officer at Strategic Financial Group LLC, where he helps oversee about $500 million in Chicago. He spoke in a Bloomberg TV interview. “They have had their foot fully on the gas for the past three years. The question remains -- what can policy makers do that is effective for the long term?”

Japan Stocks Fall on Spain Rating Cut, Bernanke Remarks (Source: Bloomberg)
Japanese stocks snapped a three-day rally after Spain’s credit rating was cut and Federal Reserve Chairman Ben S. Bernanke declined to specify options for further easing, outweighing China’s first interest-rate cut since 2008. Sony Corp. (6758), a consumer electronics company that relies on Europe for a fifth of its sales, lost 3 percent. Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, dropped 2 percent. Hitachi Construction Machinery Co. (6305), which gets 17 percent of its revenue from China, gained 1.5 percent after a report it’s poised to reach its earnings target. The Topix Index fell 0.8 percent to 724.70 as of 9:26 a.m. in Tokyo, poised for a 2.2 percent rise this week, its biggest since the period ended Feb. 24. The Nikkei 225 Stock Average (NKY) lost 1.1 percent to 8,543.26.

Most U.S. Stocks Fall as Financial Slump Offsets China (Source: Bloomberg)
Most U.S. stocks declined as a late- day slump in financial and technology shares erased an advance driven by China’s first interest-rate cut since 2008. The Standard & Poor’s 500 Index began paring a rally in the morning as Federal Reserve Chairman Ben S. Bernanke said the central bank will assess the economy before deciding if more stimulus is needed. The measure erased gains in the final hour of trading after a report that Greece’s upcoming election could be derailed. Bank of America Corp. (BAC) and Hewlett-Packard Co. (HPQ) dropped at least 1.3 percent. Newmont Mining Corp. (NEM) slumped 2 percent as gold tumbled amid reduced bets on Fed action.
About seven stocks retreated for every five rising on U.S. exchanges at 4 p.m. New York time. More than 7.2 billion shares changed hands, or 6.3 percent above the three-month average. The S&P 500 declined less than 0.1 percent to 1,314.99, after rallying as much as 1.1 percent earlier today. The Dow Jones Industrial Average advanced 46.17 points, or 0.4 percent, at 12,460.96, after gaining as much as 140.47 points.

German Stocks Extend Gains After China’s Rate Cut (Source: Bloomberg)
German stocks rose, completing their biggest two-day rally since April, after China cut interest rates, bolstering optimism that policy makers will increase their efforts to stimulate the global economy. Commerzbank AG (CBK) led gains on the benchmark DAX Index (DAX) after China’s decision and amid reports the European Union may support Spanish lenders. Deutsche Boerse AG (DB1) rose after RBC Capital Markets advised buying shares in the operator of the Frankfurt stock exchange. The DAX climbed 0.8 percent to 6,144.22 at the 5:30 p.m. close in Frankfurt. The gauge gained 2.1 percent yesterday after European Central Bank President Mario Draghi indicated the bank will act if the debt crisis worsens. The DAX has still tumbled 14 percent from its 2012 high on March 16 amid growing concern that Greece will have to leave the euro area. The broader HDAX Index rose 1 percent today.
“We need policy action right now,” said Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg. “Any reaction from central banks will be positive and a support in the short term, although markets will remain hostage to the European situation until we get more clarity and a solution on that front.” China cut benchmark lending and deposit rates for the first time since 2008. The one-year deposit rate will drop to 3.25 percent from 3.5 percent effective tomorrow. The one-year lending rate will fall to 6.31 percent from 6.56 percent.

U.K. Stocks Advance After China Cuts Interest Rates (Source: Bloomberg)
U.K. stocks advanced as China cut interest rates for the first time since 2008 in an effort to boost lending and growth in the world’s second-largest economy. Johnson Matthey Plc (JMAT) gained 4.9 percent after posting a 74 percent increase in full-year profit and declaring a special dividend. Tullow Oil Plc added 2.1 percent after it found oil off the shores of Ivory Coast. Burberry Group Plc (BRBY) climbed 5.1 percent after Credit Suisse Group AG upgraded its recommendation on the stock. The FTSE 100 advanced 1.2 percent to 5,447.79 at the close in London. The gauge has still lost 8.7 percent from its 2012 high on March 16 as concern mounted that Greece will be forced to leave the euro area. The broader FTSE All-Share Index climbed 1.2 percent today. Ireland’s ISEQ Index added 0.4 percent. The People’s Bank of China said the benchmark one-year lending rate will drop by 0.25 percentage points effective tomorrow. The one-year deposit rate will also drop by 0.25 percentage points, it said.
U.K. stocks rose the most in six months yesterday as the European Central Bank left its benchmark interest rate unchanged and extended its unlimited short-term cash offering until the start of 2013.

Emerging Stocks Reach One-Week High as China Cuts Rates (Source: Bloomberg)
Emerging-market stocks rose to a one- week high after China’s first interest rate cut since 2008 fueled speculation more central banks will take steps to boost economic growth. The MSCI Emerging Markets Index climbed 1.2 percent to 913.18 at the close in New York. The gauge has advanced 3.5 percent in the past three days, the biggest gain since February. Information technology companies rose the most since Feb. 15 as Samsung Electronics Co. (005930) jumped 5.2 percent in Seoul and Cielo SA, Brazil’s biggest card-payment processor by market value, added 2.3 percent to lift the Bovespa. (IBOV) Russia’s Micex index rose to a three-week high in Moscow. China’s one-year deposit rate will drop to 3.25 percent from 3.5 percent effective tomorrow, the People’s Bank of China said on its website today. The benchmark one-year lending rate will drop to 6.31 percent from 6.56 percent. European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s growth outlook worsens.
Spain sold 2.07  billion euros ($2.6 billion) of bonds, having set a maximum target of 2 billion euros, as its 10-year borrowing costs rose. “The authorities are showing the determination to stimulate the economy and that certainly is a powerful message,” Esther Law, London-based director of emerging-markets strategy at Societe Generale SA, said by phone. “It’s a surprise in a good way and will force other central banks to think about whether this will be a good time to ease.”

