Thursday, June 14, 2012

20120614 1806 FCPO EOD Daily Chart Study.

FCPO closed : 2846, changed : -102 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : turned downward, seller in advantage.
Support : 2850, 2800, 2770, 2750 level.
Resistance : 2900, 2920, 2950, 2970 level.
Comment :
FCPO closed plunge substantially lower with better volume changed hand. Soy oil price currently trading weaker after overnight closed recorded more than 1% loss while crude oil price currently trading weaker after overnight fall.
Fear on slowing down global economy and current Europe debt crisis will lead to weaker CPO demand in the future triggered traders to press the sell button hardly while awaits tomorrow cargo surveyor export data.
Daily chart analysis adjusted to suggesting a downside biased market development with possible pullback correction and MACD indicator turned crossed down.
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.

20120614 1734 FKLI EOD Daily Chart Study.

FKLI closed : 1569 changed : -3.5 points, volume : lower.
Bollinger band reading : correction range bound little upside biased.
MACD Histogram : weakening, buyer seller battling.
Support : 1570, 1565, 1550, 1530, 1515 level.
Resistance : 1570, 1580, 1590, 1600, 1610 level.
Comment :
FKLI closed weaker with dying volume changed hand doing about 2 points discount compare to cash market that closed lower. Overnight U.S. markets retreat lower and today Asia markets ended in negative zone while European markets currently falling lower.
World markets slide lower after sentiment turned negative on Spain credit rating downgrade by Moody's, Credit Suisse and Deutsche Bank lower China growth forecast plus overnight U.S. reported lower retail sales.
FKLI daily chart reading recommending a correction range bound little upside biased market development possibly testing support level near middle Bollinger band.
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.

20120614 1700 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : side way range bound.
 Hang Seng chart reading : side way range bound .
KLCI chart reading :  correction range bound little upside biased testing resistance level.

20120614 1558 Global Market & Commodities Related News.

Asian shares slipped as weak U.S. retail sales data raised fresh concerns about sluggish economic growth, while an Italian debt auction later in the day will test market confidence in whether Rome can avoid becoming the next victim of the euro zone crisis. Wall Street ended lower on Wednesday as fears ahead of the weekend elections in Greece finally drove down a market that had been treading water through most of the day.

The euro was capped in Asia after two days of gains on short covering as market players looked to Italy's bond auction later in the day amid concerns external support may become necessary for the euro zone's third-largest economy.

FOREX-Euro capped ahead of Italian bond auction
TOKYO, June 14 (Reuters) - The euro was capped in Asia after two days of gains on short covering as market players looked to Italy's bond auction later in the day amid concerns external support may become necessary for the euro zone's third-largest economy.
The euro rose in the past two days as traders pared extremely bearish positions ahead of Sunday's crucial Greek election and after disappointing U.S. retail sales data weighed on the dollar.

Chicago soybeans slid around half a percent falling to a one-week low as concerns over global growth weighed on the market, while spot-month corn rose for a second straight session on tight old-crop supplies.

Vietnam 2011/2012 coffee output, exports seen up
Coffee output from Vietnam's current 2011/2012 crop would reach  20 million bags, up 2.7 percent from the previous season, the International Coffee Organization said, raising its estimate by around 9 percent from 18.3 million bags previously.

Argentina challenges Spain's biofuel rules at WTO
Argentina said on Wednesday it was challenging Spain to explain a new biodiesel law that it says breaks World Trade Organization rules and could cost the South American country $1 billion in lost export earnings.

Scramble for corn lifts US Gulf basis to 1-mth peak
The scramble for scarce stocks of U.S. corn heated up on Wednesday, as exporters at the Gulf Coast bought corn barges at the highest price in a month, suggesting renewed competition for domestic users whose basis bids were already near record-high levels.

U.S. corn yield seen down 3 pct from USDA forecast
The U.S. corn crop is wilting after a stretch of hot and dry weather in the Midwestern grain belt, with 15 analysts polled by Reuters on average expecting the yield to drop nearly 3 percent from that projected by the U.S. Department of Agriculture.

Argentine soy crushing down 6.5 percent in April
Argentina crushed 3.5 million tonnes of soybeans in April, down 6.5 percent from a year ago and marking the second straight month of decline, the Agriculture Ministry said in its latest crushing report.

Brent crude held above $97 trading in a narrow range with investors reluctant to take positions ahead of the outcome of a meeting of producer group OPEC and Greek elections.

Japan to pass bill to insure Iran oil imports -report
Japan's lower house is set to pass a special bill on Friday to allow it to provide insurance for continuing Iranian crude imports, making it the first country to attempt to initiate sovereign cover once EU sanctions on Iran are expected to start in July, the Yomiuri newspaper said on Thursday.

World oil reserves up 8 pct, supply fears persist
The world's store of oil jumped 8.3 percent last year, as exploration rose and record crude prices made marginal projects commercially viable, yet supplies will struggle to meet demand due to political factors, oil giant BP  said on Wednesday.

Saudi under OPEC pressure to prevent oil collapse
Saudi Arabia came under pressure on Wednesday from fellow OPEC producers to cut oil output to prevent a further slide in crude prices.

BNP Paribas cuts 2012 base metals price forecast
June 13 (Reuters) - BNP Paribas slashed its base metals price forecasts for this year and next, and said risks to its forecasts are tilted heavily to the downside due to the economic uncertainty in Europe.
The bank lowered its 2012 price forecast for aluminium to $2,085 per tonne from $2,270, and its 2013 forecast to $2,450 a tonne from $2,575.

China nickel ore imports seen at record on Indonesia curbs
HONG KONG, June 13 (Reuters) - China's nickel ore imports are expected to have hit a record high in May after a rush to purchase laterite ore ahead of a curb on shipments by top supplier Indonesia, although high inventories could put pressure on nickel prices
Imports of nickel ore and concentrates likely surged about 40 percent to more than 6.8 million tonnes in May from the previous month, a sales manager at a major Chinese nickel pig iron producer said.

Aluminum car doors, frames: Industry's "next frontier"-Alcoa
NEW YORK, June 13 (Reuters) - The global push to improve fuel efficiency in vehicle fleets will more than double the demand for aluminum in the auto market by 2025, Alcoa's  director of automotive marketing said Wednesday.
Car makers from BMW to Audi have already started to react to the so-called Corporate Average Fuel Economy (CAFE) standards and are beginning to move away from heavier steel body frames to lighter-weight material in what should be the "next frontier" for the aluminum industry, Randall Scheps told delegates at the American Metal Market's Aluminum Summit in New York.

LME copper players turn up heat on warehouse queues
LONDON, June 13 (Reuters) - Global copper market heavyweights are drafting proposals to stop metal from getting stuck in queues leaving storage facilities, as such delays would threaten the credibility of the London Metal Exchange's (LME) flagship product, industry sources said.
The issue has arisen at a delicate moment, as the LME lines up a potential $2 billion sale to another exchange.  

Copper prices edged up with hopes of improved demand from recent stimulus programmes introduced by top metals consumer China outweighing concerns about euro zone debt and sluggish U.S. growth.

Gold traded steady after posting a fourth straight session of gains in the previous session when weak U.S. data fuelled expectations for monetary stimulus, and investors remain nervous before a make-or-break Greek election.

METALS-Copper up on hopes for China demand, but global econ woes weigh
SHANGHAI, June 14 (Reuters) - Copper prices edged up, with hopes of improved demand from recent stimulus programmes introduced by top metals consumer China outweighing concerns about euro zone debt and sluggish U.S. growth.
But gains were capped as investors awaited the results of an Italian debt auction and U.S. jobs data later on Thursday, while Greece goes to the polls on Sunday in a vote that could determine whether the country stays in the euro zone.

PRECIOUS-Gold steady after 4 days of gains; Greece in focus
SINGAPORE, June 14 (Reuters) - Gold traded steady after posting a fourth straight session of gains in the previous session when weak U.S. data fuelled expectations for monetary stimulus, and investors remain nervous before a make-or-break Greek election.
Cash gold has gained more than 1 percent this week, breaking ranks with the euro, which has fallen 0.8 percent as mounting worries about the euro zone's ability to contain the debt crisis drew some safehaven flows into gold.

20120614 1553 Crude Palm Oil Related News. (Source: Reuters)

VEGOILS: Palm oil hits 2012 low on global economic woes DBYU2 FCPOc3 - RTRS
By Chew Yee Kiat
SINGAPORE, June 14 (Reuters) - Malaysian palm oil futures slumped to the lowest in 2012 on Thursday as the euro zone debt crisis and sluggish U.S. growth triggered a flight of capital from riskier assets.
Investors were keeping an eye on the results of an Italian debt auction and U.S. jobs data later in the day, as well as Greek polls this weekend that could precipitate the country's exit from the bloc for fresh trading cues. Uncertainty about the global economy pushed Asian shares down on Thursday. MKTS/GLOB
"On the weekend ahead we are going to see the Greek election and market participants are staying away from the market for the time being," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.
"Fundamentals remain quite encouraging, we have a higher demand and lower stocks. But fundamentals are not taking the front seat as macroeconomic factors are still domineering at the moment."
By the midday break, benchmark August palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 1.7 percent to 2,898 ringgit ($911) per tonne.
Prices dropped below the 2,900-ringgit mark for the first time this year to hit a low of 2,896 ringgit earlier in the session, a level unseen since Oct. 25, 2011.
Traded volumes stood at 15,239 lots of 25 tonnes each, higher than the usual 12,500 lots as investors rushed in to liquidate their positions.
Fundamentals were supportive with Malaysian palm oil stocks hitting a 13-month low in May, a sign that strong demand was eating into stocks. (Full Story)
Malaysian palm oil exports were lacklustre for June 1-10, but traders expect shipments to pick up as India and Pakistan restock ahead of the Muslim fasting month starting in mid-July.
Cargo surveyors will report export numbers for the first half of the month on Friday. PALM/ITS PALM/SGS
Lower soybean ending stocks reported by the U.S. Department of Agriculture on Wednesday also suggested tighter supply and provided support for palm oil prices.
Brent crude held above $97, trading in a narrow range with investors reluctant to take positions ahead of the outcome of a meeting of producer group OPEC and Greek elections. O/R
In other vegetable oil markets, U.S. soyoil for July BOc1 delivery gained 0.1 percent in Asian trade. The most active Jan 2013 soyoil contract DBYF3 on the Dalian commodity exchange lost 1.5 percent, tracking uncertainty in the global markets.

