Tuesday, June 19, 2012

20120619 1818 FCPO EOD Daily Chart Study.

FCPO closed : 2948, changed : +49 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : rising, seller taking profit and reduce position.
Support : 2920, 2900, 2850, 2800 level.
Resistance : 2950, 2970, 3020, 3050 level.
Comment :
FCPO closed firmer with increasing volume changed hand. Soy oil price currently trading firmer after overnight closed higher while crude oil price trading little lower moving side way.
Price traded higher after U.S. giving dry weather outlook will damage soybean crop and a anticipation of better demand ahead of tomorrow export data.
Daily chart study remained recommending a pullback correction downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120619 1747 FKLI EOD Daily Chart Study.

FKLI closed : 1597.5 changed : +16 points, volume : higher.
Bollinger band reading : upside biased with possible pullback correction.
MACD Histogram : resumed rising, buyer in advantage.
Support : 1590, 1580, 1570, 1565 level.
Resistance : 1600, 1610, 1620, 1630 level.
Comment :
FKLI rallied significantly higher with improved volume participation doing 2.5 points premium compare to cash market that also closed higher. Overnight U.S. markets closed little lower pulling back after recent climb and today Asia markets ended mixed while European markets currently trading higher.
Higher Spain borrowing cost and possible Greece bailout renegotiation development resulted global markets to trade mixed without clear direction while back home Malaysia market trade surge higher possibly on better prospect after Felda Global Venture IPO recorded good result and possible U.S. and China stimulus measure.
Technical chart study adjusted to recommending an upside biased market development with possible pullback correction after breaking previous high resistance now turned support at 1591.5 level and now possible testing year high near 1606.5 level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120619 1721 Regional Markets EOD Daily Chart Study.

 DJIA chart reading : upside biased.
 Hang Seng chart reading : upside biased with possible pullback correction.
KLCI chart reading :  upside biased with possible pullback.

20120619 1616 Crude Palm Oil Related News. (Source: Reuters)

VEGOILS-Palm edges up on U.S. dry weather outlook DBYU2 FCPOc3 - RTRS 19-Jun-2012 13:18
USDA reports damaged soy crop due to dry weather in Midwest Palm oil to revisit low of 2,838 ringgit -technicals Coming up: Malaysian palm oil exports for June 1-20 on Wednesday
By Chew Yee Kiat
SINGAPORE, June 19 (Reuters) - Malaysian palm oil futures gained on Tuesday on expectations of higher demand as dry U.S. weather could damage the soybean crop further, tightening global edible oil supply.
A victory by pro-bailout parties in the Greek polls over the weekend appears to have lessened the risk for a renewed financial crisis, sending palm oil futures to close just below the 2,900-ringgit mark on Monday.
But as optimism began to fade in financial markets, dry weather cues came into play as the U.S. Department of Agriculture (USDA) said unfavourable weather had damaged soybean crop quality.
"Prices should remain positive with the Greeks behind us. Dry weather in the U.S. Midwest also supports a bullish stance," said a trader with a local commodities brokerage in Malaysia.
By the midday break, benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 1.4 percent to 2,940 ringgit ($932) per tonne, after rising as high as 2,943 ringgit.
Traded volumes stood at 15,744 lots of 25 tonnes each, higher than the usual 12,500 lots.
Palm oil technicals were bearish as Reuters market analyst Wang Tao said prices would revisit the June 14 low of 2,838 ringgit. (Full Story)
But fundamentals remain supportive as Malaysian palm oil exports recorded a double-digit jump for the June 1-15 period from a month ago, reflecting resilient demand ahead of the Muslim fasting month starting in mid-July. PALM/ITS PALM/SGS
Cargo surveyors will issue exports data for June 1-20 on Wednesday.
The USDA revealed dry weather damage on Monday in its weekly crop report, saying 56 percent of soybean crop was in good-to-excellent shape as of Sunday, down four percentage points from the previous week. (Full Story)
A lower soybean crop could lead to a smaller supply of soybean oil, shifting demand to the cheaper refined palm oil, which is trading at a steep discount of close to $150.
Brent crude steadied around $96 a barrel on Tuesday, staying close to 16-month lows hit in the prior session, as Spain's rising borrowing cost showed Europe is nowhere near resolving its debt crisis that has hurt the outlook for fuel demand. O/R
In other vegetable oil markets, U.S. soyoil for July BOc1 delivery gained 1.5 percent. The most active Jan 2013 soyoil contract DBYF3 on the Dalian commodity exchange edged up 1.2 percent.
"The elections in Greece provided some support, but the main reason behind higher prices today was the dry weather in the United States although the impact could be short term," said Huang Zhi Qiang, an analyst with Guotai Junan Futures in Shanghai.

20120619 1602 Global Market & Commodities Related News. (Source: Reuters)

Asian shares edged down, while European stocks were set to inch higher following the previous roller-coaster session, although gains were seen limited ahead of Spain's short-term debt auction. The Nasdaq advanced on Monday, propelled by a rally in Apple and other big-cap tech stocks, but fears Europe's debt crisis is in danger of worsening limited broader gains.

FOREX-Euro licks wounds as focus shifts from Greece to Spain
TOKYO, June 19 (Reuters) - The euro  recouped some losses sustained after Spain's borrowing costs spiked to euro-era highs, but gains were capped ahead of a debt sale which is likely to see Madrid's borrowing costs rise even more.
Markets cut short Monday's honeymoon after a pro-bailout vote in Greece, pushing Spain's bond yields to 7.3 percent, undermining Madrid's ability to finance itself less than two weeks after the EU decided to lend it 100 billion euro to boost its lenders.

G20 ramps up pressure on Europe over debt crisis, welcomes China moves towards FX reforms, reaffirms commitment to market-set exchange rates, avoid misalignments and competitive devaluations, does warn over excess volatility and disorderly movements  - Reuters.

HKEx shares drop; concern it's over-paying for LME
HONG KONG, June 18 (Reuters) - Investor concern that Hong Kong Exchanges and Clearing Ltd (HKEx) , operator of Asia's largest bourse, is over-paying with its $2.2 billion buy of the London Metal Exchange knocked its shares down by the most in two weeks on Monday.
In the first session since the acquisition was announced late on Friday, HKEx shares fell 4.5 percent to their lowest close since June 8. The Hang Seng Index rose 1 percent.

Japan PM Noda - Told G20 JPY rapid rise driven by speculators, fall-out from EZ crisis - Reuters.

FinMin Azumi - Told G20 JPY rise not good for economy, urges EZ action - RTRS.

China May net FX purchases CNY23.4 bln ($3.68 bln), April CNY60.6 bln sales.

ECB/Austria CB Nowotny - Bank sector is Spain's main problem, Greece must implement reforms, must be believable, Greece doesn't have time, next fund disbursement decision by July-end - Reuters, DowJones.

RBA June 5 meeting minutes - Case for June cut finely balanced, scope for policy to be more supportive of domestic activity, no significant weakening in conditions vs forecasts, uncertainties large though

RBNZ AsstGov McDermott - Inflation targeting effective, also eyeing other other tools - Reuters.

NZ FinMin English - Won't let planned budget surplus in '14/15 slip - Reuters.

The euro recouped some losses sustained after Spain's borrowing costs spiked to euro-era highs, but gains were capped ahead of a debt sale which is likely to see Madrid's borrowing costs rise even more.

U.S. corn rose to a one-week high as the U.S. Department of Agriculture said new-crop quality had been damaged by recent hot, dry weather, prompting concerns that stocks will not be replenished as projected.

Brent crude steadied around $96 a barrel, staying close to 16-month lows hit in the prior session, as Spain's rising borrowing cost showed Europe is nowhere near resolving its debt crisis that has hurt the outlook for fuel demand.

Tokyo Steel cuts July prices, demand remains weak
TOKYO, June 18 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steel maker, said on Monday it would cut prices of its product for delivery in July by up to 9 percent to reflect sluggish demand.
It will cut prices of H-shaped beams, its major product, by 9 percent, or 8,000 yen, to 65,000 yen per tonne.

Japan May crude steel output rises 2 pct yr/yr
TOKYO, June 19 - Japan's crude steel output rose 2 percent in May from a year earlier, industry figures showed on Tuesday, as strong demand from the domestic car and construction sectors outweighed a decline in exports.
Output rose for a third consecutive month to 9.23 million tonnes during the month, the Japan Iron and Steel Federation (JISF) said on Tuesday.

Malaysian lawmakers green light rare earths plant
KUALA LUMPUR, June 19 (Reuters) - Australia's Lynas Corp  is set to clear the final hurdle for its delayed $800 million rare earths plant after Malaysian lawmakers asked the government to issue the miner a temporary operating license despite community safety concerns.
The recommendations of a six-member parliamentary committee

London copper was steady, after ending slightly down in the previous session when an early euphoria over a victory for Greece's pro-bailout parties soon gave way to worries about Spain's shaky finances and wider problems in the global economy.

Gold rose for an eighth consecutive session, the longest winning streak since July last year, after a weekend victory for pro-bailout parties in Greek elections failed to shake off worries about a worsening debt crisis in Europe.

METALS-London copper steadies; euro zone eyed
SHANGHAI, June 19 (Reuters) - London copper steadied , as investors weighed the potential of monetary easing by the United States against nagging worries about the euro zone debt crisis, with the financial health of Greece and Spain back in focus.
The Federal Reserve will hold a two-day policy meeting starting on Tuesday and some economists have said that the U.S. central bank may unveil more stimulus measures following recent disappointing economic data.

PRECIOUS-Gold rises for 8th day, euro zone worries support
SINGAPORE, June 19 (Reuters) - Gold rose for an eighth consecutive session , the longest winning streak since July last year, after a weekend victory for pro-bailout parties in Greek elections failed to shake off worries about a worsening debt crisis in Europe.
Investors shifted their focus to a policy meeting by the U.S. Federal Reserve, which economists say, appears increasingly likely to offer more monetary stimulus despite political opposition, internal reticence and concerns about whether it will be effective.

20120619 1141 Global Market & Commodities Related News.

GLOBAL MARKETS-Asia stocks slip as euro zone fears focus on Spain
SINGAPORE, June 19 (Reuters) - Asian shares slipped as a post-Greek election relief rally quickly ran out of steam, with rising Spanish and Italian bond yields signalling that European leaders still have much to do to contain the euro zone debt crisis.
"Spanish yields have shot through the highs from November, and even the short end is now looking shaky," said Jens Nordvig, global head of FX strategy at Nomura in New York. "Europe is facing much greater challenges than the risk of a Greek exit."

