Thursday, June 21, 2012

20120621 1807 FCPO EOD Daily Chart Study.

FCPO closed : 3000, changed : -41 points, volume : lower.
Bollinger band reading : correction range bound little downside biased.
MACD Histogram : rising, seller closing position as buyer testing market.
Support : 2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed retreated lower after recent rallies with decline volume changed hand. Soy oil price currently trading lower after overnight closed recorded gain while crude oil price continue to trade weaker.
Slower U.S. economy growth forecast and no stimulus action taken by Federal Reserve resulted broad commodities including crude palm oil to head south today.
End of day chart study adjusted to suggesting a correction range bound little 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.

20120621 1737 FKLI EOD Daily Chart Study.

FKLI closed : 1606.5 changed : -1 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : rising higher, buyer in control.
Support : 1600, 1590, 1580, 1570 level.
Resistance : 1610, 1620, 1630, 1640 level.
Comment :
FKLI closed little lower with lesser volume transacted doing 5 points premium compare to cash market that also pullback little lower. Overnight U.S. markets decline marginally and today Asia markets ended mostly in negative zone while European markets currently recording small loss.
Global markets recent upbeat disappear today after overnight U.S. Federal Reserve cut U.s. economy growth forecast, extended its operation twist without any stimulus measure announce plus concern on possible slow China manufacturing let investors in little disappointment.
Technical chart study revised to calling a pullback correction upside biased market development.
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.

20120621 1719 Regional Markets EOD Daily Chart Study.

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

20120621 1621 Global Market & Commodities Related News.

Asian stocks slipped, while European equities are likely to open lower after the Federal Reserve disappointed some investors with only a limited expansion of monetary stimulus and a survey showed China's vast factory sector slowed for an eighth month running. U.S. stocks edged lower on Wednesday after the Federal Reserve acted to aid the fragile economy with stimulus measures that were in line with market expectations but went no further.

FOREX-Dollar resilient after Fed largesse, euro slips
SINGAPORE/SYDNEY, June 21 (Reuters) - The dollar held above a one-month low against a basket of major currencies, no worse for wear even after the Federal Reserve delivered another dash of monetary stimulus and said it was ready to do more if necessary.
Dollar bears were stopped from rampaging by the fact the Fed stopped short of launching a more aggressive programme of buying bonds outright, or QE3, which some in the market had expected, traders said.

U.S. corn fell as investors took profits after stellar gains earlier in the week, while disappointment that the U.S. Federal Reserve did not introduce more aggressive stimulus measures to boost the economy also dragged down grains prices.

Brazil mid crop cocoa harvest still accelerating
Brazil's main cocoa state Bahia looks near to peak flow in the mid crop harvest, with deliveries to warehouses of 102,434 60-kg bags (6,146 tonnes) in the last week, a third more than the same week last year, Bahia Commercial Association data showed.

India can export 2-3 mln T of wheat to Iran
India could export up to 3 million tonnes of wheat to Iran if supplies are requested, Food Minister K.V. Thomas said on Wednesday, as India seeks to reduce huge wheat stocks and help settle payment for a large oil import bill.

Nigerian millers see more demand for U.S. wheat
Nigerian flour millers, key buyers of U.S. wheat, continue to need more U.S. supplies despite efforts by the Nigerian government to reduce reliance on foreign wheat imports, top Nigerian milling executives said on Wednesday.

The dollar held above a one-month low against a basket of major currencies, no worse for wear even after the Federal Reserve delivered another dash of monetary stimulus and said it was ready to do more if necessary.

Brent crude fell to its lowest in 18 months at around $92 a barrel on demand growth concerns as China's factory sector slowed and as the U.S. Fed's stimulus plan dashed hopes for more aggressive steps to boost the world's top economy.

May daily aluminium output 67,900 T - IAI
LONDON, June 20 (Reuters) - Daily average primary aluminium output in May dropped to 67,900 tonnes compared with a revised 68,100 in April and 69,900 in May 2011, provisional figures from the International Aluminium Institute (IAI) show.
Total production in May (31 days) was 2.104 million tonnes, compared with 2.043 million tonnes in April (30 days) and 2.168 million in May 2011.

China says rare earth price gap based on quality, customs
BEIJING, June 20 (Reuters) - China denied on Wednesday that it interferes with prices on the global rare earths market amid a trade dispute with other major economies, saying product quality variations account for the price gap between the metals it produces for export and domestic use.
In March, the European Union, United States and Japan complained to the World Trade Organization that Beijing, which has a monopoly over world supplies of the mineral, illegally choked exports while holding down prices for domestic manufacturers.

China copper imports seen hurt by credit easing, regulatory moves
BEIJING, June 20 (Reuters) - Copper imports by China, the top consumer of the metal, could fall in the next few months even as the world's second-largest economy gradually recovers, since easier credit will reduce demand for copper used for trade financing.
Beijing unexpectedly cut interest rates this month to counter a sharpening economic slowdown. Previous moves since November to reduce the amount of cash banks are required to hold as reserves have also boosted bank lending.

China considers adding metals to stockpile plan -sources
HONG KONG, June 20 (Reuters) - China's state economic planner is considering ways to reshape the country's programme of stockpiling strategic materials and could include metals such as rare earths, tungsten, indium, molybdenum and tin, two sources with knowledge of the plan said.
Additional stockpiling moves by China, the world's top copper buyer and second largest oil consumer, would be certain to benefit commodities prices, which have lost 9 percent this year, battered by bleak prospects for the global economy.

Global steel production growth slows in May
Global steel production growth slowed in May, data from an industry body showed on Wednesday, with output expected to remain sluggish in the coming months as weak economic growth erodes demand.

Australia industry struggling outside mining boom -survey
Australian industry not lucky enough to be leveraged to the country's mining boom continued to struggle this quarter under the weight of a high currency and a darker global outlook, a survey showed on Thursday.

Copper hit one-week lows after investors saw their hopes for more aggressive stimulus measures by the U.S. Fed dashed and worried Spain's borrowing costs would soar, flagging the risks of shaky euro zone finances to the global economy.

Gold slipped for a third straight day after the U.S. Federal Reserve stopped short of launching another round of quantitative easing to stimulate the economy, a move that could have boosted bullion's appeal in times of uncertainty.

METALS-Copper down after Fed disappoints, China data glum
SHANGHAI, June 21 (Reuters) - Copper hit one-week lows after investors saw their hopes for more aggressive stimulus measures by the U.S. Fed dashed and worried Spain's borrowing costs would soar, flagging the risks of shaky euro zone finances to the global economy.
While most investors expected the latest HSBC China Flash Purchasing Managers Index to fall under 50 again in June, the seven-month low number of 48.1 confirmed that economic growth in the world's top metals consumer was still slowing.

PRECIOUS-Gold falls for 3rd day, Fed disappoints
SINGAPORE, June 21 (Reuters) - Gold slipped for a third straight day after the U.S. Federal Reserve stopped short of launching another round of quantitative easing to stimulate the economy, a move that could have boosted bullion's appeal in times of uncertainty.
But lower prices were expected to attract purchases from jewellers in Asia, while a fragile U.S. economy and the debt crisis in Europe may eventually prompt the Fed to adopt more aggressive measures to help the economy.

20120621 1056 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares struggle, commodities down as Fed disappoints
SINGAPORE, June 21 (Reuters) - Asian stocks struggled and commodities fell broadly after the Federal Reserve ramped up monetary stimulus by expanding "Operation Twist", but disappointed some investors who had been hoping for more aggressive measures.
"The positive impact of a weaker yen should outweigh the disappointment about the U.S.'s economic outlook and the lack of more powerful stimulus," said Masayuki Doshida, senior market analyst at Rakuten Securities. "But there won't be a sustained rally on the back of this."

COMMODITIES-Markets slump as Fed disappoints; oil at 18-mth low
NEW YORK, June 20 (Reuters) - Commodities slumped , a day after the sharpest rally in four months, as investors expressed their disappointment with the U.S. Federal Reserve for not being as aggressive as they had hoped in stimulating the economy.
"Unequivocally, the markets are disappointed with the Fed's action," said Adam Sarhan, chief executive at Sarhan Capital, a New York-based financial advisory that also comments on commodity markets.

Oil-Oil hits 18-month low as stockpiles rise, Fed disappoints
NEW YORK, June 20 (Reuters) - World oil prices tumbled more than 3 percent to their lowest in a year and a half, as data showed U.S. crude inventories unexpectedly swelled and investors were disappointed at measures the Federal Reserve announced to aid the economy.
"Some market participants were expecting QE3 (a third round of quantitative easing), and will be disappointed yet again," said Jason Schenker at Prestige Economics in Austin, Texas "The stimulus announced today is very modest."

Japan, China to import Iran oil after EU ban
TOKYO, June 20 (Reuters) - At least two of Asia's four top buyers of Iranian crude will keep imports flowing, though at overall reduced rates, as they find ways around an EU ban on insuring tankers carrying the Islamic country's oil.
Asia needs oil to feed growing demand and top consumers are reluctant to entirely halt imports from Iran and depend entirely on top exporter Saudi Arabia, especially given that output from other alternative suppliers such as Libya and Iraq has not stabilized.

NATURAL GAS-US natgas futures end lower, reverse from 4-week high
NEW YORK, June 20 (Reuters) - U.S. natural gas futures reversed course and ended lower after climbing to a four-week high, as milder forecasts for next week offset early-session support from the strong heat that has kicked up air conditioning demand.
"We had the run up on the heat, but it's going to be short lived. I think the market is consolidating recent gains, trading in the $2.40 to $2.75 range," said George Ellis, director at BMO Capital Markets in New York.

EURO COAL-Prices rise with gas, up 75 cents a tonne
LONDON, June 20 (Reuters) - Prompt physical coal prices rose by around 75 U.S. cents to $1.00 a tonne, in line with gas, but remained close to the two-year lows reached earlier this month.
Brent crude fell, pinned close to 17-month lows, as worries over Spain's borrowing costs and gloomy prospects for global demand growth weighed on prices [O/R].

