Tuesday, June 26, 2012

20120626 1808 FCPO EOD Daily Chart Study.

FCPO closed : 3035, changed : +5 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histogram : rising, seller reducing exposure.
Support : 3020, 2970, 2950, 2920 level.
Resistance : 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed marginally higher with shrinking volume transacted. Soy oil price currently retreating lower after overnight rallied substantially while crude oil price moving range bound below $80 per barrel.
FCPO traded in quiet volume tight 26 point range market with indecisive direction ahead of EU Summit, lower China growth by HSBC, increased but slowing down exports reported by cargo surveyor and news on India tenders to buy 3,000 tonnes of crude palm oil.
Daily technical chart study remained suggesting a correction range bound 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.

20120626 1720 FKLI EOD Daily Chart Study.

FKLI closed : 1591 changed : -12 points, volume : higher.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : weakening, buyer taking profit.
Support : 1590, 1580, 1570, 1565 level.
Resistance : 1600, 1610, 1620, 1630 level.
Comment :
FKLI closed recorded loss with higher volume participation doing 2 points discount compare to cash market that also closed lower. Overnight U.S. markets fall lower and today Asia markets ended mostly lower while European markets currently having mixed development.
Trader decide to lock in profit ahead of EU Summit meeting, HSBC forecast lower China economy growth and declined demand at Spain debt auction.
Daily chart reading still calling a pullback correction upside biased market development with heavy rollover activities taking place.
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.

20120626 1703 Regional Markets EOD Daily Chart Study.

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

20120626 1609 Global Market & Commodities Related News.

Asian shares fell as investors remained sceptical that a summit of European leaders would yield any substantive measures to solve the region's protracted debt crisis, now in its third year. European stock index futures pointed to a slightly higher, but doubts about whether this week's EU summit will lead to significant measures to shore up the region's most indebted countries could limit the rebound. U.S. stocks fell sharply on Monday, putting the S&P 500 near break-even for June so far, as investors saw little reason to be optimistic about a European Union summit this week.

The euro was on the defensive near a two-week low against the dollar on growing worries that an upcoming European summit would produce nothing to solve the region's debt crisis.

FOREX-Euro near 2-week low as EU summit hopes fade
TOKYO, June 26 (Reuters) - The euro was on the defensive near a two-week low against the dollar on Tuesday on growing worries that an upcoming European summit would produce nothing to solve the region's debt crisis.
"Yesterday in Asia, people were saying they would wait for the summit. But it's becoming almost pointless to wait for it," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.

U.S. new-crop corn rose more than 2 percent to the highest since early November, building on last session's limit-up gains, while wheat rose to an about nine-month top as a worsening U.S. drought threatens to curb supplies.

USDA slashes corn, soy ratings as heat withers crops
The U.S. Agriculture Department on Monday cut its condition ratings for both corn and soybeans to their lowest late-June levels since 1988, following a week of hot and dry weather in key growing areas.

U.S. crops bake, raising fears of smaller yields
U.S. corn and soybeans are baking as a scorching dome of heat  covers the center of the country, with little relief in sight until the weekend at the earliest, agricultural meteorologists said on Monday.

China's Wen signs accords, eyes Argentina's corn
Chinese Premier Wen Jiabao said China is interested in buying more corn from Argentina, the world's second-biggest supplier after the United States, a senior Argentine Agriculture Ministry official told Reuters on Monday.

Liffe backs planned softs, wheat delivery limits
Major commodity exchange NYSE Liffe  is sticking with a plan to introduce delivery limits on its cocoa, robusta coffee, white sugar and feed wheat contracts although it has added a new exemption, the exchange said in a market notice.

Brent crude held steady near $91 per barrel as short-covering and forecasts of a drop in U.S. crude inventories offset worries that a European summit would be unable to produce a concrete solution to the region's debt crisis.

POLL-US crude stocks seen down on lower imports
U.S. crude oil stockpiles were forecast to have fallen last week due to a drop in imports, a preliminary Reuters poll showed on Monday.

Gulf of Mexico energy ops resume after storm misses
Some of the Gulf of Mexico's biggest oil and gas producers began to restart production and restaff evacuated platforms on Mo nday as Tropical Storm Debby slowly headed for the Florida panhandle, away from energy infrastructure in the basin.

Top Argentine oil field hit by protests
Labor protests are still disrupting operations at Argentina's biggest oil field, Cerro Dragon, after four days, owner Pan American Energy said on Monday.

S.Korea replaces Iran oil with other Middle East sources
South Korea's economy ministry said on Tuesday most of its Iranian oil imports had already been replaced by supplies from other producers such as Iraq, Kuwait, Qatar and the United Arab Emirates, and by spot purchases, although some still needed to be covered.

London copper rose for a second session, supported by promising U.S. housing data that calmed worries about the state of the world's top economy, although thin volumes suggest caution ahead of the European Union Summit later this week.

Gold held steady above $1,580 an ounce after rising in the previous session on growing uncertainty on whether a key European Union summit this week will be able to resolve the region's debt crisis.

Metals sector scrambles for funds as squeeze bites
Europe's producers and users of industrial metals are scrambling to find alternate sources of funding as regional banks, hurt by the debt crisis and tougher global capital rules, become increasingly reluctant to lend.

Sumatra Copper & Gold to sell 20 pct Indonesia stake
JAKARTA, June 26 (Reuters) - Australia's Sumatra Copper & Gold  is to sell a stake of up to 20 percent to meet Indonesian foreign ownership requirements introduced this year, a senior executive said on Tuesday.
Indonesia, the seventh largest gold producer last year, is looking to limit foreign ownership in mines to no more than 49 percent after 10 years of production.

Morgan Stanley seeks 1.9 pct stake in Fortescue - dealers
MELBOURNE, June 26 (Reuters) - Fortescue Metals Group  founder Twiggy Forrest is seeking to buy 60 million shares or 1.9 percent in the iron-ore miner for about A$294 million ($294 million), dealers said adding the book build by Morgan Stanley is yet to be completed.
Morgan Stanley was bidding for 60 million shares at around A$4.90 a share on an all-or-nothing basis, meaning if the full order was not met, no shares would be bought.

Asian gold bugs eye price weakness, c.bank buying
JAKARTA, June 25 (Reuters) - Weak bullion prices and prospects for bargain buying by central banks will take centre stage at a gold industry gathering in Indonesia this week, along with the country's plans for a raft of new mining regulations that could be worrying for investors.
Gold has lost some of its safe-haven appeal in recent weeks, as investors cash in despite market turmoil partly due to the euro zone debt crisis, but there are expectations that lower prices could attract buyers.

METALS-Copper gains on U.S. data, China restocking
SHANGHAI, June 26 (Reuters) - London copper rose for a second session on a weaker dollar and short-covering on Tuesday, as traders bought back their positions ahead of the upcoming European Union Summit and took advantage of low prices following a 2.7 percent fall last week.
"The euro edged up against the dollar today, which means it is cheaper for Europeans to buy copper today and some of them have done so," said a LME trader.

PRECIOUS-Gold holds above $1,580 on EU summit uncertainty
SINGAPORE, June 26 (Reuters) - Gold held steady above $1,580 an ounce on Tuesday after rising in the previous session on growing uncertainty on whether a key European Union summit this week will be able to resolve the region's debt crisis.
"If the U.S. dollar remains strong, then gold may easily move down a little bit. We have to see if people are losing confidence in gold. One thing is for sure, the world's economy is slumping," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

20120626 1127 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares down over EU summit scepticism
TOKYO, June 26 (Reuters) - Asian shares were down as investors remained sceptical that a European leaders summit later this week will produce any substantive measures to solve the region's protracted debt crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan
"With EM (emerging market) risks still subject to global/European market developments, investors will likely remain reluctant to make strong directional calls." said Barclays Capital analysts in a research note, adding that they would stay long in U.S. dollars, especially against European currencies.

COMMODITIES-Corn surges, oil falls on weather watch
NEW YORK, June 25 (Reuters) - Grains swept U.S. commodities higher on Monday with corn surging more than 7 percent as soaring temperatures in the Midwest jeopardized crops, while oil slipped as the season's first major storm missed the production-rich Gulf of Mexico.
"It's a classic weather market," said Dale Durchholz, an analyst at Agrivsor LLC in Bloomington, Illinois. "The weather forecasters are talking about triple-digit temperatures (degrees Fahrenheit) on Thursday and Friday, at a time when corn is most vulnerable - you have a crop that is just starting the pollination process."

OIL-Oil steady as U.S. storm fears ease, eyes on Europe
NEW YORK, June 25 (Reuters) - Oil steadied on Monday as short-covering countered easing concerns that Tropical Storm Debby would batter U.S. production platforms in the Gulf of Mexico and fading hopes that a European summit would produce a viable solution to the region's debt crisis.
"Oil continues to be weighed down by negative sentiment for global growth ahead of a two-day summit of EU leaders June 28," said Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut.

Gulf of Mexico energy ops resume after storm misses
HOUSTON, June 25 (Reuters) - Some of the Gulf of Mexico's biggest oil and gas producers began to restart production and restaff evacuated platforms on Mo nday as Tropical Storm Debby slowly headed for the Florida panhandle, away from energy infrastructure in the basin.
Debby, the first named storm of 2012 to disrupt energy operations in the Gulf, temporarily idled nearly half of its oil output -- nearly double the amount shut on Sunday -- and more than a third of natural gas output as producers shut down operations and evacuated staff at installations in the storm's projected path.

POLL-US crude stocks seen down on lower imports
June 25 (Reuters) - U.S. crude oil stockpiles were forecast to have fallen last week due to a drop in imports, a preliminary Reuters poll showed on Monday.
Averaging the estimates from five analysts, crude inventories were forecast to have fallen by 700,000 barrels in the week to June 22, the survey showed.

Top Argentine oil field hit by protests
BUENOS AIRES, June 25 (Reuters) - Labor protests are still disrupting operations at Argentina's biggest oil field, Cerro Dragon, after four days, owner Pan American Energy said on Monday.
Cerro Dragon lies in the Patagonian province of Chubut and produces about 100,000 barrels of crude per day, or roughly 15 percent of total output in the country. Pan American, or PAE, is controlled by oil major BP Plc .