COMMODITIES-Oil, metals dip as Greece euphoria fades; corn jumps
NEW YORK, June 18 (Reuters) - Oil closed down and metals prices mostly fell as investors looked beyond the victory of pro-bailout parties in Greece's elections to wider problems in Europe, while U.S. grains markets rallied on drought worries.
"In the short term, it's hard to see how there's going to be a convincing rally with all of the ongoing macro problems" over Europe, said Wiktor Bielski, a London-based analyst for Russian commodities brokerage VTB Capital.

Saudi keeps traders guessing on oil downside
--Robert Campbell is a Reuters market analyst. The views expressed are his own--
NEW YORK, June 18 (Reuters) - Saudi Arabia has cleared up any doubts about its unhappiness with oil prices above $100 a barrel but last week's OPEC meeting has done nothing to dispel speculation that the kingdom may be willing to see crude go much lower for a while.
Crude's collapse from near $130 a barrel earlier this year has been brought about by a slowing world economy and determination on the part of Saudi Arabia to force the world to sit up and take notice when it flexes its supply muscles.

Oil-Oil falls on euro zone worry, fading stimulus hope
NEW YORK, June 18 (Reuters) - Brent crude prices fell to 16-month lows as pressure from the broad euro zone debt crisis and fading expectations for coordinated central bank action erased gains derived initially from the pro-bailout election result in Greece.
"The selloff after the initial rally was because last week's strength was on the news that central banks would have a coordinated response to the Greece election and now the hope for more stimulus or liquidity has faded," said Phil Flynn, an analyst at Price Futures Group in Chicago.

POLL-U.S. crude stocks seen down on lower imports
June 18 (Reuters) - U.S. crude oil stockpiles likely fell last week for a third straight week due to lower imports, a preliminary Reuters poll showed on Monday.
Crude inventories are forecast to have fallen by 1 million barrels in the week to June 15, according to the survey of six analysts.

Oil market shrugs at imminent Iran tanker insurance ban
June 18 (Reuters) - In less than two weeks, Iran's biggest oil buyers will lose access to the London-based insurance market that protects 95 percent of the world's tanker shipments against oil spills or catastrophic collisions.
Barring an unexpected last-minute deal to relax European Union sanctions, Europe's Protection and Indemnity (P&I) clubs will be unable to insure vessels carrying Iranian crude from July 1, an unforeseen but ultimately critical side effect of EU sanctions to punish Iran for its nuclear program.

NATURAL GAS-US natgas futures end up 7 pct on weather, storage
NEW YORK, June 18 (Reuters) - U.S. natural gas futures ended sharply higher, lifted by forecasts for hot weather in the Northeast and Midwest that should boost cooling demand and also by expectations for another supportive weekly inventory report.
"We have hot weather coming up, so there's some short covering, and people suspect that coal-to-gas switching will continue to slow storage builds, but if prices near $3 we're going to see a lot less switching," a New York analyst said.

EURO COAL-Prices dip 75c on euro zone fears
LONDON, June 18 (Reuters) - Prompt physical coal prices fell by around 75 U.S. cents a tonne  in line with weaker oil as a pro-bailout vote in Greece failed to ease euro zone fears.
"Demand is not the issue, although it has been weak in Europe, India and China have been strong year-on-year," one producer said.

20120619 1026 Currencies Related News (Source: Reuters)

ASIA FX MARKETS OPEN
 TUESDAY, JUNE 19, 2012

GREEK SAGA CONTINUES; UP NEXT FOMC

Market Briefs
• US June NAHB Housing Market Index 29 vs exp 28 and prev 28
• CAD APR Int’l. Securities Transactions 10.2b vs exp 5b and prev -2.4b
• EU says the Troika not considering an extension of Irish loan repayments
• Fitch says won’t place all EZ Sovereigns on watch negative as it had indicated would be the case if Greek Euro exit were a probable near-term event
• Fitch says it sees lower risk of disorderly Greek debt default and EU exit
• Germany’s Merkel: Can’t accept any loosening of agreed reform pledges in Greece after election; Greek Gov’t must fulfill commitments made to int’l. lenders
• EU’s Barroso: EUR is very high; it’s not a problem; many in Europe would like it a little lower
• EU’s Wieser: New Greek loan payments won’t be made until a new memorandum of understanding is signed between Greece Gov’t and Troika

Looking Ahead - Data
• JPY 05:00 APR Leading Index Final; No f/c prev 95.1
• JPY 05:00 APR Coincident Index Final; No f/c prev 96.5

Looking Ahead – Events, Other Releases
• AUD 01:30 Reserve Bank Board Minutes for June

Currency Summaries
EUR/USD  Relief that Greece voted for a pro-bailout party on Sunday was short-lived, as were EUR/USD gains on the news. It topped out by 1.2750 and the upper 21-day Bolli band. Much of the first half of this month was about squaring up short EUR trades in case of a supposedly supportive Greek vote result or central bank action, namely from the ECB, that will put the financing crisis on the periphery in remission again. Unfortunately, Spanish 10-yr yields surged to new euro-zone highs above 7% today, which forced heavy macro selling of EURs versus the USD and most other currencies. By the London fix, the damage was done and EUR/USD was clinging to support at 1.2550-55. While Greece's ND party was trying to cobble together a workable coalition, a Spanish Minister was saying only the ECB had the tools to relieve crushing financing costs. Merkel threw cold water on easier bailout terms for Greece and ECB's Draghi got ready for his Thur meet with EZ FinMins at which we suspect he will be pressed for LTROs, SMPs or anything to stop the rot. G20's a joke. It's all about the ECB at this stage.

USD/JPY EUR/JPY led the early losses in the yen crosses and USD/JPY, as the hoped-for Greek election result failed to end the upward spiral in Spanish yields to new EUR-era highs. The bulk of the disappointment in that result was priced before the London fix. An uptick in the US NAHB index to a 5-yr, if still deeply depressed, high prompted profit-taking by EUR shorts and spec buying on the notion that there's no alternative to ECB liquidity injections at this point. EUR/JPY bounced from 99.15. The cross was oversold on the hourlies and traders failed to remove Friday's 99.10 low. Rebounds look stunted by offers in the 99.70 and 200-HMA vicinity. Day's high was rejected just ahead of the Jun 11 recovery high, making that even more pivotal. USD/JPY, on Friday, caromed away from the topside of its downtrend line from Mar highs. Monday's rebound was rejected by the hourly downtrend line off the Jun 13 high. It's Tenkan is crossing above the Kijun now, removing the bearish alignment, though Cloud cover looms in the low 80s. AUD/JPY cleared down TL and 38.2% Fibo hurdles today, running stops in the event.

GBP/USD Sterling was something of a sideshow to the main euro story in the wake of the Greek elections. The focus shifting to Spain saw the single currency sold again, and that pushed EUR/GBP below Friday’s lows into the 0.8025 area after it had played around near 0.8100. Cross selling helped support GBP/USD somewhat, but the market still retraced back to test 1.5630 into the US morning during the worst of the risk aversion action. As that market psychology eased, though, cable managed to recovering back to range around 1.5660.The reversal from new highs in GBP/USD creates a dark cloud cover candlestick pattern. Coming close to the declining upper Bollinger Band and near the bottom of the consolidation area either side of 1.5800 from mid-May, it's a natural reversal situation within the context of a consolidation period. That could mean further weakness. May UK CPI is expected to come in at 0.1% Tuesday, down from 0.6% in April, potentially supporting the case for the BoE to do QE soon, which wouldn't help cable.

USD/CHF Initial reaction to the ND win in Greece was to buy dollars in Wellington, but this was rapidly replaced by dollar buying against the EUR and CHF - tied at the hip via the SNB's 1.2000 EUR/CHF floor - when it became clear the news would not be enough to lower rising funding costs in Spain, Italy and other debt-burdened euro-zone members. Even if a new Greek govt is formed via coalition, the betting is they'll be unable to move the reform/austerity agenda very far, will run out of money by summer end and will not get the Troika's blessing then. German and others have already said they expect the terms of the second Greek bailout to be adhered to. USD/CHF caromed off its lower 21-day Bolli by today's 0.9424 low and surged back toward the converging 10 and 21-DMAs at 0.9540/50 and close to the down TL off the Jun highs, Tues at 0.9564. Slightly oversold daily Slow Stochs are turning back up. Main question is whether the meeting between the EZ FinMins and Draghi on Thursday will trigger a new round of LTROs, SMPs or some new emergency measure to beat back the USD, if only temporarily.

USD/CAD  spent most of the NY session consolidating within the upper limits of the range for the day. Risk-on sentiment from the Greek election was non-existent during NY hours giving the USD a flight to quality bid for most of the session. Early NY trades saw the pair continue the O/N rally off the lows as sentiment soured throughout the morning. Oil and NorAm equity marts traded lower throughout the day and aided in keeping USD/CAD at elevated levels. The 10 & 21 DMAs (1.0278) combined with offers layered in the 1.0280-1.0305 region capped the rally and the pair settled into a tight 1.0240/60 range for the afternoon. Consolidation could be in order over the coming sessions. Daily Bolli bands are narrowing while daily RSI and Stoch studies are turning up. The 10 and 21 DMAs have done a good job of containing price action so the pair may trade between them and the lower 21 day Bolli c. 1.0160 for now. Tomorrow brings Apr. Wholesale Sales data from Canada but market players are likely to focus on the EZ situation and the upcoming FOMC meeting on Wednesday. Should the Fed come up with new easing measures, recent USD/CAD gains are likely to be wiped out.

AUD/USD  Opened NY feeling heavy and unloved as the positive risk sentiment from overnight faded. Early NY trade saw the pair drift lower and re-test the O/N lows and close of Friday c. 1.0055/60. Bids in that region and a bounce off the lows in commodity and NorAm equity markets stemmed the slide. An early afternoon spike in price saw a rally and the pair make new highs for the day. The rally was attributed to a major U.S. custodial bank selling massive amounts of EUR/AUD for the 1 p.m. NY fix. EUR/AUD spiked lower to briefly trade below 1.2400. AUD could be gaining favor globally again. Blowout GDP and employment data two weeks ago have traders thinking the economy is not doing all that bad. Some of the highest interest rates in the developed markets combined with massive quantities of hard assets also make investments down under attractive. With the EZ still not out of the woods, we may see EUR/AUD continue its slide started in mid-May. Daily technical studies indicate EUR/AUD’s move lower can continue. Daily RSI and Stoch studies still show negative momentum with no signs of diverging. The 21 day Bolli bands continue to widen indicating the move lower has legs. The RBA releases the minutes of their June meeting at 01:30 GMT. Traders will be looking for hints of future rate cut to come. Keep in mind though that the better than f/c GDP & jobs data were post-RBA rate cut so they will not be factored into any comments made during the meeting.