Most Stocks Fall as Early Rally Fades; Treasuries Advance (Source: Bloomberg)
Most U.S. stocks fell as a late-day slump in banks and technology shares wiped out an early rally triggered by China’s first interest-rate cut since 2008. Oil slid, while Treasuries rose and the dollar was little changed. About three stocks dropped for every two that gained on U.S. exchanges and the Standard & Poor’s 500 Index erased a rally of as much as 1.1 percent to close down less than 0.1 percent at 4 p.m. in New York. Bank of America Corp. and Oracle Corp. paced losses in lenders and computer companies. Oil, which surged as much as 2.4 percent this morning, slipped 0.2 percent to $84.82 a barrel in the regular session and extended declines to as much as 1.9 percent in after-hours trading. The 10-year U.S. note yield lost two basis points to 1.64 percent.
Equities began paring gains at 10 a.m. New York time, while Treasuries turned higher and commodities slid, as Federal Reserve Chairman Ben S. Bernanke said the central bank will need to assess conditions before deciding if more measures are needed to stoke an economy threatened by Europe’s debt crisis and U.S. budget cuts. The S&P 500 lost its entire gain by the final 15 minutes of trading as the Associated Press reported that a municipal strike threatens to derail a June 17 Greek election that could determine the nation’s future in the euro. “It’s disappointing that the markets were not able to sustain the momentum established by the Chinese action,” said Peter Jankovskis, who helps manage about $2.8 billion at Oakbrook Investments in Lisle, Illinois. “Bernanke’s comments weren’t indicative of a Fed that will take aggressive action in the near future. They didn’t match to expectations. There’s also concern about the upcoming Greek election. We’ll have to wait and see how all that plays out.”

Euro Weakens Versus Major Peers Before German Export Data (Source: Bloomberg)
The euro weakened against most of its 16 major counterparts before data forecast to show German exports fell in April, adding to evidence that the European debt crisis is hurting the region’s economy. The Dollar Index rebounded from a near one-week low as Asian stocks dropped, boosting demand for safer assets even after China cut interest rates for the first time since 2008 to stimulate growth. The Japanese currency traded near the lowest level in two weeks versus the dollar on speculation the Bank of Japan (8301) will debate overhauling its asset-buying program next week. “The ground in Europe is still shaking and there are still problems there,” said Alex Sinton, director for institutional foreign exchange at Australia & New Zealand Banking Group Ltd. (ANZ) “Euro has had a corrective rally. It should come under further pressure.”
The euro dropped 0.2 percent to $1.2539 as of 9:47 a.m. in Tokyo from the close yesterday in New York. The shared currency slid 0.1 percent to 99.90 yen, following a 0.4 percent advance yesterday. The yen was at 79.65 per dollar from 79.63. The Japanese currency has lost 2.1 percent since June 1 and yesterday slid to as low as 79.80, the weakest since May 25.

FOREX-Euro, growth currencies firm on stimulus hopes
LONDON, June 7 (Reuters) - The euro hovered near one-week highs  and growth-linked currencies were supported by expectations that global policymakers will act soon to support a flagging economic recovery.
"There is also profit taking in long dollar positions. We expect Bernanke to strike a dovish tone and that will keep alive expectations of more quantitative easing."

Treasuries Gain as Central Bankers Strive to Cut Rates (Source: Bloomberg)
Treasuries rose after China cut interest rates, bolstering expectations central bankers around the world will work to keep borrowing costs down to support the global economy. Benchmark 10-year yields were 18 basis points from the record low after Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank has options for further easing. Australia cut interest rates on June 5, and European Central Bank President Mario Draghi left the door open at a June 6 press conference to a reduction. “It looks like coordinated action,” said Hiromasa Nakamura, who helps oversee the equivalent of $41.9 billion as an investor for Mizuho Asset Management Co. in Tokyo. “It’s positive for Treasuries.” The 10-year yield declined two basis points, or 0.02 percentage point, to 1.62 percent as of 10:07 a.m. in Tokyo, Bloomberg Bond Trader data show. It reached an all-time low of 1.44 percent on June 1. The 1.75 percent note due in May 2022 advanced 5/32, or $1.56 per $1,000 face amount, to 101 5/32.

Steepest Global Slide Since Recession Pushes Rate Cuts (Source: Bloomberg)
Monetary-policy makers from around the world are being pressed into action to shore up a global economy that is suffering its steepest slowdown since the recession ended in 2009. On the heels of a June 5 interest-rate cut by Australia, China yesterday unveiled its first reduction in borrowing costs in more than three years to counter what Premier Wen Jiabao has called increasing downward economic pressure. European Central Bank President Mario Draghi left the door open at a June 6 press conference to a rate cut, while highlighting the limitations of the ECB’s tools in countering the region’s financial turmoil. And Federal Reserve Chairman Ben S. Bernanke told a Congressional committee yesterday that policy makers will discuss later this month whether to do more to spur growth, though he said the steps they could take may have “diminishing returns.”
“Across the board, we’re seeing the central banks being galvanized into action by weak growth around the world,” said Nariman Behravesh, chief economist in Lexington, Massachusetts, at IHS Inc.

Bernanke Sees Easing Options While Not Specifying Them (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke told lawmakers the central bank has options for further easing while declining to specify them, and he described risks ranging from Europe’s crisis to fiscal tightening in the U.S. “If we decide that further action is required, then of course we have to decide what action is appropriate or what communications are appropriate,” Bernanke said to the Joint Economic Committee today. “We do have options that we can consider.” Bernanke on June 19-20 will lead the Federal Open Market Committee in a policy-setting meeting confronting the slowest employment growth in a year and a widening crisis in Europe. His comments were more measured than those of Vice Chairman Janet Yellen, who yesterday outlined possible easing steps, such as buying more bonds or extending Operation Twist, the program to lengthen maturities of the securities the Fed already owns.
“Bernanke said they could do more, but it didn’t seem like further quantitative easing or even an extension of twist was a done deal,” said Drew Matus, a U.S. economist at UBS Securities in Stamford, Connecticut.