Saudi Arabia keeps oil tap on for world growth, Russia hurts
LONDON, June 25 (Reuters) - Saudi Arabia is showing no sign of changing its policy of high oil output to support global economic growth, despite a fall in crude prices below $90 a barrel for the first time in 18 months.
Gulf and Western government sources in contact with Saudi officials said the OPEC power can tolerate oil at $90 or below for months, price levels that hurt Iran and Russia as they face off against Riyadh over the conflict in Syria.

U.S. "tight oil" output to double by 2035-EIA
NEW YORK, June 25 (Reuters) - The U.S. government published its first official forecast for booming "tight oil" production on Mo nday, estimating that shale formations such as the Bakken in North Dakota will more than double output in the next two decades.
The projections, one small part of the Energy Information Administration's updated long-term forecasts, shed light on the agency's take on the role of the oil found in low-permeability reservoirs such as shale and chalk formations, the largest new source of U.S. supply since offshore Gulf of Mexico.

EU affirms Iran oil ban, dismisses Greek concerns
LUXEMBOURG, June 25 (Reuters) - EU governments on Monday formally approved an embargo on Iranian oil to start on July 1, dismissing calls by debt-ridden Greece for possible exemptions to help ease its economic crisis.  
They also warned Iran that more pressure could be put in place if it continued to defy international demands for limits on its nuclear programme, which they say is geared to developing weapons. The Islamic Republic says its nuclear activity is for electricity production and other peaceful ends only.

India allows use of Iran ships for oil imports
NEW DELHI, June 25 (Reuters) - India has allowed state refiners to import Iranian oil, with Tehran arranging shipping and insurance, from July 1, keeping purchases of over 200,000 barrels per day (bpd) flowing after European sanctions hit insurance for the cargoes, government and industry sources said.
India, one of Iran's biggest crude buyers, has just secured a waiver from U.S. sanctions which target Tehran's nuclear ambitions by cutting imports over 20 percent.

NATURAL GAS-US natgas futures end higher on heat, storm
NEW YORK, June 25 (Reuters) - U.S. natural gas futures ended higher on Monday as the season's first Gulf of Mexico storm disrupted some offshore supplies and warmer weather forecasts for this week raised prospects for more air conditioning demand.
"Although it might seem as though Tropical Storm Debby in the eastern Gulf of Mexico is the key support pushing prices higher in today's trade, we see the temperature forecast ... as the most significant weather development," Tim Evans, analyst at Citi Futures Perspective, said in a report.

EURO COAL-Stable, eyes on output cuts
LONDON, June 25 (Reuters) - Prompt physical coal prices were unchanged on Monday although swaps slipped by around 50 U.S. cents in line with oil's fall but no fresh trades were reported and few bids or offers were seen.
"There is significant stress in the coal market around South China with suppliers either seeing an outright default or having to re-negotiate on price, credit terms and delivery schedules," Barclays Capital said in a research note on Monday.

20120626 1017 Malaysia Corporate Related News.

KPJ sets aside RM2bn capex over 5 years
KPJ Healthcare Bhd is allocating RM2bn in capital expenditure (capex) over the next five years to further strengthen its position in the country’s private healthcare sector. Chairman Kamaruzzaman Abu Kassim said the capex included RM867m to be spent over the next three to four years to open new hospitals nationwide. He said RM100m to RM150m would also be allocated yearly to upgrade existing outlets, including building new wings at its existing hospitals and buying new medical equipment. (StarBiz)

FGV’s Q1 net profit hits RM223.2m
Felda Global Ventures Holdings Bhd (FGV) posted a net profit (before minority interest) of RM223.2m in the first quarter ended 31 Mar 2012. This was lower than the RM350.2m recorded in the same quarter last year. The lower profit was partially due to rising costs and a decrease in revenue from downstream operations as a result of a tolling agreement related to its joint venture in Canada. (BT)

Retailers group raises forecast
The Malaysian Retailer Chains Association (MRCA) has revised upwards its 2012 revenue growth projection of its members to between 5% and 6% as it foresees more contributions coming from abroad. MRCA, which has 206 members with over 10,000 retail outlets, late last year projected average growth of 4%-5% for its members. The revised projection is more in line with the 6% growth forecast by Malaysia Retail Association (MRA). However, MRCA numbers are different from those of MRA as the former only takes into account sales growth registered overseas by its locally-incorporated members. (BT)

Pos Malaysia ventures into Islamic pawnbroking
Pos Malaysia Bhd continues its diversification by venturing into Ar-Rahnu, the Islamic pawnbroking business. The postal group has entered into a 80:20 joint venture with Bank Muamalat Malaysia Bhd (BMMB) to start Ar-Rahnu in selected Pos branches. The partnership will leverage on Pos Malaysia’s extensive network of more than 700 outlets nationwide to minimize start-up and operating costs and BMMB’s experience in pawnbroking. (Financial Daily)

Handal Resources lands RM150m job
Handal Resources Bhd’s unit Handal Offshore Services SB (HOSSB) has landed a RM150m contract from ExxonMobil Exploration and Production Malaysia Inc. The company told Bursa Malaysia that the award was for the provision of integrated crane services for a period of five years commencing June 2012, with the option for a one-year extension. (Financial Daily)

Alam Maritim sees higher revenue after combining operations
Alam Maritim Resources expects a higher revenue this year after the integration of its offshore support vessel (OSV) and offshore installation and construction (OIC) operations. Chief executive officer Azmi Ahmad said the company’s competitive edge was its ability to provide integrated services so that clients were able to minimise their logistics cost. “With the development of our OIC unit, we are able to increase the utilisation rate of our assets. We expect our vessel utilisation rate to be 89% this year,” he said after Alam Maritim AGM. Chairman Datuk Ahmad Sufian said the company’s OSV sector had an orderbook of RM700m, which would last for two to three years, and a long-term charter contract for two vessels lasting 14 years. (StarBizWeek)

Tajudin, MAS withdraw suits
Malaysia Airlines and its two subsidiaries and former Malaysia Airlines (MAS) executive chairman Tan Sri Tajudin Ramli have withdrawn their suits against each other for breach of fiduciary duty. High Court judge Justice Rosilah Yop granted the application and struck out the plaintiff's claim against all defendants and all counter-claims against 17 defendants without cost and without liberty to re-file. Malaysia Airlines and its two subsidiaries - MAS Golden Holidays SB and MAS Hotels & Boutiques SB - filed the main suit in 2006 against Tajudin and four others. (StarBizWeek)

Massive dredging at Samalaju Port
The new Samalaju Port project in Bintulu will involve massive dredging and reclamation works worth RM193.9m as part of plans to expand port facilities. According to the project's approved preliminary environmental impact assessment (PEIA) report, an estimated 18.98ha would be reclaimed for the construction of port platform areas as well as other structures such as wave breaker and berths. Bintulu Port Holdings (BPHB), which was tasked by the Sarawak government to undertake the project, awarded the construction of interim port facilities contract to Trans Resources Corp SB (TRC) recently. The interim facilities would comprise a ro-ro ramp and two barge berths of 160m in length each with a depth of 7m. The contract would be divided into two sections A and B for completion in nine and 12 months respectively. (StarBiz)

MBSB to grow Cheeky Savings Club accounts
Malaysia Building Society (MBSB) intends to grow its Cheeky Savings Club to 50,000 accounts by the year-end from 16,000 currently. As part of its strategy to accelerate growth, the company will launch “Over The Top” kids reality show that will start airing on 8 Sept for eight consecutive weeks. “We hope that these Cheeky Savings Club members will eventually come back to us for other services, be it housing loans, hire purchase or bancassurance,” said senior vice-president for retail business division Azman Aziz. Currently, some 95% of MBSB's loans are derived from Angkatan Koperasi Kebangsaan Malaysia's (Angkasa) scheme. (StarBiz)

Country Heights mulls Chinese healthcare hub
Country Heights Holdings (CHHB) is mulling setting up a hub in Kuala Lumpur or Sarawak to house a hospital for traditional Chinese medicine, a university and college. CHHB founder Tan Sri Lee Kim Yew said Malaysia needs a good 300-bed hospital so the public can seek treatment using Chinese medicines and methods from acupuncture to cupping. In its efforts to expand and diversify its health business, CHHB has set up a traditional Chinese and healthcare centre at Golden Horses Health Sanctuary, located at the Mines Wellness City (MWC). MWC, formerly, Mines Resort City, is an integrated health and wellness resort city in Sri Kembangan, here. (BT)

EPF sells plantation stocks
The Employees Provident Fund (EPF) has been selling down its shares in several plantation companies including Kuala Lumpur Kepong, IOI Corp, TH Plantations, Genting Plantations, Tradewinds Plantation and IJM Plantations since 31 May, ahead of the listing of Felda Global Ventures Holdings (FGV). The value of these transactions amounted to some RM230m. A fund manager said it is possible the fund is selling down its holdings of plantation stocks whose earnings are tied to crude palm oil price in a move to rebalance its portfolio ahead of FGV's listing on Thursday. (Financial Daily)

Dialog signs MoU with Halliburton
Dialog Group subsidiary Dialog D&P SB has entered into a memorandum of understanding (MoU) with Halliburton Energy Services (M) SB (HESSB) to jointly cooperate to pursue projects and opportunities in the redevelopment of mature oil fields in Malaysia. Dialog told Bursa Malaysia last Friday that the strategic alliance with HESSB is in line with Dialog's strategy to continue to develop its upstream capabilities in the oil and gas activities. (Malaysia Reserve)

Prestariang gets nod to set up higher education institution
Prestariang has received an invitation from the Ministry of Higher Education to set up a private higher education institution in the country, the information communication and technology (ICT) training services provider said in a filing to Bursa Malaysia last Friday. The company said its subsidiary, Prestariang Education SB, received a letter of invitation to set up the institution, to be known as University of Computing in Malaysia. Prestariang currently offers ICT certification and provides training programmes in software development. (Malaysia Reserve)

Government to drive post-harvest technologies
The government will generate more initiatives and provide relevant incentives for the development of post-harvest technologies in a move to boost production in the agriculture sector, said Deputy Prime Minister Tan Sri Muhyiddin Yassin. He said special allocations and research and development (R&D) grants would be provided to support these initiatives. He added that through better infrastructure, crop production management techniques and post-harvest technologies, Malaysia had set the target of raising production of agriculture commodities by 40% by 2020. (Financial Daily)