20120621 1029 Market Related News. (Source: Reuters)

Market Briefs
• Fed says continuing program to extend Operation Twist through end of year, No new QE, No change to late 2014 exceptionally low rates language
• Fed 2012 Forecasts: Real GDP revised to 1.9%-2.4% from 2.4%-2.9%, Unemployment revised to 8.0%-8.2% from 7.8%-8.0%, PCE Price Index 1.2%-1.7% from 1.9%-2.0%, Core PCE 1.7%-2.0% from 1.8%-2.0%
• Germany’s Merkel: EFSF, ESM do include possibility for buying bonds on secondary market, but not now in discussion
• Greek conservative leader Samaras sworn in as PM
• Canada Q1 job vacancy rate 1.8% vs. 1.6%
• Mexico Apr Retail Sales +2.5% y/y vs. f/c 2.8% and prior 4.3%
• BOE’s Broadbent: Case for monetary stimulus has increased; Inflation outlook improved; Reaction to new schemes good; Decides month by month on QE
• Bernanke: Prepared to take further steps if necessary; Would consider additional asset purchases if economy needed further support

EUR/USD  Monday's high at 1.2748, a 38.2% retrace of 2012's trading range, saw another failure there today as the wind was sucked out of the CB easing bid. Those expecting something more than an extension of the Twist from the Fed were disappointed. Judging by the collapse in commodities and rebound in the dollar after the dour Fed Statement, Econ f/c and Bernanke presser that weren't linked to any outright QE by said Fed, quite a few were betting on QE3. There was early EUR buying on the formation of a relatively stable Greek govt and lingering rumors of ESM/EFSF being used to buy govies in the secondary market. But the Greek's have their work cut out, while Merkel's nod that EFSF & ESM are technically capable of being used for secondary bond buys also came with the caveat that such buying had "conditionality" attached to it. In short, she still wants fiscal oversight/sovereignty ceding to sign off on debt collectivization. ECB's Coeure chimed in afterward with talk of rate cut discussions and LTRO being better than SMP, with the former only needed in general liquidity challenges, not localized ones. EZ PMI is out Thur.

USD/JPY   The BOJ made it clear overnight that all monetary tools remains on the table, nothing is ruled out. This is no hollow threat in the face of today's miserable Japanese Trade data. It posted its first ever deficit with the EU. The big problem is surging Japanese imports, up 9.3% y/y to May vs +3.3% expected and +8.1% last. Tokyo has decided to restart two nuclear reactors to help fill the power gap into the summer and also to reduce need for imported fuel. USD/JPY was bid from the start in NY, first running stops above 79.15, then above 79.31 (Mon's high and the 10-DMA). A final flurry of buying came on the FOMC's Twist extension and absence of near-term QE threats, at least in the initial statement. Offers by the Jun high at 79.75-80 capped with help from considerably weaker Fed GDP and Employment f/c, as well as Bernanke noting that the Fed has done a tremendous amount to support growth and asset prices already, but could do more if it had to. EUR/JPY took out the 100.90 prior highs and 101 defenses before hitting the upper 21-d Bolli by the 101.42 highs. 101.63 Fibo is next. Down TL from Apr is now support at 99.97.

GBP/USD An unexpected rise in the UK claimant count (+8.1k vs. -12.8k, -3k expected) and news from the MPC meeting minutes that Gov. King shifted to an easing stance weighed on sterling through the day. There was a big spike in EUR/GBP up toward 0.8100 initially that was quickly reversed, but the cross still sloped upward the rest of the day. GBP/USD likewise dropped and recovered to eventually break Tuesday’s high on dollar selling. That turned in the US morning and saw cable fall through 1.5700 in the afternoon, with some FOMC volatility along the way. In the context of what looks to be a consolidation for GBP/USD based on falling Trend Intensity and narrowing Bollinger Bands, it is worth noting the test today of both the upper Band and the 50% retracement of the Apr-Jun decline (approx. 1.5785). That creates an easy expectation for a range reversal back toward the little consolidation around 1.5500 we saw a short while back.

USD/CHF  Swiss ZEW for Jun at -43.4 vs -4 last was far gloomier than the German one released Tuesday at -16.9 vs 10.8 last, perhaps as the outsized banking sector in the Alpine economy suffered greater anxiety regarding the eurozone threats that surround it. Of course, like Germany, Swiss interest rates toward the front of the curve have been bid into negative territory on safe-haven flows from the periphery. This cheap money, reinforced by the SNB's 1.2000 EUR/CHF floor, has added to a housing bubble in Switzerland, creating some risks to local lenders. The SNB has chided one local bank to increase its capital base as a result of this risk and the broader threat from its European trading partners. Germany is the biggest of those, thus shielding Swiss exporters from the worst of the region's malaise, but even the core has struggling with growth lately. EUR/USD floored, USD/CHF trading is merely the inverse of EUR/USD; the latter's recovery being rejected twice this week by the 38.2% retracement near 1.2745 (0.9423 the rough USD/CHF equivalent support). Fed's twist not enough to break that support. Swiss Trade out Thur.

USD/CAD  started the NY session near its lows for the day as traders anticipated additional easing measures from the FOMC today. As the day progressed S-T profit taking ahead of the announcement brought the pair back up to old support in the 1.0195/1.0205 region. After the initially Fed announcement the pair spiked higher to test resting offers in the 1.0230/40 region, an area that coincides with T-L resistance (1.0241) off the June 4th high. Also aiding in capping the rally at the highs is the 10 DMA (1.0247) that has done a good job of capping rallies in this latest move down. Merkel’s comments about potential buying of secondary bonds via the EFSF & ESM gave risk a rally and took USD/CAD back towards the lows. Bernanke’s press conference seemed to hint that the Fed would rather see some action on the fiscal side to help the economy before the Fed does any additional easing took some of the shine off the risk rally but the pair has managed to remain closer o the lows of the day. The technical outlook remains negative for the pair. The daily RSI remains below 50 and the 21 day Bolli bands are widening again. Numerous rejections of the trend line off the June highs combined with the 10 DMA capping rallies bolsters the case for additional moves lower.

AUD/USD  opened the NY session trading near the highs of the O/N session as the risk-on theme built up ahead of today’s FOMC meeting carried over. Marginal new highs were made c. 1.0210 but resting offers ahead of 1.0220/25 and the lows from April capped the rally. Trading quieted down until the afternoon when the Fed announced Operation Twist will be extended to the end of this year but no new QE would be involved. The knee jerk reaction was to sell off risk and AUD/USD followed suit. The pair quickly dropped to interim support c. 1.0130/35 before recovering. Comments from Germany’s Merkel regarding the possibility of the EFSF & ESM buying bonds in the secondary mkt gave risk a lift once again and AUD/USD went on to make new highs c. 1.0225. Merkel’s comment also stated that discussions on secondary purchases were not in discussion right now while also stating that the buying entails conditionality and is purely theoretical. That took some of the shine off the risk rally. Fed economic projections downgraded US GDP and employment forecasts for 2012 & 2013 and turned sentiment south again. Bernanke’s presser added more weight to risk as it appears he wants more action fiscally before the Fed make more accommodations. Risk and AUD/USD sold off more to trade back below 1.0170/75. Technically we may see the first signs the rally is stalling. Daily RSI and Stochastic studies are turning down from O/B territory while the April low (1.0226) and the 200 DMA (1.0250) cap the rally for now.

NZD/USD  News of a new Greek government helped the market’s overall risk tone during the early US morning during which time the kiwi went bid. That saw NZD/USD revisit Tuesday’s highs (though not break them) and AUD/NZD move down to the 1.2780 area again. The currency started losing ground later in the US morning, though, and although there was volatility from the FOMC statement near midday, that continued through the US afternoon. NZD/USD ended up breaking its prior lows and moving into Monday’s range as a result. AUD/NZD, meanwhile, move back up to prior highs, though did show weakness in the latter part of the day again. We're still seeing uptrend indications for NZD/USD as Trend Intensity has turned north again. The issue is proximity to the March low near 0.8050 which we expect to be resistance. RSI reached near to overbought, but never quite got there, so the might yet be a kick up to test those prior lows. We are due to get Q1 GDP figures from NZ on Thursday, with the market expected an uptick to 0.5% from 0.3%, which may factor in to proceedings.

LATAM The day’s feature event was the policy decision put forth by the FOMC at midday, but while the announcement of extended Operation Twist and no new QE created volatility, it didn’t really net out to change the markets much. The markets just continued moves that had already been unfolding, likely in anticipation of what we got from the Fed. That generally meant a stronger dollar. USD/BRL is representative. It started the day with new lows below 2.025, rallied to 2.035 before the FOMC statement, fell back to the prior lows, then rallied to new highs. Mexico reported a strong April retail sales reading of 0.9%. The market was looking for 0.6% as compared to the -0.43% posted in the prior month. USD/MXN followed the same course as 13.65 early lows gave way to 13.75 area highs pre-Fed. There was a new low on the news, and no new highs to follow, though.

20120621 1009 Local & Global Economy Related News.