India's May vegoil imports fell 3.1 pct m/m -trade - RTRS
14-Jun-2012 15:16
NEW DELHI, June 14 (Reuters) - India's vegetable oil imports in May fell 3.1 percent to 896,921 tonnes as soyoil purchases declined, a leading trade body said on Thursday, while there was a jump of 70 percent in refined palm oil imports as worries over a duty hike dissipated.
The monthly imports were slightly higher than the average forecast in a Reuters survey.
India, the world's No. 1 importer of cooking oils, buys mainly palm oil from Indonesia and Malaysia and a small quantity of soyoil from Argentina and Brazil.
A Reuters survey had forecast average imports of 884,625 tonnes in May, with a high of 941,000 tonnes. (Full Story)
The imports in May were higher than 664,133 tonnes imported during the same month a year ago.

20120614 1113 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares ease on weak US data, wary before Italy debt sale
TOKYO, June 14 (Reuters) - Asian shares eased as weak U.S. retail sales raised concerns about sluggish economic growth, while an Italian debt auction later will test market confidence in whether it can avoid becoming the next victim in the euro zone crisis.
"It tells you much about how bearish market expectations are when a 3 notch downgrade of Spain pushes EUR/USD 15 pips lower," said Sebastian Galy, strategist at Societe General.

COMMODITIES-Mostly down despite weaker dollar; soybeans tumble
NEW YORK, June 13 (Reuters) - Commodities were mostly lower with soybeans dropping the most in two weeks in reaction to favorable weather for the U.S. crop while crude oil was pressured by plentiful global supplies.
"Macroeconomic nervousness has a grip on the markets right now", off-setting the benefits from a weaker dollar, said Sterling Smith, agricultural analyst for Citigroup in Chicago.

OIL-Brent flat, U.S. crude down; OPEC meeting eyed
NEW YORK, June 13 (Reuters) - Brent crude oil futures closed near flat and U.S. crude fell about 1 percent in choppy trading as weak U.S. economic data and worries about the euro zone's finances outweighed a drawdown in U.S. crude inventories.
"Oil futures remain in an oversold condition, but the downtrend is persisting because of weaker demand," said Rich Alexander, senior broker at the Zaner Group in Chicago.

Japan to pass bill to insure Iran oil imports -report
TOKYO, June 14 (Reuters) - Japan's lower house is set to pass a special bill on Friday to allow it to provide insurance for continuing Iranian crude imports, making it the first country to attempt to initiate sovereign cover once EU sanctions on Iran are expected to start in July, the Yomiuri newspaper said on Thursday.
The bill is expected to be passed during the current session of the parliament that ends on June 21, as the secretary generals of the biggest opposition Liberal Democratic Party and its former partner, the New Komeito, have backed the bill, the report said.

World oil reserves up 8 pct, supply fears persist
LONDON, June 13 (Reuters) - The world's store of oil jumped 8.3 percent last year, as exploration rose and record crude prices made marginal projects commercially viable, yet supplies will struggle to meet demand due to political factors, oil giant BP  said on Wednesday.
BP said in its annual calculation of global oil and gas reserves, considered the industry's most comprehensive, that oil reserves totalled 1,653 billion barrels at the end of 2011.

POLL-US natgas storage seen up 74 bcf in weekly EIAs          
NEW YORK, June 13 (Reuters) - U.S. natural gas inventories were forecast to have gained 74 billion cubic feet last week, according to a Reuters poll of industry traders and analysts on Wednesday.
The U.S. Energy Information Administration will release gas storage data for the week ended June 8 on Thursday at 10:30 a.m. EDT (1430 GMT).

Saudi under OPEC pressure to prevent oil collapse
VIENNA, June 13 (Reuters) - Saudi Arabia came under pressure on Wednesday from fellow OPEC producers to cut oil output to prevent a further slide in crude prices.  
Price hawks in the Organization of the Petroleum Exporting Countries are fretting that slowing economic growth will send crude, already off $30 since March, plummeting further.

Sliding oil price rebalances Middle East economy
DUBAI, June 13 (Reuters) - Ziad Makhzoumi, chief financial officer of Arabtec , the United Arab Emirates' biggest construction firm by stock market value, thinks the region's economy will probably ride out weak oil prices comfortably. But he sees a risk.
If oil drops below the price at which energy-exporting countries in the Gulf can balance their state budgets - a scenario which he thinks unlikely - infrastructure and other building projects will slow down or in some cases halt.

NATURAL GAS-Mild weather sends US natural gas futures down 2 pct
NEW YORK, June 13 (Reuters) - U.S. natural gas futures, pressured by milder weather this week, ended lower, but the warmer outlook for later this week and next week helped limit the downside.
"There's not a lot of (hot) weather around to generate electric power demand, and the (EIA storage) build tomorrow could be a little bearish," said Tom Saal, senior vice president at INTL Hencorp Futures in Miami.

EURO-COAL-Bid/offer spreads narrow, trade quiet
LONDON, June 13 (Reuters) - European delivered coal prices held steady at around $82-85 a tonne but the bid/offer spreads narrowed, although few trades were reported.
"The Indians aren't really looking for replacements for Indonesian coal because they don't believe anything radical will happen this year beyond some incremental tax rises," one supplier said.

20120614 1006 Malaysia Corporate Related News.

Starhill REIT buys Aussie hotels
YTL Corp’s Starhill REIT is expanding its international footprint with the acquisition of three Marriott hotels in Australia for RM1.31bn (AUD415m). The purchase of the Marriott hotels in Sydney, Brisbane and Melbourne will give Starhill REIT the largest portfolio overseas property assets of any Malaysian REIT. “This acquisition will enlarge the trust’s portfolio to approximately RM3bn from RM1.58bn,” said Tan Sri Francis Yeoh, chief executive of Projek Pintar SB, the manager of Starhill REIT. Yeoh is also the largest shareholder of Starhill REIT through YTL Corp, which owns 56.4% of the trust. (Financial Daily)

TRC gets RM194m contract from Bintulu Port
TRC Synergy’s wholly-owned subsidiary, Trans Resources Corp SB, has accepted a RM194.0m contract from Bintulu Port Holdings to develop the Samalaju Port in Bintulu. In a filing with Bursa Malaysia, TRC said the project was expected to strengthen the group’s operations in Sabah and Sarawak. However, the project would not have any effect on the issued and paid-up share capital, substantial shareholders’ shareholdings, net assets per share, and gearing of the company and its subsidiaries. (Financial Daily)

MSM has RM100m to buy sugar plantations in Southeast Asia
Malaysia’s largest sugar refiner MSM Malaysia Holdings (MSM) has set aside about RM100m to acquire sugarcane plantations in South-East Asia as part of its plans to expand its upstream business, its executive director Datuk Sabri Ahmad said. The company says it’s looking at Indonesia and Myanmar to acquire these sugarcane plantations. In another development, MSM is in the process of converting its 5,000ha of sugar cane plantations in Perlis to rubber estate. Executive director Datuk Sabri Ahmad said the land is no longer suitable for sugar cane due to climatic conditions. (Malaysian Reserve) (Financial Daily)

MSM Malaysia: To invest RM85m to upgrade refineries
MSM Malaysia Holdings is investing RM85m to upgrade its sugar refineries. Its CEO Chua Say Sin said on Wednesday the funding for the upgrading would be financed from its initial public offer proceeds. Chua said as sugar consumption is expected to increase in Malaysia and globally, MSM is to grow a strong and sustainable business for all its stakeholders. The immediate focus is to upgrade production facilities, expand export sales and pursue strategic investments in new markets. (StarBiz)

AirAsia eyes 5 more regional tie-ups
AirAsia will work on five more joint ventures with regional airlines over the next two years to position itself as a global brand on top of the one that was signed with Japan's All Nippon Airways.”We need to pivot to a wider, regional lens from the first decade's focus, which was largely domestic,” chief executive officer Tan Sri Tony Fernandes said. “Shifting AirAsia's emphasis to a regional strategy is not just good business, but also a move that will keep up ahead of the inevitable competition that is heading our way,” Fernandes said at a press conference yesterday. He also said that the company was considering to add a fleet of 50 planes to meet its operations' needs. The 75 aircraft that were ordered are expected to be delivered by 2016. (StarBiz)

Fajarbaru eyes MRT deals
Fajarbaru Builder Group is understood to have submitted bids to build stations for the RM40bn MyRapid Transit (MRT) project. Business Times understands that Fajarbaru is eyeing contracts to build MRT stations under packages S4 and S5, which closed on 28 May and 11 June, respectively. The combined value of the two packages to build the seven stations is about RM650m. Fajarbaru executive director Teo Sock Cheng confirmed that it had submitted the bids to MRT Corp, but declined to reveal the value. (BT)

KPJ Healthcare plans to conclude two acquisitions by year-end
KPJ Healthcare Bhd, which is on an aggressive expansion plan, hopes to conclude two acquisitions by year-end, said managing director Datin Paduka Siti Sa'diah Sheikh Bakir. “There are offers which we are assessing both locally and internationally. We hope to conclude at least one local acquisition and one overseas by year-end,” Siti Sa'diah told StarBiz in an interview. However, she did not reveal the size of the acquisitions. She said KPJ had been looking for potential acquisitions continuously. ”We're ready for two acquisitions a year and also to build two hospitals a year.” (StarBiz)

Felda Global: Set to price IPO at top end
Felda Global Ventures Holdings is set to price up to US$3.2bn IPO on Wednesday at the top of an indicative range, as strong demand from domestic investors helps it counter a recent global trend of failed listings. Three sources with direct knowledge of the deal  said the company priced the IPO at RM4.55 a share, near the top of a RM4.00-RM4.65 indicative range. The deal, the world’s second biggest  IPO this year behind Facebook Inc’s US$16bn offering, will put Kuala Lumpur neck and neck with China’s Shenzhen as the main IPO destination in the Asia Pacific region, leaving behind Hong Kong, which grossed the highest IPO proceeds in the world in 2010 and 2011. The IPO also underscores how Malaysia’s equity market has been partially insulated from global volatility because it is dominated by local investors and a large domestic pension fund system. (Business Times)