Consumer Credit in U.S. Rose in April for an Eighth Month (Source: Bloomberg)
Consumer credit in the U.S. rose in April for the eighth consecutive month, boosted by financing for education and automobiles. The $6.51 billion increase followed a $12.4 billion gain in the previous month, the Federal Reserve said today in Washington. Non-revolving credit, which includes student loans and automobile lending, climbed by the most in three months. Consumer credit is likely to continue growing as households rely on borrowing to buy large-ticket items like cars and to maintain their spending, which accounts for about 70 percent of the economy. Demand for student loans may have also picked up ahead of the looming rise in interest rates on such financing. “People are taking advantage of cheap borrowing costs,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said before the report. “It shows some confidence in the economy, but more than that, it’s just about higher demand.”

Household Net Worth in U.S. Increases by Most Since 2004 (Source: Bloomberg)
Household wealth in the U.S. climbed in the first quarter by the most in seven years, bolstered by a jump in stock prices and more stable home values. Net worth for households and non-profit groups increased by $2.83 trillion from January through March, the biggest gain since the last three months of 2004, to $62.9 trillion, the Federal Reserve said today in its flow of funds report from Washington. The jump in wealth reflected the first-quarter’s 12 percent surge in stock prices, the biggest in three years. The gain in equities has been cut by almost half this quarter, which combined with a cooling job market and smaller wage gains indicates it will take time for households to repair tattered finances.
“In the current environment, equity-market gains won’t be a stable source of wealth generation for households,” Paul Edelstein, director of financial economics at IHS Global Insight in Lexington, Massachusetts, said in a note to clients. “With interest rates at rock-bottom levels, home prices unlikely to advance strongly, and incomes growing anemically, there are few options right now for households to build their assets.”

Consumer Comfort in U.S. Increases for Third Week: Economy (Source: Bloomberg)
Consumer confidence rose last week for the third straight time as the drop in fuel costs helped shore up Americans’ finances and improved the buying climate. The Bloomberg Consumer Comfort Index increased to minus 37.6 in the week ended June 3 from minus 39.3 in the prior period. Another report today showed claims for jobless benefits fell last week. A 9 percent drop in gasoline prices from the one-year high reached in early April may be overcoming disappointing news on the jobs front and a slump in stocks caused by concern over the outlook in Europe. Federal Reserve Chairman Ben S. Bernanke highlighted those risks in testimony before Congress today while, refraining from discussing steps the central bank may take to spur growth as policy makers prepare to meet next week.
“Consumers are clearly a bit more optimistic following the sustained decline in gasoline prices over the past two months,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “For now, that is offsetting the economic slowdown and soft employment market, as well as the increasing probability of financial problems in Europe spilling over into the broader global economy.”

Bernanke Sees Risks to Economy From Europe to U.S. Budget (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the economy is at risk from Europe’s debt crisis and the prospect of fiscal tightening in the U.S., while refraining from discussing steps the central bank might take to protect the expansion. “The situation in Europe poses significant risks to the U.S. financial system and economy and must be monitored closely,” Bernanke said today in testimony to the Joint Economic Committee in Washington. “As always, the Federal Reserve remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate.” Bernanke also warned lawmakers that “a severe tightening of fiscal policy at the beginning of next year that is built into current law -- the so-called fiscal cliff -- would, if allowed to occur, pose a significant threat to the recovery.”
Bernanke on June 19-20 will lead the Federal Open Market Committee in a policy-setting meeting confronting the slowest employment growth in a year and a worsening debt crisis in Europe. The U.S. added 69,000 jobs last month, the fewest in a year, even as the Fed maintained record stimulus.

Initial Jobless Claims in U.S. Fell Last Week to 377,000 (Source: Bloomberg)
Fewer Americans applied for unemployment insurance payments last week, indicating limited progress in the labor market after a two-month slowdown in hiring. First-time claims for jobless benefits fell by 12,000 to 377,000 in the week ended June 2 from a revised 389,000 the prior week that was higher than initially estimated, the Labor Department said today. The median estimate of 49 economists surveyed by Bloomberg News called for 378,000 claims. The number of people receiving extended payments plunged. The claims figures may ease concern of further labor market weakness after a report last week showed employers in May added the fewest workers in a year. While sustained demand is encouraging companies to maintain headcounts, stronger sales may be required to prompt a pickup in hiring.

Facebook Trading Losses May Near $200 Million, Knight CEO Says (Source: Bloomberg)
Industry trading losses from Nasdaq OMX Group Inc. (NDAQ)’s mishandling of Facebook Inc. (FB)’s initial public offering may be close to $200 million, Knight Capital Group Inc. (KCG) Chief Executive Officer Thomas Joyce said. Knight said last month its losses ranged between $30 million and $35 million. Nasdaq’s $40 million plan to compensate brokers for losses is “underwhelming at best,” Joyce said today at the Sandler O’Neill & Partners LP Global Exchange and Brokerage Conference in New York. “Nasdaq made decisions that created this problem that the industry suffered through, and it’s up to Nasdaq to create a solution,” he said. “Nasdaq has got to go back to the drawing board and come back with something sensible.”
Nasdaq OMX’s computer systems used to establish the opening price for Facebook were overwhelmed on May 18 by order cancellations and updates for the IPO. After the exchange repaired the problem, order updates for 30 million shares didn’t participate in the auction because of an error, Nasdaq said in a notice the next day.

China Reduces Interest Rates for First Time Since 2008 (Source: Bloomberg)
China cut borrowing costs for the first time since 2008 and loosened controls on banks’ lending and deposit rates, stepping up efforts to combat a deepening slowdown as Europe’s debt crisis threatens global growth. The one-year lending rate declines by a quarter percentage point today to 6.31 percent, the People’s Bank of China said in a statement yesterday. The one-year deposit rate drops the same amount, to 3.25 percent. The extra leeway banks will get to determine rates at variance from the official setting was called a “milestone” by UBS AG. The move, before China reports inflation, investment and output figures tomorrow, may signal that the economy is weaker than the government anticipated. Policy makers across the globe are also girding for a deeper impact from Europe’s woes, with Australia and Brazil also lowering rates in the past eight days. In South Korea, a pause in raising the benchmark has lasted a year, with the central bank staying on hold today.
“This will be the beginning of a rate cut cycle and there will be at least one more reduction this year,” said Shen Jianguang, a Hong Kong-based economist with Mizuho Securities Asia Ltd. who has worked for the European Central Bank. “The data to be released over the weekend must be very weak and inflation must have eased sharply.”