Economy: Mustapa says trade with China remains strong
International Trade and Industry Minister Datuk Seri Mustapa Mohamed on Wednesday allayed concerns over a slowing Chinese economy, which could impact external demand for Malaysian products, saying bilateral trade and investment ties remained strong. He said China had introduced some measures to ensure its economy continued to grow at a reasonable rate and, given that situation, Malaysia hoped to sustain the trade levels. Exports from China expanded by 15% last month, supported by a  6% growth in imports as consumption levels remain buoyant.  Malaysia enjoyed an 8.7% growth in total trade last year, mostly due to an Asian-driven export market with the support of China, Asean and India. (Business Times)

Economy: BNM says domestic growth still strong, rates appropriate
Bank Negara Malaysia's (BNM) bank governor Tan Sri Dr Zeti Akhtar Aziz said domestic growth remains strong despite global economic uncertainties and that the country's interest rates were  appropriate. She said that despite the eurozone crisis,  domestic growth is still strong while inflation is moderating. (Financial Daily)

Banking: BNM refutes news report about NPLs sale to foreign parties
Bank Negara Malaysia (BNM) has refuted a news report that banking institutions had sold non-performing loans (NPLs) to foreign parties. It had on Wednesday described the news report as inaccurate and misleading. The central bank said that the amount of NPLs sold in the news report was grossly overstated, adding that since 2005, NPLs sold by banks is less than RM3bn. (StarBiz)

China: New bank lending may be RMB1trn in June
New bank lending may reach RMB900bn to RMB1trn this month, China Securities Journal reports today, citing an unidentified person. Industrial and Commercial Bank of China, China Construction Bank Corp, Bank of China and Agricultural Bank of China lent a combined RMB25bn in the first half of June, according to the newspaper. New bank lending was RMB682bn in April and RMB793bn in May, according to the report. (Bloomberg)

China: Top advisers propose easing property curbs
Media reports indicated that a group of senior Chinese advisors has called on the government to relax property market restrictions to ensure brisk growth in the domestic economy. China Daily cited a proposal from the Chinese People’s Political Consultative Conference, the country’s top advisory body that is influential in policymaking, as saying that Beijing should consider loosening property purchase restrictions. The proposal also suggested China should rely on interest rate cuts rather that reductions in banks’ reserve requirement ratios to stimulate economic growth. (Reuters)

Japan: Europe debt crisis restrains rebound in exports
Japan reported its first trade deficit with the EU since the Finance Ministry began tracking data in 1979 as the debt crisis roiling Spain and Greece limits a rebound in Japanese exports. An overall shortfall of 907.3bn yen ($11.5bn) for May, reported today in Tokyo, was bigger than all 24 estimates in a Bloomberg News survey of economists. Exports rose 10% from a year earlier, the most in 17 months, while imports exceeded estimates. The trade gap with the EU was 11.1bn yen. Shipments to the EU fell 0.9% even as they surged 38% to the U.S., underscoring the threat to Japan’s recovery as Group of 20 leaders meeting in Mexico press Europe to step up damage control. Governor Masaaki Shirakawa said Wednesday that Europe poses the biggest risk as Japan’s economy returns to the path of moderate recovery. (Bloomberg)

Japan: BOJ members say Japan could be ‘adversely affected’ by Euro
Bank of Japan board members said the central bank has been pursuing “powerful monetary easing” and a few said Europe’s sovereign-debt crisis could hurt Japan’s economy, a record of last month’s gathering showed. Board members agreed that it was appropriate to monitor the effects of the BOJ’s asset purchases, which were expanded at the previous meeting in April, according to the minutes of the 22-23 May meeting released in Tokyo. One member warned that the risk of automatically adding stimulus could affect the stability of the economy and prices. The meeting was held prior to the second Greek election and a few members expressed concern that Japan’s economy could be “adversely affected” by the materialization of “substantial risk” stemming from the European crisis. These members said “the bank should stand ready to take appropriate actions without ruling out any option in advance. (Bloomberg)

Greece: Samaras to Name New Government
Greek Prime Minister Antonis Samaras is set to announce the members of his government Thursday after securing agreement from the country’s political leaders on a coalition that will seek relief from austerity measures tied to international loans. Samaras was sworn in as prime minister Wednesday, the country’s fourth premier since November, after his New Democracy party won a June 17 election with almost 30% of the vote. He’s joining forces with the socialist Pasok party, which finished third, and the sixth-place Democratic Left, to hold 179 seats in the 300-member parliament, ending a period of political limbo that began with an inconclusive May 6 election. (Bloomberg)

EU: German economic expansion to slow, Finance Ministry report says
Germany’s economic expansion is set to slow in the course of the year, the Finance Ministry said in its monthly report, citing weaker indicators. German tax revenue fell 4.3% in May y-o-y, hurt by changes in tax collection that is delaying inflows by several months, the ministry in Berlin said in the report. Tax revenue in the first five months rose 3.6% y-o-y, it said. (Bloomberg)

France: Pushing for Europe debt redemption fund
France’s Labor Minister Michel Sapin said the nation is championing a plan for excessive European debt to be pooled into a common fund as officials seek solutions to end to a debt crisis that’s engulfed Spain and now threatens Italy. Sapin said proposals for a so-called European Redemption Fund, developed by Chancellor Angela Merkel’s council of economic advisers and backed by German opposition parties, are gaining traction in Europe even though Merkel herself hasn’t warmed to it. The proposal amounts to using all the strength of the European economy as a whole, while making sure the countries that are today getting hammered by too-high interest rates see the normal part of their debt financed in normal conditions. (Bloomberg)

UK: Jobless claims unexpectedly rise as Euro crisis bites
UK unemployment claims unexpectedly rose in May, suggesting the labor market may be starting to succumb to Europe’s intensifying debt crisis. Jobless-benefit claims climbed 8,100 from April to 1.6 million, the Office for National Statistics said. The unemployment rate as measured by International Labour Organization methods was unchanged at 8.2% in the three months though April. The claimant-count numbers tend to lead what happens in unemployment, so these numbers are a bit worrying, said personnel. The figures suggest the labor-market recovery is running out of steam, increasing pressure on Prime Minister David Cameron. His budget cuts have been blamed by the opposition Labour Party for pushing the UK into its first double-dip recession since the 1970s at a time when the euro-region crisis is casting a shadow on prospects for the economy. (Bloomberg)

UK: King overruled in 5-4 vote against BOE stimulus extension
Bank of England Governor Mervyn King was overruled for the first time in almost three years as he joined a push to expand stimulus that’s gathering momentum as the danger of Europe’s debt crisis intensifies. The Monetary Policy Committee voted 5-4 to keep its bondpurchase target at 325bn pounds ($511bn) this month. That defeated votes by King, Adam Posen and David Miles for a 50bn-pound expansion, and Paul Fisher’s bid for 25bn pounds. It’s the first time King has voted in the minority since August 2009, showing the central bank is moving closer to adding stimulus after it halted expansion of its quantitative-easing program in May. (Bloomberg)

US: Fed officials sees lower US growth, slow progress on jobs
Federal Reserve officials cut their estimates for 2012 growth after last month’s slowdown in hiring and see little progress on unemployment during the rest of the year. Fed officials lowered their central tendency estimate for US 2012 GDP growth to 1.9% to 2.4% from 2.4% to 2.9% in April. Estimates for 2013 centered around 2.2% to 2.8%, compared with 2.7% to 3.1% in the previous forecast. Consumers and businesses are restraining spending as European financial stress has knocked down US stock prices. Yields on corporate borrowing rates have increased as investors flee from risk. (Bloomberg)

US: Fed expands Operation Twist to year-end, prepared to do more
The Federal Reserve will expand its Operation Twist program to extend the maturities of assets on its balance sheet and said it stands ready to take further action to put unemployed Americans back to work. The central bank will prolong the program through the end of the year, selling $267bn of shorter-term securities and buying the same amount of longer-term debt in a bid to reduce borrowing costs and spur the economy. (Bloomberg)

20120621 1007 Malaysia Corporate Related News.

RM160bn to lift rail transport
Malaysia's railway industry will pump up to RM160bn in total investment between now and 2020 to develop the rail infrastructure, said the Land Public Transport Commission (SPAD) yesterday. “The government has invested more than RM50bn in rail transport since the 1990s. Investment for future rail projects is estimated to reach RM160bn by 2020,” said SPAD chairman Tan Sri Syed Hamid Albar. (BT)

All eyes on NAP
Indications are that some aspects of the revised National Automotive Policy (NAP) will soon make its appearance, ending the long wait for liberalization of the sector. One government source said phases of the NAP were expected to be announced soon and would include a liberalization of the segment below 1,800cc, making it more attractive for new players to enter the marketplace. (StarBiz)

KUB bags RM12m government job
KUB Malaysia has secured an RM11.7m contract from Home Ministry to supply printing materials such as toners and consumables to the Royal Malaysian Police (RMP). In a statement to Bursa Malaysia, KUB said the two-year contract will contribute positively to its earnings n the 2012 financial year ending 31 Dec. KUB said the contract has minimal risk as it is based on the current and immediate requirement for these materials by the ministry for the RMP. (Financial Daily)

MRT Corp receives 7 bids for 2 tenders
Mass Rapid Transit Corp (MRT Corp) has received seven bid for two tenders, namely power supply and distribution (PSD) and track works, for the 51km Sg Buloh-Kajang line. The tenders, which closed on Monday, saw four parties bidding for the PSD tender while three submitted for track works, MRT Corp said in a statement. (StarBiz)

MISC sees return to profit
MISC, a Petronas subsidiary, is confident that it will register better quarters ahead and return to the black after it completes its exit from the liner business at the end of this month. Chairman Datuk George Ratilal also said that the company has sold 10 of its container ships, while another six are in the sale negotiation process. "The sale started from the time that we announced the cessation and a lot of our ships are pretty much sold. There are still some left," he said after MISC's annual general meeting yesterday. (BT)

Wah Seong trumps Pansar, Lim for Petra Energy Stake
Energy infrastructure group Wah Seong Corp is set to acquire Perdana Petroleum’s strategic 26.9% interest in Petra Energy after outbidding Sarawak-based Pansar and influential businessman Datuk Desmond Lim Siew Choon, financial executives close to the deal said yesterday. Wah Seong has offered to pay about RM1.70 per share for the 57.7m share in Petra Energy, valuing the deal at RM98.1m. This represents a slight premium over the company’s net asset value, which amounts to RM93.5m, or RM1.62 a share. (Financial Daily)

Bumi Armada picks Nam Cheong to build 4 vessels costing RM410.6m
Bumi Armada is expanding its fleet for the offshore support vessel market and it has appointed Singapore's Nam Cheong Ltd to build four vessels costing a total of USD130m (RM410.67m). It said on Wed it had issued a letter of intent to Nam Cheong's unit Nam Cheong Dockyard SB to build four multi-purpose platform support vessels, with an option for four additional units, at USD130m. (StarBiz)