Top Glove Corporation Berhad’s wholly-owned sub-subsidiary, Best Advance Resources Limited had on 22 June 2012 entered into a conditional Share Sale and Purchase Agreement to acquire 95% of the total issued and paid-up shares of PT Agro Pratama Sejahtera (PT Agro). PT Agro is the holder and owner of business license issued by the Ministry of Forestry for rubber forest plantation business over land area measuring almost 30,773 hectares in Kabupaten Bangka and Kabupaten Belitung, Province of Kepulauan Bangka Belitung. (BMSB)

The supplemental collaboration agreement between Malaysia Airlines (MAS) and AirAsia X was signed to provide an opportunity to the national carrier to operate flights at a lower cost, Prime Minister Datuk Seri Najib Tun Razak told the Dewan Rakyat. He said the agreement and two other memoranda of understanding inked after the MAS-AirAsia ahare-swap deal was shelved was for procurement, aircraft repair and maintenance services. "MAS had the opportunity to enjoy better terms and conditions through sharing of equipment and services besides sharing and selling reserve capacity to other airlines," said Najib, who is also Finance minister. (Bernama)

AirAsia X has made the right decision to end its Kuala Lumpur-Tianjin route and fly direct to Beijing. CEO Azran Osman Rani said more than 80% of the seats for the airline’s new four-times weekly KL-Beijing flight for the next three months had been sold since the launch of the route last Friday. We are going to extend the KL-Beijing route to daily service starting from Aug 6. (The Star)

Muhibbah Engineering (M) Bhd (MEB) entered into a conditional sale and purchase agreement with Favelle Favco Bhd (FFB) for a proposed disposal of a crane fabrication yard in New South Wales, Australia, for RM48m. The sale will be via the allotment and issuance of 31.7m new ordinary shares of 50 sen each in FFB at an issue price of RM1.52 per FFB share. The yard comprises a large industrial factory used by FFB for crane fabricating/manufacturing on around 4.684ha industrial land parcel. (BT)

A senior Umno backbencher accused the Najib administration today of favouring Tan Sri Syed Mokhtar al-Bukhary in government procurement, saying the logistics tycoon is “like a king.” Kinabatangan MP Datuk Bung Mokhtar Radin told Parliament this when criticising the selection of Syed Mokhtar’s Seaport Terminal to take the finance ministry-owned Penang Port Sdn Bhd (PPSB) private, saying it was “unsuitable in current conditions.” “Syed Mokhtar is like a king with so many banks backing him,” the Barisan Nasional (BN) backbenchers deputy chief said , referring to the former’s empire which has a reported total debt of RM34.3bn, or about 10% of all local corporate bonds. The surging debt of companies under Malaysia’s richest Bumiputera has raised fears of a repeat of the financial system’s collapse in 1998 that had then been spurred by the failure of Renong Bhd to fulfill its liabilities. (Malaysian Insider)

Petronas Dagangan plans to invest an additional RM200m in its recently acquired six downstream businesses in the Philippines, Vietnam, Thailand and Malaysia over two to three years. Chairman Datuk Wan Zulkiflee Wan Ariffin said the new businesses are expected to contribute significantly to its earnings in four to five years. He added that the companies that Petronas Dagangan has acquired are existing companies with businesses within its core competencies, namely LPG, lubricants and aviation. On local market share, Wan Zulkiflee said the company holds 31% in the retail segment, 60% in the commercial segment, 55% in the LPG segment and 24% in the lubricant segment. (Bernama)

Acquisitions of both greenfields and brownfields for oil palm and rubber plantations are expected to hasten up given continued interest to invest in plantation and agriculture crops in the next decade, said Malaysian Palm Oil Council CEO Tan Sri Dr Yusof Basiron. He said this interest will not only be confined to experienced plantation companies but also corporations which have never been involved with agriculture in the hope of reaping similar good rewards from the venture. (Starbiz)

Malaysia’s palm oil exports rose 4.4% in the first 25 days of June from the same period in May, independent market surveyor Intertek said. A total of 1,196,702 metric tons of the commodity were tracked, versus 1,146,406 tons in the same period last month, Intertek said. (Bloomberg)

Plantation industry should initiate their own action plans to meet future challenges while the government continue to assist them by identifying measures to ensure the industry's long term resilience, said Primary Industries and Commodities Minister Tan Sri Bernard Dompok. He said the main challenge in the industry would be a cohesive effort to explore measures to increase productivity. (Starbiz)

Indonesia, the world's top palm oil producer, will cut its export tax for crude palm oil to 15% in July from 19.5% or June, a trade ministry official said on Monday. The government will also cut its export tax for RBD palm olein to 7% in July, from 10% this month. (Reuters)

Malaysia's first neutral Internet Exchange, MyIX, has played a role to improve the local broadband household penetration rate to 63% as of early this year, says its chairman Chiew Kok Hin. MyIX, a non-profit organisation, was set up in 2006 to keep Malaysian Internet traffic local, with the cooperation of local ISPs to promote and allow direct connectivity among the local ISP fraternity. Its 3 co-founders are AIMS Group, Jaring Communications and Telekom Malaysia. "Local ISPs have an alternative to route their Internet traffic in an operationally efficient and cost-effective way via our faster in-country bandwidth connectivity set up. By doing that, they are saving US$400,000 (RM1.3m) a month," he said at a media briefing. MyIX has 49 members, comprising local ISPs and content providers. It has invested RM10m in the last 5 years to develop the exchange. There are 8 Internet exchange nodes currently, commissioned by the MCMC, allowing direct traffic among ISPs in Malaysia. 3 nodes are located in the Klang Valley at Menara Aik Hua, Technology Park of Malaysia and Cyberjaya, and one each in Bayan Baru, Johor Baru, Kuantan, Kuching and Kota Kinabalu. (BT)

Local real estate investment trust (REIT) market capitalisation is expected to grow by more than 30% to RM20bn this year from RM15bn in 2011, mainly from the upcoming listing of IGB Corp Bhd's REIT, said Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng. There are now 15 REITs in the country, offering an average yield or return of between 6% and 7%. Ng said the outlook for the REIT industry remained robust, driven by domestic economic growth as well as quality REIT assets, management with good track records and the location of the assets, and is starting to attract international institutional investors. "If there is continued facilitation by the government to encourage more investors to come in and at the same time, REIT players continue to display higher levels of corporate governance and putting good assets to build up their portfolios, there is no reason for Malaysia not to attract (more) international investors," he said. Ng also advised people to look at the quality, size and management of the assets before investing. "We are still in the infancy stage. It's only in the last two to three years that big names have started to come in. All the big players are starting to put their assets into REITs. The market cap had grown from over RM350m to RM10bn in 2010," he said. Meanwhile, Chor said Malaysia is still far behind in terms of REIT market cap compared with other Asian countries such as Singapore, Hong Kong and Taiwan. He said new developments such as Greater Kuala Lumpur, Iskandar Malaysia in Johor, and Sarawak Corridor of Renewable Energy will provide the engine of growth for the overall property sector in the country. In order to have steady and continued growth for such huge property development, he said investment can be sourced and secured through REITs. Chor also urged the private sector to play their role in creating and offering successful REITs. On its part, the government is giving a concessionary tax rate of 10% on dividends for non-corporate institutional and individual investors in REITs until Dec 31, 2016. (Sun)

Padiberas Nasional Bhd (Bernas) has allocated RM250m for acquisitions and capital expenditure (capex) as part of its expansion plan this year, its managing director Datuk Bakry Hamzah said. He said on Monday that RM100m would be for acquiring new rice mills. "We are planning to buy between two and three mills for our long-term investment but we are not in a rush to do so," he said, adding that such acquisitions were not Bernas' core business strategy as it already owned 33 mills and this was adequate for the rice distributor. The group controls about 25% of the local paddy market and 58% of the local rice market. (Starbiz)

An integrated steel mill, to be built in Lumut, is expected to reduce the coun-try's steel import dependence by some RM6bn once it is fully operational by June 2015. Maegma Steel HRC Sdn Bhd director Tunku Shaharuddin Tunku Mahmud said the company would be investing RM4.5bn in the first phase of the project to build the plant, which would have the capacity to produce some 1.5m tonnes of thin metal sheets, or "Hot Roll Coils" (HRC), a year. "In the first phase itself, our plant capacity will be able to help the country reduce dependence on HRC imports, which is currently estimated at one million tonnes per year."Once the plant is fully operational, it will have a capacity of producing some three million tonnes per year, valued at some RM6bn. "We will also be helping the country to save significantly in terms of foreign exchange," he added. (BT)

A proposal to introduce crop insurance coverage for farmers has been submitted to the Cabinet for approval. The idea was to provide insurance coverage for farmers whose crops were destroyed by natural disasters such as floods or dry spells, said Agriculture and Agro-based Industries Minister Datuk Seri Noh Omar. We originally proposed for insurance coverage to be made available to padi farmers but the cabinet is currently studying the proposal to see which other agricultural sectors should be given insurance coverage. (Star)

Petronas Nasional Berhad may set up a regassification plant (RGT) in Perak if the demand for natural gas is viably high. The company anticipates that with the price increase of gas there may be reduced demand in the power sector which means we may not need to build the Perak plant so soon as it can come later when the demand increases. For now, Petronas will bring in gas from two liquefied natural gas RGTs one from Malacca and the other one from the Southern part of Johor. The Johor plant is expected to be ready by the middle of the decade. (Malaysian Reserve)

Minetech Resources has accepted a letter of award from MMC Gamuda KVMRT (T) Sdn Bhd to undertake construction works worth RM29.5m. In filing to Bursa Malaysia, Minetech said it would carry out the construction of underground excavation work and rock strengthening works including all temporary and ancillary works for the Cochrane station under the Sungai Buloh-Kajang MRT line. The sub-contract works, to be completed by May 31, 2013, is expected to contribute positively to future group earnings, it added. (Bernama)

Dijaya Corp Bhd’s 80%-owned subsidiary, Aliran Peluang Sdn Bhd, has entered into a sale and purchase agreement with Chua Joo Cheng @ Chua Su Yin to acquire 23 hectares in Johor Baru, Johor, for RM105m or at RM43.80psf. Dijaya said the proposed acquisition ties in with its strategy to acquire sizeable land banks with good development potential, especially in the economic zone of Iskandar Malaysia. (BT)

20120626 1017 Global Economy Related News.