NZD/USD For the most part, the kiwi stayed out of the fray surround the reaction and counter-reaction to the Greek election result. This had both plusses and minuses. On the one hand, NZD/USD held to a fairly narrow range throughout, sticking either side of about 0.8000 for the most part. On the other hand, the lack of a rally in the NZD in the latter part of the day was indicative of relative weakness in the face of a falling USD. AUD/NZD had fallen to the 1.2740 area in the European morning where it bottomed into the US morning, but the cross recovered to the 1.2790 area. The sustained action in NZD/USD today creates an over-bought risk for the market in that the day's range is almost entirely above the upper Bollinger Band. That isn't a sustainable situation, so we can expect to see at least a lessening of the upside momentum, if not some kind of consolidation. Even still, the next resistance of note to look for is the March low near 0.8050. There's nothing on the NZ calendar for Tuesday to impact the kiwi.

LATAM An up and down (or down and up) set of markets saw the major Latam pairs cover a fair bit of ground. The initial moves were driven by a strong positive reaction to the Greek election results that saw the USD weaken in line with higher Treasury yields and stronger stocks. That all turned quickly, though, such at the trend was already working well in favor of a stronger dollar by the US morning. In that swing, USD/MXN rallied to 13.96 from lows below 13.85 and USD/BRL pushed toward 2.07. The greenback held strong against the euro, but a better overall risk tone helped the commodity currencies. That saw USD/MXN fall back toward 13.84 in the US afternoon. USD/BRL also retraced, but only reached back to about 2.06. The reversal was supported by strong stocks and higher interest rates, though the likes of oil never really got up off the mat.

20120619 0956 Global Economy Related News.

Leaders of emerging economies want the IMF to put in place reforms to increase their influence before they step up contributions to a fund to prevent future crises, and expect their money to be used only after current resources "are substantially utilised." (AFP)

After searching for months for cash, the IMF looks able to firm up a huge emergency "firewall" fund for crisis prevention after Chinese Vice Finance Minister Zhu Guangyao announced that big emerging economies would chip in to help realise the international lender’s US$430bn target. (AFP)

Out of 70 Chinese cities tracked by the government, 43 registered mom falls in home prices in May, the same number as Apr, the National Bureau of Statistics said. (AFP)

China is expected to kick-start a trial program that would allow banks to turn loans into securities and free up funds for lending. The securitisation program, endorsed by banking regulators and the Ministry of Finance, could remove as much as Rmb50bn of loans from balance sheets, according to senior Chinese banking executives. (WSJ)

China has promised Taiwanese investors on the mainland up to US$95bn in loans from four major state banks over the next three to four years as it tries to build commercial ties with the island. (The Jakarta Post)

Japan’s department store sales fell 1.0% yoy in May (+1.3% in Apr), marking the first yoy drop in three months. (Bloomberg)

The Bank of Japan raised its assessment on exports and output but warned of risks to the economy from slowing Chinese growth and fallout from Europe's sovereign debt crisis. (Reuters)

India: Unexpectedly holds rate as inflation curbs easing
India unexpectedly left interest rates unchanged as the fastest inflation among the biggest emerging markets narrows scope to bolster an economy struggling with trade and budget deficits and Europe’s debt turmoil. Governor Duvvuri Subbarao left the benchmark repurchase rate at 8%, the Reserve Bank of India said in a statement in Mumbai yesterday. Hours after the decision, Fitch Ratings cut India’s sovereign credit outlook to negative, joining Standard & Poor’s in signaling the country is at risk of losing its investment grade rating on concern growth will deteriorate. Subbarao’s room to counter the weakest Indian economic expansion in almost a decade is being limited in part by a plunge in the rupee, which has stoked an inflation rate already above 7%. (Bloomberg)

Fitch Ratings downgraded India's BBB- credit outlook from stable to negative yesterday in reflection of “India's limited progress on fiscal consolidation and, in particular, on reducing the central government deficit despite improvement in the financial health of state governments." (Agencies)

EU: Greek coalition talks enter second day amid Merkel aid warning
Greek election winner Antonis Samaras begins a second day of talks to form a coalition after holding “constructive” meetings with two party leaders, racing to forge a government that keeps bailout aid flowing. Samaras secured initial agreement yesterday from Socialist Pasok leader Evangelos Venizelos, the former finance minister who negotiated the second rescue, and said he’d hold further talks yesterday with Fotis Kouvelis, the leader of the Democratic Left party. If those three team up, they will hold a majority of 179 seats in the 300-member Greek parliament. With German Chancellor Angela Merkel offering little flexibility on emergency loans needed to keep Greece in the euro and avert economic collapse, leaders in Athens are scrambling to forge a government that can negotiate changes to some of the austerity measures linked to the EUR240bn (USD303bn) pledged by international lenders. (Bloomberg)

EU: Spanish bad loans jump, adding to recession concerns
More Spanish loans went unpaid in April, suggesting the country’s recession is forcing more companies and consumers into default as the government struggles to restore investor confidence. Bad loans as a proportion of total lending jumped to 8.72% in April, the highest since 1994, from 8.37% in March and 6.36% a year ago as EUR4.8bn (USD6.1bn) of credit soured in the month, according to data published yesterday by the Bank of Spain in Madrid. Spain’s 10-year government bond yields yesterday reached a euro-era record as concern the region’s debt crisis may deepen outweighed optimism about the results of Greece’s election. Euro finance chiefs called for a new government to emerge “swiftly” from yesterday’s contest, which showed the pro-bailout New Democracy party in a position to form a coalition. (Bloomberg)

US: Obama in Mexico grabs sideline meetings on European debt
President Barack Obama, working to help contain Europe’s sovereign debt crisis, pressed leaders of the world’s largest economies yesterday, including Germany’s Angela Merkel, to find a consensus plan as financial markets escalated pressure on Spain. Chiefs of the Group of 20 nations are in Los Cabos, Mexico, for two days of meetings as Spanish borrowing costs soared to a euro-era record and elections in Greece failed to damp the threat of contagion that threatens the global and U.S. economies as well as Obama’s re-election prospects. “We are going to be very busy,” Obama said as he left a morning meeting with the summit’s host, Mexican President Felipe Calderon. “We are confident that this will be a productive summit.” In addition to Calderon, Obama was meeting yesterday on the sidelines of the summit with Merkel and Russian President Vladimir Putin, with whom he discussed violence in Syria and other issues. The two leaders have been at odds over Syria, with Obama pressing Putin to help ease out Syrian President Bashar al- Assad. The Russian leader has protected Assad with United Nations Security Council vetoes and Russia has sold weapons to the Assad regime. (Bloomberg)

The US NAHB/Wells Fargo housing market index rose to 29 in Jun, the highest level in five years, from a revised 28 in May, matching consensus. (Bloomberg)

US median household net worth dived 35% to US$66,740 in the five year period, the Census Bureau said (comparisons with prior periods is difficult because of inflation adjustment issues). (Reuters)

20120619 0955 Malaysia Corporate Related News.

Felda Global Ventures Holdings (FGVH) is confident of a successful listing on Bursa Malaysia, saying its strong business model would enable it to face global economic uncertainties. Chairman Tan Sri Mohd Isa Abdul Samad said under FGVH's initial public offering (IPO), the institutional offering of 1.92 billion shares was oversubscribed by 45x. Meanwhile, Malaysian Issuing House Sdn Bhd (MIH) said in a statement on Friday that the IPO's public portion of 72.963m shares was oversubscribed by 6.75x. "This is a good sign for FGVH's listing on the Main Board on June 28," Mohd Isa said, (Starbiz)

Louis Dreyfus Commodities Asia is said to be reconsidering its investment in Felda Global Ventures Holdings (FGVH) as the latter goes for listing next week, said business executives familiar with the matter. According to sources, Louis Dreyfus is said to be reconsidering its 2.5% strategic stake in FGVH due to the high fees imposed and the numerous cornerstone investors in the exercise. "The allocation of shares was supposed to be finalised yesterday, but Louis Dreyfus did not make it," a source said. FGVH declined to comment when contacted. (Financial daily)

Mudajaya eyes additional projects
Mudajaya eyes additional projects to increase in recurring income rather than focusing on 'cyclical construction activities', said managing director and chief executive officer Anto SF Joseph. The company said it will aim to secure more project in the region namely in India, Vietnam and the Middle East in which it is in talks with their business partners there. Anto Joseph also said Mudajaya has bid for projects of RM5bn and expects to add to its outstanding order book of RM3.6bn. Joseph said the company's on-going coal-based thermal power station in the state of Chhatisgarh is making significant progress and is expected to be completed on schedule. (StarBiz)

Aireen Omar is new AirAsia CEO for Malaysia
AirAsia has appointed Aireen Omar as its new chief executive officer (CEO) of Malaysian operations. AirAsia group CEO Tan Sri Tony Fernandes said Aireen has been with AirAsia for the past six years. Reuters meanwhile reported that prior to the appointment, Aireen was AirAsia's regional head of coporate finance and treasury. She will assume her new post on 1 July and report directly to Fernandes who confirmed he was moving to Jakarta. "We have 60% domestic and 40% international market share. We intend to maintain that and grow it," she told reporters after being named AirAsia's CEO for Malaysia's operations. (StarBiz) Please see accompanying report

TM to woo more developers
TELEKOM Malaysia (TM) wants to work with more housing developers to provide its UniFi broadband service. TM state general manager Ramlan Omar said the group had been working with several developers in Johor, Penang and the Klang Valley to install the service at their property projects. On the collaboration with Berjaya Hills, he said the service agreement was for five years and renewable. "We invested RM1.1m while Berjaya Hills invested RM1.4m to build the infrastructure to ensure there is smooth broadband connectivity for hotel guests and people living around the areas," he said. (BT)

Partnering solutions provider Orenda, Celcom Axiata launched Educube, the 3-in-1 online education service where primary and secondary school students can participate in online exams. "We are investing a significant amount of money in this service and for RM4.99 a month, we are confident that most of our customers will find this a value for money proposition," said Celcom advanced data chief operations Afizulazha Abdullah. (BT)

TNB signs MoU to embark on coal plant project in Sumatra
Tenaga Nasional (TNB) has signed a memorandum of understanding (MoU) with Indonesia's state-owned power company and a mining company for what could be a multibillion ringgit power plant project and an undersea power cable across the Straits of Malacca. The Malaysian national utility company said yesterday it was looking at laying a 275kV interconnection line from Malacca to Sumatra and a mine mouth coal-fired power plant project. The MoU involves TNB, Pt Perusahaan Listrik Negara and coal mining company PT Bukit Asam. An industry source estimates the overall cost of the mine mouth project including transmission lines, project cost and power plant would be more than RM7bn. (Malaysian Reserve)