Maxis: To focus on key markets
Maxis’s CEO Sandip Das said the company will focus on key markets such as the immigrant, student and tourist segments and the Sabah and Sarawak region where growth is still attractive. He said there were a few markets we did not prioritise in the past. He said the markets were the immigrant market, Sabah and Sarawak and parts of eastern Malaysia like Kuantan. In referring to the immigrant market, he said that's a floating population of anywhere between 2m to 4m people, and it gets refreshed every few years. He said the first thing the integrated telco did last year to capture this burgeoning sector was to rationalise its international direct dialing rates to match the competition, leading to almost 600% growth in some areas. Sandip added that Maxis did not have a strong network in Sabah and Sarawak previously but had rectified that this year. On the tourist market, he explained that as Malaysia attracted more visitors, they are determined to get our rightful share. He said this would be done by offering better roaming rates. (StarBiz)

Felda Global Venture: Dreyfus portion taken up by other investors
A business executive familiar with the matter said the 2.5% stake in Felda Global Ventures Holdings (FGV) that was previously offered to Louis Dreyfus Commodities Asia has been offered and snapped up by other investors. However, he added that this does not mean that Louis Dreyus will stay out  of FGV as it is still keen to acquire a small stake in the future. According to him, Louis Dreyfus is unable to invest in FGV as the IPO stage because it was unable to confirm its interest before the closing date of the institutional offering on June 13. The reason was due to the company and FGV needing more time to iron out the details of a strategic partnership. (Financial Daily)

DRB-Hicom: Ex-CEO of Lotus sues for wrongful termination
Dany Bahar, the flamboyant and allegedly free-spending former CEO of Group Lotus plc, has reportedly decided to sue DRB-Hicom, the ultimate owner of Lotus, for wrongful termination. According to Swiss newspaper Bilanz, Bahar  filed the suit in London’s High Court. Bahar’s legal suit comes amid reports that he had misused company money to renovate several properties that he owned, as well as to pay for private aircraft. According to some UK news reports, Bahar was paid a guaranteed annual package of at least £1.2m (RM6m). Bahar assumed the position as chief executive in 2009 after he was roped in from Fiat SpA’s Ferrari. DRB-Hicom declined to comment for this article. (Business Times)

MBM Resources: Expects RM180m capex this year
MBM Resources expects its capex to be RM180m for this year, the highest in the group's history. Its group MD Looi Kok Loon said this was part of the RM250m capex for 2011 to end-2013 as it accelerates its transformation into a complete automotive group. He said this expansion would also hinge on the revised National Automotive Policy (NAP) to be announced. (StarBiz)

MAA Group: Explore private equity as new business
Having disposed of its key insurance arm, MAA Group’s forte will remain in asset management. Executive chairman Tunku Datuk Ya’acob Tunku Abdullah said the group is currently studying the possibility of a private equity business. However, he said the group will not be making any acquisitions until after September 2013 as the proceeds from the disposal of MAA Assurance are subject to escrow until the said date. (Financial Daily)

Scomi Group: MARC downgrades Scomi Group’s RM500m debt notes
Malaysian Rating Corporation (MARC) has downgraded its rating on Scomi Group's RM500m medium term notes (MTN) programme to BBB+ from A. The ratings agency said on Wednesday that the rating continues to be maintained on MARCWatch Negative. The rating action affects RM200m of outstanding notes. It said the downgrade in Scomi's rating reflects noteholders' rising susceptibility to event risk as a result of a delay encountered in the completion of its announced divestments of equity in subsidiaries,  Scomi Nigeria Pte Ltd (SNPL) and Oiltools Africa Ltd (OAL). It added that the delay in its asset disposal programme had impacted the timeline for Scomi's proposed partial refinancing of the outstanding notes as the refinancing transaction hinged upon the completion of its asset disposal plan. (StarBiz)

Salcon: Mulling more M&A in China
Fresh from its acquisition of water assets in China, Salcon is still on the lookout for M&A opportunities in a bid to speed up the listing of its Chinese water assets in the next two years, the company’s executive director said. Datuk Eddy Leong Kok Wah said that they are in talks with one or two groups for a potential merger. Salcon plans to list its Chinese water assets in the next two to three years. It aims to increase its combined capacity to 3,000m litres per day by then. (Financial Daily)

Konsortium Logistik: Eyes 20% growth
Konsortium Logistik’s CEO Datuk Che Azizuddin Che Ismail said the company is eyeing up to 20% revenue increase for FY2012. He said the group was upbeat on its business outlook, driven by its two initiatives -- Asean Logistic Park (ALP) and Regional Distribution Hub. He said the ALP in Sadao, southern Thailand, will be the distribution hub to cater for crossborder movements between Malaysia and Thailand while Regional Distribution Hub at Westport will serve as a dedicated logistics facility for specialised products. He said the group targets the movement of 4,000 containers per month for its ALP initiative. Che Azizuddin also said the group managed to secure several contracts in 1Q 2012, including a RM120m chartering contract with a major client in the power generation sector. (Business Times)

Focus Point Holdings: Eyes more franchising deals in Indonesia
Focus Point Holdings is finalising franchising deals in Indonesia as the group seeks to expand its business across Southeast Asia. President of Focus Point Holdings group Datuk Liaw Choon Liang said they have already set up three branches in Brunei, adding that they are in the midst of finalising franchise deals in Indonesia. The CEO of Focus Point Vision Care Sdn Bhd, Kim Ng said the potential partners must be professional and committed. As to whether there were plans to expand in Malaysia, she said the group was cautious due to the uncertainties in the economy and competitive retail market. (StarBiz)

Kumpulan Hartanah Selangor: Optimistic of positive growth this year
Kumpulan  Hartanah Selangor (KHSB)’s Chairman Raja Idris Raja Kamaruddin  said the company is optimistic of positive growth this year as the company embarks on the development of prime commercial land in Petaling Jaya. He said joint development plans of the 3.84 hectare piece of land in the heart of Section 14, Petaling Jaya, was currently being finalized. He said the development of shop offices, small-office-home-office (SOHO), office tower and service apartments will begin by year-end and contribute close to RM1bn in GDV over 7 years. Raja Idris also said several proposals have also been received for the development of 2,000 hectares of land in Bestari Jaya (Batu Berjuntai) in Selangor. (Bernama)

Kumpulan Perangsang Selangor: To divest slower yielding investments and assets
Kumpulan Perangsang Selangor (KPS) is looking at divesting slower yielding investments and assets to reorganise its portfolio. KPS chairman Raja Idris Raja Kamarudin said these include its 20% stake in Sprint Highway which it acquired in 2002 at RM130m. He said the company has not decided on the status of its stake in Sprint, but indicated that talks are on-going with certain principals of the assets. While Sprint has yielded returns since KPS bought the 20% stake in 2002, the proceeds have been  used to repay KPS' borrowings. Looking ahead, Kamarudin said proceeds from any possible divestments will be channelled to other fasteryielding investments instead of being used to reduce the group's debt obligations. He said the money is better utilised to generate income from new investments instead of being used to save on interest rates. (Financial Daily)

Prestariang: Eyes M&As to expand value chain
Prestariang is looking into mergers and acquisitions (M&As) to complete its softwaredeveloping and training value chain. Executive director Abu Hasan Ismail said on Wednesday that due to its strong cash position, it would look into M&As and also focus on further developing its intellectual property. He said Prestariang was in search of partners to enhance its products and grow its education business, which would provide long-term recurring income. On the dividend policy, Abu Hassan said the group intended to distribute quarterly interim dividends this year, instead of a final dividend. He added Prestariang's dividend policy would remain above 50% and this should not impact the company's cashflow. (StarBiz)

Automotive: All eyes on NAP
Indications are that some aspects of the revised National Automotive Policy (NAP) will soon make its appearance, ending the long wait for liberalisation of the sector. One government source said phases of the NAP were expected to be announced soon and would include a liberalisation of the segment below 1,800cc, making it more attractive for new players to enter the marketplace. The source said something will be announced soon and would touch on matters that the Government wanted to implement as soon as possible. When asked to comment on this, Minister of International Trade and Industry (Miti) Datuk Seri Mustapa Mohamed said his ministry, which is reviewing the NAP, was in the final stages of streamlining the incentives for energy-efficient vehicles (EEVs).  He added that the Government was talking to a few Japanese automakers to manufacture EEVs locally. According to reports, the Government has put in place strategies under the upcoming revised NAP to turn Malaysia into a regional hub for EEVs. (StarBiz)

Plantation: Malaysian Palm Oil Council CEO says not viable to emulate Indonesia's tax
Malaysia is currently mapping out plans to make its palm oil sector more competitive but it would not mirror that of Indonesia's strategies, which in reality, will result in huge losses for producers. Malaysian Palm Oil Council CEO Tan Sri Dr Yusof Basiron said Malaysia cannot emulate the pratice in Indonesia, where export taxes are collected upfront from producers as it would distort the market. Explaining further, he said the price of fresh fruit bunches (FFB) are calculated less 18% in terms of oil value. As such, he said this enables refiners to produce palm oil at 18% cheaper than market rates as it is already discounted at the FFB level. The mill will then passes the oil to the refineries at another discount of 8%. But, some downstream industries only incur minimal export duty, Yusof said, citing bio-diesel which attracted an export duty of only 2%. Yusof added that not all processed palm oil is exported as some are consumed locally in manufactured goods or oleochemicals. (Business Times)

Telecommunication: MCMC finalising allocation of 2.6GHz spectrum
The Malaysian Communications & Multimedia Commission (MCMC) is finalising its allocation of the 2.6GHz spectrum that will accommodate the shift to fourth generation wireless and long-term evolution networks by Malaysian telecommunication companies. Chairman Datuk Mohamed Sharil Tarmizi said one of the things  they are trying to ensure is sufficient cooperation among service providers in terms of the rollout of the networks. He said they are looking at infrastructure and not service provider consolidation. (StarBiz)

20120621 1000 Global Market Related News.

Asian Stocks Advance as Fed Extends Economic Stimulus (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index heading for a second day of gains, after the Federal Reserve expanded its economic stimulus program and said it stands ready to take further action. Honda Motor Co. (7267), a carmarker that gets about 44 percent of sales from North America, rose 2.5 percent in Tokyo. Lotte Shopping Co. Lotte Shopping Co. added 1.5 percent in Seoul after the South Korean operator of department stores submitted a bid for Himart Co., an appliance retailer. Woodside Petroleum Ltd., Australia’s No. 2 oil producer, lost 1 percent as crude futures fell. The MSCI Asia Pacific Index (MXAP) added 0.1 percent to 116.83 as of 9:35 a.m. in Tokyo, with about three share rising for every two that fell. More than $5 trillion has been erased from global equities since March amid slowing economic growth in the U.S. and China, and a spreading European debt crisis that pushed Spain’s borrowing costs to a record.
“We continue to believe that the Fed will need to provide additional support given the precarious position of the global economy,” said Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong.