Maybank: Acquires stake in Luster Industries
Maybank has emerged as a substantial shareholder in Luster Industries with a 5.95% stake in the latter. The bank announced that it had acquired 64.2m shares of 10 sen each in Luster. It said the subscription was made pursuant to the exercise of debt to equity conversion in accordance with a debt settlement agreement dated Nov 25, 2011 involving Luster. A PN17 company, Luster is an integrated manufacturer of high precision and precision plastic parts and components. As part of its proposed regularisation plan, Luster is looking to settle RM64.4m in debt via the issuance of RM17.9m in loan stocks, 25.4m new ordinary shares of 10 sen each, and 263.8m new shares with 131.9m free detachable warrants. The shares and warrants were part of an exercise that saw the company issue a total of 834.1m new shares alongside 441.6m free detachable warrants. (StarBiz)

MMC Corp: May be looking at RM3bn IPO of Malakoff
According to two people with knowledge of the matter said, Malakoff is planning an IPO that may raise about US$1bn (RM3.2bn). The company, 51% owned by MMC Corp, had invited at least 6 banks to submit proposals for the IPO by June 18, said the people, who spoke on the condition of anonymity because the process is private. They said the share sale might take place by the end of this year. Malakoff was publicly traded until it was acquired by MMC in 2007 for RM9.3bn, according to data compiled by Bloomberg. A source even said the IPO might value Malakoff at as much as US$3.5bn (RM11.4bn). (Bloomberg)

Dutch Lady: MD says company on track to achieve RM1bn sales target in 2013
Dutch Lady’s MD Rahul Colaco says the group is on track to reach its RM1bn sales target for 2013, driven by the strength of its brand and market position, despite the slowdown in the local dairy industry. He said that the growth of the local dairy industry was expected to reach between 6% and 7% this year, compared with last year's 8% to 9%. Colaco also said that the group is always striving to increase its products' prices  only moderately and aimed to minimize the effects on consumers. (Bernama)

MAS: More changes in management
More management changes are under way at MAS with CFO Razman Omar tipped to leave the national carrier. Sources said Rozman has tendered his resignation and plans to re-join his previous company AirAsia as regional head of finance effective July. According to  a source, Rozman is leaving despite attempts by the major shareholders of MAS and his key officials to get him to stay on at the national carrier. The departure of Rozman follows the announcement of deputy group CEO Mohammed Rashdan Yusof’s resignation effective end of this month. (Financial Daily)

DRB-Hicom: Proton Prevé exceeds 11,000 bookings
In just two months after launch, Proton Prevé has commanded a total booking of 11,310 units, making it the most popular 1.6-litre sedan in the market. Proton Holdings Executive Chairman Datuk Seri Mohd Khamil Jamil said a total of almost 1,000 units were booked by eager customers as early as March, a month before the launch while another 4,893 units were booked in the month of April. (Business Times)

Dialog Group: Saudi Arabia supply base starts operations
Dialog Group's supply base in Saudi Arabia, which saw the company invested about RM93.5m, has started operations. It said on Wednesday its 60%-owned Dialog Jubail Supply Base Company Ltd (DJSB), had secured a long-term contract from Snamprogetti Saudi Arabia Co Ltd to provide logistic services. Dialog's intention to set up the Jubail supply base was to be a one-stop integrated offshore logistic hub and resources centre for oilfield services, equipment and supplies, supporting the active and growing offshore oil and gas activities in the Arabian Gulf. It said DJSB, had on June 11, secured the RM17m contract from Snamprogetti where its base services would be used to move project cargo from land to offshore work site for the Saudi Aramco Wasit gas development Hasbah offshore facility in Saudi Arabia. (StarBiz)

Wah Seong: Eying strategic stake in Petra Energy
Wah Seong  Corp and little-known Pan Sarawak Holdings Sdn Bhd have emerged as the frontrunners to acquire a strategic 26.9% equity interest in oil services company Petra Energy. Perdana Petroleum, formerly known as Petra Perdana is the current owner of the strategic block of shares in Petra Energy. The marine services company has given CIMB the mandate to sell the block of shares in April this year, under a bidding exercise that closes tomorrow. Based on Petra Energy’s closing price of RM1.25 Wednesday, the block has a market value of RM72.1m. When contacted, Wah Seong deputy MD Giancarlo Maccagno acknowledged that the company was interested in the block. Pan Sarawak executives could not be reached for comment. (Financial Daily)

Naim Indah Corp: LPG venture hits a snag
Naim Indah Corp’s (Ninorp) diversification into the liquefied petroleum gas (LPG) business has hit a snag. Nicorp said Aspire Rich Sdn Bhd had received a letter from Oman-based Natural Gas Co (NGC) stating that the agreement between the two parties to acquire the LPG assets from Shell Malaysia Trading Sdn Bhd had been terminated. Nicorp added that it was also informed that Aspire Rich was disputing the termination of the agreement and was seeking legal advice on the matter. (Financial Daily)

Tebrau Teguh: Iskandar Waterfront serves conditional mandatory takeover
Iskandar Waterfront Holdings Sdn Bhd (IWHSB) has served a notice of conditional mandatory takeover offer on Tebrau Teguh. Tebrau Teguh said the Feb 13 conditional share sale agreement where IWHSB would acquire 222m Tebrau Teguh shares or 33.15% from Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ) had become unconditional on Wednesday. As such, it said IWHSB is obliged to extend a mandatory take-over offer to  acquire all the remaining 447.7m Tebrau Teguh shares (66.85%)" for 76 sen per share. IWHSB had received an irrevocable undertaking from KPRJ that it would not accept their remaining shareholding of 53.6m shares representing 8% of the Tebrau Teguh's paid-up capital. (StarBiz)

Scomi Engineering: Mumbai monorail project to commence operations in January
Maharashtra Chief Minister Prithviraj Chavan announced  that the first phase of the  9km Mumbai Monorail project is scheduled to commence operations in January 2013. Scomi Engineering Country President, Kanesan Velupillai said that Scomi's India unit, Urban Transit Pte Ltd, would also be in charge of the operations and management of the full completion of the project for a duration of 6 years. He said they have a team of 60 personnel already trained in all aspects from operations control, depot, rolling stock maintenance and  they have the monorail drivers to run the system. Kanesan said the project was now undergoing testing prior to trial runs begins before the lead up to the commissioning. (Bernama)

Bina Puri: Subsidiary gets US$10m mini hydro plant contract
Bina Puri Holdings’ subsidiary will build and operate a mini hydro power plant in Sulawesi, Indonesia costing US$10m (RM31.80m). It said on Wednesday its 80% owned PT. Megapower Makmur had  signed an agreement with PT PLN (Persero) to undertake the project, which is the sixth in the region. It said the annual output of electricity produced is approximately 23,915 GWH.  It added that the tenure of power purchase agreement is 15 years effective from the date of commercial run of the  power plant. Bina Puri said construction would take 24 months. It expected the project to contribute positively to the group's earnings from FY 2014 onwards. (StarBiz)

Banking: Bank Mandiri delays plan to open branch in Malaysia
Bank Mandiri, has delayed a plan to open its first branch in Malaysia by year-end as it is waiting for the country's Financial Services Act (FSA) to be in place. The state-owned bank, which has long sought to expand into Malaysia and Singapore, in line with its ambition to be an Asean bank, currently has only a remittance business in Malaysia. In Singapore, it has a limited operating branch. Its CFO Pahala Mansury said from what they understand, there is going to be a new Act in banking that will allow foreign-owned banks to establish more branches and other forms of outlets. He said the bank wants to know, for example, what kind of flexibility it will have in terms of the number of branches it can establish and the kind of businesses it can offer. He said if it is feasible, Bank Mandiri expects to open a branch here, the first ever by an Indonesian bank, in as soon as six to nine months after the FSA takes effect, or at least once there is greater clarity on what it will entail and when it will take effect. (Business Times)

Construction: MRT’s RM1.6bn tender gets disappointing response
Three of the six pre-qualified companies have walked away from the RM1.6bn MRT train supply tender for the 51km Sungai Buloh-Kajang line without submitting a bid. Although an extension of one month had been given, South Korea’s Hyundai Rotem Company had pulled out, while Japan’s Kawasaki Heavy Industries Rolling Stock Co and Canada’s Bombadier Transportation decided not to submit bids. MRT Corp CEO Datuk Azhar Abdul Hamid said he was disappointed with the pullout and the failure by several of the shortlisted groups to make submission to participate in the tender. The agency had hoped for all six bids to come in. The 3 remaining bidders are Siemens SMH Rail Consortium from Germany and Chinese train-makers, Changchun Railways Vehicle Co Ltd and CSR Zhuzhou Electric Locomotive Co Ltd. The  3 groups will be subjected to a four-stage evaluation process and an award is expected in late July. (Financial Daily)

Oil & Gas: Terengganu home for refinery
Malaysia will house Asia's largest biorefinery complex in Terengganu. The complex, which the government has allocated RM170m for its infrastructure, is expected to generate a cumulative gross national income of RM20.4bn by 2020 and produce 2,500 green-jobs. The East Coast Economic Region Development Council (ECERDC) has teamed up with the Terengganu government and Malaysian Biotechnology Corp Sdn Bhd (BiotechCorp) to facilitate the project. ECERDC CEODatuk Jebasingam Issace John said with the biorefinery project, ECER now had secured more than RM10bn in investments. From the total, RM2.1bn investments were from Pahang, RM5bn from Johor and RM500m from Kelantan. Terengganu makes up the balance. ECERDC expects total investments to hit RM15bn this year. Jebasingam said the complex would be the first in Malaysia to use cellulosic feedstock to produce bioderivatives such as advanced carbohydrates, biochemicals, biomaterials, biofertilisers and active feed ingredient. (Business Times)

Steel: Government imposes import licence on alloy steel products
The International Trade and Industry Ministry announced that the importation of eight tariff lines of alloy steel products (HS 7225) will be subject to licensing requirements from June 15. In a statement, it said the imposition of import licence on these products was gazetted under the Customs (Prohibition of Imports) (Amendment) (No.2) Order 2012 on Tuesday. It said the imposition of import licensing requirements on these products will serve to ensure that imported alloy steel products meet established quality and safety requirements, and minimise the importation of sub-standards products. It is also to facilitate the monitoring of trade in these products. (Bernama)

20120614 1006 Local & Global Economy Related News.