Green Packet secures RM161.1m financing for expansion of 4G network
Green Packet's unit in Labuan has secured a USD51m (RM161.1m) financing from a consortium led by South-East Asia focused investment firm Kendall Court Capital Partners Ltd and Leafgreen Capital Partners Pte Ltd to expand its 4G network and consumer acquisitions activities in Malaysia. The financing consists of long-term loan and warrants for a duration of 60 months. Green Packet said its subsidiary, Packet One Networks (M) SB (P1), will issue warrants with a tenure of five years, which are exercisable into a maximum aggregate of 143,820 new ordinary shares of P1 (in the event P1 undertakes an initial public offering). Green Packet said the facility will increase the company's current gearing ratio to 2.33 times from 1.33 times at present. (Malaysian Reserve)

Can-One gets seats on Kian Joo board
The legal tussle between Kian Joo Can Factory (KJCF) and majority shareholder Can-One may soon come to an end following the appointment of the latter's CEO and chief operating officer (COO) to KJCF's board yesterday. KJCF's shareholders approved the appointment of Can-One CEO Yeoh Jin Hoe and COO Chee Khay Leong through a poll held at the company's AGM yesterday. Yeoh and Chee were nominated by Can-One, which won a Federal Court case in January to purchase a 32.9% stake in KJCF from Kian Joo Holdings SB (KJHSB). Can-One won the case after a long three-year legal tussle with the See family, who controls KJHSB (Financial Daily)

IGB makes first foray into Indonesia
IGB Corp is making its maiden foray into Indonesia, where the cash-rich property developer is acquiring a piece of land in West Jakarta for USD30.8m (RM97m). IGB said its wholly-owned subsidiary, IGB International Ventures SB, and British Virgin Islands-based joint venture partner Aspire Horizon Ltd will acquire the piece of land measuring 1.1ha. IGB and Aspire Horizon have established JV entity Wilmer Link Ltd on a 52:48 shareholding basis. Wilmer will in turn acquire a special purpose vehicle (SPV) which will own the land in Indonesia. According to IGB, the land will accommodate a hotel development worth RM32.2m. IGB also said it will advance up to USD5m to Wilmer to partially finance the acquisition of the land. (Financial Daily)

Pharmaniaga, which resumed trading last Friday, was issued with an unusual market activity (UMA) query by the stock exchange regulator after hitting limit-up for the second time. The company’s shares closed up 30%, or RM1.97, to RM8.47 with 2.67m shares traded yesterday. A separate filing showed that 550,000 shares were traded in an offmarket deal at an undisclosed price. Pharmaniaga said in a reply to the UMA that there were no corporate developments including those in the stage of negotiation/discussion that could account for the rise in the share price. (Starbiz)

New Hoong Fatt Holdings plans to capitalise on the growing automotive market, especially in the neighboring region. Managing Director Chin Jit Sin said the group would intensify its focus on overseas expansion. On the local front, NHF's branch in Gombak will be consolidated with the Segambut branch this month. Its Segambut warehouse is being expanded to include a RM7m double-storey warehouse, expected to be completed at the end of 2012. (Bernama)

20120619 0947 Global Market Related News.

Asian Stocks Decline on Record Spanish Borrowing Costs (Source: Bloomberg)
Asian stocks fell, with the regional benchmark index retreating from a one-month high, as Spain’s borrowing costs climbed to a euro-area record and optimism faded that Greece’s election will calm the debt crisis. Canon Inc. (7751), a camera maker that depends on Europe for about a third of its sales, slid 1.7 percent in Tokyo. Asahi Co. dropped 1.3 percent after the bicycle retailer said profit fell. Woodside Petroleum Ltd., Australia’s second-largest oil producer, fell 1.4 percent as crude futures declined. The MSCI Asia Pacific Index (MXAP) slipped 0.2 percent to 115.52 as of 9:27 a.m. in Tokyo, with about three shares falling for every two that rose. Over $5 trillion has been erased from global equities since March amid concern growth is slowing in the U.S. and China, and as Europe’s debt crisis intensified.
“We see Europe escalating rather than solving its problems,” said Tim Riordan, of Parker Asset Management Ltd., a hedge fund in Sydney that has about $200 million under management. “The focus is rolling on to Spain, and with bond yields going over 7 percent, this has been a red flag in the past. You’re in a bit of a downward spiral and this leads us to be fairly cautious.”

Asia Stocks, Oil Fall as Spanish Yields Soar; Aussie Halts Gains (Source: Bloomberg)
Asian stocks and oil fell as borrowing costs in Spain climbed to a euro-era record, fueling concern the debt crisis is deepening. The Australian dollar halted a three-day advance. The MSCI Asia Pacific Index fell 0.2 percent at 9:20 a.m. in Tokyo as the Nikkei 225 Stock Average slid 0.3 percent. Oil in New York fell 0.1 percent to $83.17 a barrel. The so-called Aussie dropped 0.1 percent to $1.0111, before the Reserve Bank releases minutes of its June meeting at which it cut interest rates for a second straight month. Standard & Poor’s 500 Index futures were little changed. Spain, which has asked euro-region governments for as much as 100 billion euros to help shore up its banks, reported yesterday that bad loans jumped in April to 8.72 percent of total lending, the highest since 1994. The 10-year Spanish yield surged above 7 percent.
Group of 20 nations are discussing a mix of measures, including deficit reduction for some countries and pledges for additional stimulus by others with sounder finances, a Canadian official said as leaders prepare for a two-day summit in Mexico. “We are positioned quite negatively,” said Tim Riordan, of Parker Asset Management Ltd., a hedge fund in Sydney that has about $200 million under management. “We see Europe escalating rather than solving its problems. The focus is rolling on to Spain, and with bond yields going over 7 percent, this has been a red flag in the past. You’re in a bit of a downward spiral and this leads us to be fairly cautious.”

Japan Stocks Fall on Record Spain Yields, Greek Election (Source: Bloomberg)
June 19 (Bloomberg) -- Japanese stocks fell from a one- month high after borrowing costs in Spain surged to a euro-era record and Greece’s election failed to assure investors that European officials will contain the region’s debt crisis. Canon Inc. (7751), the world’s biggest camera maker that gets 31 percent of its revenue in Europe, declined 1.7 percent. Tokyo Steel Manufacturing Co. fell 4.2 percent after cutting prices. Shizuoka Bank Co. gained 2 percent on a share buyback plan. The Nikkei 225 Stock Average (NKY) dropped 0.3 percent to 8,693.78 as of 9:23 a.m. in Tokyo after yesterday rising to the highest since May 22. The broader Topix Index slid 0.3 percent to 736.94. Stocks fell even as leaders at the Group of 20 nations meeting in Mexico plan to urge euro-area governments to protect the currency union.
“We see Europe escalating rather than solving its problems,” said Tim Riordan, of Parker Asset Management Ltd., a hedge fund in Sydney that has about $200 million under management. “ The focus is rolling on to Spain, and with bond yields going over 7 percent, this has been a red flag in the past. You’re in a bit of a downward spiral and this leads us to be fairly cautious.”

Most U.S. Stocks Rise as Greece Tempers Spain Concern (Source: Bloomberg)
Most U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a third day, as optimism about Greece’s attempts to form a coalition government tempered concern about a surge in Spanish bond yields. Apple Inc. (AAPL), the world’s most valuable company, added 2 percent to pace gains in technology shares. D.R. Horton Inc. and Lennar Corp. (LEN) climbed at least 3.9 percent as confidence among homebuilders rose to a five-year high. Facebook Inc. (FB) rallied 4.7 percent in the one-month anniversary of its initial public offering. Energy and financial shares in the S&P 500 declined. Ten stocks gained for every nine falling on U.S. exchanges at 4 p.m. New York time. The S&P 500 rose 0.1 percent to 1,344.78, after dropping 0.6 percent. The Dow Jones Industrial Average lost 25.35 points, or 0.2 percent, to 12,741.82. The Nasdaq Composite Index added 0.8 percent to 2,895.33. Trading volume for exchange-listed stocks in the U.S. was about 5.8 billion shares, 13 percent below the three-month average.
“We managed not to drive off the cliff in Greece, but we still got flat tires,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “The challenges in Spain are very much in front of us. There’s not a lot of conviction.”

European Stocks Little Changed on Spain’s Borrowing Costs (Source: Bloomberg)
European stocks were little changed as the yield on Spain’s benchmark 10-year bond climbed above 7 percent, amid fading optimism that Greece’s election will calm the euro area’s sovereign-debt crisis. Cable & Wireless Worldwide Plc jumped 7.8 percent after its largest investor said it will accept Vodafone Group Plc’s takeover offer. Banco Santander SA (SAN) sank 4.6 percent, contributing the most to a retreat by a gauge of bank shares. The Stoxx Europe 600 Index added 0.1 percent to 244.36 at the close after earlier rallying as much as 1.1 percent and sliding as much as 0.4 percent. The benchmark measure has dropped 10 percent from its peak on March 16 on concern that the euro area’s sovereign-debt crisis has triggered a slowdown in global economic growth.
“The Greek election hasn’t changed many things,” said Stanislas de Bailliencourt, a fund manager at Sycomore Asset Management in Paris, which oversees $2.4 billion. “Difficulties remain and it’s going to be a long process. Spanish bond yields continue to rise. There isn’t a lot of investor appetite for this type of risk. The market remains nervous.”

Stocks in Greece Rally to One-Month High After Election (Source: Bloomberg)
Greek stocks rallied to a one-month high after pro-bailout parties obtained more than half the seats in national elections, easing concern the country will leave the euro currency union. National Bank of Greece SA (ETE), the country’s largest lender, and EFG Eurobank (EUROB) Ergasias SA, jumped at least 11 percent. Hellenic Telecommunications Organization SA, Greece’s largest telephone company, gained 11 percent. The ASE Index (ASE) advanced 3.6 percent to 580.67 at the close of trading in Athens, after earlier rising as much as 7.2 percent. The gauge surged 10 percent on June 14, the second- biggest rally since 1990, amid speculation that the New Democracy party would lead the next government. The measure has climbed 22 percent since tumbling to a 22-year low on June 5.
The election outcome “makes the formation of a pro- European government more likely, removing political uncertainty in the short-run,” Panagiotis Kladis, an analyst at National Securities SA in Athens, wrote in a note today. “Banks could move further upwards this week, although this has been discounted to some extent towards the end of last week.”