Japanese Stocks Advance as Fed Expands Operation Twist (Source: Bloomberg)
June 21 (Bloomberg) -- Japanese stocks rose for a second day after the U.S. Federal Reserve expanded its Operation Twist program to buy longer-dated assets and said it stands ready to take further action to fight unemployment. Honda Motor Co. (7267), a carmaker that gets 44 percent of its sales in North America, rose 2.4 percent. Renesas Electronics Corp. (6723) gained 4.6 percent on a report that KKR & Co. and Silver Lake are in talks to invest in the chipmaker. Inpex Corp. (1662), Japan’s No. 1 energy explorer, slid 1.2 percent as crude fell. The Nikkei 225 Stock Average (NKY) gained 0.7 percent to 8,812.83 as of 9:21 a.m. in Tokyo. The broader Topix Index advanced 0.6 percent to 751.59, with about three stocks rising for each that fell. Foreign investors were net buyers of Japanese stocks last week for the first time in nine weeks, data released today showed.

U.S. Stocks Decline With 10-Year Treasuries After Fed (Source: Bloomberg)
U.S. stocks and 10-year Treasuries fell after the Federal Reserve cut growth estimates and expanded its economic stimulus program known as Operation Twist. Oil tumbled to an eight-month low. The Standard & Poor’s 500 Index lost 0.2 percent to 1,355.69 at 4 p.m. in New York, paring a drop of as much as 0.9 percent. The yield on 10-year Treasuries increased four basis points to 1.66 percent, while the rate on 30-year bonds was almost unchanged at 2.74 percent. Crude slid 2.7 percent to $81.80 a barrel after U.S. inventories climbed to a 22-year high. The S&P GSCI Index of commodities fell to the lowest level since 2010. Spanish and Italian bonds rallied on speculation European leaders will act to reduce yields.
Fed Chairman Ben S. Bernanke, who said progress in the job market has slowed, extended the program of replacing short-term bonds with longer-term debt by $267 billion through the end of 2012, disappointing investors anticipating a more aggressive approach. Policy makers cut their estimate for U.S. gross domestic product growth in 2012 to between 1.9 percent and 2.4 percent from 2.4 percent to 2.9 percent. “The Fed’s goal is to take volatility out of the market, keep rates low and stable and help mortgage rates stay low,” said Bret Barker, a money manager at Los Angeles-based TCW Group Inc., which manages about $128 billion in assets. “The Fed is not out of bullets. If things get worse they will act more. This keeps us afloat for now. The Fed is buying time and trying to allow the economy to continue to heal.”

European Stocks Advance Before Fed Rate Decision (Source: Bloomberg)
European stocks advanced, sending the Stoxx Europe 600 Index to its highest level in more than a month, amid speculation the Federal Reserve will expand Operation Twist to help sustain economic growth. Aer Lingus Group Plc surged 15 percent after Ryanair Holdings Plc (RYA) renewed its offer to buy the company. Hennes & Mauritz AB (HMB) rose 4.8 percent after earnings topped forecasts. Unilever NV (UNA) declined after Procter & Gamble Co., the world’s largest consumer-products maker, cut its earnings forecast. The Stoxx 600 (SXXP) rose 0.6 percent to 249.67 at the close in London, the gauge’s highest level since May 11. The benchmark measure has still fallen 8.3 percent from its peak on March 16 amid concern Europe’s sovereign-debt crisis has derailed global economic growth.
“The Federal Open Market Committee is taking center stage with expectations once again high that Fed will finally do something to stimulate increasingly sluggish growth,” said Markus Huber, head of German sales trading at ETX Capital in London. “The Fed will have to deliver something today.” The Fed will probably expand Operation Twist beyond $400 billion to spur growth and buy protection against a deeper crisis in Europe, according to a Bloomberg News survey of economists.

Emerging-Market Stocks Advance on Stimulus Speculation (Source: Bloomberg)
Emerging-market stocks rose to a five-week high after the Federal Reserve said it will extend its monetary stimulus program and German Chancellor Angela Merkel discussed bond purchases to address Europe’s debt crisis. The MSCI Emerging Markets Index (MXEF) gained for a fourth day, adding 0.5 percent to 948.27 by the close in New York, the highest since May 14. Information technology companies rose as SK Hynix Inc., the world’s No. 2 computer-memory chipmaker, surged in Korea and shares of E Ink Holdings Inc. (8069) swelled in Taiwan. LLX Logistica SA (LLXL3) gained 6.1 percent in Brazil.
The Fed today said it plans to extend its Operation Twist program to replace short-term bonds with longer-term debt by $267 billion through the end of 2012 to reduce unemployment and protect the expansion. The statement was followed by Merkel’s announcement that bond purchases by the European bailout fund may be a possibility. German policy makers had been opposed to such use of the fund even as Spanish 10-year bond yields reached a record high earlier this week. “The Fed statement probably met the minimum expectation because a lot of investors were holding out for the possibility of additional stimulus,” Nick Chamie, head of global foreign- exchange strategy at Royal Bank of Canada in Toronto, said by phone today. “Merkel’s comments were a bid for optimism because it showed she is open to increasing resources to slow a vicious cycle of increasing risks.”

FOREX-Euro supported by Fed easing bets, seen vulnerable
LONDON, June 20 (Reuters) - The euro steadied versus the dollar , holding gains made on speculation the U.S. Federal Reserve will adopt further monetary stimulus, although the risk of those expectations being disappointed left the common currency vulnerable.
"The weakness in the dollar is understandable but once that speculation is out of the way, and we know what the Fed are going to do, concerns about the euro zone will come back to the fore," said Simon Derrick, head of currency research at Bank of New York Mellon.

Aussie, Kiwi Approach 7-Week Highs on Stimulus Prospects (Source: Bloomberg)
The Australian and New Zealand dollars traded near the strongest levels in almost seven weeks amid speculation central banks globally will add to stimulus measures. The Australian currency rallied yesterday after Federal Reserve Chairman Ben S. Bernanke said policy makers were prepared to take further action even after they expanded the central bank’s so-called Operation Twist program. The New Zealand dollar advanced after data showed economic growth accelerated. Demand for the currencies was limited before European finance ministers meet today amid concern the euro-area crisis will weigh on global growth. “The U.S. dollar’s going to stay a little bit weak in the near term, particularly against the Aussie and kiwi,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia (CBA), the country’s biggest lender. The Fed’s move is likely to boost the South Pacific currencies, although they’re unlikely to experience “a big lift” due to the turmoil in Europe, he said.
The Australian dollar traded at $1.0188 as of 10:25 a.m. in Sydney from $1.0194 in New York yesterday, when it climbed as high as $1.0224, its strongest level since May 4. The New Zealand currency, known as the kiwi, added 0.4 percent to 79.95 U.S. cents. It earlier touched 80.17 cents, also the highest since May 4.

Euro Falls Before Spanish Sale Amid Debt Crisis Concern (Source: Bloomberg)
The euro fell, snapping a two-day gain against the dollar and yen, as Spain prepared to auction bonds today amid concern that the European debt crisis is deepening in the bloc’s fourth largest economy. Euro-area finance ministers are set to meet in Luxembourg today to discuss the currency union’s financial woes. Demand for the dollar was limited on prospects the Federal Reserve will implement further stimulus if the economy warrants it, depreciating the greenback. The central bank said yesterday it will extend its so-called Operation Twist program, while cutting estimates for growth in the largest economy. New Zealand’s dollar rose after data showed economic growth accelerated. “As long as Spain’s debt problem stays with us, my bearish view on the euro won’t change,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency-margin company. “Whether Spain can resolve its debt problem has yet to become clear, so anxieties continue to prevail.”
The 17-nation euro slid 0.2 percent to $1.2682 at 9:02 a.m. in Tokyo from yesterday, when it capped a two-day advance of 1 percent. It fell 0.3 percent to 100.74 yen, after gaining 1.6 percent over the previous two days. The U.S. currency traded at 79.44 yen, 0.1 percent lower than the close in New York. New Zealand’s dollar, known as the kiwi, added 0.5 percent to 80.01 U.S. cents, after earlier touching 80.17, the highest level since May 4.

Fed Expands Operation Twist by $267 Billion Through 2012 (Source: Bloomberg)
The Federal Reserve will expand its Operation Twist program to extend the maturities of assets on its balance sheet and said it stands ready to take further action to put unemployed Americans back to work. The central bank will prolong the program through the end of the year, selling $267 billion of shorter-term securities and buying the same amount of longer-term debt in a bid to reduce borrowing costs and spur the economy. “If we don’t see continued improvement in the labor market, we’ll be prepared to take additional steps if appropriate,” Fed Chairman Ben S. Bernanke said at a news conference in Washington following a two-day meeting of the Federal Open Market Committee. “Additional asset purchases would be among the things that we would certainly consider.”
Policy makers moved to shore up the world’s largest economy as faltering growth leaves it vulnerable to fallout from the European debt crisis and looming fiscal tightening in the U.S. Fed officials today lowered their outlook for growth and employment, foreseeing a jobless rate of at least 7.5 percent at the end of 2013.

Fed Officials Sees Lower U.S. Growth, Slow Progress on Jobs (Source: Bloomberg)
Federal Reserve officials cut their estimates for 2012 growth after last month’s slowdown in hiring and see little progress on unemployment during the rest of the year. Fed officials lowered their central tendency estimate for U.S. 2012 gross domestic product growth to 1.9 percent to 2.4 percent from 2.4 percent to 2.9 percent in April. Estimates for 2013 centered around 2.2 percent to 2.8 percent, compared with 2.7 percent to 3.1 percent in the previous forecast. Consumers and businesses are restraining spending as European financial stress has knocked down U.S. stock prices. Yields on corporate borrowing rates have increased as investors flee from risk. “Financial conditions are becoming somewhat more adverse for the economy,” said Kathleen Stephansen, senior investment strategist and global head of sovereign research at AIG Asset Management in New York. “The markets are still fragile.”
Seven Federal Open Market Committee participants said the first interest rate increase would occur in 2014, while six said it would occur in 2015. U.S. central bankers cut the benchmark lending rate to a range of zero to 0.25 percent in December 2008.