BOJ May Be Pushed to Twist Bond Purchases as Growth Slows (Source: Bloomberg)
The Bank of Japan (8301) may debate overhauling its asset-buying program next week after its campaign to end deflation was undercut by government bondholders’ reluctance to sell as financial turmoil deepens. Governor Masaaki Shirakawa and his board gather June 14-15, days before a Greek election that may determine whether the nation leaves the euro, triggering deeper European trauma. The euro crisis has already sparked a surge in demand for bonds that left the BOJ unable to meet targets for purchases twice in May. The disruptions to the central bank’s program coincide with increasing pressure by Japanese lawmakers for Shirakawa to step up efforts to support the economy, which is forecast to slow after it strengthened last quarter. BOJ board members may extend the maturity of the debt they buy or increase purchases of riskier assets, according to Bank of America Merrill Lynch.
“Given failures in bond operations, the BOJ may extend the maturity of bonds as soon as this month,” said Masayuki Kichikawa, Tokyo-based chief economist for the bank. “If not this time, they will have to do it this year at least.”

Japan Economy Grows More Than Initial Estimate (Source: Bloomberg)
Japan’s economy expanded more than the government initially estimated in the first quarter, adding to evidence that the world’s third-largest economy will sustain its recovery this year. Gross domestic product grew an annualized 4.7 percent in the three months ended March 31, the Cabinet Office said in Tokyo today, compared with a preliminary estimate for a 4.1 percent expansion. The median forecast of 18 economists surveyed by Bloomberg News was for 4.5 percent growth. The report includes an upward revision to private demand, signs that the domestic economy is recovering as rebuilding from last year’s earthquake kicks in and government incentives for buying fuel-efficient cars boost consumption. At the same time, Japan is at risk from a deepening European debt crisis that is spurring gains in the yen that could weigh on profits of exporters.
“Domestic demand will probably remain on a recovery trend as the effects of the government’s measures and public investment for rebuilding” are likely to carry into the third quarter, said Yoshiki Shinke, chief economist at the Dai-Ichi Life Research Institute in Tokyo, said before the report. “Yet, there are clouds on the horizon as the downside risks from overseas factors are rising.”

Brazil Slowdown Prompts Carmaker Renault Argentina to Cut Shifts (Source: Bloomberg)
Renault Argentina SA, the country’s third-biggest car producer, is cutting back on shifts at its Cordoba plant after a drop in sales prompted by slowing demand in neighboring Brazil. The maker of the Clio and Kangoo models will halt one of two production shifts today and both shifts tomorrow and on June 15 in part because of falling sales, according to an official at the company who isn’t authorized to speak publicly. The plant employs 1,800 people. The Argentine auto industry has been hit by a drop in demand from Brazil, the country’s biggest trading partner. Vehicle exports fell 46 percent in May from a year earlier, according to a June 5 statement by the Argentine Automakers Association. Domestic sales of vehicles slid by 15 percent over the same period, while output dropped 24 percent.
South America’s second-biggest economy will expand 2 percent this year, according to Boris Segura, a Latin America analyst at Nomura Holdings Inc. Segura cut his earlier forecast of 3 percent due to import restrictions and lower investments. That would be the weakest growth since a 0.9 percent expansion in 2009.

SNB Foreign-Currency Holdings Hit Record on Intervention (Source: Bloomberg)
The Swiss central bank’s foreign- currency reserves surged to a record in May as the euro region’s increasing turmoil forced policy makers to step up their defense of the franc floor. Currency holdings rose to 303.8 billion Swiss francs ($318 billion) from 237.6 billion francs in April, according to a statement published on the Swiss National Bank’s website today. Walter Meier, a spokesman at the SNB in Zurich, said a “large part” of the increase was due to currency purchases to defend the minimum exchange rate of 1.20 francs per euro. The central bank finds itself engulfed by the euro region’s worsening fiscal crisis after Spain’s banking woes and Greece’s inconclusive elections raised the specter of a break-up of the currency union. SNB President Thomas Jordan said last month that policy makers are “observing a considerable upward pressure on the franc” as investors shift into havens including the Swiss currency.
“It’s quite a significant increase,” said Alessandro Bee, an economist at Bank Sarasin in Zurich. “The euro crisis is decisive -- if there’s a further worsening, the SNB will be forced to remain active on markets.”

Spain Market-Access Concern Eases, Bond Sale Beats Target (Source: Bloomberg)
Two days after a senior government official said Spain’s access to debt markets was closed, the Treasury beat its 2 billion-euro target ($2.5 billion) at a bond sale, easing concern about financing the region’s third-biggest budget deficit. Spain sold its benchmark 10-year bond to yield 6.044 percent, the most since Nov. 17 when the yield in the secondary market reached a euro-era record 6.78 percent. Demand for the security was 3.29 times the amount sold, higher than at the previous auction in April. In the secondary market Spain’s 10- year bond yield fell to 6.109 percent after the sale at 10:05 a.m. in London. The auction results were “pretty decent overall and the market appears eminently comfortable with the outcome,” said John Davies, a fixed-income strategist at WestLB AG in London. “A tad above the top end of the target volume range obviously looks good, but I think the more encouraging factor was that the 2022 bond came at 6.04 percent, so safely below levels prevailing in the secondary market.”
Budget Minister Cristobal Montoro said on June 5 that the “door of the markets isn’t open to Spain” as he called for European institutions to help the nation shore up its lenders. As Spanish borrowing costs approach the 7 percent level that preceded bailouts in Greece, Ireland and Portugal, the Treasury increasingly depends on domestic banks.

20120608 1030 Global Commodities Related News.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Strong gains in the bean market helped wheat to surge into the close. Minneapolis led the charge higher with roughly 18- to 21-cent gains. Chicago wheat ended 17 1/4 to 19 cents higher, and Kansas City wheat closed 13 1/2 to 15 cents higher. Most wheat futures trimmed gains by 4 or more cents in after-hours trade. Wheat futures benefited from generally improved appetite toward risk and spillover support from corn today.