China: Rate cut signals start of stocks rally
China’s stocks are poised to gain over the next three months, spurred by the central bank’s first interest-rate cut since 2008, if history is any guide. The chart of the day shows the performance of the Shanghai Composite Index since 1996 in the three months each time after the People’s Bank of China lowered borrowing costs, data compiled show. After the 13 previous rate cuts, the stocks gauge advanced nine times with the average result a 7.5% gain. The index declined four times, all occurring during the midst of the Asian financial crisis in 1998 and the collapse of Lehman Brothers Holdings Inc in 2008. (Bloomberg)

South Korea: Consumer confidence drops to 3-month low on European debt woes
South Korean consumer confidence dropped to the lowest level in three months as Europe’s debt woes dimmed the outlook for Asia’s fourth-largest economy. The sentiment index was at 101 in June after reaching 105 in May, the Bank of Korea said in an e-mailed statement today. A reading above 100 indicates optimists outnumber pessimists. The expected inflation rate over the next year was 3.7% in June, unchanged from last month, today’s report showed. Consumer inflation held at a 21-month low of 2.5% in May. The consumer confidence index is based on survey responses from 2,072 households in 56 cities. It was conducted by mail and telephone between 12 and 19 June. (Bloomberg)

India: India prepares to counter Rupee’s Slide
India boosted the amount of government bonds foreign investors can purchase by USD5bn, seeking to bolster demand for INR after it tumbled to a record low against USD. Foreign institutional investors can now purchase USD20bn worth of government securities, up from USD15bn previously, the Reserve Bank of India said in a statement today. Long-term overseas buyers such as sovereign wealth funds, central banks and pension funds will be allowed to invest in the debt directly to broaden the base of investors, the Reserve Bank also said. INR is Asia’s worst performer in the past year, having tumbled 21% versus USD, and its decline had contributed to an inflation rate that the central bank last week deemed too high to allow an interest-rate cut. (Bloomberg)

India: Readies measures to counter Rupee slide spurring inflation
India plans to unveil measures today to support the rupee as its slump to a record low against the dollar threatens to intensify price pressures and boost the cost to companies of repaying foreign debt. The government and central bank will make the announcement, Finance Minister Pranab Mukherjee told reporters in Kolkata on 24 June. The ruling Congress party’s nominee for president, Mukherjee told the Press Trust of India he will resign from his current post today. A group of federal and state legislators elects the next president 19 July. India’s currency is Asia’s worst performer of the past year, having tumbled 21% versus USD, and its decline has contributed to an inflation rate that the central bank deemed last week too high to allow an interest-rate cut. (Bloomberg)

NZ: New Zealand names Graeme Wheeler as next RBNZ governor
New Zealand’s government named Graeme Wheeler, a former World Bank official, as central bank governor to replace Alan Bollard who finishes a 10-year term on 25 Sept. New Zealand’s central bank governor has sole responsibility for making interest rate decisions, and Wheeler is being appointed as Europe’s fiscal crisis restrains consumer confidence and weighs on exports, which make up 30% of the economy. The official cash rate is at a record low, with a 58% chance of a rate cut before year end, according to interest rate swaps data compiled by Bloomberg. New Zealand’s economy expanded 1.1% in the first quarter from the prior quarter, the most in five years. Still, consumer confidence fell in June to the lowest level in more than a year, ANZ National Bank Ltd. said, citing a Roy Morgan survey of 1,040 people. (Bloomberg)

BRIC: Biggest currency depreciation since 1998 poised to worsen
The largest emerging markets, whose economies grew more than four-fold in the past decade, are making losers out of everyone from central bankers to Procter & Gamble Co. as their currencies post the biggest declines since at least 1998. For the first time in 13 years, the Brazil’s Real, Russia’s Ruble and Indian’s Rupee are weakening the most among developing-nation currencies, while the China’s Yuan has depreciated more than in any other period since its 1994 devaluation. P&G, the world’s largest consumer-goods maker, cut its profit forecast for the second time in two months last week in part because of currency losses. Brazil’s Fibria Celulose SA, the biggest pulp producer, asked banks to loosen restrictions on dollar loans after the real hit a three-year low. (Bloomberg)

EU: Germans show lowest support for keeping Euro in four-nation poll
Germans showed the lowest support for the euro among the four largest nations using the currency, according to a poll published in four European newspapers on 24 June. The poll shows 39% of Germans favor leaving the euro, versus 28% of Italians, 26% of French and 24% of Spaniards, according to a survey. In all four countries, majorities said that loans to Greece will never be paid back, even as most said that not saving Greece would increase the euro region’s difficulties dangerously. In France and Germany, most of those polled said Greece should leave the euro if it can’t pay back its loans, while in Italy and Spain about half shared that view. (Bloomberg)

EU: Merkel backs debt sharing in Germany amid closer EU union push
Chancellor Angela Merkel’s government agreed to underwrite the debt of Germany’s states, backing a form of burden-sharing that she is resisting at the euro-area level to combat the financial crisis. The federal government, facing pressure from the 16 states over tighter European Union budget rules that risked worsening a deficit squeeze, unexpectedly backed a form of shared liability to help the states meet constitutional budget limits. The two layers of government plan their first joint debt sale in 2013, the government press office said in an e-mailed statement. Merkel’s government backed down in a deal the opposition, which controls the upper house of parliament, said will help secure ratification of the EU’s fiscal pact in Germany. The accord doesn’t mean Germany is ready to assume similar liability for the euro zone, Finance Minister Wolfgang Schaeuble said. (Bloomberg)

EU: Euro trades near two-week low before EU leaders meet this week
EUR traded within 0.3% of a two-week low against USD on concern that the European Union summit this week won’t lead to decisive measures to end the currency bloc’s debt crisis. Demand for the US currency as a refuge was supported on prospects that Asian stocks will extend global losses. The two-day EU summit in Brussels starting 28 June is the first meeting of European leaders since the Greek parliamentary elections on 17 Jun that saw victories for pro-bailout parties. France and Italy are urging Germany to take decisive action to end the debt crisis, now in its third year, after Spain’s 10-year bond yields jumped to more than 7% last week. (Bloomberg)

US: Consumer spending probably stalled in May
Consumer spending stalled in May, a sign the biggest part of the US economy may struggle as employment and wages cool, economists said before reports this week. Purchases were unchanged last month after a 0.3 % gain in April. Manufacturing is weakening, while housing shows further signs of stabilization, other reports may show.
A slowdown in payrolls and unemployment above 8% have damped consumer confidence, which may keep restraining sales at companies from Darden Restaurants Inc. to CarMax Inc. Waning demand, together with concern about Europe’s debt crisis and US fiscal policy, helps explain why the Federal Reserve last week extended a program to keep borrowing costs low. (Bloomberg)

US: New home sales reach two-year high as US mortgage rates fall
Demand for new US homes rose more than forecasted in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool. Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6% from the prior month, the Commerce Department reported. Falling borrowing costs may keep luring buyers to builders like Toll Brothers Inc., even as a cooling job market and limited access to credit restrain the recovery. The Federal Reserve last week extended a programme to keep long-term interest rates low in a bid to reduce unemployment, sustain housing and prevent a global slowdown from stalling the expansion. (Bloomberg)

US stocks slump as European crisis threatens S&P 500 earnings
US stocks tumbled on concern that this week’s European Union summit will fail to tame a crisis which put American earnings on pace for the first decline since 2009. Technology, financial and energy shares dropped the most among 10 groups in the Standard & Poor’s 500 Index. The S&P 500 slid 1.6% to 1,313.72 at 4 pm New York time as 470 of its 500 stocks declined. The Dow Jones Industrial Average fell 138.12 points, or 1.1%, to 12,502.66. Volume for exchange-listed stocks in the US was about 5.9 billion shares, or 13% below the three-month average. (Bloomberg)

20120626 1012 Global Market Related News.

Asia Stocks Drop on Concern Euro Summit Won’t Tame Crisis (Source: Bloomberg)
Asian stocks fell for a fourth day on concern a meeting of European Union leaders this week will fail to tame the region’s debt crisis. BHP Billiton Ltd. (BHP), the world’s largest mining company, slid 1.2 percent as investors sold shares with earnings tied to economic growth. Nippon Sheet Glass Co. (5202), the company on Japan’s Nikkei 225 Stock Average that relies most on Europe for sales, fell 1.1 percent. Whitehaven Coal Ltd. (WHC) climbed 5.3 percent as the Australian Financial Review reported that billionaire Nathan Tinkler may unveil an offer of more than $5 billion for the coal producer as soon as next week. The MSCI Asia Pacific Index (MXAP) fell 0.2 percent to 113.35 as of 9:55 a.m. in Tokyo, with three shares declining for every two that rose. The gauge has dropped 0.5 percent this year amid concern economic growth in the U.S. and China is slowing as Europe’s crisis deepens.
“Investors expect a summit of European Union leaders this week to achieve little in solving the euro zone’s ongoing problems,” said Malcolm Wood, an equity strategist at Morgan Stanley Smith Barney Australia in Sydney.

Japan Stocks Decline of Euro Summit, Consumption Tax Vote (Source: Bloomberg)
Japanese stocks fell a third day on concern European leaders will fail to come up with a solution to the debt crisis at a summit this week and before Japanese lawmakers vote on a consumption tax increase later today. Honda Motor Co. (7267), a carmaker that gets about 80 percent of its sales abroad, lost 1.7 percent after the yen strengthened, cutting the exporter’s outlook. Nippon Electric Glass Co. sank 5.4 percent after cutting its net-income outlook, saying it won’t earn any first-quarter profit. Terumo Corp. slid 1.7 percent after the medical tool maker’s equity rating was downgraded to underperform by SMBC Nikko Securities Inc. The Nikkei 225 (NKY) fell 0.4 percent to 8,700.30 as of 9:43 a.m. in Tokyo, with volume more than 10 percent lower than the 30-day average. The broader Topix Index lost 0.2 percent to 743.47. Stocks also fell on a Sankei newspaper report former Democratic Party of Japan leader Ichiro Ozawa may establish a new party as early as next week to oppose doubling the consumption tax.
“There’s increasing concern that the EU summit won’t work out concrete measures to overcome the debt crisis as there has been no change in Germany’s resistance to euro-zone debt sharing,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “The yen is strengthening and that hurts exporters.”