Malaysia: Minimum Retirement Age Bill 2012 tabled today
The compulsory retirement age of private sector employees will be raised to 60 under the Minimum Retirement Age Bill 2012, which was tabled for first reading at the Dewan Rakyat today. (BT)

Thailand: Central bank holds rates
Thailand’s central bank left benchmark interest rate unchanged at 3.0% for a third straight meeting yesterday and warned about risks to the global economy. “The balance of risks for the Thai economy was skewed towards growth rather than inflation,” its Monetary Policy Committee said. (BT)

Indonesia: Plans stimulus to boost consumption amid slowdown
Indonesia will implement stimulus measures to boost consumption and infrastructure spending as a global slowdown limits exports and an imminent election in Greece threatens to deepen Europe’s debt turmoil. The government will tap last year’s IDR24trn budget surplus to fund building projects, and lift the tax-free annual income level to IDR24m from IDR16m. Indonesia currently targets a 2012 budget deficit of IDR190.1trn, on capital spending of IDR168.8trn. (Bloomberg)

Italy: Holds first bond sale after Spain rescue as yields surge
Italy holds its first bond auction since Spain’s EUR100bn bank rescue request drove up yields, as the government seeks to convince investors the country won’t be the next to need aid. Its Treasury sells as much as EUR4.5bn of three-, seven- and eight-year bonds today, one day after it was forced to pay 3.97% to sell one-year bills, 163bps more than at the previous sale a month ago. (Bloomberg)

EU: Industrial output falls second month on Germany
Euro-area industrial production declined for a second month in April, led by a drop in Germany, adding to signs of a deepening economic slump. Output in the 17-nation euro area slipped 0.8% from March, when it decreased a revised 0.1%. From a year earlier, production fell 2.3%. (Bloomberg)

US: Presses EU to clarify future of euro zone
US Treasury Secretary Timothy Geithner kept the pressure on European leaders to lay out their plans for the future of the euro zone sooner rather than later to keep the debt crisis from escalating. Speaking ahead of next week's meeting of the G-20 nations, Geithner said other European countries had to move closer to Germany, which has shown a willingness to consider a financial union. European leaders are meeting 28-29 June to negotiate a new set of reforms that is supposed to map out the future of the euro zone. (MarketWatch)

US: Posts USD125bn deficit in May
The US government ran a budget deficit of USD125bn in May, pushing the deficit to USD844bn for the first eight months of fiscal 2012. The government spent USD305bn in May, up 31% y-o-y. Adjusted for the timing of payments for certain benefits, and for re-estimates related to the Troubled Asset Relief Program, May spending would be less than 1% above a year ago. (MarketWatch)

US: May retail sales fall as gas purchases tumble
US retail sales fell in May for the second month in a row as consumers spent less to fill up their gas tanks. Retail sales declined by 0.2% last month on a seasonally adjusted basis. Lower sales over the past two months marked the first back-to-back drop since May and June 2010. If gas purchases are omitted, however, retail spending actually rose a slight 0.1% last month. (MarketWatch)

US: Producer prices plummet 1% in May
Lower energy and food costs pulled US Producer Price Index (PPI) down 1.0% in May. Core producer prices, excluding volatile food and energy, rose 0.2%. The May decline in the PPI was the largest since a drop of 1.2% in July 2009, just when the recession was ending. It also marks the second straight monthly decline in wholesale prices. In April, the headline PPI rate had fallen 0.2%, while the core rate had risen 0.2%. (MarketWatch)

20120614 1004 Global Market Related News.

Data (Source: Reuters)
• US May Retail Sales -0.2% vs. -0.2% (revised from +0.1%), as expected
• US May Retail Sales Ex-Autos -0.4% vs. -0.3% (revised from +0.1%), expected 0.0%
• US May PPI -1.0% vs. -0.2%, expected -0.6%; Core +0.2% vs. +0.2%, as expected
• US Apr Business Inventories +0.4% vs. +0.3%, expected +0.3%
• US Apr Business Sales +0.2% vs. +0.2%
• Canada may need to raise rates this year (OECD)* Canada’s Flaherty: If need to do more to cool housing market, “We’ll do more”
• US EIA Weekly Crude Stocks -191k bbls, expected +1.4mln bbls; Gasoline -1.72mln bbls, expected +1.1mln bbls

Asian Stocks Drop on Spain Downgrade, Growth Concern (Source: Bloomberg)
Asian stocks declined as Spain’s credit rating was cut and economic reports in the U.S and Europe added to concern the global economy is slowing. Canon Inc., a camera maker that gets 31 percent of sales from Europe, lost 0.8 percent in Tokyo. Mitsui & Co Ltd., which gets about 44 percent of its revenue from commodities, slipped 1.2 percent as copper futures fell. James Hardie Industries SE (JHX), a building-materials supplier that counts the U.S. as its biggest market, decreased 2.2 percent in Sydney as retail sales in the world’s largest economy dropped. The MSCI Asia Pacific Index (MXAP) lost 0.3 percent to 113.08 as of 9:28 a.m. in Tokyo, with more than two shares falling for each that rose. The gauge dropped 12 percent from this year’s peak on Feb. 29 through yesterday amid concern growth in the U.S. and China is slowing and as Europe’s debt crisis intensified.
“Obviously, the Spanish bank bailout on the weekend didn’t help matters and probably increased the focus on Italy, and also made investors worry about investing in Spanish bonds,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “Europe is sliding further into a recession and the global economy is still slowing in the U.S., and so I think this is a soft patch.”

Japan Stocks Fall on Global Slowdown Signs, Italian Bonds (Source: Bloomberg)
June 14 (Bloomberg) -- Japanese stocks fell as U.S. and European data added to concern the global economy is slowing and after borrowing costs climbed in Italy.  Honda Motor Co. (7267), an auto manufacturer that gets 44 percent of its sales in North America, fell 1.3 percent. Nintendo Co., a maker of gaming consoles that depends on Europe for a third of its sales in the U.S. and Europe, lost 1.4 percent. Otsuka Holdings KK gained 1.5 percent after the pharmaceutical company announced a share buyback plan. The Nikkei 225 Stock Average (NKY) dropped 0.6 percent to 8,534.37 as of 9:18 a.m. in Tokyo. Trading volume was 16 percent below the 30-day average ahead of a Greek election on June 17 that may signal whether the nation exits the euro. The broader Topix Index lost 0.5 percent to 722.99, fluctuating between gains and losses over the past five trading days.
“Europe is sliding further into a recession and the global and U.S. economies are still slowing down, and so I think this is a soft patch,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “It’s still the time for caution on the short-term view. There’s a lot of event risk around.”

U.S. Stocks Drop Amid Lower Retail Sales, Europe Concern (Source: Bloomberg)
U.S. stocks slid, after yesterday’s gain, as retail sales fell and concern about Europe’s debt crisis grew amid higher borrowing costs in Italy and Germany. Nine out of 10 groups in the Standard & Poor’s 500 Index retreated as consumer discretionary, commodity and industrial shares had the biggest losses. Home Depot Inc. (HD), Caterpillar (CAT) Inc. and DuPont (DD) Co. dropped at least 1.5 percent. JPMorgan Chase & Co. (JPM) rose 1.6 percent as Chief Executive Officer Jamie Dimon testified about his bank’s practices to lawmakers. Dell Inc. (DELL) advanced 2.6 percent after saying it will pay a dividend. The S&P 500 fell 0.7 percent to 1,314.88 at 4 p.m. New York time. It rose 1.2 percent yesterday. The Dow Jones Industrial Average declined 77.42 points, or 0.6 percent, to 12,496.38. Trading volume for exchange-listed stocks in the U.S. was about 6.1 billion shares, 10 percent below the three-month average.

Bovespa Rises a Second Day as Homebuilders Rally on Rate Outlook (Source: Bloomberg)
The Bovespa (IBOV) advanced, posting the only gain among major equity indexes in the Americas, as homebuilders and consumer stocks jumped on speculation policy makers will further reduce interest rates to shield Brazil’s economy from the global slowdown. Brookfield Incorporacoes SA, Brazil’s fourth-largest homebuilder by revenue, advanced the most on the benchmark. PDG Realty SA Empreendimentos e Participacoes rose to the highest in almost three weeks. Online retailer B2W Cia. Global do Varejo gained for a fifth day, the longest winning streak in nine months. The Bovespa rose 1.1 percent to 55,650.51 at the close in Sao Paulo. Fifty-four stocks gained on the gauge while 12 fell. The real weakened 0.2 percent to 2.0724 per U.S. dollar at 5:45 p.m. local time.
“The Brazilian government has been very clear in saying that, amid the slowdown in the global economy, its number one priority is to boost growth,” Henrique Kleine, the chief analyst at Magliano SA brokerage, said by phone from Sao Paulo. “That’s why you see stocks linked to domestic consumption performing better than the market’s average.” Brookfield gained 6.4 percent to 3.65 reais. PDG Realty rose 4.2 percent to 3.50 reais. The BM&F Bovespa Real Estate Index (IMOBBV) advanced 1.8 percent.

European Stocks Fall as Borrowing Costs Rise at Debt Sale (Source: Bloomberg)
European stocks declined as borrowing costs increased at debt auctions in Germany and Italy and as Sweden’s SKF (SKFB) AB reported weakening demand for its products in the second quarter. SKF, the world’s largest maker of ball bearings, dropped 7.3 percent. Renault SA (RNO) led a selloff by carmakers, sliding 4.2 percent. Etablissements Maurel & Prom SA surged the most since 2003 amid takeover speculation. The Stoxx Europe 600 Index (SXXP) dropped 0.4 percent to 242.56 in London. The gauge yesterday climbed 0.6 percent as investors shrugged off a surge in Spanish borrowing costs. The Stoxx 600 has still fallen 11 percent from its high this year on March 16. “The most interesting development for me has been the move higher in bund yields,” said Ioan Smith, a director at Knight Capital Europe Ltd. in London. “Investors are clearly becoming concerned about Germany’s growing liabilities associated with the euro zone and suggests there is an element of tail risk being priced in.”
Germany sold 4.04 billion euros ($5.08 billion) of 10-year bunds today at an average yield of 1.52 percent, up from a rate of 1.47 percent at the last auction on May 16. Investors bid for 5.81 billion euros of the bunds, above the 5 billion-euro maximum sales target for the auction, the Bundesbank said.