Emerging Stocks Rise to 5-Week High After Greek Elections (Source: Bloomberg)
Emerging-market stocks rose, driving the benchmark index (SENSEX) to a five-week high, as concern that Greece may be forced out of the euro eased. The MSCI Emerging Markets Index advanced 1 percent to 934.06 by 4:31 p.m. in New York, the highest level on a closing basis since May 15. Redecard SA, Brazil’s second-biggest card- payment company, led technology shares higher after posting the sharpest increase in four months. The Bovespa rose to the highest since May 21 as Tam SA surged to a five-year high. The BSE India Sensitive Index lost 1.4 percent as policy makers left rates unchanged. Most developing nations’ benchmark gauges advanced after Greece’s New Democracy and Pasok parties won enough seats in parliament to forge a majority government, reducing concern the country was headed toward an exit from the euro. Concern Europe’s debt crisis is deepening curtailed exports and foreign investments to emerging markets.
“Investors are feeling relieved that the worst case scenario in Greece is avoided,” said Chu Moon Sung, a Seoul- based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion. “Problems of Europe’s debt crisis and a slowing global economy are still there, and I think investors will keenly watch for governments’ stimulus measures as well as policy cooperation.”

Biggest Stocks Beat S&P 500 Most in 13 Years as P/Es Fall (Source: Bloomberg)
The largest U.S. companies are beating the average stock in the Standard & Poor’s 500 Index by the most in more than a decade, fueled by rising dividends, valuations 31 percent below the historical average and fear. Companies in the S&P 100 from Apple Inc. to Bank of America Corp. (BAC) have gained 7.7 percent in 2012, compared with 5.1 percent for a version of the S&P 500 that strips out weightings for market value, the widest margin since 1999, data compiled by Bloomberg show. With price-earnings ratios down 6.6 percent this quarter to 12.7 and payouts at 2.2 percent of share prices, analysts raised buy recommendations for the group to the highest level since 2007.
The biggest stocks are showing corporate America’s resilience even though Mitt Romney, the presumptive Republican candidate in this year’s national election, criticized President Barack Obama earlier this month for saying the private sector is “doing fine.” A second year of record profits is helping the S&P 100 (OEX) beat every developed market index in the world as investors seek the relative safety of the U.S. after $5.1 trillion was erased from global equities since March 27. “The mega-caps are just cheap compared to other segments of the stock market,” Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., said in a June 14 phone interview. His firm oversees $3.68 trillion. “There are a lot of things that are wrong in the economy, to state the obvious, and these are companies that have the wherewithal to survive.”

U.S. 30-Year Yields Are Near Two-Week Low Before Spain Bill Sale (Source: Bloomberg)
Treasury 30-year yields were one basis point from an almost two-week low before Spain sells bills today amid concern Europe’s debt crisis is spreading to the region’s fourth-biggest economy. Rates remained lower following a decline yesterday after Spain’s 10-year yields climbed to more than 7 percent for the first time in the euro era. The Federal Reserve opens a two-day policy meeting today as speculation lingers that the central bank will take further steps to boost economic growth. “The bond market reflects both the weak U.S. recovery and demand for dollar assets as a haven from Europe’s turmoil,” said Makoto Suzuki, a senior bond strategist in Tokyo at Okasan Securities Co. “That’s why yields are staying low.” The 30-year yield was little changed at 2.66 percent at 9:20 a.m. in Tokyo after touching 2.65 percent yesterday, the least since June 6. The yield dropped to a record low 2.51 percent on June 1. The 3 percent security due in May 2042 traded at 107, according to Bloomberg Bond Trader data.

FOREX-Euro falls, Spanish woes overshadow Greek poll
LONDON, June 18 (Reuters) - The euro fell from a one-month high against the dollar  with the election win for pro-bailout parties in Greece overshadowed by Spanish bond yields surging back above the 7 percent level which traders view as unsustainable.
"The euro is already off the day's highs, displaying that while we have a decent result in the Greek election, everybody knows it's going to be a long, rocky road and we are nowhere near the end of Greece's problems," said Jane Foley, senior FX strategist at Rabobank.

Dollar Shortage Seen in $2 Trillion Gap Says Morgan Stanley (Source: Bloomberg)
Central banks rebuilding foreign- exchange reserves at the fastest pace since 2004 are crowding out private investors seeking U.S. dollars, boosting demand even as the Federal Reserve considers printing more currency. After falling to an all-time low of 60.5 percent in the second quarter of last year, the dollar’s share of global reserves rose 1.6 percentage points to 62.1 percent in December, the latest International Monetary Fund figures show. The buying has left the private sector with $2 trillion less than it needs, according to investment-flow data by Morgan Stanley, which sees the dollar gaining 8.2 percent in 2012, the most in seven years.
While the Fed has created more than $2 trillion under its stimulus programs since 2008, the flows signal that there may actually be a shortage of dollars to meet demand as Europe’s debt crisis deepens and the global economy slows. The dollar has risen 3.5 percent since the end of April against a basket of the most-widely traded currencies even amid speculation that the Fed, which meets this week, may undertake the type of stimulus measures that weakened it in the past. “The market often assumes that people are long dollars, but many of those dollars are held by central banks, which are unlikely to move out,” Ian Stannard, head of European currency strategy at Morgan Stanley in London, said in a June 13 interview. “That leaves us with the private sector, which is short,” meaning they don’t have enough of them, he said. “In an environment where we see a global slowdown, the dollar will be well supported.”

Fed Seen Twisting to Risk Management to Spur U.S. Growth (Source: Bloomberg)
Federal Reserve officials must choose this week between their best estimates and their worst fears of what will happen to the U.S. economy. Policy makers will bring new forecasts to their June 19-20 meeting and probably will mark down their April central-tendency estimate for growth of 2.4 percent to 2.9 percent this year. Lurking in the background is the risk of increasing financial stress in Europe and stubbornly high U.S. unemployment that has remained above 8 percent for 40 consecutive months. All this could prompt them to move away from their outlook for moderate growth and tilt toward a “risk-management” strategy pioneered by former Fed Chairman Alan Greenspan, which puts more emphasis on tracking and containing high-cost threats. Both Janet Yellen, the Fed’s vice chairman, and William C. Dudley, head of the Federal Reserve Bank of New York, used the phrase in the past month.
“What we are hearing from Vice Chairman Yellen and President Dudley, and the minutes of the last meeting, is that there are more risks on the downside,” said Donald Kohn, the former Fed vice chairman who is now a senior fellow at the Brookings Institution. “The ability to combat weakness with interest rates at the zero lower-bound is limited and uncertain. In a situation like this, their reasoning is you might want to buy some insurance.”

Obama in Mexico Grabs Sideline Meetings on European Debt (Source: Bloomberg)
President Barack Obama, working to help contain Europe’s sovereign debt crisis, pressed leaders of the world’s largest economies today, including Germany’s Angela Merkel, to find a consensus plan as financial markets escalated pressure on Spain. Chiefs of the Group of 20 nations are in Los Cabos, Mexico, for two days of meetings as Spanish borrowing costs soared to a euro-era record and elections in Greece failed to damp the threat of contagion that threatens the global and U.S. economies as well as Obama’s re-election prospects. “We are going to be very busy,” Obama said as he left a morning meeting with the summit’s host, Mexican President Felipe Calderon. “We are confident that this will be a productive summit.” European leaders, including German representatives, have come to the summit with a “notable shift” in outlook, persuaded by a slowing global economy of the need to place greater Treasury Undersecretary for International Affairs.

Fiscal Cliff Road Paved by Those Who Took U.S. to Brink (Source: Bloomberg)
The people responsible for averting the end-of-year fiscal cliff are the same ones who almost caused a U.S. debt default, let airline ticket taxes lapse for two weeks and came within two hours of shutting down the government. The 112th Congress, paralyzed by ideological divides and deadlocked on routine issues, may approach the brink again. Lawmakers are nowhere near an agreement on what to do about $607 billion of tax increases and spending cuts slated to kick in at the beginning of 2013. “If people wanted to resolve these problems, we’d have them resolved,” said Representative Henry Waxman, a California Democrat first elected in 1974. “People used to work out compromises for the good of the country.” Instead, Waxman and lawmakers in both parties said they don’t expect much from Congress until after the Nov. 6 election. That delay will force a compressed legislative session with the economy and the role of government in the balance.

China Medical Slumps After Bondholders Ask for Liquidation (Source: Bloomberg)
China Medical Technologies Inc. (CMEDY) posted the biggest two-day drop since April in New York after Stroock & Stroock & Lavan LLP said bondholders of the Beijing- based medical device company filed a petition for liquidation. American depositary receipts of China Medical traded on the U.S. over-the-counter market dropped 8.6 percent to $4.65 in New York yesterday, after tumbling 14 percent on June 15. Debt holders of China Medical directed Wilmington Trust to file a so-called winding-up petition with the Grand Court of the Cayman Islands on June 15, Jayme Goldstein, a lawyer at Stroock & Stroock & Lavan said by phone yesterday, adding his firm represents individual bond holders in the case. He declined to name his clients or give further details, citing the firm’s policy.
Eric Schaffer, a New York-based partner at Reed Smith LLP, confirmed that he was the U.S. counselor for Wilmington Trust, which acts under the direction of bond holders, while declining to provide more information before getting consent from his client. China Medical, a Cayman Islands-registered company, raised $110 million in its U.S. initial public offering in August 2005. The Nasdaq stock exchange said March 14 it was delisting the company’s ADRs, according to a statement from the bourse.

Hong Kong’s Wealth Gap Widens Amid Aging Population, Inflation (Source: Bloomberg)
Hong Kong’s wealth gap widened in the decade to 2011 as the city’s population aged and employers demanded more high-skilled workers. The city’s Gini coefficient, an index of the income gap, rose to 0.537 in 2011, from 0.525 in 2001, the Census and Statistics Department said yesterday in a report. The gap is wider than in Canada, the U.K., the U.S., Australia and Singapore, according to the report. The report highlights the challenges that incoming Chief Executive Leung Chun-ying faces when he takes office July 1 after pledging to aid low-income earners and increase housing supply. Thousands of workers took to the streets on the Labor Day holiday, demanding that Leung address the wealth gap. “Restructuring of the economy leading to a shift in demand from the traditional low-skilled workers to high-skilled high- income workers was one of the key factors behind the widening income disparity,” the report said.