U.S. Stocks Drop on Europe as Crisis Threatens Earnings (Source: Bloomberg)
U.S. stocks tumbled on concern this week’s European Union summit will fail to tame a crisis which put American earnings on pace for the first decline since 2009. Technology, financial and energy shares dropped the most among 10 groups in the Standard & Poor’s 500 Index. Bank of America Corp. (BAC) and Chesapeake Energy Corp. (CHK) slumped at least 4.2 percent. Microsoft Corp. (MSFT) sank 2.7 percent after agreeing to acquire Yammer Inc. for $1.2 billion in cash. Constellation Brands Inc. surged 13 percent as it may benefit from a potential deal between Grupo Modelo SAB and Anheuser-Busch InBev NV. The S&P 500 slid 1.6 percent to 1,313.72 at 4 p.m. New York time as 470 of its 500 stocks declined. The Dow Jones Industrial Average fell 138.12 points, or 1.1 percent, to 12,502.66. Volume for exchange-listed stocks in the U.S. was about 5.9 billion shares, or 13 percent below the three-month average.
“There are reasons for investors to be concerned,” Stephen Wood, the New York-based chief market strategist for Russell Investments, said in a telephone interview. His firm oversees $140.8 billion. “In addition to the ongoing wounds of Europe, we’ll begin to see softness in corporate earnings.”

German DAX Drops Most in Three Weeks; ThyssenKrupp Sinks (Source: Bloomberg)
German stocks slid the most in three weeks as billionaire investor George Soros warned that failure to produce drastic measures at a meeting of European Union leaders could spell the demise of the euro. HeidelbergCement AG, the world’s third-largest maker of cement, retreated 4.2 percent. Deutsche Bank AG (DBK), the country’s biggest bank, lost 4.1 percent after RBC Capital Markets downgraded the stock. ThyssenKrupp AG (TKA) fell 3.8 percent as JPMorgan Chase & Co. reduced its share-price estimate for Germany’s largest steelmaker. The DAX Index slid 2.1 percent to 6,132.39 at the close of trading in Frankfurt, the biggest drop since June 1. The gauge has fallen 14 percent from its 2012 high on March 16 amid concern that the euro-region debt crisis is harming the economy, trimming the advance in the first six months of the year to 4 percent. The broader HDAX Index retreated 2 percent today.
“There is no conviction to put money to work and take any risks as we wait for this week’s European meeting,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. “When Soros talks, people listen, and when he talks about a ‘fiasco,’ there is a lack of conviction in buying shares.”

U.K. Stocks Drop for a Third Day as Shire Plunges (Source: Bloomberg)
U.K. stocks retreated for a third day as investors awaited a summit of European Union leaders later this week in Brussels. Shire Plc (SHP) tumbled 11 percent, the largest decline on the benchmark FTSE 100 Index, after the Food and Drug Administration approved a generic version of its second-biggest selling treatment for use in the U.S. SABMiller (SAB) Plc fell 1.7 percent after the stock was downgraded. The FTSE 100 dropped 63.04, or 1.1 percent, to 5,450.65 at the close in London, extending its slide from the beginning of this year to 2.2 percent. The gauge has declined 5.5 percent so far this quarter. The broader FTSE All-Share Index lost 1.2 percent today, while Ireland’s ISEQ Index slipped 0.9 percent. “In this febrile atmosphere, there is little that seems capable of lifting markets from their gloom,” Chris Beauchamp, a market analyst at IG Index in London, wrote in a note. “With yields on Spanish and Italian bonds creeping higher once again, the stage is now being well set up for this week’s summit.”

FOREX-Euro weak as sentiment sours before EU summit
LONDON, June 25 (Reuters) - The euro fell broadly  as concerns about stuttering global growth and low expectations of progress in tackling the debt crisis at a European summit later in the week weighed on demand for riskier currencies.
"There's some nervousness ahead of the EU summit. Reports about the meeting (on Friday) have not intensified hopes or expectations that there will be agreement or any big progress," said Niels Christensen, currency strategist at Nordea.

Treasuries Snap Gain as U.S. to Begin Note Auctions (Source: Bloomberg)
Treasuries snapped a rally from yesterday on concern yields that are within 20 basis points of a record low will damp demand when the government sells $99 billion of notes this week. The U.S. is scheduled to auction $35 billion of two-year securities today, the same amount of five-year debt tomorrow and $29 billion of seven-year notes on June 28. Today’s two-year offering faces an extra hurdle from the Federal Reserve, which is selling short-term Treasuries from its holdings to purchase longer maturities. The Fed announced last week that it plans to extend the program, known as Operation Twist, through year-end to spur the economy. “Yields will rise,” said Kei Katayama, who buys U.S. government debt in Tokyo at Daiwa SB Investments Ltd., which manages the equivalent of $62.2 billion and is a unit of Japan’s second-largest brokerage. “The two-year auction may have difficulties because of Operation Twist. The U.S. economy is not very strong, but I expect steady growth.”
Benchmark 10-year yields increased one basis point, or 0.01 percentage point, to 1.61 percent as of 9:31 a.m. in Tokyo, Bloomberg Bond Trader data show. The 1.75 percent security due in May 2022 fell 3/32, or 94 cents per $1,000 face amount, to 101 1/4.

Euro Trades Near 2-Week Low Before EU Summit This Week (Source: Bloomberg)
The euro traded 0.4 percent from a two-week low against the dollar amid concern that a European Union summit this week won’t lead to decisive measures to end the currency bloc’s debt crisis. The 17-nation euro held onto a drop from yesterday versus the pound before Spain and Italy sell debt today amid concern contagion from Greece will push up borrowing costs. Moody’s Investors Service downgraded 28 Spanish banks yesterday, citing the country’s sovereign debt and rising real estate losses. Demand for the U.S. currency as a refuge was supported as Asian stocks extended global losses. “We expect a disappointing outcome from the EU leaders’ summit, so therefore we think that the euro may weaken into the week’s end,” said Richard Grace, chief currency strategist and head of international economics in Sydney at Commonwealth Bank of Australia (CBA), the nation’s biggest lender. “The U.S. dollar is going to remain quite firm.”
The euro traded at $1.2519 at 10:20 a.m. in Tokyo from $1.2504 at the close in New York yesterday, when it touched $1.2471, the weakest since June 12. It fetched 80.36 U.K. pence from 80.29 pence, following a 0.4 percent decline yesterday. The yen dropped 0.2 percent to 99.80 per euro and lost 0.1 percent to 79.72 against the dollar.

Aussie Dollar Gains as Investors Pare Back Rate-Cut Bets (Source: Bloomberg)
Australia’s dollar rallied after touching its weakest level in 1 1/2 weeks yesterday as traders pared bets on interest-rate cuts on speculation the nation’s economy will be strong enough to weather Europe’s debt crisis. The so-called Aussie strengthened versus most of its 16 major counterparts before officials of the Reserve Bank of Australia gather next week for a policy meeting, where they are forecast to keep the key rate unchanged, according to a Bloomberg News survey. Gains in the Australian and New Zealand currencies were limited before Spanish Economy Minister Luis de Guindos speaks in parliament today after Moody’s Investors Service cut the credit ratings of 28 Spanish lenders.
“The market’s pricing for the extent of RBA rate cuts looks overdone,” said Khoon Goh, a senior foreign-exchange strategist in Singapore at Australia & New Zealand Banking Group Ltd. (ANZ) “I don’t think the Aussie will get sold off too heavily, unless we get a real deterioration in the euro zone debt crisis. Eventually we see the Aussie heading up towards the $1.04 level, probably by early next year.” The Australian dollar rose 0.1 percent to $1.0024 as of 11:07 a.m. in Sydney after reaching 99.69 U.S. cents yesterday, the lowest since June 14. The Aussie gained 0.2 percent to 79.92 yen. New Zealand’s currency advanced 0.2 percent to 78.89 cents after dropping 0.4 percent to 78.73 yesterday. It was at 62.89 yen, 0.3 higher than yesterday’s close. The Aussie has dropped 1.8 percent versus the U.S. dollar since Dec. 31. The kiwi has advanced 1.5 percent.

Treasuries Beat Rest of Bonds as Mortgages Show 1% Growth (Source: Bloomberg)
Treasuries are beating all other U.S. fixed-income securities for the first time in three quarters as investors around the world seek the safest assets. U.S. government debt has gained 2.9 percent since March, while corporate bonds returned 1.9 percent, mortgages rose 1 percent and municipal bonds increased 1.8 percent, according to Bank of America Merrill Lynch index data. The combination of Europe’s debt crisis, China’s slowdown and record stimulus by the Federal Reserve means Treasuries are outperforming the global bond market by 1.3 percentage points, after lagging behind by 2.4 percentage points in the previous quarter.
The returns show that even after the Fed kept the economy growing for 11-straight quarters by buying $2.3 trillion of assets and continuing to swap $667 billion of short-term debt into longer-term securities, bond investors expect the economy will remain sluggish. The extra yield investors demand to own anything else besides Treasuries corresponds to an expansion of less than 1 percent, according to Barclays Plc index data compiled by ING Investment Management.

Central Banks Commit to Ease as Threat of Lost Decades Rises (Source: Bloomberg)
Central bankers are finding it easier to support their economies than to spur expansion as the prospect of Japanese-like lost decades looms across the developed world. Another round of loosely correlated global stimulus has begun after the Federal Reserve extended its Operation Twist program and counterparts from Japan to Europe consider more monetary easing of their own. The Bank of Israel today joined those injecting stimulus by reducing its benchmark interest rate for the first time in five months, in part to insulate its economy from “potential negative consequences” elsewhere. The rub is that even as they renew their rescue efforts, policy makers are postponing forecasts for fuller recoveries and run the risk that their latest actions pack a smaller punch. This raises the prospect of longer-term anemic expansion akin to the doldrums Japan has suffered since the early 1990s.

Home Sales Reach Two-Year High as U.S. Rates Fall: Economy  (Source: Bloomberg)
Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool. Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the prior month, the Commerce Department reported today in Washington. The median estimate in a Bloomberg News survey of 67 economists was 347,000. The number of houses on the market held near a record low. Falling borrowing costs may keep luring buyers to builders like Toll Brothers Inc. (TOL), even as a cooling job market and limited access to credit restrain the recovery. The Federal Reserve last week extended a program to keep long-term interest rates low in a bid to reduce unemployment, sustain housing and prevent a global slowdown from stalling the expansion.
“It’s another sign of life in the housing sector,” said Brian Jones, a senior U.S. economist for Societe Generale SA in New York, who forecast a gain to 362,000. “It’s consistent with a gradual improvement in activity, but we’ve got miles to go before we get back to normal.”