Job Growth May Fizzle in U.S. as Productivity Gains: Economy (Source: Bloomberg)
The U.S. economy may be on the cusp of a pickup in productivity that will make it more difficult for Federal Reserve policy makers to reduce unemployment. After cooling throughout last year, worker output per hour will probably rise at around 1.5 percent, in line with its long- run trend, according to economists like Ellen Zentner and Robert Gordon. That means the lower-than-forecast payroll gains in May and April may be closer to the norm than the exception for the rest of the year as companies redouble efforts to improve efficiency. Payrolls will grow between 80,000 and 120,000 per month, less than this year’s 165,000 average, even as the economy expands by about the same 2 percent, estimates Zentner, a senior economist at Nomura Securities International Inc. Fed Chairman Ben S. Bernanke earlier this year aired his concern that hiring will subside without faster economic growth.
“As the rate of productivity normalizes, businesses won’t need to hire as many workers,” said New York-based Zentner. “The level of job growth we’ve been getting over the past few months is probably pretty normal.”

Bernanke Says Volcker Rule Would Have Influenced JPMorgan Loss (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke said the Volcker Rule may have been able to influence the outcome of JPMorgan Chase & Co.’s $2 billion trading loss. Bernanke said documentation of a trade’s rationale, an auditing process, governance rules and compensation limits that are part of the proposed Volcker Rule may have played a role in changing the result at the largest U.S. bank. The legislation aims to limit proprietary trading while allowing exemptions for market-making and hedging. One relevant feature of the rule “would have been the control of governance aspects,” Bernanke said today at a news conference. “That might have potentially changed the outcome.” Five banking regulators, including the Fed and the Treasury Department’s Office of the Comptroller of the Currency, are finalizing the Volcker Rule. Regulators have struggled with whether JPMorgan’s trade would have been allowed under the proposal’s exemption for portfolio trading.

Fed Seen Extending Operation Twist and Avoiding Bond Buys (Source: Bloomberg)
The Federal Reserve will probably decide today to expand Operation Twist beyond $400 billion to spur growth and buy protection against a deeper crisis in Europe, according to a Bloomberg News survey of economists. Fifty-eight percent of respondents in a June 18 poll said the Fed will prolong the program, which seeks to lower borrowing costs by extending the average maturity of the securities in the central bank’s portfolio. The current program ends this month. Policy makers led by Chairman Ben S. Bernanke may conclude that growth is too feeble to reduce unemployment much further after payroll growth came close to stalling in May. At the same time, with inflation close to their 2 percent goal and the Greek election reducing the risk of a euro breakup, they may decide an additional round of quantitative easing isn’t needed for now, economists said.
“Extending Operation Twist is the path of least resistance,” said Josh Feinman, the New York-based global chief economist for DB Advisors, the Deutsche Bank AG asset management unit that oversees $232.1 billion. “It would be an extension of something we have in place, so it would be more seamless, and it doesn’t complicate exit strategies as much because it’s not expanding the balance sheet,” said Feinman, a former senior economist for the Fed Board in Washington.

China Lowers Entry Barrier for Overseas Institutional Investors (Source: Bloomberg)
China plans to lower the entry barrier for foreign institutional investors looking to buy publicly traded securities in mainland exchanges, as part of reforms to add depth to the country’s capital markets. The government will cut the minimum requirement on assets under management to $500 million from $5 billion for companies seeking a license under the Qualified Foreign Institutional Investor program, the China Securities Regulatory Commission said in a statement on its website yesterday. The regulator also said it will allow them to invest in the country’s interbank bond market. Introducing more long-term funds from abroad will help improve market confidence, promote stable growth in China’s capital markets and provide “robust” investment returns to domestic investors, the CSRC said on May 18. QFII, introduced in 2002, allows approved foreign investors to buy and sell yuan- denominated securities.
Foreign investors will be required to have at least two years of operational experience under the new rules, compared with the current minimum requirement of five years, according to yesterday’s statement. Qualified investors will also be allowed to hold a combined maximum 30 percent stake in any single yuan- denominated stock, compared with 20 percent previously, the CSRC said.

Merkel Balks at Sovereign Debt Purchases to Overcome Crisis (Source: Bloomberg)
German Chancellor Angela Merkel balked at committing to direct sovereign debt purchases through the euro-area bailout fund, pushing back on calls by the bloc’s leaders who backed the measure as a way to ease the crisis. Such a move, while legally possible, “is not up for debate” at present, Merkel said yesterday in Berlin. French President Francois Hollande championed the idea of using the European Stability Mechanism to purchase indebted countries’ bonds as a way to counter rising yields. Just returned from the Group of 20 summit in Los Cabos, Mexico, Merkel said: “I haven’t heard about such things.” “There is no concrete planning that I know about, but there is the possibility of purchasing sovereign bonds on the secondary market,” Merkel told reporters in Berlin after meeting with Dutch Prime Minister Mark Rutte. “But this is a purely theoretical statement about the legal situation.”
Merkel’s non-committal stance on the measure opens a fresh conflict as euro finance ministers meet today and Italian Prime Minister Mario Monti hosts a four-way summit in Rome tomorrow. Hollande prodded Germany to use the European Union’s permanent rescue fund to buy debt from countries such as Italy, which have taken steps to revamp their economies.

Samaras to Name New Greek Government as Euro Area Ministers Meet (Source: Bloomberg)
Greek Prime Minister Antonis Samaras is set to announce the members of his government today after securing agreement from the country’s political leaders on a coalition that will seek relief from austerity measures tied to international loans. Samaras was sworn in as prime minister yesterday, the country’s fourth premier since November, after his New Democracy party won a June 17 election with almost 30 percent of the vote. He’s joining forces with the socialist Pasok party, which finished third, and the sixth-place Democratic Left, to hold 179 seats in the 300-member parliament, ending a period of political limbo that began with an inconclusive May 6 election. “We have the required outcome, which is a necessary condition for the creation of a new, long-term, government that will give stability and hope to people,” Samaras said yesterday in Athens.
European officials have held out the prospect of flexibility over fiscal austerity for Greece after the country’s election amounted to a referendum on remaining in the 17-nation euro currency union. Greece has slipped behind budget-cutting targets that euro-area nations and the International Monetary Fund imposed in exchange for 240 billion euros ($305 billion) in aid pledges in the past two years.

Greece’s Samaras Becomes Premier of Three-Party Coalition (Source: Bloomberg)
Antonis Samaras, head of Greece’s New Democracy party, was sworn in as prime minister after Greek political leaders agreed on a coalition that will seek relief from austerity measures tied to international loans. New Democracy, which won a June 17 election with almost 30 percent of the vote, will join forces with the socialist Pasok party, which finished third, and the sixth-place Democratic Left. They will hold 179 seats in the 300-member parliament, ending a period of political limbo that began with an inconclusive May 6 election. “We have the required outcome, which is a necessary condition for the creation of a new, long-term, government that will give stability and hope to people,” Samaras said today in Athens before he was sworn in by President Karolos Papoulias.
European officials have held out the prospect of flexibility over fiscal austerity for Greece after the country’s election amounted to a referendum on remaining in the 17-nation euro currency union. Greece has slipped behind budget-cutting targets imposed by the euro area and the International Monetary Fund in exchange for 240 billion euros ($305 billion) in aid pledges over the past two years.

King Defeated in BOE Stimulus Push as QE Momentum Grows (Source: Bloomberg)
Bank of England Governor Mervyn King was overruled for the first time since 2009 as he joined a push to expand stimulus that’s gaining momentum amid rising jobless claims and growing risks from Europe’s debt crisis. The Monetary Policy Committee voted 5-4 to keep its bond- purchase target at 325 billion pounds ($511 billion) this month. That defeated votes by King, Adam Posen and David Miles for a 50 billion-pound expansion, and Paul Fisher’s bid for 25 billion pounds. A separate report showed jobless-benefit claims climbed climbed 8,100 in May from the previous month to 1.6 million, the Office for National Statistics said. This month was the first time King voted in the minority since August 2009, showing the central bank is moving closer to adding stimulus after it halted expansion of its quantitative- easing program in May.
The Federal Reserve will probably decide today to expand Operation Twist beyond $400 billion to spur growth, economists say, as Group of 20 leaders meeting in Mexico press Europe to step up measures to contain the region’s crisis. “The risks to U.K. and global activity from financial distress and political tension within the euro area had intensified again,” Bank of England policy makers said in the minutes of their June 6-7 meeting. Most members “judged that some further economic stimulus was either warranted immediately or would probably become warranted to meet” the 2 percent inflation target.

U.K. Jobless Claims Unexpectedly Rise as Euro Crisis Bites (Source: Bloomberg)
U.K. unemployment claims unexpectedly rose in May, suggesting the labor market may be starting to succumb to Europe’s intensifying debt crisis. Jobless-benefit claims climbed 8,100 from April to 1.6 million, the Office for National Statistics said today in London. The median forecast of 20 economists in a Bloomberg News survey was for a drop of 4,000. The unemployment rate as measured by International Labour Organization methods was unchanged at 8.2 percent in the three months though April. “The claimant-count numbers tend to lead what happens in unemployment, so these numbers are a bit worrying,” said George Buckley, an economist at Deutsche Bank AG in London. “I wouldn’t be surprised if this is a response to the euro crisis. Employment may weaken -- that means potentially worse numbers on the public finances.”
The figures suggest the labor-market recovery is running out of steam, increasing pressure on Prime Minister David Cameron. His budget cuts have been blamed by the opposition Labour Party for pushing the U.K. into its first double-dip recession since the 1970s at a time when the euro-region crisis is casting a shadow on prospects for the economy.