India Unexpectedly Holds Rate as Inflation Curbs Easing: Economy (Source: Bloomberg)
India unexpectedly left interest rates unchanged as the fastest inflation among the biggest emerging markets narrows scope to bolster an economy struggling with trade and budget deficits and Europe’s debt turmoil. Governor Duvvuri Subbarao left the benchmark repurchase rate at 8 percent, the Reserve Bank of India said in a statement in Mumbai today. Only four of 25 economists in a Bloomberg News survey predicted the outcome, with 19 expecting a 0.25 percentage-point cut and the remainder a half-point reduction. Hours after the decision, Fitch Ratings cut India’s sovereign credit outlook to negative, joining Standard & Poor’s in signaling the country is at risk of losing its investment grade rating on concern growth will deteriorate. Subbarao’s room to counter the weakest Indian economic expansion in almost a decade is being limited in part by a plunge in the rupee, which has stoked an inflation rate already above 7 percent.
“Re-accelerating inflation, a still fragile rupee and the continued lack of action from New Delhi are limiting the RBI’s room for easing,” said Richard Iley, the Hong Kong-based chief economist for Asia at BNP Paribas SA. “Reform, not stimulus, is required to reboot India’s disappointing macro-economic performance.”

Australian Bonds Gain, Currency Drops on Europe Crisis (Source: Bloomberg)
Australia’s bonds advanced and its currency halted a three-day gain as surging borrowing costs for Spain reignited speculation that European leaders are struggling to contain their debt crisis. The so-called Aussie fell against most of its 16 major peers before a Spanish bill sale today as Group of 20 nations prepare to urge euro-area governments to take all steps necessary to protect the currency union. The local dollar slid before the Reserve Bank of Australia releases minutes of its June meeting, when it lowered interest rates. New Zealand’s currency failed to extend a three-day gain versus the greenback as Asian stocks fell, curbing demand for riskier assets. “Spain’s got some fairly material structural issues that can’t be solved overnight, and markets are reluctant to lend at the moment,” said Michael Turner, a Sydney-based strategist at RBC Capital Markets. “I could see the Aussie trade a little bit lower.”
Australian bonds rose, pushing the 10-year yield down by 10 basis points, or 0.1 percentage point, to 2.98 percent as of 10:36 a.m. in Sydney. The Australian dollar lost 0.1 percent to $1.0117 after advancing 1.9 percent in the past three days. It fell 0.2 percent to 79.95 yen.

Australia Has Scope to Respond to Europe Turmoil, Parkinson Says (Source: Bloomberg)
Australia has scope to respond to an economic shock emanating from Europe, where “the absence of political will” is a key barrier to fixing the region’s fiscal problems, Treasury Secretary Martin Parkinson said. “The euro-zone crisis is unlikely to be resolved for some considerable time to come,” Parkinson, the Treasury’s top bureaucrat, said in a speech late yesterday in Canberra. “While the Greek election has been grabbing headlines and attention, we should not over-dramatize these events, but nor should we believe the election eliminates the risks emanating from Greece or from the euro zone more broadly.” Concern that Greece, in a fifth year of recession, will reject austerity measures needed to qualify for international aid and risk the turmoil of exiting the 17-nation euro currency is easing after pro-bailout parties won enough seats to form government in weekend elections.
Turmoil in Europe contrasts with Australia, where the economy under Prime Minister Julia Gillard’s government has delivered low unemployment and moderate inflation. In May her government forecast it will end four years of deficits with an A$1.54 billion ($1.5 billion) surplus for the year starting July 1. “Australia is well-placed to cope with whatever emanates from Europe,” Parkinson said. “We have significant flexibility and capacity at our disposal to cope with a range of different global scenarios.”

Europe Imperils U.S. Sales From Chemicals to PCs: Economy (Source: Bloomberg)
American exporters from Dow Chemical Co. (DOW) to Hewlett-Packard Co. are preparing for a further decline in demand from Europe as the region’s deepening debt crisis threatens to derail a source of strength for the U.S. economy. JPMorgan Chase & Co. cut its forecast for second-quarter growth to 2 percent from 2.5 percent last week, in part because of a deteriorating trade balance. Earlier this month, it lowered its third-quarter estimate to 2 percent from 3 percent, “with much of the downward revision accounted for by an expectation that the pace of export growth will slow,” chief U.S. economist Michael Feroli said in a June 1 research note. U.S. exports to the 27-nation European Union dropped 4.8 percent in the year ended April, the worst 12-month performance since November 2009, Commerce Department figures show. By comparison, total U.S. exports were up 3 percent in April from the same time last year.
The slump in Europe coincides with slowing growth in other major markets for U.S. goods, such as China and Brazil. “The decline in Europe will weaken our exports over the long term,” said Michelle Meyer, a senior U.S. economist at Bank of America Corp. in New York. “We look for the trade deficit to widen not only to the euro zone but developing economies as well,” she said, consistent with their forecast that the U.S. economy will slow to just 1 percent growth by year-end from the 1.9 percent annual pace in the first quarter.

Europe Muddle Thickens as Doubts Persist Leaders Can Stem Crisis (Source: Bloomberg)
“To put it bluntly: we’re not going to pay,” the German chancellor said. That threat didn’t come from Angela Merkel, besieged from all sides to save Europe from an avalanche of debt. It was a rare outburst from her pro-European predecessor, Helmut Kohl, against calls that Germany plow more into the common European budget in 1998. Germany ended up paying, illustrating the contortions it has gone through for the sake of European unity. Today, Merkel faces mounting pressure to make even greater concessions, by putting Germany’s financial muscle behind an integrated banking and borrowing system to keep the euro intact. The question is whether, after two years of muddling through, Europe’s pre- eminent power can act quickly and decisively.
“I think she will remain an incrementalist: we have not yet reached the point where it is obvious that we are hanging over the precipice,” said Paul de Grauwe, a professor at the London School of Economics and two-time Belgian candidate for a European Central Bank post. “It looks again that what is going to come out is going to temporarily pacify markets until it is clear that it is not going to be sufficient.”

Greek Coalition Talks Enter Second Day Amid Merkel Aid Warning (Source: Bloomberg)
Greek election winner Antonis Samaras begins a second day of talks to form a coalition after holding “constructive” meetings with two party leaders, racing to forge a government that keeps bailout aid flowing. Samaras secured initial agreement yesterday from Socialist Pasok leader Evangelos Venizelos, the former finance minister who negotiated the second rescue, and said he’d hold further talks today with Fotis Kouvelis, the leader of the Democratic Left party. If those three team up, they will hold a majority of 179 seats in the 300-member Greek parliament. With German Chancellor Angela Merkel offering little flexibility on emergency loans needed to keep Greece in the euro and avert economic collapse, leaders in Athens are scrambling to forge a government that can negotiate changes to some of the austerity measures linked to the 240 billion euros ($303 billion) pledged by international lenders.
“With Mr Venizelos we remain in agreement that we must have, at all cost, and within the deadline of my mandate, a government of national salvation,” Samaras said in Athens yesterday after receiving the three-day mandate to form a government. “We will, of course, have new meetings.”

Samaras Races to Form Greek Government as EU Warns on Timing (Source: Bloomberg)
Greek election winner Antonis Samaras raced to build a coalition to keep bailout aid flowing after the anti-bailout party Syriza rejected his offer to join a government, with talks set to continue a second day. With German Chancellor Angela Merkel offering no flexibility on emergency loans, Socialist Pasok leader Evangelos Venizelos, the former finance minister who negotiated the second rescue, proposed President Karolos Papoulias host a meeting of party leaders tomorrow to get a coalition with the widest possible support. “With Mr Venizelos we remain in agreement that we must have, at all cost, and within the deadline of my mandate, a government of national salvation,” Samaras said in Athens after receiving the three-day mandate to form a government. “We will, of course, have new meetings.”
Yesterday’s vote forced Greeks, in a fifth year of recession, to choose open-ended austerity to stay in the euro or reject the terms of a bailout and risk the turmoil of exiting the union. With the 17-nation currency’s future on the line, finance ministers pledged to assist Greece in its struggle with the cycle of austerity and recession that has trapped the country since it became the first victim of the debt crisis in 2010.

Europe’s Mistakes a Lesson for Latin America, Chile Says (Source: Bloomberg)
Latin America must avoid the costly welfare policies plunging Europe into crisis and should adhere to a market-friendly course to preserve gains made over the past decade’s economic boom, Chilean President Sebastian Pinera said. Countries in the region like Chile that have maintained open economies and fiscal discipline will fare better during a global slowdown than those pursuing “a different model” like Cuba, Venezuela and Bolivia, Pinera said in an interview yesterday in Mexico, where he’s attending a Group of 20 summit. “We don’t want to put at risk everything we’ve done up to now,” said Pinera, a 62-year-old billionaire businessman who was elected in 2010 on a pledge to make Chile the first developed country in Latin America. “Take a look at European countries, that’s the path that we do not want to follow.”
Chile’s recent economic resilience should serve as a lesson for a region increasingly adopting protectionist policies, Pinera said. Even in the face of weaker demand from China, the world’s top copper producer will grow 4.9 percent this year, surpassing the 3.7 percent average for Latin America, according to a forecast this month by the United Nations’ economic unit for the region.

Euro Crisis Shifts to Spain as Merkel Faces G-20 Pressure (Source: Bloomberg)
Group of 20 leaders focused their response to Europe’s financial crisis on stabilizing the region’s banks, raising pressure on German Chancellor Angela Merkel to expand rescue measures as contagion engulfed Spain. As U.S. President Barack Obama called after-dinner talks with euro-area leaders at the G-20 summit in Mexico, the Treasury department’s top international negotiator, Lael Brainard, said Europe is making an effort to “break the feedback loop” between banks and government debt, the link that is worsening Spain’s woes. “We’re seeing a notable shift in European discussion” toward spurring economic growth and “laying out a path to financial union,” Brainard told reporters as the two-day summit began at the resort of Los Cabos.
G-20 chiefs met as Spain’s borrowing costs soared to a euro-era record and elections in Greece failed to damp the threat of contagion. Merkel, who heads Europe’s largest economy and rejects pooling euro-area debt or boosting deficit spending, said she’ll defend her policies with “good arguments” as world leaders press Europe to stamp out the debt crisis now in its third year. Obama has blamed the crisis for slowing U.S. employment growth.