Wheat Market Recap Report (Source: CME)
July Wheat finished up 17 1/2 at 641 3/4, 3 off the high and 21 1/2 up from the low. December Wheat closed up 17 1/4 at 682 1/4. This was 21 1/4 up from the low and 1 off the high. July wheat was trading up 14 cents on the day late in the trading session after trading at a mid-session peak of up 20 1/2 cents on the day. Short-covering emerged with strength in the other grains and a slightly positive tilt to outside markets to support the strong gains into the mid-session. The ongoing harvest for winter wheat, slow weekly export sales news and news of hefty supply from India were factors which may have limited the advance. Weekly export sales came in at just 165,700 metric tonnes which was well below expectations. Traders see a decline in production and ending stocks for the US and the world for the reports on Tuesday. US ending stocks for both the old crop and new crop seasons are expected to slip about 20 million bushels. Old crop ending stocks were 768 million bushels last month and new crop was 735 million bushels. Traders see a 50-60 million bushel decline in winter wheat production from 1.694 billion bushels projected in May. Traders also see world ending stocks slipping down about 3 million tonnes from 188.13 million in May but there are some expectations for a 4-6 million tonne drop in Russia and a 2-3 million tonne drop in China due to weather. The Buenos Aires Grains Exchange lowered their estimate for the new season wheat plantings to 3.8 million hectares from 4.0 million as their previous forecast. This is down from 4.6 million last year. July Oats closed up 5 3/4 at 300. This was 6 3/4 up from the low and 4 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures closed 7 3/4 to 17 cents higher, which was good for a high-range close in all but the July contract, which ended mid-range. Support came on spillover from weakness in the U.S. dollar index and sharp gains in the soybean market. Traders reacted to news China has announced it will reduce its target interest rate to stimulate its economy -- bolstering demand expectations.

Corn Market Recap for 6/7/2012 (Source: CME)
July Corn finished up 7 3/4 at 594, 7 1/2 off the high and 9 1/2 up from the low. December Corn closed up 17 at 536 1/2. This was 18 1/2 up from the low and 1 off the high. July corn was trading near 7 cents higher on the day late in the session with December up 17 cents. Funds were noted as heavy buyers on the day. Outside positive forces eased into the mid-day but a drier forecast for next week helped to spark more concerns for declining crop conditions into the key pollination period ahead. The 11-15 day forecast models also turned hotter with talk of mid-90's into the Corn Belt a possibility. Weather in China is also a concern with some areas turning hot and dry. Old crop ending stocks are expected to decline by 25-30 million bushels for the supply/demand update next week as compared with 851 posted last month. New crop ending stocks are expected near 1.75 billion bushels from 1.881 billion last month. Traders see Argentina corn production revised down by about 1 million tonnes from last month's estimate of 21.5 million tonnes. From the May to the June report, the USDA has on occasion lowered their yield forecast in the supply/demand reports but this is usually due to late plantings. Declines occurred in 2009 (down 2 bushels per acre), 2008 (down 5), 2002 (down 2.1) and 1995 (down 5.9). Net weekly export sales came in at 251,800 metric tonnes for the current marketing year and 147,200 for the next marketing year for a total of 399,000 which was below trade expectations. Cumulative corn sales stand at 89.1% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 89.8%. Sales of 355,000 metric tonnes are needed each week to reach the USDA forecast. July Rice finished up 0.16 at 14.225, equal to the high and equal to the low.

GRAINS-Corn hits 2-wk high, soy up for 3rd day on risk appetite
SINGAPORE, June 7 (Reuters) - 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.
"There has been a reversal in attitude in the past 24 hours within the commodity markets which has been influenced by improved investor risk appetite," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia.

POLL-Australia's wheat output seen lower on dry weather
SYDNEY/SINGAPORE, June 7 (Reuters) - Australia's wheat output in the year to June 2013 is likely to be almost 4 percent lower than the government's March estimate of 26 million tonnes and more than 15 percent below last year's record-large production as dry weather threatens yields.
The country is estimated to produce 25 million tonnes of wheat in 2012/13, according to a Reuters survey of 10 analysts, as farmers in the world's second largest exporter wrap up planting later this month.

India monsoon rains 36 pct below average in first week
NEW DELHI, June 7 (Reuters) - India's monsoon rains were 36 percent below average in the week to June 6, the weather office said on Thursday, reflecting the delay in the arrival of the seasonal rains over south India from the usual June 1 start date.
The four-month long rainy season is in the initial stages and crops are not greatly affected by the quantity of rains now, with distribution of rainfall in mid-July after the monsoon covers the entire country more important for their growth.
 
India's grains stocks at record high, exposed to rot
NEW DELHI, June 7 (Reuters) - India's wheat stocks at government warehouses surged to a record 50.2 million tonnes on June 1, well above the official target of 4.0 million tonnes for the quarter ending June 30, government sources said on Thursday.
Rice inventory for the same period was 32.1 million tonnes against a target of 12.2 million tonnes. The government has an extra 3 million tonnes of wheat and 2 million tonnes of rice as strategic reserves over and above the monthly stocks.
 
Russia's AgMin says drought worries have passed
GELENDZHIK, Russia, June 7 (Reuters) - Concerns about damage from a spring drought in Russia's south passed and Agriculture Ministry is retaining its forecast for a grain harvest of 94 million tonnes in the new season, a deputy agriculture minister said on Thursday.
"Our forecasts haven't changed and are not likely to change. We estimate the harvest at 94 million tonnes. Yes, there were concerns, but we think they have passed because it has rained," deputy minister Ilya Shestakov said at the Russian Grain Union's XIII International Grain Round in a Black Sea resort town.

Rains improve crops in Russia's parched south
MOSCOW, June 6 (Reuters) - 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.
"We expect the total harvest to be less than last (2011/12) year," Anna Strashnaya, the head of the agricultural forecasting department at Russia's Federal Hydrometeorology and Environment Monitoring Service (Rosgidromet), said in an interview.
 