Princeton’s Blinder Says Fed Has Weak Weapons for Growth (Source: Bloomberg)
Princeton University economist Alan Blinder said remaining options for Federal Reserve policy probably won’t provide a powerful boost to the U.S. economy. “The basic problem for the Fed is it’s used all the heavy artillery a long time ago and it’s down to relatively weak weapons,” Blinder, a former Fed vice chairman, said in an interview today on Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays. “Even a full-scale QE3 in mortgage-backed securities is not that powerful a weapon these days with mortgage rates as low as they are” and impediments to the market, including borrowers who can’t refinance because their mortgage is larger than their home’s value, he said. The Fed, seeking to cut borrowing costs, has bought $2.3 trillion of securities in two rounds of quantitative easing, or QE.
Central bank officials on June 20 downgraded their forecasts for growth and employment while noting “significant downside risks” to the economy. At that meeting they announced they would swap $267 billion in short-term Treasury securities with longer-term debt in an extension of their so-called Operation Twist program.

China’s Economy Needs ‘Structural Change,’ Hang Lung Says (Source: Bloomberg)
China’s economy needs “structural change” to encourage consumers to spend more to allow it to weather the global economic slowdown, according to Ronnie Chan, chairman of Hong Kong-based Hang Lung Properties Ltd. (101) “Structurally, China’s economy must change and it’s changing,” Chan said in an interview with Bloomberg TV in New York yesterday. “Personal consumption is one area that’s increasing, so in the coming five to 10 years that will be one of the main games.” China’s economic growth has slowed, prompting the central bank to cut borrowing costs for the first time since 2008 on June 7. Still, the Housing Ministry said this month that China will “steadfastly” retain property curbs including higher down payments and restrictions on the number of homes that buyers can purchase.
Cash-strapped Chinese developers are reluctant to buy land after government curbs in place since 2010 to prevent a property bubble tightened credit, draining liquidity. Hang Lung’s cash ratio, a measure of liquidity, was 2.66 at the end of 2011, the second highest among the 50 biggest Hong Kong-listed builders tracked by Bloomberg. The company is spending more than HK$40 billion ($5.2 billion) building shopping malls in China.

S. Korean Consumer Confidence Drops to 3-Month Low on Europe (Source: Bloomberg)
South Korean consumer confidence dropped to the lowest level in three months as Europe’s debt woes dimmed the outlook for Asia’s fourth-largest economy. The sentiment index was at 101 in June after reaching 105 in May, the Bank of Korea said in an e-mailed statement today. A reading above 100 indicates optimists outnumber pessimists. The Bank of Korea indicated on June 21 it may cut its 2012 growth forecast in July for the second time this year as Europe’s crisis worsens. German Chancellor Angela Merkel yesterday rejected joint euro-area bonds as European Union leaders struggle to agree on a plan ahead of a two-day summit this week. “The European debt woes are finally hurting consumer sentiment here and this is a bad sign for our economy as exports are already declining,” said Lee Sang Jae, a senior economist at Hyundai Securities Co. in Seoul.
“The authorities may have to come up with stimulus such as interest rate cuts should the EU continue to heavily weigh on consumer and business sentiment around the world.”

Moody’s Downgrades 28 Spanish Banks on Sovereign Risk (Source: Bloomberg)
Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA), Spain’s largest lenders, were downgraded by Moody’s Investors Service because of the country’s sovereign debt and souring real-estate loans. At least a dozen lenders were lowered to junk status, Moody’s said yesterday in a statement. The ratings company downgraded six banks by four levels and 10 by three grades with the rest getting one- and two-tier declines. “In Spain you have a combination of a significant sovereign-debt burden coupled with a collapsing real estate market,” said Bruce Simon, chief investment officer at Los Angeles-based City National Bank, which manages $14 billion in client assets and doesn’t own debt issued by the lenders. “That’s doubling the pressure on Spanish banks.”
Moody’s issued a three-step reduction in Spain’s credit grade on June 13, citing the debt, a weakening economy and limited access to capital markets. Spain was lowered to Baa3, the lowest investment-grade rating, from A3 and remains on review for a further cut after announcing plans to borrow 100 billion euros ($125 billion) from European Union rescue funds to recapitalize banks.

Cyprus Requests Funds Becoming Fifth Euro Nation to Seek Aid (Source: Bloomberg)
Cyprus sought a financial lifeline from the euro area’s firewall funds, becoming the fifth of the euro’s 17 member states to request a bailout. “The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure to the Greek economy,” the Cypriot government said today in a statement distributed by the press and information office in Nicosia. The request will be limited to support for Cypriot banks, which need less than 6 billion euros ($7.5 billion), in hopes of securing aid with fewer conditions than a full-fledged economic rescue package, according to a person familiar with the bailout talks. The government still believes it has a chance to get a loan from China or Russia, which it might use to improve its bargaining position, the person said, declining to be identified because the talks are confidential.
Cyprus, which takes over the European Union’s rotating presidency on July 1, follows Greece, Ireland, Portugal and Spain in seeking help to return to financial health. The third- smallest euro economy has been hurt by losses from Greece’s recession and debt restructuring.

Greece Seen Blocked From Debt Markets Until 2017: Euro Credit (Source: Bloomberg)
Greece may have to wait at least another five years before it can sell bonds to investors, according to financial institutions that trade debt with European governments. A new administration in Athens and signs that European Union leaders are willing to loosen Greek austerity measures failed to convince primary dealers that the country will be able to return to the market before its second bailout ends in the next three years. Three of 20 companies surveyed by Bloomberg News that deal directly with sovereign bond issuers expect it to take at least a decade before Greece issues debt again. Ten say investors would lend money to the country no sooner than 2017, while five predict 2015 at the earliest. The median forecast was a minimum of five years. “The challenges facing Greece remain extremely large,” said Jamie Searle, a fixed-income strategist at Citigroup Inc. in London. “It will be a long while before they can get back to the market.”
Greece last sold bonds in March 2010 before the extra yield that investors demand for holding its 10-year securities instead of German bunds ballooned the next month to 443 basis points, then a euro-era record. That forced the country, facing 8.5 billion euros ($10.7 billion) of bond repayments, to start bailout talks with the EU, the European Central Bank and International Monetary Fund.

Merkel Backs Debt Sharing in Germany Amid Closer EU Push (Source: Bloomberg)
Chancellor Angela Merkel’s government agreed to underwrite the debt of Germany’s states, backing a form of burden-sharing that she is resisting at the euro-area level to combat the financial crisis. The federal government, facing pressure from the 16 states over tighter European Union budget rules, dropped its opposition to a form of shared debt sales to help the states escape a deficit squeeze and meet constitutional limits. The two layers of government plan their first joint debt sale in 2013, the government press office said in an e-mailed statement yesterday. Merkel’s coalition backed down in a deal the opposition, which controls the upper house of parliament, said will help secure ratification of the EU’s fiscal pact in Germany. With EU leaders due to discuss further integration at a summit on June 28-29, the accord in Germany doesn’t mean the bloc’s dominant economy is ready to assume liability for the entire euro zone, Finance Minister Wolfgang Schaeuble said.
Joint debt sales in the 17-nation currency region “don’t make sense” as long as budgets are set by national governments, Schaeuble told ZDF television late yesterday. “As long as the national states make the decisions, they have to be liable. If you can spend money on my tab, you won’t be thrifty.”

Central Banks Face Limits of Power as Crisis Persists (Source: Bloomberg)
Central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen their finances fall short, the Bank for International Settlements said. “Central banks are being cornered into prolonging monetary stimulus as governments drag their feet and adjustment is delayed,” the Basel, Switzerland-based BIS said in its annual report, published yesterday. “Both conventionally and unconventionally accommodative monetary policies are palliatives and have their limits.” While central banks’ actions were key to limiting damage from the collapse of Lehman Brothers Holdings Inc., interest rates are now “as low as they can go” and debt purchases have swollen central bank balance sheets, the BIS said. European Central Bank President Mario Draghi has indicated that the ECB is close to exhausting its tools after cutting its benchmark rate to a record low and flooding the banking system with cash.
“In the middle of all this we find the overburdened central banks, pushed to use what power they have to contain the damage,” Stephen Cecchetti, BIS economic adviser, said on a conference call. “There are very clear limits to what central banks can do. It’s critical for the health of the global economy to break the vicious cycles and reduce the pressure on central banks.”

Germany to Confront United Euro Bloc at Summit (Source: Bloomberg)
Germany will confront an increasingly united bloc of euro-area nations demanding more ambitious policies to fight the financial crisis this week, as European leaders prepare for a summit setting the course for their currency’s preservation or ultimate demise. As concern mounts over their banking systems and finances, Spanish and Italian leaders have added their voices to those calling for more decisive action, a counterpoint to Germany’s more incremental approach to solving the 2 1/2-year-old crisis. European Union leaders will attend pre-summit meetings as they work to to narrow differences before the June 28-29 gathering in Brussels. “We are too close to the edge of the cliff for comfort, and the time to make big changes is awfully short,” Erik Nielsen, chief economist at UniCredit SpA (UCG) in London, wrote in a note to clients yesterday.

Euro Crisis Hits Profits Globally as P&G Cuts Forecast (Source: Bloomberg)
Europe’s debt crisis is putting pressure on corporate earnings globally with companies from Procter & Gamble Co. (PG) to Danone (BN) cutting forecasts and signaling profits will fall at more companies this year. Analysts predict members of the Standard & Poor’s 500 Index in the U.S. will report a 1.1 percent average drop in second- quarter earnings, after estimating a gain as recently as last month, according to data compiled by Bloomberg. That would be the first decline in 11 quarters after a 6.2 percent average increase in the first quarter. A stronger dollar is another threat to earnings as U.S. exports become more expensive. In Asia, the chairman at computer manufacturer Compal Electronics Inc. (2324) said last week that concern about a global slowdown is making him less optimistic about the second half of the year. Paris-based Danone lowered its 2012 profitability forecast as Spanish shoppers switch to cheaper brands of yogurt.
“There is a lot of trepidation about second-quarter earnings,” Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York, said in a June 22 interview. He oversees about $2 billion including shares of Apple Inc. and DuPont Co. “You are very unlikely to see companies coming out with favorable outlooks given the problems in Europe and the slowing growth in the U.S. and China.”

20120626 1011 Soy Oil & Palm Oil Related News.

ITS CPO export up 4.4% to 1,196,702 tonnes for the period of 1~25 Jun 2012.
SGS CPO export up 8.8% to 1,212,262 tonnes for the period of 1~25 Jun 2012.