Melco Discount Grows as Euro Woes Spur ADR Drop: China Overnight (Source: Bloomberg)
Chinese stocks traded in the U.S. slid from a two-week high and Melco Crown Entertainment Ltd. (MPEL) slumped as concern Europe’s debt crisis will spread outweighed prospects of more stimulus for Asia’s biggest economy. The Bloomberg China-US Equity Index (SHCOMP) of the most-traded Chinese companies in the U.S. dropped 0.9 percent to 90.50 yesterday. Melco Crown, a Macau casino operator, traded at the biggest discount to Hong Kong shares since June 1 after the city’s gaming revenue outlook was cut. LDK Solar Co. (LDK) led peers lower as Jefferies Group Inc. said European demand for panels slowed. E-Commerce China Dangdang Inc. jumped after the National Business Daily reported a deal with Tencent Holdings Ltd. China cut its benchmark interest rates last week for the first time since 2008 as May economic data showed inflation slowed more than economists’ forecasts and industrial production grew less than projected.
Borrowing costs increased at debt auctions yesterday in Germany and Italy, and European Union da ta showed Euro-area industrial production declined for a second month in April, adding to signs of a deepening economic slump.

Emerging Stocks Rise to 2-Week High on China Subsidies (Source: Bloomberg)
Emerging-market stocks climbed to a two-week high as signs of a pick-up in technology demand and speculation China will take more steps to bolster economic growth overshadowed concern Europe’s debt crisis will spread. The MSCI Emerging Markets Index (MXEF) rose 0.7 percent to 919.47 at the close in New York, the highest level this month. Cyrela Brazil Realty SA Empreendimentos e Participacoes surged 5.1 percent, while United Spirits Ltd. rose to lead the advance in the index. Russia’s Micex Index (INDEXCF) rallied 0.6 percent on gains for OAO Gazprom Neft. Brazil’s Bovespa advanced, led by Brookfield Incorporacoes SA, a real estate developer. A gauge of technology stocks rose 0.7 percent after Taiwan Semiconductor Manufacturing Co. (2330), the world’s largest maker of custom chips, said demand for leading-edge chip technology is still strong.
China ZhengTong Auto Services Holdings Ltd. (1728) jumped the most since October 2011 in Hong Kong after China said it will give trade-in subsidies of as much as 18,000  yuan ($2,826) for the replacement of some commercial vehicles. “The market is being held up by perceived corporate catalysts and optimism of more subsidies at a time when Europe is still struggling with its debt crisis,” Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. (BDO), said by phone. “This rally won’t last until Europe takes more concrete steps.”

Emerging Offshore Chinese Renminbi Market : China Pursues Internationalization of their Currency (Source: CME)
The People’s Republic of China (PRC) has aggressively been pursuing the internationalization of the Chinese Yuan or Renminbi (CNY or RMB) since the financial crisis of 2008. The ultimate goal is to achieve full currency convertibility, thereby promoting use of the Renminbi as a reserve currency and international trade currency of choice. Thus, the People’s Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) jointly announced on July 19, 2010 that RMB may be deliverable in Hong Kong. This created a new offshore market in RMB, dubbed the “CNH” market. Since its introduction, this market has grown at a rapid pace, attracting widespread interest and activity. This development is changing the character of the RMB markets and of the FX markets in general. Note, of course, that CME Group currently offers RMB futures and options. Thus, we seek to examine this development in greater detail.

FOREX-Euro steady, but vulnerable to Italian and Greek woes
LONDON, June 13 (Reuters) - The euro was steady, w ith bearish investors selling at higher levels as concerns mounted that debt contagion would ensnare Italy and as general unease prevailed about the euro zone before crucial Greek elections.
"There is a risk that the Spanish problems could spread to Italy and investors are mindful of that," said Jeremy Stretch, head of currency strategy at CIBC World Markets.

Dollar Remains Lower Against Euro Before U.S. CPI Data (Source: Bloomberg)
The dollar remained lower against the euro following a two-day slide before U.S. data that may show consumer prices fell, rekindling expectations the Federal Reserve will take more steps to bolster the economic recovery. The euro maintained a rally from an 11-year low versus the yen amid speculation traders are paring their bearish bets on the European currency before Greek elections on June 17. The Fed is scheduled to hold a two-day policy meeting starting June 19. New Zealand’s dollar strengthened against all of its 16 major counterparts after the central bank left the benchmark interest rate unchanged. “The dollar is susceptible to weakening because expectations for additional easing are rising ahead of the policy meeting next week,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency margin company. “A decline in employment and the economy is the biggest concern for the Fed.”
The dollar traded at $1.2564 per euro as of 9:34 a.m. in Tokyo after falling 0.4 percent to $1.2557 in New York yesterday. It lost 0.2 percent to 79.36 yen. The 17-nation euro was at 99.72 yen following a 0.7 percent advance in the previous two days to 99.80. The common currency touched 95.60 on June 1, the lowest since November 2000. The U.S. consumer-price index probably fell 0.2 percent in May from a month earlier, the most since December 2008, the median estimate of economists showed in a Bloomberg News survey. The Labor Department will release the figures today.

Treasuries Drop Before U.S. Sells $13 Billion of 30-Year Notes (Source: Bloomberg)
Treasury 30-year notes declined as the U.S. prepared to auction $13 billion of the securities today following sales of three- and 10-year debt earlier this week. Losses in U.S. government securities were limited before data forecast to show U.S. consumer prices fell, providing the Federal Reserve room to take further steps to spur the economy. The gap in yields between 10-year notes and Treasury Inflation Protected Securities, which represents traders’ expectations for inflation over the life of the debt, was 2.1 percentage points, down from 2012 high of 2.45 percentage points in March. “Investors may be taking a little breather from buying Treasuries,” said Masaru Hamasaki, chief strategist in Tokyo at Toyota Asset Management Co., which oversees the equivalent of $24 billion. “The flight-to-quality amid concern over the European debt crisis and U.S. slowdown has already sent bond prices to an expensive level.”
The 30-year yield rose two basis points, or 0.02 percentage point, to 2.72 percent at 9:50 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 3 percent bond due May 2042 fell 9/32, or $2.81 per $1,000 face amount, to 105 21/32. Benchmark 10-year yields gained one basis point to 1.61 percent after dropping to a record 1.4387 percent on June 1.

Euro Crisis Deeper With Moody’s Downgrading Spain, Cyprus (Source: Bloomberg)
The European debt crisis deepened as the credit ratings of Spain and Cyprus were downgraded by Moody’s Investors Service. Moody’s yesterday cut Spain’s rating three steps to Baa3 from A3, citing the nation’s increased debt burden, weakening economy and limited access to capital markets. Moody’s also lowered Cyprus’s bond rating to Ba3 from Ba1, attributing the downgrade to the material increase in the likelihood of a Greek exit from the euro area, and the resulting increase in the probable amount of support that the government may have to extend to Cypriot banks. Moody’s is following the sentiment of financial markets that weren’t calmed by Europe’s 100 billion-euro ($126 billion) weekend bailout of Spanish banks, said Clay Lowery, a vice president at Washington-based Rock Creek Global Advisors LLC and former assistant Treasury secretary for international affairs.
For Moody’s, “it’s not whether you’re going to make money off your investment, it’s what is the creditworthiness of the borrower,” Lowery said. “Spain’s debt load has gotten larger with much more senior debt, so at least the potential for them to default has now gone up.”

Retail Sales in U.S. Declined for a Second Month in May (Source: Bloomberg)
Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed today in Washington. Sales excluding car dealerships slumped by the most in two years. The smallest wage gains in a year and unemployment exceeding 8 percent are taking a toll on the consumer spending that accounts for about 70 percent of the economy, leaving it more vulnerable to shocks from the European crisis. Federal Reserve policy makers gather next week to decide whether further stimulus is needed to fuel the three-year-old expansion. “The consumer is pulling back,” said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the drop in sales. “There isn’t a lot of job creation. We will continue to see softer numbers.”
Stocks fell after the report and as higher borrowing costs in Italy and Germany fueled concern about the global economy. The Standard & Poor’s 500 Index declined 0.7 percent to 1,314.88 at the close in New York. Last month’s drop in retail sales matched the median forecast of 79 economists surveyed by Bloomberg News. Estimates ranged from a drop of 0.7 percent to a gain of 0.5 percent. April and May marked the first back-to-back declines in two years.

Wholesale Prices in U.S. Fell 1% in May on Cheaper Energy (Source: Bloomberg)
Wholesale prices in the U.S. dropped in May by the most since July 2009 as costs of energy and food decreased, easing pressure on companies to pass expenses to customers. The producer price index fell 1 percent, more than forecast, following a 0.2 percent decrease the prior month, Labor Department figures showed today in Washington. Economists projected a 0.6 percent decline, according to the median estimate in a Bloomberg News survey. The core measure, which excludes volatile food and energy prices, climbed 0.2 percent for a second month. Slower global growth that’s tempering demand for raw materials may allow producers to hold down costs and preserve margins, a benefit to consumers facing weaker income gains. Limited inflation also provides Federal Reserve officials with more room to stimulate the U.S. expansion.
“The signs are that inflation pressures are dissipating fairly quickly,” said Jeremy Lawson, a senior U.S. economist at BNP Paribas in New York. “From a producer perspective, it means import costs are low so they can maintain relatively healthy margins. For consumers, it provides some relief, adds to purchasing power, at a time where their incomes are being constrained by very weak wage growth.”