Australia approves Glencore's takeover of Viterra
MELBOURNE, June 7 (Reuters) - Australia's competition regulator approved a friendly takeover bid by Swiss commodities trader Glencore International Plc  of Viterra Inc , clearing another hurdle for the biggest deal in years in the global agricultural sector.
Glencore offered Viterra C$16.25 per share, or C$6.l billion, in March for the company, which owns the biggest share of Western Canada's grain storage and farm supply outlets, as well as nearly all grain storage capacity in South Australia.
 
Canada farm groups want curbs on Agrium's clout
WINNIPEG, Manitoba, June 6 (Reuters) - Two influential Canadian farm groups will urge the country's Competition Bureau to scale back Agrium Inc's   proposed purchase of Viterra Inc  assets, saying Agrium might become too powerful in the sale of fertilizer and other crop supplies.
In a C$6.1 billion ($5.9 billion) deal, global commodities giant Glencore International PLC  will buy Viterra, Canada's biggest grain handler, this summer, pending regulatory approval.
 
Morocco grain imports to jump; neighbours buy less
June 6 (Reuters) - Morocco's soft wheat imports may be its highest since 1981 after unfavourable weather left it with the worst cereal campaign among North African countries this year, while Algeria and Egypt expect lower purchases because of good local harvests.  
Morocco's agriculture ministry expects a 43 percent drop in this year's cereal harvest that would include 2.6 million tonnes of soft wheat, one million tonnes of durum wheat and 1.2 million tonnes of barley.

SOFTS-Sugar extends gains, rain delays Brazil harvest
LONDON, June 7 (Reuters) - Raw sugar held above 20 cents, as wet weather in top producer Brazil was expected to cause harvest delays.
“New York July cocoa  faces a resistance at $2,227 per tonne, a break above which will trigger a further gain to $2,275, according to Reuters market analyst Wang Tao.”

Colombia coffee output up for second month in a row
BOGOTA, June 6 (Reuters) - Colombia's coffee output rose 2 percent in May, the second monthly increase in a row, showing crops are recovering after a slump in production caused by months of heavy rains, the growers federation said on Wednesday.
Colombia, the world's top producer of high quality Arabica beans, produced 689,000 60-kg bags in May, the federation said. Exports fell to 592,000 bags last month, 1,000 bags less than during the same month last year.
 
Brazil's Bahia churns out cocoa at fastest in 4 yrs
SAO PAULO, June 6 (Reuters) - Brazil's main cocoa producing state Bahia churned out beans last week at its fastest pace in four years, data from the Bahia Commercial Association said, while output also rose sharply in other states.
Bahia warehouses took delivery of 93,267 60-kg bags of cocoa in the week to June 3, 24 percent more than in the same period  last season, the data showed.
 
Ghana cocoa crop likely well below target-Cocobod
DAVOS, Switzerland, June 6 (Reuters) - 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.
"We were expecting rainfall and the rain didn't come - that has been a problem. The way things are going the target will be difficult," said Cocobod chief executive Tony Fofie, citing 850,000 tonnes as the likely output figure.

Oil Drops a Second Day After Bernanke Holds Off on U.S. Stimulus (Source: Bloomberg)
Oil fell for a second day in New York after Federal Reserve Chairman Ben S. Bernanke said the central bank will wait before deciding if economic stimulus is needed for the U.S., the world’s biggest crude user. Futures dropped as much as 1.5 percent, trimming the first weekly increase in six. Fed officials need to assess the risk from Europe’s debt crisis and U.S. budget cuts, Bernanke said to the Joint Economic Committee yesterday, without specifying the options to boost growth. Crude slumped 17 percent in May, the biggest monthly drop in more than three years, on speculation Europe’s debt crisis may worsen and curb fuel demand. Oil for July delivery decreased as much as $1.30 to $83.52 a barrel in electronic trading on the New York Mercantile Exchange, and was at $83.90 at 9:37 a.m. Sydney time. The contract yesterday slipped 0.2 percent to $84.82, the lowest close since June 5. Prices are up 0.8 percent this week and down 15 percent this year.
Brent oil for July settlement slid 71 cents, or 0.7 percent, to $99.93 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $15.11. China, the world’s second-biggest oil user, may today announce its biggest cut to gasoline and diesel prices since at least 2008 after the slump in global crude. State-controlled fuel will drop by 620 yuan ($97) a metric ton, equivalent to 28 cents a gallon, starting tomorrow, according to C1 Energy, a commodity researcher that has correctly reported the timing and size of changes before government announcements.

India cuts May Iran oil imports 38 pct-trade
NEW DELHI, June 7 (Reuters) - Indian refiners cut imports from Iran by 38 percent in May from a year ago, tanker discharge data showed, in a second month of steep reductions as they switch suppliers to cushion the impact of new U.S. sanctions on Tehran.
The cutbacks raise New Delhi's chances of winning a waiver similar to that granted by the United States to Japan and some European countries after "substantial" reductions in their imports.

OIL-Brent falls on weak demand, eyes Fed stimulus hopes
SINGAPORE/LONDON, June 7 (Reuters) - Brent crude dipped  due to slack demand while prices were supported around $100 by signs Europe would find a way to deal with Spain's banking crisis and the United States might embark on monetary stimulus.
"The price of oil has rebounded well from its June 1 lows. However, the price increase is just a flow-through effect of the risk-on mentality from investors," Miguel Audencial, sales trader at CMC Markets, said in a report.

China Set to Announce Steepest Fuel-Price Cut Since 2008 (Source: Bloomberg)
China, the world’s second-biggest oil user, may today announce its biggest cut to gasoline and diesel prices since at least 2008 after a slump in global crude costs. State-controlled fuel prices will drop by 620 yuan ($97) a metric ton, equivalent to 28 cents a gallon, starting tomorrow, according to C1 Energy, a Shanghai-based commodity researcher that has correctly reported the timing and size of changes before government announcements. Costs at the pump are “almost certain” to be adjusted under rules set by the National Development and Reform Commission, the nation’s top economic planner, the official Xinhua News Agency reported June 6.
A cut in fuel prices threatens to counter falling crude costs for China Petroleum & Chemical Corp. (600028) and PetroChina Co. (857), the nation’s biggest refiners, and extend processing losses that widened last quarter. Brent crude in London, a benchmark grade tracked by China’s government, entered a so-called bear market on June 1 after sliding more than 20 percent from this year’s high. The reduction forecast by C1 Energy on its website yesterday is equivalent to 6.4 percent, according to Bloomberg calculations based on nationwide average retail gasoline prices published by the government. A 620-yuan cut would be the steepest since the current pricing system was introduced in December 2008. The NDRC considers adjusting fuel rates when the 22-day moving average of Brent, Dubai and Indonesia’s Cinta crude changes more than 4 percent from the previous revision. Today is the 22nd working day after the last adjustment on May 10, Xinhua said.