Indonesia cuts crude palm export tax to 15 pct in July - RTRS 25-Jun-2012 19:43
JAKARTA, June 25 (Reuters) - Indonesia, the world's top palm oil producer, will cut its export tax for crude palm oil to 15 percent in July from 19.5 percent for June, a trade ministry official said on Monday. The government will also cut its export tax for RBD palm olein to 7 percent in July, from 10 percent this month. It will hold its export tax on cocoa beans at 5 percent.

Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean futures settled slightly off their highs with still-impressive gains of 40 to 50 cents in most contracts. Soymeal and soyoil futures also ended in the upper half of their daily trading range with strong gains. Soybean traders were squarely focused on building weather premium today, as weekend rains were largely disappointing and heat and dryness is expected to persist in the Corn Belt through July 4.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished up 42 1/4 at 1468 1/4, 10 3/4 off the high and 25 3/4 up from the low. November Soybeans closed up 50 1/4 at 1425 3/4. This was 27 1/4 up from the low and 11 1/4 off the high. August Soymeal closed up 9.5 at 429.2. This was 5.8 up from the low and 6.6 off the high. August Soybean Oil finished up 1.56 at 51.4, 0.36 off the high and 1.13 up from the low. November soybeans surged to 50 cents higher heading into the closing bell and the market managed to push to new contract highs. Soybean futures rose in Chicago after morning weather maps showed that crops in the lower and eastern Midwest will see no significant stress relief, at least through Wednesday of this week. Afternoon weather models show a cooler and wetter pattern for the southern Midwest, beginning next Monday. Confidence and accumulation for this idea is low at this point in time. Western Corn Belt regions, especially southern areas, look to turn very hot in the next two weeks with mid-90's and even 100 degree temperatures common in the week ahead. The dry conditions are making it difficult for farmers to double crop beans over harvested wheat. The U.S. Dollar is trading slightly higher while stocks are lower on the day, ahead of the European Summit later this week. November soybeans received additional strength after the USDA reported that private exporters sold 120,000 tonnes of new crop soybeans to China this morning. Weekly Net Export Inspections, released for the week ending June 21st, were reported below market estimates at 9.18 million bushels. Inspections need to average 12.8 million per week to reach the USDA projection for the marketing year. Traders expect the soybean "good to excellent" ratings to be revised lower in the afternoon Crop Progress Report.

VEGOILS-Palm ends higher on dry U.S. weather, export demand
SINGAPORE, June 25 (Reuters) - Malaysian crude palm oil futures closed higher on hopes demand for the tropical oil would get a boost as dry weather in the United States curbs supply of competing soybean oil.
"The dry weather is lending support. Demand should also be able to stay healthy because of last-minute purchase ahead of Ramadan," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank.

Dry weather puts late US soy plantings in jeopardy
CHICAGO, June 22 (Reuters) - Kelly Robertson jammed a screwdriver into the hard, dry ground on his farm in southern Illinois, carved out six inches (15 cm) of soil and could not find any moisture.
Because of the dry conditions, Robertson, who grows corn, soybeans and wheat near Benton, Illinois, did not begin planting soybeans until last week, fearing the seeds would not have enough moisture to germinate.

20120626 1011 Global Commodities Related News.

Bulls Proven Wrong as Prices Slump Into Bear Market: Comm (Source: Bloomberg)
Speculators increased bets on a rally in commodities for a second consecutive week, just as prices tumbled into a bear market after the Federal Reserve refrained from expanding monetary stimulus. Hedge funds and other money managers raised net-long positions across 18 U.S. futures and options by 7 percent to 628,560 contracts in the week ended June 19, Commodity Futures Trading Commission data show. That’s the highest in four weeks and the first consecutive gain since the end of February. Commodities slumped into a bear market June 21, a day after the Fed extended its Operation Twist program while refraining from a third round of debt buying known as quantitative easing. Reports last week showed that Americans filed for more jobless claims than forecast, sales of previously owned U.S. homes fell in May and manufacturing in the Philadelphia region contracted this month at the fastest pace in almost a year.
“People were thinking that we’d see the next stimulative event, and they started to front-run the trade, and that got reversed quickly,” said Jeffrey Sherman, who helps manage $37 billion of assets for DoubleLine Capital in Los Angeles. “We’re in for a volatile time in commodities as people try to ascertain what’s going to drive growth.”

DTN Closing Grain Comments 06/25 14:54 : Grains Post Strong Gains (Source: CME)
Grain contracts rallied throughout the session with corn closing limit up through the May 2013 contract. Wheat and soybeans were supported by the sharp rally in corn, with moves in all three tied to weather. Outside markets were mixed throughout the day, highlighted by a stronger U.S. dollar index and lower Dow Jones Industrial Average.

COLUMN-Wheat set to regain crop market limelight
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
CHICAGO, June 22 (Reuters) - Corn has been hogging most of the headlines and trader attention in recent weeks as dry fields across key U.S. farmland sparked concerns over potential crop problems over the remainder of the 2012 growing season.
But after much-needed rains finally alleviated many stressed U.S. corn fields in recent days, the wheat market looks likely to take over some of the limelight as global wheat growers suffer dryness concerns of their own and import demand starts to pick up in key markets.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Chicago and Kansas City wheat finished high-range with gains of 40- to 50-plus cents. Minneapolis wheat ended mid- to high-range with gains of 21 to 38 cents. Strong gains in the corn market due to weather concerns made it easy for wheat to rally. Fundamentally, the market continues to benefit from crop concerns in areas of the Former Soviet Union, Europe, China and Australia.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 53 at 740 1/2, 1 1/2 off the high and 44 1/4 up from the low. December Wheat closed up 50 1/4 at 757. This was 40 up from the low and 3 off the high. The Chicago wheat complex traded sharply higher early today trading as much as 51 3/4 higher on the day early. The market found more technical support on the move through the May highs and after a minor set-back into the mid-day, futures pushed back up to make new highs for the day into the close. The U.S. Dollar was trading slightly higher while stocks were sharply lower on the day ahead of the European Summit later this week. Short covering and outright buying in wheat was noted, following the gap higher open in corn. Wheat futures extended gains after the Russia Agriculture of Ministry revised their wheat crop forecast for 2012/13 at 46 to 49 million tonnes vs. current USDA estimate of 53 million tonnes. Russian wheat exports were also revised lower to 16 to 18 million tonnes, from 20 million tonnes. The USDA currently has Russian wheat exports at 16 million tonnes for 2012/13. The Paris Matif wheat futures climbed to a new one year high on the news. Furthermore, Statistics Canada will release crop planting estimates on Wednesday. Early indications suggest Canadian farmers will trim wheat plantings in favor of canola due to higher oilseed prices and expected increases in international demand. Weekly Net Export Inspections, released for the week ending June 21st, were reported in the range of market estimates at 19.48 million bushels. Inspections need to average 22 million per week to reach the USDA projection for the marketing year. September Oats closed up 20 at 324. This was 19 up from the low and equal to the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures closed sharply to their 40-cent limit higher on weather concerns. Limits expand to 60 cents for the next session. Today it was all about the weather, as strength in the U.S. dollar index due to ongoing euro-zone worries was put on the backburner (for now). Disappointing weekend rains and forecasts for building heat and continued dryness this week and into the July 4th timeframe have traders concerned about the crop as pollination has begun early this year.

Corn Market Recap for 6/25/2012 (Source: CME)
September Corn finished up 40 at 591 1/4, equal to the high and 25 1/2 up from the low. December Corn closed up 40 at 594. This was 23 3/4 up from the low and equal to the high. The corn complex traded sharply higher on the day, posting limit higher moves in September, December, and March corn. July corn lost to the December contract on bullish new crop weather data, however, even July corn was trading near limit-up late in the session. December corn gapped higher on the open and touched fresh 5 month highs. Trade volume was above average today. Demand remains sluggish for U.S. corn as reports surfaced today that China continues to have strong interest in Argentinean corn. Furthermore, our research shows that while Ethanol Margins are marginally higher, week over week, they continue to run at some of the lowest levels we have on record. Afternoon weather models show a cooler and wetter pattern for the southern Midwest, beginning next Monday. Confidence and accumulation is low at this point in time. Western Corn Belt regions, especially southern areas, look to turn very hot in the next two weeks with mid-90's and even 100 degree temperatures common in the week ahead. This has traders nervous over yield loss due to stress for pollination. Traders expect the corn good to excellent ratings to be revised lower in the afternoon Crop Progress Report by 2%. Weekly Net Export Inspections, released for the week ending June 21st, were reported above market estimates at 27.01 million bushels. Inspections need to average 34.4 million per week to reach the USDA projection for the marketing year. September Rice finished up 0.215 at 14.94, equal to the high and 0.14 up from the low.

US new-crop corn hits 4-mth high on dry weather
SINGAPORE, June 25 (Reuters) - Chicago new-crop December corn jumped more than 4 percent to its highest since early February, while November soybeans climbed to a contract high as dry weather in parts of the U.S. Midwest threatened crops.
"It is very much a weather-related rally in this session," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia in Sydney. "Corn and soybeans are drawing support from dryness in the eastern corn-belt in the United States and wheat is drawing support from dryness in Ukraine and Russia."

Rains in China's corn, cotton provinces to ease drought concerns
BEIJING, June 25 (Reuters) - Rains in China's major corn and cotton producing provinces this week will give much needed
relief to drought-stricken fields, although some areas risk being hit by floods, the country's weather bureau said.
Drought concerns in China, the world's second-largest consumer and producer of corn, have already pushed domestic corn
futures  to their highest since early May. Wet weather will support output and curb additional U.S. imports.
Ukraine's 2012 grain crop to fall 22 pct to 43-44 mln t
KIEV, June 25 (Reuters) - Ukraine's 2012 grain harvest is likely to total 43 million to 44 million tonnes,compared with a record 56.7 million tonnes in 2011 due a sharp decrease in wheat output, a senior weather  forecaster said on Monday.
Tetuana Adamenko, the head of the agriculture department for Ukraine's state weather centre told a news conference the ex-Soviet republic could harvest 12.2-12.3 million tonnes of wheat this year against 22.3 million in 2011.

Argentine corn harvest slowed by wet or flooded fields
BUENOS AIRES, June 22 (Reuters) - Argentina's 2011/12 corn harvest advanced slowly in the country's top growing province of Buenos Aires due to damp or flooded fields, the Agriculture Ministry said on Friday.
The South American country is the world's second-biggest corn supplier after the United States, but this year's crop has been plagued by drought early in the season and more recently by torrential rain.