Europe Debt Crisis Restrains Rebound in Japan’s Exports: Economy (Source: Bloomberg)
Japan reported its first trade deficit with the European Union since the Finance Ministry began tracking data in 1979 as the debt crisis roiling Spain and Greece limits a rebound in Japanese exports. An overall shortfall of 907.3 billion yen ($11.5 billion) for May, reported today in Tokyo, was bigger than all 24 estimates in a Bloomberg News survey of economists. Exports rose 10 percent from a year earlier, the most in 17 months, while imports exceeded estimates. The trade gap with the EU was 11.1 billion yen. Shipments to the EU fell 0.9 percent even as they surged 38 percent to the U.S., underscoring the threat to Japan’s recovery as Group of 20 leaders meeting in Mexico press Europe to step up damage control. Governor Masaaki Shirakawa said today that Europe poses the biggest risk as his nation’s economy returns to the path of “moderate recovery.”
“The Bank of Japan must be closely monitoring markets as high uncertainties remain in Europe,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. They’ve indicated they will act “in a timely manner if markets are roiled and the yen gets much stronger.”

Greece Faces Downgrade to Emerging-Market Status by MSCI (Source: Bloomberg)
Greece’s stock market was put under review for reclassification to emerging markets by MSCI Inc. (MSCI), a change that would make the European Union nation the first advanced country to be cut to developing status. The MSCI Greece (MXGR) Index, which includes only two companies, is “structurally no longer in line with Developed Markets size requirements,” MSCI, whose stock indexes are tracked by investors with about $7 trillion in assets, said in a statement yesterday. The index provider said it may discontinue the calculation of the MSCI Greece Index should the stock valuations keep declining.
Greece completed the largest bond restructuring in history in March after holders forgave more than 100 billion euros ($126.9 billion) of debt. The MSCI Greece Index has lost 93 percent over the past five years as the economy contracted and politicians struggled to keep it within the 17-nation euro- region. Companies on the gauge trade at an average 8 times estimated earnings, a 34 percent discount to companies on the MSCI World Index. (MXWO) “The market has already made up its mind about Greek equities,” Michael Shaoul, the New York-based chairman of Marketfield Asset Management, wrote in an e-mail yesterday. “MSCI is simply bowing to the inevitable. In a sense they really need a new category, blown-up developed markets.”

New Zealand GDP Growth Accelerates 1.1%, Most in 5 Years (Source: Bloomberg)
New Zealand’s economy grew at the fastest pace in five years last quarter, sending the local currency near a seven-week high as investors reduced bets the central bank will cut interest rates. Gross domestic product rose 1.1 percent in the three months ended March 31 from the previous quarter, when it expanded a revised 0.4 percent, Statistics New Zealand said in a report released today in Wellington. Growth was the quickest since the first quarter of 2007 and almost three times the 0.4 percent projection by the central bank and the median estimate in a Bloomberg News survey of 14 economists. The acceleration of New Zealand’s export-driven economy may be short lived, economists said, as commodity prices fall and Europe’s fiscal crisis restrains consumer confidence. Reserve Bank Governor Alan Bollard last week signaled the official cash rate may remain at a record-low 2.5 percent through the first quarter next year.
“Clearly this sort of number puts any immediate thoughts of easing very much on the back burner, but I wouldn’t rule it out if the world implodes,” said Darren Gibbs, chief New Zealand economist at Deutsche Bank AG in Auckland. “The question for the RBNZ is we have declining terms of trade, a tightening fiscal stance and some difficulties offshore. Is the economy going to be able to accelerate from here?”

20120621 1000 Global Commodities Related News.

Commodities Drop After Fed Cuts Growth Estimates; Euro Declines (Source: Bloomberg)
Commodities and the euro retreated after the Federal Reserve cut growth estimates and expanded its stimulus program less than some investors had expected. Stocks gained and New Zealand’s dollar rose to a seven-week high. Oil, copper and nickel fell more than 1 percent by 9:49 a.m. in Tokyo. The euro snapped a two-day advance against the dollar and yen as Spain prepared to sell bonds today, while New Zealand’s so-called kiwi rose 0.6 percent after data showed the economy expanded more than predicted. The MSCI Asia Pacific (MXAP) Index rose 0.2 percent while Standard & Poor’s 500 Index futures fell 0.1 percent. Fed officials cut their estimate for gross domestic product growth in 2012 to between 1.9 percent and 2.4 percent from 2.4 percent to 2.9 percent, and extended the program of replacing short-term bonds with longer-term debt by $267 billion through the end of 2012. New Zealand’s economy grew at the fastest pace in five years last quarter.
“Markets had been hoping for a little bit more from the Fed,” said Stan Shamu, a market strategist at IG Markets in Melbourne, a provider of trading services in stocks, bonds and commodities. “Sentiment has really slumped after the lower growth forecast.”

Recap: Grains (Source: CME)
Corn futures reversed course heading into the close with July softening to finish fractionally lower while deferred months rallied late to end with fractional to 3-cent gains through the September 2013 contract. Most contracts softened slightly in after-hours trade. Traders took some profits out of the corn market today, encouraged by a slightly better chances for rains. But showers are expected to provide only limited relief.
Soybean futures settled 9 3/4 to 15 3/4 cents higher, which was near session highs. In after-hours trade, the market trimmed gains. Soybean futures were supported by weather and crop concerns. While some forecasters are calling for slightly better rain chances and moderating temps, relief for the driest areas is expected to be very limited.
Wheat futures closed mostly around 10 to 14 cents higher in Chicago and Kansas City, while Minneapolis wheat posted stronger gains with the July contract more than 40 cents higher on the day. Minneapolis wheat futures led price gains today amid concerns about tight supplies of high-protein spring wheat given too much precip in areas of the U.S. Northern Plains and Canadian Prairies.
July cotton futures plummeted their 500-point limit lower today, but the contract moved slightly off these levels at the close to finish 481 points lower. Deferred months ended mid-range with losses of 136 to 231 points. After seeing very strong gains last week and earlier this week, buying interest fizzled today and the front-month contract plummeted, triggering sell stops on the way down.

DTN Closing Grain Comments 06/20 15:14 : Grains Rally Late (Source: CME)
Grain contracts closed at or near session highs following a late surge. Soybeans led the way, with the wheat complex right on its heels. Corn was lethargic throughout the session before its bullish close.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 9 1/2 at 678 1/2, 5 1/4 off the high and 20 up from the low. December Wheat closed up 8 1/4 at 701 3/4. This was 18 1/4 up from the low and 4 3/4 off the high. Chicago wheat traded 12-14 cents higher late in the session today on short covering and a decent recovery in the other grains. This was prompted by the idea that the USDA will decrease the world production estimates next month. Eastern Spring Wheat areas of Ukraine could trend warmer and drier to finish out the month and could possibly continue into July. The 6-10 day precipitation forecast calls for.25-1.5 inches of rain for the FSU winter and spring wheat crops. European wheat futures saw late gains and reached a new 3 week high after U.S. wheat futures began to rally. Paris Wheat saw follow through buying after it was announced that France likely sold Algeria 600,000 tonnes of milling wheat. Iraq has issued a tender to buy at least 50,000 tonnes of all origin wheat and exports sales are estimated at near 400,000 tonnes in tomorrow morning's export sales report. Chicago July wheat rallied into the close today, despite a firmer U.S. Dollar. September Oats closed down 4 at 302 3/4. This was 1/2 up from the low and 7 1/2 off the high.

Corn Market Recap for 6/20/2012 (Source: CME)
September Corn finished up 1 1/4 at 568 3/4, 1 off the high and 16 1/4 up from the low. December Corn closed up 3 at 566 1/2. This was 17 3/4 up from the low and 1 off the high. December corn traded a 19 cent range today and finished positive near the end of trading today. The 11-15 day forecast is unchanged with cooler temperatures for most of the Corn Belt but extremely light rainfall. December corn saw profit taking after yesterday's rally but found support on an uninspiring weather forecast to finish out the month of June and heading into July. Southern Midwest and northern Delta regions should begin pollination next week and the prospect for higher than normal temperatures and below normal rainfall will likely reduce yield. Traders see weekly export sales for corn near 550,000 tonnes for the release for tomorrow morning. December corn settled near the highs of the day despite a firmer U.S. Dollar following statements made by the Fed this afternoon. September Rice finished down 0.005 at 14.745, 0.105 off the high and equal to the low.

U.S. corn falls on profit taking, market monitors weather
SYDNEY, June 20 (Reuters) - U.S. corn slid as traders locked in profits after the contract jumped 10 percent in the previous two sessions on concerns that hot, dry weather in the Midwest will reduce new-crop yields.
"There is perhaps a little bit of profit taking going on while people wait for fresh news on the weather map," Brett Cooper, senior manager of markets at FCStone Australia said.

Rain clogs Brazil's commodities ports with ships
SAO PAULO, June 19 (Reuters) - Rain in southern Brazil is extending ship lineups at the country's largest agricultural commodities ports Santos and Paranagua, where more than 250 vessels are waiting to unload or load fertilizers, grains, sugar and other cargoes, the authorities said on Tuesday.
Brazil is the world's leading exporter of sugar and No.2 soybean exporter after the United States. Global futures prices often respond to delays or interruptions to shipments of these commodities out of Brazil.

Argentine fuel truckers defy the government and strike
BUENOS AIRES, June 19 (Reuters) - Argentina's truck drivers defied a government order for talks and called a three-day strike targeting fuel distribution on Tuesday, their second protest over pay and taxes this month.
Argentina is one of the world's biggest exporters of grains and the vast majority of farm goods are shifted to port by truck.

Fertilizer makers rise on corn production forecasts
June 19 (Reuters) - Shares of fertilizer makers including CF Industries Holdings Inc , Terra Nitrogen Co LP  and CVR Partners LP  rose on expectations that an anticipated fall in U.S. corn production this summer will force farmers to spend more on crop nutrients in the next planting season.
Corn futures hit a one-month high on Tuesday as the hot and dry weather in the U.S. Midwest threatened crop prospects for the summer.