Japan LNG imports may rise 10 pct in 2012/13
KUALA LUMPUR, June 7 (Reuters) - Japan will need to import as much as 90 million tonnes of LNG this fiscal year, up nearly 10 percent from 2011, to generate the power needed to compensate for shut nuclear reactors, the chairman of the Japan Gas Association said on Thursday.
The world's largest importer of liquefied natural gas has relied heavily on LNG after the March 2011 tsunami wrecked the Fukushima nuclear plant, shattered public confidence in atomic safety and led to the shutdown of all of the country's reactors. Japan's heavy buying has driven up Asian gas prices.

Copper Trade Most Bullish Since March as China Cuts: Commodities (Source: Bloomberg)
Copper traders are the most bullish in three months as China, the biggest buyer, reduced interest rates to bolster growth, increasing expectations that prices will rebound from the longest slump in two years. Sixteen of 31 analysts surveyed by Bloomberg expect the metal to gain next week and eight were neutral, the highest proportion since March 9. Stockpiles in warehouses monitored by the London Metal Exchange, the world’s largest metals bourse, declined 38 percent this year and Morgan Stanley is predicting at least another year of supply shortages. China, which accounts for 41 percent of global demand, cut interest rates for the first time since 2008 yesterday after growth slowed for five consecutive quarters. Federal Reserve Chairman Ben S. Bernanke told Congress yesterday the central bank is ready to act should economic conditions worsen. Copper tripled as the Fed bought $2.3 trillion of debt in two rounds of so-called quantitative easing ending in June 2011.
“Since China is the biggest user of copper that rate cut should give a little boost,” said Donald Selkin, the New York- based chief market strategist at National Securities Corp., which manages about $3 billion of assets. “The potential for some kind of stimulus package should result in copper finally turning around.”

20120608 1029 Soy Oil & Palm Oil Related News.

Palm Oil Heading for 20-Month Low as Slowdown Cuts Demand (Source: Bloomberg)
Palm oil, used in everything from candy to biofuels, may tumble 9 percent to the lowest level in 20 months as a slowdown in China and Europe curbs demand, according to Dorab Mistry, director at Godrej International Ltd. Futures may slump to as low as 2,700 ringgit ($853) a metric ton from 2,974 ringgit in the absence of fresh stimulus by the U.S. to revive growth, said Mistry, abandoning his forecast for prices to reach 4,000 ringgit. The most-active contract last traded below 2,700 ringgit in October 2010. Futures may rebound to 3,300 ringgit as the decline may stimulate demand, he said at a conference in Mumbai yesterday. Prices have slumped 18 percent since climbing to a 13-month high in April as growth slowed in China, the biggest cooking-oil user, and the debt crisis worsened in Europe. A decline in prices may cut costs for companies such as Nestle SA (NESN), the world’s largest food company, while reducing profits at producers including Sime Darby Bhd (SIME) and Wilmar International Ltd. (WIL)
“The scenario on commodities has darkened considerably in the world at large,” said Mistry, who’s traded palm oil for more than three decades. “The main catalyst as far as palm oil prices are concerned has been the fall in crude oil prices. The logic has been that biodiesel demand is the swing factor and as crude oil falls, biodiesel becomes uncompetitive.” Biodiesel demand this year may see “very little growth” as a drop in oil prices reduces consumption for non-mandatory use, he said. Palm oil’s use in biofuels may expand by only 1 million ton this year, while its demand for food will expand by 2 million tons, he said. Brent crude oil prices have declined 6.4 percent this year, weakening demand for the tropical oil.

Opening Gates
A further decline in crude prices in the absence of stimulus measures from the U.S. “we will see the opening up of the gates for prices to fall further,” said Nagaraj Meda, managing director of TransGraph Consulting Pvt., who has forecast prices for 13 years. Palm oil for delivery in August fell 1 percent to 2,974 ringgit on the Malaysia Derivatives Exchange yesterday. The price reached a 13-month high of 3,628 ringgit on April 10. “On the whole, demand growth has been disappointing,” said Mistry. “The Chinese consumer of vegetable oils has tightened his belt and we have not seen the strong year-on-year rise in consumption as in the past.”
China’s economy will expand 7.9 percent this quarter from a year earlier, the least in three years, based on the median estimate in a Bloomberg survey. That compares with average growth of 10 percent in the last five years. The People’s Bank of China cut interest rates yesterday for the first time since 2008, stepping up efforts to combat a deepening economic slowdown. The one-year deposit rate will drop to 3.25 percent from 3.5 percent effective today, it said.

Rupee Decline
India, Asia’s third-largest economy, grew 5.3 percent last quarter, the least since 2003, government data showed last week. Vegetable-oil imports by India, the biggest palm buyer, will gain 9 percent to 9.48 million tons in 2012-2013, Mistry said. “India’s imports of palm so far are well ahead of the previous year. The period of out-performance has come to an end” as a decline in rupee against the dollar increases costs, he said. The rupee, the worst performing currency in Asia this quarter, fell to a record low of 56.515 a dollar on May 31. India imports nearly 55 percent of its annual vegetable oil needs of almost 16 million tons. Crude soybean oil will rebound to about $1,200 a ton free- on-board by the end of this year after falling to $1,000 a ton, Mistry said. Rapeseed oil may trade at a premium to soybean oil even with an expansion in canola output, he said.