Rains offer some respite for eastern Europe grain crops
SOFIA, June 22 (Reuters) - Rain showers boosted wheat and barley crops in large parts of eastern Europe in May and June, but the damage from a dry autumn and winter frosts will keep 2012 harvests below last year's levels.  
Heavy rains in May could have a negative impact on crops in western Ukraine and Romania, both large Black Sea grain producers, while lighter rainfalls helped plantings in Poland, Hungary and Bulgaria, officials and farmers said.

Toepfer raises forecast of German 2012 wheat crop
HAMBURG, June 22 (Reuters) - Germany's leading grain trading house Toepfer International on Friday raised its forecast for the country's 2012 wheat crop to 22.71 million tonnes from the 21.49 million tonnes it estimated in May.
This would make the 2012 crop slightly above the 22.70 million tonnes harvested in 2011.

Asia Softs-Sugar premiums at 11-mth high; rubber in range
SINGAPORE, June 25 (Reuters) - Thai raw sugar premiums are likely to stay this week at their highest in almost a year after New York futures resumed their downtrend, while a rebound in Tokyo rubber futures could be short-lived on weak fundamentals, dealers said.
"The demand environment around the world remains uncertain. We continue to hear varying reports around global sugar demand, and the supply side of the equation is equally uncertain," said  Luke Mathews, a commodities strategist at CBA in Sydney.

India's 2012/13 natural rubber imports seen down 27 pct
MUMBAI, June 25 (Reuters) - India's natural rubber imports in the year ending March 2013 are likely to drop by 27 percent from a year ago to 150,000 tonnes as local output rises and as international prices are not very attractive for importers, a senior government official said.
The world's fourth-biggest producer of natural rubber imported 205,433 tonnes of the tyre-making raw material last year, taking advantage of lower prices in the world market.

Indonesia rubber output, exports seen down 10 pct -group
JAKARTA, June 25 (Reuters) - Rubber output and exports this year in Indonesia, the world's second-biggest producer, are expected to fall by as much as 10 percent, an industry group said on Monday, due to dry weather conditions and falling global prices.
Rubber output is seen down by 8-10 percent from 2.95 million tonnes last year, while exports are forecast to drop 10 percent versus 2.45 million tonnes in 2011, said Asril Sutan Amir, chairman of the Indonesian Rubber Association (Gapkindo).

COLUMN-Iran standoff to slow Saudi's oil slide response
--Robert Campbell is a Reuters market analyst. The views expressed are his own.--
NEW YORK, June 22 (Reuters) - Amid this week's carnage in crude oil markets with Brent futures slumping to 18-month lows, bullish traders have held out hope that Saudi Arabia will bail out the market with a quick cutback in oil production. They are likely to be disappointed.
Saudi Arabia has driven oil into a supply surplus this year by ratcheting up its own production to near 10 million barrels per day.

Iraq Kirkuk exports expected to fall in July
London, June 25 (Reuters) - Exports of Iraqi Kirkuk crude oil are expected to fall to about 399,000 barrels per day in July, a loading programme showed on Monday, from 417,000 bpd in June.
Turkey's Tupras will be the largest buyer of Iraqi Kirkuk crude next month, according to the programme, with plans to lift 1.8 million barrels of the grade.

NORWAY GAS-No impact on flows from oil workers strike
OSLO, June 25 (Reuters) - An oil workers' strike on the Norwegian continental shelf had no immediate impact on the country's gas exports to Europe on Monday morning, data from the gas system operator showed.
About 700 oil workers went on strike from Sunday, shutting down oil and gas production at two major fields offshore Norway that account for about 4 percent of the country's total gas output.

Euro Coal-Prices rise but near-term still looks grim
LONDON, June 22 (Reuters) - Prompt physical coal prices shot up by over $1.50 a tonne on Friday, bid higher on both swaps and physical led by a European utility, but the outlook during the summer remains grim, traders and utilities said.
"Almost everywhere looks bearish from a macro perspective, almost every origin of coal is close to pricing-in to Europe but coal prices went up sharply today," one utility said.

Russia cuts coal output as margins squeezed-exporters
LONDON, June 22 (Reuters) - Russia is likely to lose 6-8 million tonnes of thermal coal exports in 2012 due to production cuts begun in the past month by miners who are being squeezed by slumping prices and rising costs, exporters said.
Russia's thermal coal exports have been fairly stable at around 70-75 million tonnes for the past few years, limited by logistics, but export prices are now significantly below what it costs to mine coal and move it to port.

S.Korea May Iran crude imports down 40 pct on year
SEOUL, June 25 (Reuters) - South Korea's imports of Iranian crude oil fell nearly 40 percent in May from a year earlier, reflecting Seoul's efforts to reduce purchases in return for a waiver from U.S. sanctions targeting Iran's controversial nuclear programme.
The north Asian nation, currently the world's No.4 buyer of Iranian crude, could also see imports suspended from July due to a European insurance embargo on Iranian oil shipments.

Oil-Oil falls as investors unconvinced on EU growth talk
LONDON, June 25 (Reuters) - Brent crude slipped further and U.S. crude turned negative as trade moved to European trading hours  with concerns about faltering global growth and Europe's intractable debt crisis hitting investor confidence.
"Another round of European sovereign debt issues ... and bearish fundamentals have already started to weigh on oil prices," Morgan Stanley said in a research note.

Oil Stocks Biggest Losers With Valuations Lowest Since 2009 (Source: Bloomberg)
At a time of record fuel demand, bountiful oil and natural gas, and expanding economies, no stocks are doing worse in the world than energy producers from BP Plc to Hess (HES) Corp. The MSCI World Energy Index (MXWO) has declined 11 percent this year, more than any other group, according to data compiled by Bloomberg. The gauge has climbed 42 percent since equities bottomed in 2009, less than any industry with earnings tied to economic growth. In the U.S., the stocks are at the cheapest levels relative to the Standard & Poor’s 500 Index since 2009. The divergence reflects the transformation of an industry where growing consumption of energy has been met with even bigger gains in supply. U.S. crude inventories are the highest since 1990 and natural gas prices have lost 36 percent in 12 months amid a glut spurred by hydraulic fracturing. Bears say energy producers, making up about 10 percent of global stocks, will keep equities from advancing. Bulls say the market will rally when their shares rebound.
“The S&P 500 will have a tough time making meaningful progress until the energy sector bottoms and begins to move higher,” Jim Russell, the Cincinnati-based chief equity strategist at U.S. Bank Wealth Management, which oversees about $116 billion, said in a phone interview on June 20. “Even though the valuations of the stocks are cheap, the fundamentals have not yet bottomed.”

Iron Ore-Spot rally may stall on weak China steel market
SINGAPORE, June 25 (Reuters) - Spot iron ore prices may struggle to stretch gains this week, as supply outpaces demand with China's steel market staying sluggish, raising the risk for traders hoping to resume a recent 10-day rally.
"It seems we are in an oversupplied market but there are some people out there who have a lot of cargoes and are trying to keep the market artificially up," said a Singapore-based iron ore trader.

Steel overcapacity will spur plant shutdowns
NEW YORK, June 22 (Reuters) - The director of Turkish steelmaker Colakoglu Metalurji expects steel production cuts and plant shutdowns in the United States, in Turkey, Russia, Ukraine and elsewhere as margins get squeezed by weaker demand and oversupply, he told Reuters this week.
"This a tendency I am expecting for the next 2-3 months: shutdowns not only in the U.S. but almost everywhere...because there is still oversupply, that's for sure," Ugur Dalbeler, managing director of Colakoglu Metalurji, said in an interview on the sidelines of an American Metal Markets steel conference.

METALS-London copper rebounds from 6-month low
SHANGHAI, June 25 (Reuters) - Copper prices rose on Monday after European leaders calmed the markets with promises of reforms to combat the euro zone debt crisis, and after Germany, France, Spain and Italy agreed a 130 billion euro ($156 billion) package to revive growth.
Limited restocking of copper by Chinese investors in order to exploit favourable arbitrage between London and Shanghai also supported prices, but London copper's fall to a six-month low on Friday showed markets were still worried that the problems faced by Europe, the U.S. and China may crimp demand for metals.
PRECIOUS-Gold inches up after weekly drop; EU summit eyed
SINGAPORE, June 25 (Reuters) - Gold edged up on Monday after falling more than 3 percent last week, but interest in the precious metal could be limited by a steady U.S. dollar and deflation worries stemming from a global economic slowdown.
Inflation fears have helped fuel several years of strong gains for gold, but investors are now starting to worry about deflation after recent reports showed signs of slowing global economic activity, already dented by the debt crisis in Europe. Bullion has shed most of its early gains and is trading almost flat for the year.

Shipping Bears Ascendant as Fleet Growth Swamps Cargoes: Freight (Source: Bloomberg)
Shipping analysts are getting more bearish on the outlook for rates to haul iron ore and coal as China, the biggest consumer of both commodities, grows at the slowest pace in three years at a time of record fleet expansion. Capesizes, each holding about 180,000 metric tons of cargo, will earn an average of $11,709 a day in 2012, the lowest in at least 14 years, the median of 10 analyst estimates compiled by Bloomberg shows. They predicted $15,000 in a December survey. The fleet will expand 13 percent this year, compared with a 4 percent advance in cargo volumes, according to London-based Clarkson Plc (CKN), the world’s biggest shipbroker. Rates tumbled 85 percent since the start of January, more than for any other type of commodity carrier, as everyone from the World Bank to the Federal Reserve cut growth estimates.
China, which imports more iron ore than all other nations combined, is expanding at the slowest pace since 2009 and the 17-nation euro region returned to recession this quarter, the median of 16 economist forecasts shows. “China’s growth hasn’t been as good as some people had hoped,” said Rahul Kapoor, a Singapore-based analyst at RS Platou Markets AS, who cut his 2012 forecast to $10,000 from $13,000 in December. “That’s being compounded by rather negative demand for iron ore in Europe. Fleet growth has also been huge and above most people’s expectations.”

Baltic index flat as activity slows
June 22 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, was unchanged on Friday due to a slowdown in vessel activity.
"We saw a temporary increase in cargoes but things are starting to slow down again," said George Lazaridis, head of research with Greek shipbroker Intermodal.