Dimon Says Fiscal Cliff May Be Reached Before Year-End (Source: Bloomberg)
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon, testifying to a U.S. Senate panel, said the government is risking an earlier-than-expected fiscal crisis as policy makers stay deadlocked on taxes and the budget. “The one thing to keep in mind about the fiscal cliff is it may not wait until Dec. 31,” Dimon, 56, said today before the Senate Banking Committee, which called him to answer questions about a $2 billion trading loss. “Markets and businesses may start taking actions before that, that create a slowdown in the economy.” A so-called fiscal cliff may be reached at year-end when tax-and-spending changes are scheduled to take effect unless Congress acts. Tax cuts enacted under then-President George W. Bush will expire as will a temporary reduction in the Social Security payroll tax. About $1 trillion in automatic spending cuts would begin, expanded jobless benefits will expire and the government will approach the legal limit on federal borrowing.
Dimon said lawmakers’ inability to reach an agreement on budget issues “helped cause a little downturn last year.” He urged approval of a compromise similar to the Simpson-Bowles plan, issued by President Barack Obama’s fiscal commission, which includes spending cuts and tax increases to balance the budget.

Geithner Says European Leaders Know They Must Do More (Source: Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner said European leaders “recognize they’re going to have to do a bunch more” to stem the region’s debt crisis. “This is a very challenging crisis for them still,” Geithner said today during a talk at the Council on Foreign Relations in Washington. Spain and Italy appealed today to European policy makers to step up their response to the crisis after a 100 billion-euro ($125 billion) lifeline for Spanish banks failed to calm markets. Yields on Spanish debt due in 10-years climbed to 6.75 percent today, compared with 5.1 percent at the end of last year. As Geithner spoke, Spain’s credit rating was downgraded three steps by Moody’s Investors Service, citing the nation’s increased debt burden, weakening economy and limited access to capital markets.

Clinton Calls on Russia to End Arms Sales to Syria (Source: Bloomberg)
Syria is “spiraling toward civil war,” with Russia supporting the violence by continuing to arm President Bashar al-Assad’s regime, U.S. Secretary of State Hillary Clinton said. “We have repeatedly urged the Russian government to cut these military ties completely and to suspend all further support and deliveries,” Clinton said yesterday at the State Department. “We know -- because they confirm -- that they continue to deliver.” The remarks were the latest in an exchange of critical comments by U.S. and Russian officials, putting on display their deepening rift over how to deal with the conflict in Syria, a nation that has been Russia’s main Mideast ally. Earlier in the day, Russian Foreign Minister Sergei Lavrov rejected U.S. accusations that it’s sending arms for use against Syrian civilians and said his country is simply fulfilling its contractual obligations.
“We are completing previously signed and paid-for contracts,” Lavrov said during a press conference in Tehran with his Iranian counterpart Ali Akbar Salehi. “All these contracts have to do exclusively with air-defense systems.”

Felda Said to Raise $3.3 Billion in Malaysian Share Sale (Source: Bloomberg)
Felda Global Ventures Holdings Bhd., the world’s third-largest operator of palm oil plantations, raised about 10.4 billion ringgit ($3.3 billion) in the biggest initial public offering since Facebook Inc. (FB), said three people with knowledge of the matter. The Kuala Lumpur-based company sold shares to institutional investors at 4.55 ringgit each, said the people, asking not to be identified as the information is confidential. Felda Global had marketed the shares at 4 ringgit to 4.65 ringgit. Demand for stock from fund managers exceeded supply by more than 29 times at that price, two people said. Malaysian IPOs are defying the market turmoil brought on by Europe’s debt crisis, which caused companies to scrap at least $4.2 billion of first-time sales in the past month. Hospital operator IHH Healthcare Bhd. and power company Malakoff Bhd. are pursuing IPOs that may help Kuala Lumpur’s bourse widen its lead in Asian deals this year.
“Felda is in a sweet spot because it is a large offering in a Malaysian context with a very cash-rich base of investors,” Abdul Jalil Abdul Rasheed, who helps manage $3 billion as chief executive officer of Aberdeen Islamic Asset Management Sdn. in Kuala Lumpur., said yesterday. “We see other IPO markets being weak, but Malaysia has pulled through.” Graff Diamonds Corp. and Formula One are among companies whose plans to go public in Asia were undone in the past month by stock-market volatility. Powerica Ltd., an Indian company backed by Standard Chartered Plc’s private equity unit, shelved plans for an IPO, people familiar with the deal said yesterday.

Indonesia Plans Stimulus to Boost Consumption Amid Slowdown (Source: Bloomberg)
Indonesia will implement stimulus measures to boost consumption and infrastructure spending as a global slowdown limits exports and an imminent election in Greece threatens to deepen Europe’s debt turmoil. The government will tap last year’s 24 trillion-rupiah ($2.5 billion) budget surplus to fund building projects, and lift the tax-free annual income level to 24 million rupiah from 15.8 million rupiah, Bambang Brodjonegoro, head of fiscal policy at the Ministry of Finance, said in Jakarta today. Indonesia currently targets a 2012 budget deficit of 190.1 trillion rupiah, on capital spending of 168.8 trillion rupiah. “During this time, exports aren’t the main driver to support our growth,” Brodjonegoro said. “As exports have fallen, we’ll boost consumption and investment.”
Policy makers are diverging in their responses to growth risks, with South Korea this month eschewing fiscal stimulus and keeping interest rates unchanged while countries from China to Brazil have lowered borrowing costs. Bank Indonesia has held off from adding to a February rate cut, seeking to support a currency that has fallen about 4 percent in 2012 as the European crisis hurt exports and spurred outflows from emerging markets.

Thailand Holds Rate a Third Time as Risks to Growth Increase (Source: Bloomberg)
Thailand’s central bank kept its key interest rate unchanged for a third straight meeting amid rising risks from the European debt crisis and slowing growth in China. The Bank of Thailand held its benchmark one-day bond repurchase rate at 3 percent, it said in Bangkok today, a decision predicted by all 18 economists in a Bloomberg News survey. The monetary authority cut a combined 50 basis points in November and January to spur growth after last year’s floods. Policy makers across the globe are grappling with the challenges posed by Europe and slowing expansion, with China, Brazil and Australia opting for rate cuts in recent weeks. Thai exports unexpectedly declined in April while inflation is still at a “manageable level,” the central bank said last month, adding on May 30 that there is still room for monetary easing.
“The Thai economy is not that weak as to require an immediate rate cut,” said Satoshi Ushijima, the Bangkok-based vice president of the treasury division at Mizuho Corporate Bank Ltd. “A cut is an option for them in the future if the situation deteriorates, and as inflation is not a major issue now.” The Thai baht rose 0.3 percent to 31.58 per dollar as of 2:47 p.m. in Bangkok. The one-year onshore interest-rate swap, the fixed cost needed to receive a floating payment, declined one basis point, or 0.01 percentage point, to 2.72 percent. Southeast Asia’s second-largest economy unexpectedly expanded in the first quarter as factories, including Honda Motor Co., resumed production and local demand revived after the nation’s worst floods in almost 70 years. Manufacturing output rose for the first time in eight months in April.

Rajoy Battles ECB for Loans; Monti Appeals for EU Action (Source: Bloomberg)
Tensions among European leaders are breaking into the open as bond investors reject their fixes for a debt crisis that threatens to overwhelm the euro region’s financial firewalls. German Finance Minister Wolfgang Schaeuble sniped at Greek yacht owners in comments published yesterday while Spanish Prime Minister Mariano Rajoy declared “battle” on the European Central Bank. Austrian Finance Minister Maria Fekter retracted a forecast that Italy would need aid, and Spain pushed back against Finnish advice on how to use its 100 billion-euro ($126 billion) bank bailout. Rifts are deepening with Greek elections on June 17 risking the first exit from the single currency as voters buckle under the continent’s most severe austerity program. Spanish bond yields reached a record after the nation’s request for aid for its banks fueled speculation the world’s 12th biggest economy may need a full rescue.
“What we’re seeing now says much about the deepening cracks in Europe’s political financial and economic edifice,” Nicholas Spiro, managing director at Spiro Sovereign Strategy in London, said in a telephone interview.

Euro-Area Industrial Output Falls Second Month on Germany (Source: Bloomberg)
Euro-area industrial production declined for a second month in April, led by a drop in Germany, adding to signs of a deepening economic slump. Output in the 17-nation euro area slipped 0.8 percent from March, when it decreased a revised 0.1 percent, the European Union’s statistics office in Luxembourg said today. Economists had projected a drop of 1.2 percent, the median of 28 estimates in a Bloomberg News survey showed. From a year earlier, production fell 2.3 percent. European manufacturers are cutting spending and jobs as global growth weakens. China led a slowdown in manufacturing across Asia last month and European economic confidence slumped to the lowest in 2 1/2 years. European Central Bank President Mario Draghi said on June 6 that risks to the economic outlook had increased and “a few” Governing Council members had called for an interest rate cut.
“The latest data clearly show that the euro-land economy is in free fall,” Jan Amrit Poser, chief economist at Bank Sarasin in Zurich, said in an e-mailed note before today’s report. “If measures to counter this development are not put in hand soon, the euro land will slip into a deep recession.”

Spain’s Record Yields Show Italy Bailout Risk (Source: Bloomberg)
Spain’s benchmark borrowing costs rose for a fourth day after touching a record yesterday, raising the specter of sovereign bailouts for the government in Madrid and then Italy that would stretch European Union finances to their limit. The yield on Spanish 10-year government debt rose 2 basis points to 6.73 percent at 9:55 a.m. in Madrid. Yesterday it touched 6.83 percent, the highest since 1997, after Fitch Ratings predicted that Prime Minister Mariano Rajoy will miss budget-deficit targets he’s made the foundation of his economic policy. Italian 10-year yields posted their highest close in six months yesterday and rose for a sixth session today. The bond rout wiped out the effects of 1.1 trillion euros ($1.4 trillion) in official funding for euro-region banks that has held yields in check since December. Spain’s 10-year yield is close to the 7 percent level that forced Greece, Ireland and Portugal to seek bailouts.
Italy, the second-biggest sovereign borrower in the euro area, may need to seek a rescue with in months, said James Nixon, chief European economist at Societe Generale SA (GLE) in London. “The crisis will inevitably roll on to the next domino, and that’s Italy,” Nixon said in a telephone interview. “The southern European economies are effectively in free-fall and market appetite for southern European debt is rapidly drying up. I can’t see anything to turn that dynamic around.”