Rains help EU barley, larger crop expected
HAMBURG, June 19 (Reuters) - Rain in the past weeks has helped European Union barley recover from a dry spring and a larger crop is expected of the grain, used for animal feed, beer and malt production, traders and analysts said on Tuesday.
"The wetter weather in much of Europe has sharply improved the harvest outlook," one barley trader said. "I think we are now expecting much larger barley supplies than only four weeks ago which will be good news for animal feed makers and beer brewers."

Argentina agrees export of 6 mln tonnes new-crop wheat
BUENOS AIRES, June 19 (Reuters) - Argentina's government authorized on Tuesday the export of 6 million tonnes of 2012/13 wheat as farmers advance with early plantings, officials said.
Argentina is the world's sixth-biggest wheat exporter and the key supplier to neighboring Brazil, but growers have been planting less of the crop in recent years due to complaints about the government's export quota system.

US corn, soybeans keep wilting in hot, dry weather
CHICAGO, June 18 (Reuters) - Hot and dry weather has hurt U.S. corn and soybean crops more than analysts expected, the U.S.
Department of Agriculture (USDA) said in its latest weekly report on Monday.
The USDA crop progress report said 63 percent of the U.S. corn crop last week was in good-to-excellent condition -- below last week's USDA rating of 66 percent and also below an average of analysts' estimates for 64 percent.

SovEcon cuts outlook for Russia 2012/13 harvest
MOSCOW, June 19 (Reuters) - A top Russian grain analyst lowered his 2012/13 grain harvest forecast by 4.5 percent and his wheat harvest forecast by 5.7 percent from previous estimates and said the outlook could be reduced further due to falling yields.
SovEcon Chief Executive Andrei Sizov Sr. forecast Russia's 2012/2013 grain harvest at 85 million tonnes, down from 94 million tonnes in 2011/2012.

ICE coffee, sugar, cocoa dip, await Fed
LONDON, June 20 (Reuters) - Arabica coffee and raw sugar futures on ICE eased in thin volumes, as investors waited to see if the U.S. Federal Reserve will adopt further monetary stimulus to help counter faltering economic growth.
"New York July coffee KCN2 is expected to rise to $1.6105 per lb, as indicated by its wave pattern and a Fibonacci retracement analysis," according to Reuters market analyst Wang Tao.

Centam, Mexico, Colombia coffee exports up 5.8 pct in May
GUATEMALA CITY, June 19 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic
rose 5.8 percent in May from the same month last year, reaching 2.89 million 60-kg bags in the month.
Guatemala's coffee association Anacafe, which collates   figures from the arabica growing region, said exports through the first eight months of the 2011/2012 harvesting   season totaled nearly 18 million bags, down 4.4 percent from the same period during the 2010/11 season.

ETH to invest $500 mln to raise Brazil cane output
BRASILIA, June 19 (Reuters) - Brazilian ethanol producer ETH plans to invest 1 billion reais ($490 million) this year, most of which will go to planting more sugar cane to help alleviate a supply shortage, the Folha de Sao Paulo newspaper said on Tuesday.
The investment will help the company roughly double its cane output versus two seasons ago by adding 115,000 hectares of cane on top of 100,000 hectares it planted last season, according to the report quoting ETH President Luiz de Mendonca.

Oil Drops a Second Day on U.S. Crude Stockpile Increase (Source: Bloomberg)
Oil fell for a second day after crude stockpiles unexpectedly climbed to the highest level in 22 years in the U.S., the world’s biggest user of the commodity. Futures slipped as much as 0.8 percent in New York after dropping 2.7 percent yesterday. Inventories increased 2.86 million barrels last week to 387.3 million, the highest level since July 1990, an Energy Department report showed. Supplies were forecast to shrink 1.3 million barrels, according to a Bloomberg News survey of analysts. The price decline accelerated after Federal Reserve policy makers lowered their outlook for U.S. economic growth and employment. Oil for August delivery slipped as much as 63 cents to $80.82 a barrel in electronic trading on the New York Mercantile Exchange, and was at $80.86 at 9:17 a.m. Sydney time. The July contract, which expired yesterday, fell $2.23 to $81.80, the lowest close since Oct. 5. Front-month prices are down 18 percent this year.
Brent oil for August settlement decreased $3.07, or 3.2 percent, to $92.69 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 $11.24, the lowest level since January.

China end-May crude stocks up 0.2 pct on month-Xinhua
BEIJING, June 20 (Reuters) - China's commercial crude oil stocks rose 0.2 percent by the end of May from a month earlier, while fuel inventories slid 0.7 percent, the official Xinhua news agency reported in a newsletter on Wednesday.
The slight increase in commercial crude oil stocks could indicate more oil was moved to strategic oil reserves, after China imported a record 6.0 million barrels per day (bpd) of crude oil last month but daily refinery crude runs only climbed 0.4 percent from April.

China's Unipec asks Iran to deliver July crude -sources
BEIJING, June 20 (Reuters) - China's Unipec, trading arm of top Asian refiner Sinopec Corp , has requested Iran to deliver July-loading crude cargoes to Chinese ports, ahead of a European insurance ban on Iranian oil exports that takes effect from July 1.
"There is a company mandate requesting the July Iranian supplies to be on a delivered basis," said one oil official.

Sanctions hit Iran as oil users battle to avert disruptions
In less than two weeks, Iran's biggest oil buyers will lose access to the London-based insurance market as European Union sanctions aimed at hurting Tehran’s nuclear programme kick in, disrupting payments between OPEC's second-biggest supplier and its energy-hungry customers in Asia.

OIL-Brent oil slips, Europe worries weigh
LONDON, June 20 (Reuters) - Brent crude oil fell , pinned near 17-month lows, hit by worries over Spain's high borrowing costs and prospects for global demand growth.  
"Oil has really decided it has no interest in the FOMC, it has not priced in any significant stimulus," said David Morrison, analyst at GFT Global.

Founder of $125 Billion Gold ETP Market Stymied on Copper (Source: Bloomberg)
Graham Tuckwell, who created a $125 billion market in exchange-traded gold in less than a decade, is struggling to convince regulators and investors he can do the same for industrial metals. More than a year after he sought permission to start an exchange-traded product backed by copper held in warehouses, the U.S. Securities and Exchange Commission has yet to approve the plan. Investors in a similar London-listed fund from Tuckwell’s ETF Securities Ltd. accumulated just $13.2 million of copper since December 2010, equal to about 46 minutes of global demand, data compiled by Bloomberg show. While Tuckwell created a class of securities now backed by 2,405 metric tons of gold, exceeding the reserves of all but four central banks, he’s had less success with industrial metals. The new products are opposed by some consumers concerned they will cause shortages of materials used in everything from cables to cars, while the U.S. Commodity Futures Trading Commission is trying to limit speculation.
“As you move away from the typical investment products to things that would be viewed to be more usable commodities, regulators become more concerned,” said Deborah Fuhr, a co- founder of London-based research group ETFGI LLP and the former head of ETF research at BlackRock Inc. “Graham really was the guy who brought the first exchange-traded gold product to the markets. As you move into other commodities, though, they tend not to be seen as an investment by most investors.”

20120621 0959 Soy Oil & Palm Oil Related News.

Soybean Recap (Source: CME)
Soybean futures settled 9 3/4 to 15 3/4 cents higher, which was near session highs. In after-hours trade, the market trimmed gains. Soybean futures were supported by weather and crop concerns. While some forecasters are calling for slightly better rain chances and moderating temps, relief for the driest areas is expected to be very limited.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished up 15 3/4 at 1437, equal to the high and 22 up from the low. November Soybeans closed up 11 at 1395 1/2. This was 25 up from the low and 1/4 off the high. August Soymeal closed up 1.6 at 424.3. This was 6.8 up from the low and 1.0 off the high. August Soybean Oil finished up 0.31 at 50.94, 0.33 off the high and 0.65 up from the low. Soybeans rallied for the fourth consecutive session today on a warm and dry forecast for the next 10 days. Soybeans traded 9-11 cents higher heading into the closing bell. Scattered showers are expected to move from eastern Nebraska to the northern plains in the short term forecast. The 11-15 day map continues to show dry conditions for the eastern Midwest and parts of the Delta but some models do not show heat. Overall, no drastic change has been made to the forecast for the next 2 weeks. December soybean oil rallied today and made new highs near 52.00 on rumors that China bought Argentinean soybean oil and could soon shift their demand to the US soybean market due to available supplies. The U.S. Dollar traded lower for most of the session, but rallied late in the afternoon as the Fed released statements on the status of the U.S. economy. Soybeans were able to shrug off the lower commodity trade, led by crude oil, and finish near the highs of the session. Exports sales are estimated at near 850,000 tonnes for tomorrow mornings export sales report.

VEGOILS-Palm hits 3-week high as festival demand chases supply
SINGAPORE, June 20 (Reuters) - Malaysian crude palm oil futures hit a near 3-week high as investors bet on higher demand for palm oil after hot and dry weather in the U.S. threatened to curb the soy crop available for crushing into edible oil.
"Demand is expected to grow as we are moving into the Ramadan month," said a trader with a foreign commodities brokerage in Malaysia.

Latin America soybean sowings to expand -Oil World
HAMBURG, June 19 (Reuters) - Argentine and Brazilian farmers are likely to expand soybean plantings at the expense of grains for their 2013 crop because of higher profits from the oilseed, Hamburg-based oilseeds analysts Oil World said on Tuesday.
"Farmers in South America are getting more enthusiastic about expanding soybean cultivation, taking advantage of the comparatively lower production costs in relation to grains and favourable price prospects," Oil World said.

20120621 0859 FCPO EOD Daily Chart Study.

FCPO closed : 3041, changed : +93 points, volume : higher.
Bollinger band reading : pullback correction little downside biased.
MACD Histogram : rising, seller closing position.
Support : 3050, 3020, 2970, 2950 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed surge significantly higher with increasing volume transacted. Soy oil price currently trading lower after overnight closed higher while crude oil price trading lower on higher supplies factor.
Lower inventories, bad weather and coming Ramadan festival demand factors drive FCPO price to surge higher today after 2 cargo surveyor reported higher export data.
Daily chart reading revised to calling a pullback correction little downside biased market development with MACD indicator having positive crossed up.
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.