Austerity Doesn’t Pay as Debt Markets Ignore Rating Cuts (Source: Bloomberg)
Britain is forcing Stephen Jobling and his stroke patients to defend the nation’s AAA credit rating. Staffing at the National Health Service hospital ward where Jobling works was reduced by about half in the U.K.’s deepest drive since World War II to shrink its deficit. The goal was to avoid losing the top credit score, which might risk higher interest expenses, according to the government of Conservative Prime Minister David Cameron. “If they could see these people suffering while we have two members of nursing staff running round trying to wash, dress and feed 20 patients, they would think twice,” says Jobling, 27, a nurse at Lincoln County Hospital in eastern England. “You should be looking after your people. You shouldn’t be bothering about some credit agency from somewhere else.”
The bond market says he’s right. After Moody’s Investors Service issued a “negative” outlook for U.K. debt on Feb. 13, yields on government securities relative to benchmark U.S. Treasury debt fell over the next month, instead of rising.

Greek Coalition Talks Enter Second Day Amid Merkel Aid Warning (Source: Bloomberg)
Greek election winner Antonis Samaras begins a second day of talks to form a coalition after holding “constructive” meetings with two party leaders, racing to forge a government that keeps bailout aid flowing. Samaras secured initial agreement yesterday from Socialist Pasok leader Evangelos Venizelos, the former finance minister who negotiated the second rescue, and said he’d hold further talks today with Fotis Kouvelis, the leader of the Democratic Left party. If those three team up, they will hold a majority of 179 seats in the 300-member Greek parliament. With German Chancellor Angela Merkel offering little flexibility on emergency loans needed to keep Greece in the euro and avert economic collapse, leaders in Athens are scrambling to forge a government that can negotiate changes to some of the austerity measures linked to the 240 billion euros ($303 billion) pledged by international lenders.
“With Mr Venizelos we remain in agreement that we must have, at all cost, and within the deadline of my mandate, a government of national salvation,” Samaras said in Athens yesterday after receiving the three-day mandate to form a government. “We will, of course, have new meetings.”

20120619 0946 Global Commodities Related News.

China still key for commodities despite Greek relief
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, June 18 (Reuters) - Commodities joined the general relief rally after Greeks voted narrowly to support pro-bailout parties, but any sustained gains will depend on risks abating over Chinese demand and Iranian crude supplies.
While it is undoubtedly positive for Europe and for risk assets that Greece is now far more likely to stay in the euro, it would be a big call to say that the weekend election does much to solve the continent's underlying problems.

DTN Closing Grain Comments 06/18 14:26 : New-Crop Corn Leads the Way (Source: CME)
The new-crop corn market surged higher Monday, wiping out all but a dime of last week's collapse on weather concerns. Wheat and beans followed, posting sharp gains of their own despite renewed strength in the U.S. dollar index.

All Grains Higher at Midday(Source: CME)
Grain trade is higher on less favorable weather, and less outside market fears.
By David Fiala
DTN Contributing Analyst

The U.S. stock market indices are mixed with the Dow index down 25 points. The interest rate products are higher. The dollar index is 37 higher. Energies are mixed with crude $0.80 lower. Livestock trade is mixed with hogs sharply higher. Precious metals are mixed with gold up 3.

General Comments
Corn
Corn trade is 17 to 20 higher across the board this morning. Outside market input is mixed as the pro-bailout parties in Greece secured a narrow victory, but the initial relief rally was blunted by a continued increase in Spanish borrowing costs. U.S. weather remains a supportive factor with generally warmer and drier weather being shown in the forecasts, with near-term heat stressing crops. The July contract will be watched closely today, as rumors pounded it on Friday regarding Brazilian imports, and ethanol plant closures, but so far it has shrugged them off. One north-central Nebraska plant has suspended operations for the moment. Basis remains strong in the interior and will limit breaks. Today's crop condition reports will be watched closely, with expectations of last week's rain to hold conditions in the 62%-to-67% range. Export inspections were nearly 25 million bushels, which is a little slow compared to the USDA projections but 8 million better than last week.

Soybeans
Soybean trade is 11 to 14 higher on the nearby trade, and 16 to 18 higher on the new crop contract. Meal is $4 to $6 higher, and oil is 20 to 30 higher. The July contract will need to move back above $13.85 and $14.00 to regain positive chart momentum, but the November contract is better supported at $13.18, and $12.99. The recent rains in the western growing areas may have brought more double-crop beans into the equation as dryness is eased for the moment. Exports were fairly active last week, and the trade will be watching to see if that can be sustained this week. Crop conditions are expected to be in a range of 58% to 62% this afternoon. Export inspections were 7.9 million bushels, down pretty good on the week, and closer to typical for this time of year.

Wheat
Wheat trade is 20 to 22 higher in Chicago, 21 to 24 higher in Kansas City and 15 to 18 higher in Minneapolis this morning. Harvest pressure should be waning over half of the winter wheat crop should be harvested by now. The Russian Ag Ministry has indicated that early yields are disappointing and production may be off by as much as 30%. Russian wheat prices have surged the past week, and they have been releasing intervention stocks at regular intervals. Chinese production has also been reduced in the past week. U.S. yields have been a mixed bag, but generally the worst case scenario after the hot and dry may has not been realized. Chicago wheat will need to sustain a move above $6.22 and then $6.40 to create much positive chart momentum. Spring wheat conditions should remain elevated at 75% good to excellent or better. Export inspections were 20 million bushels, which is a shade below pace.
David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered Commodity Trading Adviser.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Chicago wheat ended 20 1/4 to 21 3/4 cents higher through the March 2013 contract, while deferred months saw gains in the teens. Kansas City wheat closed 20 1/2 to 22 1/2 cents higher. Minneapolis finished with double-digit gains. Futures trimmed losses slightly in after-hours trade. Wheat futures enjoyed spillover support from a weather-inspired rally in the corn market today.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 21 3/4 at 648 1/2, 3 off the high and 19 up from the low. December Wheat closed up 21 1/4 at 672 1/2. This was 21 up from the low and 3 1/4 off the high. July wheat traded 20 1/4 cents higher today on spillover support from the corn market. WN posted a new 4 session high and recovered all of Friday's losses. Short-covering from fund traders was noted as strength in the other grains and "less" macroeconomic fears has helped support the buying. Weekly export inspections came in at just 20.62 million bushels which was below trade expectations. Support in wheat could resurface if international production and weather issues do not subside soon. September Oats closed up 5 1/4 at 299. This was 5 up from the low and 8 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures settled 20 to 28 cents higher, which was a high-range close but slightly off session highs. Futures mildly extended gains in most contracts in after-hours trade. Traders built weather premium into the market today as weekend rains were generally disappointing, especially in the driest areas of the Corn Belt. In addition to the disappointing weekend rain event, conditions are forecast to be hot and dry this week.

Corn Market Recap for 6/18/2012 (Source: CME)
September Corn finished up 28 3/4 at 538 1/4, 3 1/2 off the high and 26 up from the low. December Corn closed up 29 1/2 at 535 1/2. This was 25 1/2 up from the low and 3 3/4 off the high. December corn traded 28 1/2 cents higher towards the end of today's session. Traders continue to be concerned with the above average temperatures and below normal precipitation in the eastern Corn Belt. Furthermore, dry conditions in the North China Plains are offering support. Traders see crop conditions slipping 2% for the crop rated good to excellent for this afternoon's update. Weekly export inspections came in at 24.7 million bushels which was above trade estimates of 16-21 million bushels. CN lost to CZ as bull spreaders unwound positions ahead of this afternoon's crop progress report. September Rice finished up 0.145 at 14.295, equal to the high and equal to the low.

U.S. corn firms as pro-bailout party wins Greek polls
SYDNEY, June 18 (Reuters) - U.S. corn rose following the election of a pro-bailout government in Greece, but off early highs as optimism waned slightly that the euro zone would avoid a fresh crisis.
"The macro economic picture has been improved by the Greek elections and that has boosted sentiment," Ker Chung Yang, investment analyst said. "However, while the pro-bailout party won, and this may bring Greece back to the negotiations table with the IMF and EU, we have to bear in mind that situations with Italy and Spain remain unresolved."

Hot weather hits Ukraine barley, good for maize
KIEV, June 18 (Reuters) - Hot weather across most of leading Ukrainian grain-producing areas may hurt output of spring barley but be favourable for maize, a senior weather forecaster said on Monday.
Mykola Kulbida, the head of Ukraine's state weather forecasting centre, also said Ukraine's western regions were suffering from excessive rain, resulting in waterlogged soil and sharper growth of weeds.

Russia's southern growing regions facing more rain
MOSCOW, June 18 (Reuters) - Rain fell this weekend in key southern agricultural regions of Russia, with further rainfall expected in the coming days after a dry spell in some regions, the state weather forecaster said on Monday.
Krasnodar, Rostov, Volgograd and Stavropol regions saw heavy rains this weekend, the Federal Hydro meteorological Centre said on its website in a weather forecast for June 18.

Turkey's wheat production seen at 19.5 mln tonnes in 2012
ISTANBUL, June 18 (Reuters) - Turkey's wheat production is expected to be around 19.5 million tonnes this year, and the state purchase price for Anatolian hard red wheat was set at 780 lira per tonne ($430) including incentives, Agriculture Minister Mehdi Eker told reporters on Monday.
Eker said durum wheat purchase price was set at 820 lira ($450) per tonne including a 115 lira incentive, and he expected barley production to be at least 6.5 million tonnes in 2012.

Argentina says 25 pct of 2012/13 wheat area planted
BUENOS AIRES, June 15 (Reuters) - Farmers in grains powerhouse Argentina have planted a quarter of the area expected to be sown with wheat this season, helped by favorable weather and soil moisture conditions, the Agriculture Ministry said on Friday.
The ministry, as well as the local office of the U.S. Department of Agriculture and the Buenos Aires Grains Exchange, expects 4.0 million hectares (9.9 million acres) to be planted with 2012/13 wheat, down from 4.6 million hectares in the 2011/12 season.
 
Informa raises U.S. corn, soy plantings estimates
CHICAGO, June 15 (Reuters) - Private analytical firm Informa Economics raised its estimate of U.S. 2012 corn plantings to 96.759 million acres (39.2 million hectares), from its previous forecast of 96.124 million, trade sources said Friday.
Informa's latest figure is above the U.S. Department of Agriculture's March 30 corn plantings forecast of 95.9 million acres, which, if confirmed, would represent the most U.S. acres seeded to corn since 1937.
 
US corn entering pollination as weather threatens
CHICAGO, June 15 (Reuters) - Corn plants in the southern and central areas of the United States are beginning to pollinate, or produce grain, a time when cool, wet weather is needed for the crop, but forecasts are calling for high temperatures and little widespread rain.
Corn was planted at a record fast and early pace this season, which moved the critical pollination stage ahead two to three weeks in nearly all of the Midwest.