Down-Under Greeks Send Money as Crisis Stirs Homeland Ties (Source: Bloomberg)
Half a century after leaving Greece and more than 12,000 kilometers (7,500 miles) from Athens, Paul Afkos says there’s no escaping the calling of his motherland. With Greek unemployment four times higher than in his adopted Australia, the 59-year-old head of Afkos Industries, a maker of mining components based near Perth, has plowed A$18 million ($17.9 million) into a 109-bed hotel in northern Greece that opened in April. “I see it as a duty,” Afkos says, after bringing forward by eight months the opening of the Afkos Grammos Hotel Resort in Kastoria. “I can’t be seen as a hypocrite, not helping my fellow Greeks. I wanted to open early to provide some assistance to these people who are in need of a job.”
Australia’s Greek population has grown from seven pirates dispatched by Britain in 1829 to a diaspora of about half a million, making Melbourne the third-largest Greek city behind Athens and Thessaloniki. Armed with patriotism and the best- performing currency against the euro since late-2008, Australia’s Greeks are deploying wealth amassed in the fastest growing major developed economy to a nation that’s needed 240 billion euros ($300 billion) in bailouts. Greece votes June 17 in an election set to decide its future in the euro zone.

N.Z. Signals Rates May Stay at Record Low to 2013 Amid EU Risks (Source: Bloomberg)
New Zealand’s central bank signaled it may keep interest rates at a record low for another year, extending a 15-month pause as weaker growth eases inflation and Europe’s fiscal crisis clouds the outlook. “It remains appropriate for monetary policy to remain stimulatory, with the official cash rate being held at 2.5 percent,” Reserve Bank of New Zealand Governor Alan Bollard said in a statement in Wellington today. The central bank lowered its forecasts for economic growth in the next three years, citing falling commodity prices and spending restraint. The RBNZ’s next step may depend on what happens in Europe, where a Greek election June 17 will influence whether it exits the euro, causing greater financial-market turmoil. The New Zealand dollar rose after today’s language lacked any specific signal Bollard will reduce borrowing costs, even as interest- rate swaps reflect a 69 percent chance of a cut by September.
“If you were to see a real euro-zone meltdown, that’s going to be reflected through in our forecasts,” Bollard said at a news conference. “Absolutely that would be a core issue we would be thinking about in terms of monetary policy.”

Australian Retail Gloom May Lift on Rate Cuts, Deloitte Says (Source: Bloomberg)
Australia’s retail “gloom” may be starting to recede after the central bank slashed the benchmark interest rate by 1.25 percentage points over the past eight months, a Deloitte Access Economics report showed. “Those cuts will free up a substantial chunk of disposable income,” the Canberra-based research company said in a report released today. Government spending measures including payments for school-age children and extra welfare spending may also provide a “sugar hit” to the retail industry, it said. Ebbing consumer confidence and declining prices prompted Myer Holdings Ltd. (MYR), the country’s largest listed department store company, to forecast a 15 percent decline in net income in the year through July. Australian households are saving money at more than twice the rate of their U.S. counterparts. In nine of the past 12 months, pessimists have outnumbered optimists in Westpac Banking Corp. (WBC) surveys.
“Overall, we expect that interest-rate cuts and budget handouts will help the retail sector continue some upward momentum in the coming months,” the report showed. “Real wages growth is picking up, which may also help sustain retail growth at a reasonable level over 2012 and into 2013.” Deloitte said risks to its forecast remain high, as threats to the global economy keep business and consumer confidence fragile and because of wealth losses due to weaker share markets and house prices.

20120614 1002 Global Commodities Related News.

Rain, Pests Imperil Wheat Crop in India as Warehouses Overflow (Source: Bloomberg)
India, the world’s second-biggest wheat producer, risks losing more than 6 million metric tons of grain to rain and pests as the country lacks warehouses to stockpile crops that have risen to records for six years. Wheat is kept in the open across markets in north India as state granaries are overflowing with about 82 million tons of rice and wheat, Food Minister K.V. Thomas said in an interview in New Delhi. A group of ministers will soon consider the sale of about 13 million tons of wheat and rice to the poor and in the open market at subsidized rates, and discuss steps to boost exports to create room for newly harvested crops, he said.
Efforts to draw down stockpiles may boost shipments from India, adding to global supplies and extending the biggest slide in food prices in two years as measured by the United Nations’ Food & Agriculture Organization. Overflowing granaries may hasten a plan to enact a law to guarantee food grain to 64 percent of India’s 1.2 billion people, where the World Bank says more than 75 percent of the people live on less than $2 a day. “Grains kept unscientifically are susceptible to damage” Thomas said yesterday. “Earlier also, some quantities were under unscientific storage, but not to this extent as seen this year. Experts team has already gone to the states to look into what has to be done so that there is no damage.”

Soros-Backed Farms Ripe for Bid at 36% Discount: Real M&A (Source: Bloomberg)
Adecoagro SA (AGRO), the agricultural company that counts George Soros as its biggest investor, is giving potential buyers the chance to get a hold of farms in Brazil and Argentina at a 36 percent discount to its net assets. The producer of soybeans, sugar and rice slumped 21 percent in the past year, more than three times the average decline of similar-sized farming companies around the world, as investors shunned Argentine assets after the government seized YPF SA. That’s left the $1.1 billion farmland venture trading at 0.64 times its net asset value of about $14.78 a share, based on the average of four analysts’ estimates compiled by Bloomberg. Adecoagro, which is listed on the New York Stock Exchange, is projected to post record revenue and profit next year as the United Nations says global food output must rise 70 percent by 2050 to feed a growing world population.
While ties to Argentina have been a drag on the stock, HSBC Holdings Plc says most of the company’s growth will come from Brazil, potentially luring takeover interest from agriculture traders Bunge Ltd. (BG) and Cargill Inc. Adecoagro could command as much as $15 a share in a takeover, said ING Groep NV, a 57 percent premium.

DTN Closing Grain Comments 06/13 14:08 : July Corn Steals the Show (Source: CME)
July corn was the story in the grain complex Wednesday as rumors circulated once again that China was looking to secure coverage in the cash market. New-crop corn and soybeans were hammered by noncommercial long-liquidation while wheat slept through most of the day.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Wheat futures saw trade on both sides of unchanged today, but bears gained the upper hand heading into the close. Chicago wheat ended steady to 2 1/2 cents lower and Kansas City ended mostly weaker in mixed trade. Minneapolis was steady to pennies lower in all but the front month, which was moderately higher. In after hours action, futures firmed to mixed trade.

Wheat Market Recap Report (Source: CME)
July Wheat finished down 1/2 at 615 1/2, 8 1/4 off the high and 1 1/4 up from the low. December Wheat closed down 1 at 658 1/2. This was 3/4 up from the low and 7 3/4 off the high. July wheat pushed moderately higher on the session early today but set-back to trade near unchanged on weakness in the other grains and bounced back to trade near 4 1/2 cents higher on the day into the mid-session. Talk that the sell-off was a bit overdone yesterday plus news of less than expected production for Australia, Germany and potentially further revisions lower in the Black Sea region helped to support the bounce. Traders see continued mostly drier than normal weather for the black Sea region ahead and Russia wheat estimates seem to be slipping to near 50 million tonnes or below as compared with 53 million from the USDA yesterday. Traders await new export business and the ongoing harvest continues. Traders noted some short-covering from fund traders early today. For the weekly export sales report for tomorrow morning, traders see wheat sales near 250,000 tonnes. July Oats closed up 12 at 307 3/4. This was 13 3/4 up from the low and 1 3/4 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
July corn futures settled 8 1/2 cents higher, while deferred contracts were mostly 10 to 12 cents lower. Aside from the July contract, futures finished near session lows. Most contracts mildly declined from settlement levels in after-hours trade. July corn futures were supported by strength in the cash market. The basis strength triggered rumors of potential Chinese demand, although nothing was confirmed.

Corn Market Recap for 6/13/2012 (Source: CME)
July Corn finished up 6 3/4 at 590 3/4, 11 1/4 off the high and 15 1/4 up from the low. December Corn closed down 13 1/4 at 509 1/4. This was equal to the low and 15 1/4 off the high. July corn pushed moderately higher on the session and traded above $6 briefly into the mid-session. December pushed to new lows late in the session and traded near 11 cents lower late in the session. Improving weather in the forecast into next week with 1-3 inches of rain in the western Corn Belt and 1/4 to 3/4 inches in the eastern Corn Belt continued to pressure with December pushing to the lowest level since June 6th. In addition, traders see less heat in the extended forecast models. Ethanol production for the week ending June 8 averaged 920,000 barrels per day. This is up 1.8% vs. last week and up 4.5% vs. last year. Total Ethanol production for the week was 6.44 million barrels which is the highest weekly total since February 10th. Corn used in last week's production is estimated at 98 million bushels as compared with 97.1 million bushels necessary each week to reach the new USDA projection for the year. Stocks as of June 8th were 20.66 million barrels. This is down 2.5% vs. last week and up 4.7% vs. last year. For the weekly export sales report for tomorrow morning, traders see corn sales near 550,000 tonnes. July Rice finished down 0.205 at 13.895, equal to the high and equal to the low.

Managed Money traders set to switch view on corn
CHICAGO, June 12 (Reuters) - Managed money traders have whittled their net exposure to the corn market back to its lowest level in close to two years lately as a near-record-large corn planted area total weighed on market sentiment as the 2012 growing season got under way. Souring economic confidence stemming from economic and political disarray in Europe also sparked a broad shedding of risk by large speculators in recent weeks.
But managed money traders may soon ramp up long-sided bets once again, especially if the hot and dry growing conditions across most of the Corn Belt cause further crop deterioration and the upcoming U.S. Department of Agriculture crop report reveals a tightening in U.S. and world corn inventories.

Corn falls for 3rd day, wheat up on Australian f'cast
SINGAPORE, June 13 (Reuters) - Chicago corn slid, falling for a third consecutive session on pressure from forecasters of more rain in the U.S. Midwest and a government report which kept the stocks unchanged.
"In the short term there will be pressure on corn prices because of the rain forecast, but if the weather continues to be dry there will be support," said Lynette Tan, an analyst with Phillip Futures in Singapore.