Malaysian Deficit
Palm-oil output in Malaysia may decline as much as 900,000 tons from January to July from a year earlier, Mistry said. A rebound is unlikely before August at the earliest, he said. “The decline in seasonal growth is truly staggering and something we have not seen in years,” he said. “Within the first five months of 2012, we have a cumulative deficit of almost 500,000 tonnes.” Production may rebound in the second half, bridging the shortfall, said Choo Yuen May, director-general of the Malaysian Palm Oil Board. Output will reach 19 million tons this year as harvest peaks in the coming months, she said in an interview yesterday. The country produced a record 18.9 million tons in 2011, according to the board. “There is a strong chance of an El Nino phenomenon arising later this year from August onwards,” Mistry said. “The initial effect of this hot and dry weather will be to accelerate the ripening of fresh fruit bunches and give us higher production in the first few months.”
El Nino weather conditions, which can parch Asia and bring cooler weather to the U.S., are likely to develop in the coming months as the Pacific Ocean continues to warm, Australia’s Bureau of Meteorology said on June 5. The oil-palm bears fruit all year, with more output in the second half. Drought, such as the one caused by El Nino in 2010, can hurt yields. “There are now definite signals of an emerging El Nino and if those signals give us an El Nino, prices will recover faster than most people expect,” Mistry said.


Soybeans Head for Longest Winning Streak in a Month on China Buy (Source: Bloomberg)
Soybeans advanced for a fourth day, the longest winning streak since April, as U.S. exporters sold more oilseeds to China and on signs policy makers around the world may take steps to revive the slowing economy. November-delivery soybeans gained as much as 2.1 percent to $13.2625 a bushel on the Chicago Board of Trade and were at $13.24 at 1:39 p.m. in London. Exporters in the U.S., the world’s largest grower and shipper, sold 120,000 metric tons of soybeans to China for delivery in the year ending Aug. 31, the Department of Agriculture said yesterday. The Group of Seven nations agreed to coordinate their response to Europe’s debt crisis. Federal Reserve Vice-Chairman Janet Yellen said the U.S. economy may need additional monetary stimulus. “The export sales report is one reason why prices are up,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore today. “We’ve also seen the macro- economic environment turning to an optimistic mood.”
China’s purchases reported yesterday add to the 2 million tons in outstanding sales to the Asian nation as of May 24, and the 20.6 million tons that have already been shipped since the marketing year began Sept. 1, 2011, according to USDA data. The country’s corn imports will rise to 7 million tons for the 12 months that began on May 1, up from 5.5 million a year earlier, a unit of the USDA said in a report posted on its website yesterday. China’s production will drop to 192 million tons from 192.78 million a year earlier, it said.

Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean bulls again donned their rally caps heading into the close, helping futures to extend gains to 40-plus cents through the January contract. Soymeal and soyoil followed suit and finished with strong gains. Most contracts extended gains slightly in after-hours trade. News China unexpectedly lowered its interest rates, likely freeing up money for importers to buy U.S. commodities, sparked commodity buying interest today.

Soybean Complex Market Recap (Source: CME)
July Soybeans finished up 41 3/4 at 1428, 2 off the high and 44 3/4 up from the low. November Soybeans closed up 42 at 1341 1/4. This was 44 1/2 up from the low and 3 1/4 off the high. July Soymeal closed up 11.7 at 426.3. This was 12.6 up from the low and 2.7 off the high. July Soybean Oil finished up 1.14 at 50.39, 0.01 off the high and 1.42 up from the low. July soybeans were trading near 41 cents higher on the day late in the session with November up near 42 cents. The China interest rate cut, positive outside market forces and questionable weather helped to spark aggressive fund buying which continued for much of the day in spite of a sharp break in gold and a recovery in the US dollar from early lows. Ideas that the weather forecast is a bit more threatening plus an outlook for tightening ending stocks for the supply/demand update next week helped to support strong buying from the trade. Traders see a drop of near 20 million bushels for ending stocks for the 2011/12 season from 210 million last month with many traders looking for a sharper drop. For new crop, traders appear hesitant to revise estimates much lower than last month's 145 million bushel carryout estimate which is already extremely tight. Net weekly export sales for soybeans came in at 220,200 metric tonnes for the current marketing year and 275,000 for the next marketing year for a total of 495,200 which was well below trade expectations. Cumulative old crop sales stand at 101.6% of the USDA forecast versus a 5 year average of 98.3%. Meal sales came in at 75,000 metric tonnes for the current marketing year and 5,200 for the next marketing year for a total of 80,200. Sales of 80,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 13,100 metric tonnes for the current marketing year and -5,000 for the next marketing year for a total of 8,100. Cumulative soybean oil sales stand at 82.6% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 71.5%. Sales of 5,000 metric tonnes are needed each week to reach the USDA forecast. The China National Grains and Oils Information Centre believes that soybean imports could top 12 million tonnes for May and June and the group is maintaining their import estimate for the year at 58 million tonnes as compared with the current USDA estimate of 56 million. Strength in meal was again the leader to the upside today with December meal rallying to just shy of the May contract into the close.

VEGOILS-Palm oil extends gains on hopes for stimulus
SINGAPORE, June 7 (Reuters) - Malaysian palm oil futures rose, as investors turned hopeful that the United States could introduce fresh monetary stimulus and European policymakers may rescue ailing Spanish banks.  
"The market is playing a waiting game," said a dealer with a foreign commodities brokerage in Malaysia.

Malaysia palm stocks to fall further, support prices -MPOC
MUMBAI, June 7 (Reuters) - Palm oil stocks in Malaysia, the world's second biggest producer, are likely to fall further in the coming months as festival demand cuts into supply, a trade body executive said on Thursday, potentially supporting prices for the edible oil.
Malaysian Palm Oil Council Chairman Lee Yeow Chor said there had been a slew of orders ahead of the Muslim holy month of Ramadan, when fasting in the day is followed by elaborate feasts at night.
 
India's May oilmeal exports up 8.6 pct yr/yr-trade body
NEW DELHI, June 7 (Reuters) - India's oilmeal exports rose to 351,791 tonnes in May from 323,907 tonnes a year earlier, a leading trade body said on Thursday, with strong gains in overseas sales for minor products such as rice husks and castor seed meal.
Soymeal exports to sanctions-hit Iran rose sharply even though overall soymeal exports fell to 142,588 tonnes in April from 176,819 tonnes a year ago, the Solvent Extractors' Association of India said in a statement.