Coffee steady, sugar firms, eyes on Greece
LONDON, June 18 (Reuters) - Arabica coffee futures on ICE, sugar and cocoa were steady to slightly higher in early trading, supported by stronger financial markets on relief that pro-bailout parties had won a slim majority in Greek elections.
“New York July coffee KCN2 will keep falling to $1.4630 per lb, driven by a wave 3-3, according to Reuters market analyst Wang Tao.”

Nicaragua coffee exports fall 3.3 percent in May
MANAGUA, June 16 (Reuters) - Coffee exports from Nicaragua dropped 3.3 percent in May compared to the same month a year earlier, reaching 196,366 60-kg bags in the month.
Nicaragua's export association CETREX said coffee exports through the first eight months of the 2011/2012 harvesting   season totaled 952,708 bags, down 19.8 percent from the same eight-month period during the 2010/2011 harvest.
 
Zambia Sugar workers end strike with pay deal
LUSAKA, June 16 (Reuters) - A strike over wages at Zambia Sugar , a unit of South Africa's Illovo Sugar , has ended after the company awarded permanent workers a 15 percent pay rise, the sugar producer and a union said on Saturday.
Workers at the company's Nakambala Sugar Estate south of the capital Lusaka went on strike on Tuesday demanding a 35 percent pay rise.
 
Vietnam to miss its 2015 cocoa development target
HANOI, June 16 (Reuters) - Vietnam will miss its target to have 40,000 hectares of cocoa by 2015 as farmers are reluctant to switch to the new cash crop and the government has not devised a formal development for the commodity, a state-run newspaper reported on Saturday.
Cocoa farmers in southern provinces have switched to growing rubber, pepper or fruits for higher profit, the Vietnam Economic Times newspaper quoted Nguyen Van Hoa, an Agriculture Ministry deputy manager as telling an industry conference on Friday.

Kimberly-Clark Plans to Cut Use of Forest Wood Pulp by Half (Source: Bloomberg)
Kimberly-Clark Corp. (KMB), maker of Kleenex tissues and Huggies diapers, plans to cut in half, by 2025, the amount of wood fiber newly taken from forests for use in the company’s products. Kimberly-Clark said it used almost 750,000 metric tons (827,000 short tons) of primary wood fiber sourced from natural forests last year. Its initiative will save the equivalent of all the fiber needed to make more than 3.5 billion rolls of toilet paper, the company said. The company will use or test alternative sources of fiber, such as bamboo and wheat straw, as part of its sustainability efforts, Dallas-based Kimberly-Clark said today in a statement disclosing the commitment. “In the long run, we hope that one day all our fiber needs will be met from sources that collectively have maximum land use efficiencies while minimizing impact on people and our planet,” Suhas Apte, the company’s vice president for global sustainability, said in the statement.

Rubber Glut Extends Bear Market Cutting Bridgestone Costs (Source: Bloomberg)
Rubber shortages are about to turn into a flood as China, the biggest consumer, grows at the slowest pace in three years, driving prices paid by Bridgestone Corp. (5108) and other tiremakers to the lowest since 2009. The surplus will reach 402,000 metric tons in the second half, from a 134,000-ton shortage in the first six months, said Chris Pardey, a former commodities trader at Cargill Inc. and Noble Group Ltd. Futures, which entered a bear market last month, will drop a further 21 percent to 200 yen a kilogram ($2,529 a metric ton) in Tokyo by the end of the year, the lowest since October 2009, according to the median of 15 analyst and trader estimates compiled by Bloomberg.
This quarter’s 22 percent decline is the worst since the global financial crisis in 2008 and exceeds a 16 percent retreat in commodities. The slump is reducing income for growers from Thailand to Ivory Coast to Indonesia and costs for Bridgestone, the world’s largest tiremaker. Shares of the Tokyo-based company will advance 33 percent in the next 12 months, the average of 11 analyst estimates compiled by Bloomberg shows. “We do remain bearish,” said Singapore-based Pardey, who is now the chief executive officer of RCMA Commodities Asia Group and predicted in January that prices would decline because of a weakening global economy. “There is potential for a significant increase in stockpiles in the second half as production picks up quickly and demand slows down.”

Euro Coal-Prices stable, FOBs under pressure
LONDON, June 15 (Reuters) - South African FOB prices were 30-75 cents a tonne higher on Friday afternoon, a minimal move upwards, but all FOB coal prices remained under pressure from oversupply and weak spot demand.
"Prices moved very slightly higher in early trading, with power, gas and a fall in the euro but overall it's still looking weak," one European trader said.

OIL-Oil turns negative as optimism fades
LONDON, June 18 (Reuters) - Oil futures fell , erasing early gains after a victory for pro-bailout parties in Greece failed to ease concerns about the euro zone, and analysts said oversupplied crude markets would cope with any loss of Iranian oil.
"The economic outlook is upsetting people more than security issues around Iran, and they realise that nothing really has come out of Greece, except that the crunch may have been delayed for a while," said Roy Jordan, an oil analyst at Facts Global Energy.

Oil Trades Near Three-Day Low as Spain Loans Fuel Europe Concern (Source: Bloomberg)
Oil traded near the lowest close in three days in New York as an increase in bad Spanish loans fueled speculation that Europe’s spreading debt crisis threatens global economic growth. Futures were little changed after dropping for the first time in three days yesterday. Spain, which has asked euro-region governments for as much as 100 billion euros to help shore up its banks, reported that bad loans jumped in April to 8.72 percent of total lending, the highest since 1994. A government report tomorrow may show U.S. crude stockpiles fell while fuel supplies increased, a Bloomberg News survey shows. Oil for July delivery, which expires tomorrow, dropped 14 cents to $83.13 a barrel in electronic trading on the New York Mercantile Exchange at 9:21 p.m. Sydney time. It slipped 0.9 percent yesterday to $83.27, the lowest close since June 13. The more-actively traded August contract lost 16 cents to $83.44. Front-month prices are down 16 percent this year.
Brent oil for August settlement decreased $1.56, or 1.6 percent, to $96.05 a barrel on the London-based ICE Futures Europe exchange yesterday. The front-month price for the European benchmark contract closed at a premium to West Texas Intermediate of $12.45. U.S. crude supplies probably dropped 1.3 million barrels last week, according to the median estimate of 7 analysts in a Bloomberg News survey before a report from the Energy Department. Gasoline stockpiles likely rose 1 million barrels as distillates increased the same amount, the survey shows.

Japan approves renewable subsidies in shift from nuclear power
TOKYO, June 18 (Reuters) - Japan approved on Monday incentives for renewable energy that could unleash billions of dollars in clean-energy investment and help the world's third-biggest economy shift away from a reliance on nuclear power after the Fukushima disaster.
Industry Minister Yukio Edano approved the introduction of feed-in tariffs (FIT), which means higher rates will be paid for renewable energy. The move could expand revenue from renewable generation and related equipment to more than $30 billion by 2016, brokerage CLSA estimates.

Saudi crude exports fell by 121,000 bpd in Apr-JODI
DUBAI, June 18 (Reuters) - Saudi crude exports fell to 7.583 million barrels a day (bpd) in April, down by 121,000 bpd from March, despite production rising to 10.102 million, according to the latest official data published by the Joint Data Initiative (JODI).
Saudi Arabia pumped 179,000 bpd more in April than in March but exports fell due to an increase in internal demand for oil and stock building, JODI data shows.

Oil market shrugs at imminent Iran tanker insurance ban
June 18 (Reuters) - In less than two weeks, Iran's biggest oil buyers will lose access to the London-based insurance market that protects 95 percent of the world's tanker shipments against oil spills or catastrophic collisions.
Barring an unexpected last-minute deal to relax European Union sanctions, Europe's Protection and Indemnity (P&I) clubs will be unable to insure vessels carrying Iranian crude from July 1, an unforeseen but ultimately critical side effect of EU sanctions to punish Iran for its nuclear program.

Iron Ore-Spot may struggle to extend rally on demand view
SINGAPORE, June 18 (Reuters) - Spot iron ore prices steadied and may struggle this week to sustain recent gains with sluggish steel demand in top consumer China likely to limit appetite for the raw material.
"We could see small gains in physical iron ore prices due to some limited restocking taking place," said a Hong Kong-based iron ore trader.

Platinum: All Signs Point to a Major Trend Reversal! : Now what’s your strategy? (Source: CME)
The Inverse Head & Shoulders forms at the end of a bearish trend and falls under the category of a reversal pattern. The reversal is further reinforced when a bullish divergence is identified on the daily RSI before breaking the neckline of the pattern. This bullish divergence occurs when the price continues to reach new lows, while each corresponding low on the RSI is higher than the previous one but is still below the oversold area (under 30).

Baltic index rises as smaller ships support
June 15 (Reuters) - The Baltic Exchange's main sea freight index, which is used to track rates for ships carrying dry commodities, rose on Friday for a sixth straight day spurred by increased activity in smaller ships.
"We note that there is a slightly more positive view on the smaller segments still," analyst Erik Nikolai Stavseth of Arctic Securities said.

20120619 0946 Soy Oil & Palm Oil Related News.

Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean futures closed 8 1/4 to 25 1/4 cents higher. Nearby beans extended gains in after-hours trade, while the rest of the market saw little price fluctuation. Given strength in the U.S. dollar index (which is often associated with price pressure on commodities), it was especially impressive to see soybean futures post strong gains to start the week. Focus in the market today was on weather concerns.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished up 16 3/4 at 1373 3/4, 4 3/4 off the high and 16 up from the low. November Soybeans closed up 25 1/2 at 1339 1/2. This was 21 3/4 up from the low and 1 1/2 off the high. August Soymeal closed up 5.9 at 409.5. This was 6.2 up from the low and 2.4 off the high. August Soybean Oil finished up 0.22 at 48.84, 1.16 off the high and 0.14 up from the low. November soybeans traded 25 higher towards the end of today's trading session. The prospect of warmer and drier weather over the next 7-10 days offered support to the new crop contract. The drier than normal forecast could raise doubts as to how much double crop beans are planted. Traders see crop conditions slipping 2% for the crop rated good to excellent for this afternoons update. Weekly export inspections came in at just 7.897 million bushels which was well below trade expectations. Traders noted liquidation in the SN/SX spread as their focus shifted towards potential yield loss for new crop beans.

VEGOILS-Palm oil gains as Greek elections fuel optimism
SINGAPORE, June 18 (Reuters) - Malaysian palm oil futures closed higher after Greece's pro-bailout parties won closely-watched elections over the weekend, preventing the euro zone debt crisis from escalating and reviving risk appetite.
"Generally, the elections in Greece have set a positive tone for the commodities market. At least we see some relief in the euro zone," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.