Australia cuts 2012/13 wheat forecast to 24.1 mln/t
SYDNEY, June 13 (Reuters) - Australia on Wednesday downgraded its winter wheat production forecast by more than 7 percent to 24.1 million tonnes, almost one-fifth smaller than last year's record crop, citing average-to-dry growing conditions so far this year.
The forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is lower than its forecast in March for a 26 million tonne crop. Last year's crop was a record 29.5 million tonnes.
Nebraska corn fields hit by disease
June 12 (Reuters) - U.S. plant scientists have found the debilitating disease Goss's Wilt in multiple corn fields across Nebraska, raising fears of yield loss in the No. 3 U.S. corn state.
The disease is not widespread at this time, but oozing leaves and leaf lesions have been noted on corn plants. Testing has confirmed the Goss's bacterial wilt and blight in corn samples received from south central and eastern Nebraska, according to University of Nebraska-Lincoln (UNL) researchers.

Argentine farmers to end strike, warn of more protests
BUENOS AIRES, June 12 (Reuters) - Argentine farmers said they would allow a one-week freeze on grains sales to end as planned on Tuesday, but threatened to stage more anti-government protests against taxes and export curbs.
The sales strike was called by growers angry about state-centric agricultural policies and a recent tax increase in No. 1 soy- and corn-producing province Buenos Aires.
From Russia to U.S., wheat crop gets smaller-USDA
WASHINGTON, June 12 (Reuters) - Harsh weather in Russia, Europe and the United States will shrivel the global wheat harvest, leading to sharply lower consumption, the U.S. government forecast on Tuesday.
In a monthly update, the Agriculture Department, however, surprised markets by holding to its projections of a record-large U.S. corn crop.
Ukraine starts 2012 grain harvesting
KIEV, June 12 (Reuters) - Farmers in southern Ukrainian regions have started the 2012 grain harvest, threshing the first 280 hectares of early grains, regional officials said on Tuesday.
The government of Ukraine's southern Crimea region said in a statement the grain yield averaged 2.03 tonnes per hectare.
Iran team looks at India wheat for possible imports
MUMBAI, June 12 (Reuters) - A delegation from sanctions-hit Iran arrived in India on Tuesday to explore the possibility of importing wheat from the south Asian nation, which has huge stocks and wants to reduce its trade imbalance with the oil exporter, government sources said.
Food shipments to Iran are not targeted under Western sanctions aimed at curbing Iran's nuclear programme, but payments remain difficult because of financial sanctions, even though India has just won a waiver from Washington on the strictures.

ICE coffee above 2-year low, cocoa consolidates
LONDON, June 13 (Reuters) - Arabica coffee futures on ICE hovered above a two-year low under pressure from ample supplies and slack demand, while cocoa edged higher, as the eurozone debt crisis remained the key driver of commodities markets in the lead up to Greece's election this weekend.
Arabica coffee futures were slightly higher, trading above the previous session's two-year low, with September  up 0.5 cent or 0.3 percent at $1.5585 per lb at 0929 GMT. The second month fell to $1.5480 on Tuesday, the lowest level for the benchmark second month since mid-June 2010.

Zambia Illovo Sugar unit workers strike over pay
LUSAKA, June 13 (Reuters) - About 3,000 workers at Zambia Sugar , a unit of South Africa's Illovo Sugar , have gone on strike demanding a 35 percent pay rise, the company said on Wednesday.
Zambia Sugar said in a statement that operations at its Nakambala Sugar Estate, about 130 km (80 miles) south of Lusaka, had been disrupted following the illegal strike, which started on Tue day.

Oil Trades Near Eight-Month Low Before OPEC Meets on Production (Source: Bloomberg)
Oil traded near the lowest close in eight months in New York before OPEC meets to discuss production quotas amid speculation the group won’t cut output as the global economy weakens. Futures were little changed after dropping a fourth time in five days yesterday. The Organization of Petroleum Exporting Countries, which meets in Vienna today, will probably maintain its output ceiling as concern that global growth is shrinking outweighs calls for supply cuts to stem sliding crude prices, three of the cartel’s oil ministers said. U.S. retail sales fell and Spain’s debt rating was cut by Moody’s Investors Service. Oil for July delivery was at $82.54 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 9:40 a.m. Sydney time. The contract fell 0.8 percent yesterday to $82.62, the lowest close since Oct. 6. Prices are down 16 percent this year.
Brent oil for July settlement, which expires today, slipped 1 cent to $97.13 a barrel on the London-based ICE Futures Europe exchange yesterday. The more-actively traded August contract slid 25 cents to $96.72. The European benchmark contract’s premium to West Texas Intermediate closed at $14.51. Ministers from Ecuador, Kuwait and Nigeria said yesterday that OPEC is set to keep its 30 million barrel-a-day limit. Venezuela, Iran, Iraq, Angola, Ecuador and Libya have argued that crude supplies are excessive. While an increase of as much as 1 million barrels a day suggested by some Gulf Arab countries would help Europe weather its slowdown, the 12-member group will probably settle on the status quo, according to two Middle Eastern delegates who declined to be identified because a decision hasn’t been made.

Tumbling oil tests notional price floor
(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON, June 12 (Reuters) - Following recent falls, oil prices are much closer to the industry's marginal cost, especially in North America, where light sweet crude futures are now valued at only a little over $80 per barrel.
For bullish investors, lower prices promise to provide support by threatening to curb rapid output growth, especially from high-cost tight oil and bitumen projects across the United States and Canada, as well as deepwater exploration, unless the global economy enters another tailspin.

OIL-Oil steady above $97 ahead of OPEC meet, Greek polls
LONDON, June 13 (Reuters) - Brent crude oil held firm, with investors awaiting the outcome of the meeting this week of the producer group OPEC, while gains were capped by worries about Europe's debt crisis and prospects for oil demand.
"The IEA confirmed that there are stock builds and they don't want to say that the market is over-supplied, but it's not a game-changer in terms of prices and the market is still well-supplied," Olivier Jakob at Petromatrix in Zug said.

OPEC price hawks call on Saudi to cut oil output
VIENNA, June 12 (Reuters) -    OPEC's price hawks on Tuesday called on Saudi Arabia to rein in excess production to stem a slide in oil prices that has knocked $30 a barrel off crude since March.
"We are going to make a very strong call in the meeting that the countries that are over-producing cut," said Venezuelan Oil Minister Rafael Ramirez.  

Nigeria aims for 25 pct oil capacity rise by 2020-NNPC
PARIS, June 12 (Reuters) - Nigeria aims boost its oil output capacity by a quarter to 4 million barrels per day by 2020 as Africa's top producer seeks to overhaul a sector plagued by corruption and theft, a top executive at state-oil firm NNPC said on Tuesday.
The target is in line with what oil majors operating in Nigeria like Shell  have said is possible, but only if big challenges such as NNPC funding for joint ventures and massive organised oil theft are addressed.

Turkey starts talks to buy Saudi oil -minister
ANKARA, June 12 (Reuters) - Turkey has begun talks with Saudi Arabia on long-term crude oil purchases, Turkish Energy Minister Taner Yildiz said on Tuesday, after the United States said it would exempt Turkey from financial sanctions because it cut purchases of Iranian oil.
Yildiz said the talks were in line with Turkey's main energy target to increase the number of countries from which Turkey imports crude oil.

20120614 1002 Soy Oil & Palm Oil Related News.

Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean futures extended early losses to end double-digit lower, with nearbys 20-plus cents lower and new-crop futures posting double-digit losses. Traders took some weather premium out of the market today as forecasters have added a near-daily chance of rain into the outlook for the next several days and into next week.

Soybean Complex Market Recap (Source: CME)
July Soybeans finished down 28 1/2 at 1406 1/2, 31 off the high and 1 3/4 up from the low. November Soybeans closed down 17 at 1320. This was 10 up from the low and 19 off the high. July Soymeal closed down 12 at 421.0. This was 0.7 up from the low and 11.5 off the high. July Soybean Oil finished down 0.6 at 49.12, 0.94 off the high and 0.05 up from the low. July soybeans were trading near 29 cents lower on the session late in the day and close to the early lows. November closed about 10 cents higher than the early lows but still moderately lower on the day. The continued weather trend of potentially wetter weather into late June plus fund selling seemed to be the feature of the day. Talk of improving weather outlook for the next few weeks and talk of increased concerns for the global economy seemed to be the primary negative forces today which sparked profit-taking selling from fund traders and speculators. Talk that China annual growth pace may dip below 7% for the second quarter was seen as a negative force as well. Talk of hefty rain totals in the western Corn belt (1-3 inches) next week and some rain in the east (1/4 to 3/4 inch) in the forecast plus a lack of heat in the extended models helped to pressure. Ideas that the market is a bit overbought after pushing to the highest level since May 17th and some talk that meal demand could ease with better corn supply ahead helped to pressure with meal the leader on the downside today. For the weekly export sales report for tomorrow morning, traders see soybean sales near 550,000 tonnes. Late weakness in the stock market, a jump in bonds and weak action in energy markets added to the negative tone.

VEGOILS-Palm oil slips as euro zone concerns fester
SINGAPORE, June 13 (Reuters) - Malaysian palm oil futures inched down in a quiet trading session, as concerns the euro zone debt crisis could slow growth offset demand chasing tighter stocks.
"In addition, supply shortage due to the tree stress effect (in Malaysia) and monetary easing policy from China should continue to support crude palm oil prices," Alan Lim, research analyst with Malaysia's Kenanga Investment Bank, said in reference to weak production growth.

Indonesia's SMART says palm output to grow 8 pct a yr
JAKARTA, June 13 (Reuters) - Indonesian palm oil firm SMART  will grow its output of the edible oil by 8 percent a year for the next five years, as its plantations mature to produce greater yields, an executive told Reuters on Wednesday.
"It will be about an 8 percent increase. Some immature plantations are now becoming mature," said Franky Widjaja, CEO of SMART's parent firm, Singapore-listed Golden Agri-Resources.
Rain helps some EU rapeseed, lashes UK crops
PARIS, June 12 (Reuters) - Spring rain continued to bring relief to rapeseed in parts of western Europe this week after many crops were hurt by winter frost, but the region was still forecast to produce a smaller harvest this summer.
Forecasters expect production of rapeseed - used for making vegetable oil and biodiesel fuel - in the European Union to fall by at least 1 million tonnes from last year's 19.1 million, with oilseed analysts Oil World projecting 18.1 million tonnes and the U.S. Department of Agriculture 17.9 million.