Wednesday, June 27, 2012

20120627 1818 FCPO EOD Daily Chart Study.

FCPO closed : 3016, changed : -16 points, volume : lower.
Bollinger band reading : correction range bound little downside biased.
MACD Histogram : turned downward, buyer seller battling.
Support : 2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded small loss with drying out volume distributed. Soy oil price currently trading little higher after overnight closed recorded small loss while crude oil price still struggling to break above $80 resistance level.
Yesterday news on Indonesia lower crude palm oil export tax and gloomy world economy send FCPO price lower today amid stiff export competetion between the 2 top world crude palm oil export country.
Technical chart wise, reading adjusted to calling a correction range bound little downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120627 1745 FKLI EOD Daily Chart Study.

FKLI closed : 1604.5 changed : +13.5 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : weakenning, buyer taking profit.
Support : 1600, 1590, 1580, 1570 level.
Resistance : 1610, 1620, 1630, 1640 level.
Comment :
FKLI closed rallied higher recovered all yesterday loss with decline volume changed hand doing 3 points premium compare to cash market that closed higher. Overnight U.S. markets rebounded little higher and today Asia markets traded in positive tones while European markets currently having mixed development.
Global market traded higher on speculation China will implement stimulus measure and possible bottoming U.S, housing market while monitoring closely EU summit meeting development. Back home, upbeat on tomorrow Felda Global Venture debut send local cash and futures market higher.
End of day chart study still calling a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120627 1657 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.

20120627 1614 Global Market & Commodities Related News.

Asian shares rose and European stock index futures pointed to a higher open although gains and volumes could be capped by doubts over whether this week's EU summit will deliver any strong new measures to support the euro zone's debt-stricken countries.
Major U.S. stock indexes bounced back on Tuesday, but trading was light with the outlook clouded by doubts before yet another summit to tackle the European debt crisis.

The euro inched higher  after hitting a two-week low the previous day, but gains were halted by scepticism that a European summit would deliver concrete measures to ease the region's debt crisis.

FOREX-Euro edges up, but EU summit again expected to disappoint
TOKYO, June 27 (Reuters) - The euro inched higher on Wednesday after hitting a two-week low the previous day, but gains were halted by scepticism that a European summit would deliver concrete measures to ease the region's debt crisis.
A quick move toward the issuance of common euro-zone bonds was highly unlikely after German Chancellor Angela Merkel was quoted as saying Europe would not share total debt liability "as long as I live."

Chicago corn slipped as the market took a breather after climbing to a 9-month top and adding more than 12 percent in the last two sessions, sparked by a severe drought in the U.S. Midwest.

Rain to push Brazil sugar output to later in year
Widespread rain during the first few months of Brazil's center-south sugarcane crush has slowed sugar and ethanol production and will push more of that output to the second half of the season, cane industry association Unica said on Tuesday.

S.Africa's 2012 maize output f'cast steady at 11.056 mln T
The South African government left unchanged its maize output forecast for 2012 at 11.056 million tonnes on Tuesday, in line with market expectations, saying it expects to have a better picture of the crop next month as harvesting continues.

Russia's Siberia rains ease, yields down in south
Rain is expected in Russia's southern agricultural regions in the coming days, although a dry spell persists in some regions of Siberia, where the harvest will start later, the state weather forecaster and an analyst said on Tuesday.

Thai rubber intervention plan lags, China sales eyed
Thailand has bought only a fraction of the 200,000 tonnes of rubber sheet it planned to purchase under a government intervention scheme and is now looking for sales to China to help prop up prices, the deputy agriculture minister said.

Brent crude fell below $93 per barrel  as heightened concerns that European leaders would fail to resolve the region's intractable debt crisis at a key meet this week offset tighter North Sea oil supply.

Euro Coal-Prices rise $1-2, ARA trades at $90/T
LONDON, June 26 (Reuters) - Prompt European physical coal prices rose by $1-2 U.S. dollars a tonne on Tuesday as the market continued to look for clear direction.
"Fundamentally it's looking very slightly stronger but nobody wants to sell at the moment because there are just too many variables which could move prices in the next few months," one European trader said.

Australia sees 2012/13 iron ore exports up 10 pct
Australia, the world's biggest producer of iron ore, on Wednesday forecast a 10 percent rise in exports in the next fiscal year as mining companies spend billions of dollars beefing up operations, and said coal shipments will also soar.

Rio Tinto sees mid-term iron ore price moderation
AMSTERDAM, June 26 (Reuters) - Rio Tinto   expects a moderation in iron ore prices going forward as additional supply comes on stream, and sees no going back to annual pricing, a senior company executive said on Tuesday.
"The demand outlook is strong but supply is responding as well," Alan Davies, president of international operations for Rio Tinto told Reuters in an interview on the sidelines of a Metal Bulletin iron ore conference.

Iron Ore-Spot offers drop, weak China steel mkt may extend
SINGAPORE, June 27 (Reuters) - Spot price offers for Australian and Brazilian iron ore cargoes in China dropped as demand thinned amid a sluggish Chinese steel market that is likely to extend through next month as rains slow construction projects.
"All our clients are bearish. They think steel demand in July will be worse because it's been raining in most parts of China, so construction work could slow down," said an iron ore trader in Shanghai.

London copper dropped, snapping two straight days of gains, as investors shied away from riskier assets on growing conviction a European summit this week will fail to resolve the region's intractable debt crisis.

Russia's Jan-May gold production down 3 pct y/y-lobby
Russian gold firms cut gold production by 2.9 percent in the first five months of 2012 comparing to the same period last year, the industry lobby said on Tuesday.

Gold regained strength, although concerns European leaders would fail to come up with concrete measures to solve the region's debt crisis could prompt a flight to the safety of the U.S. dollar and dent bullion.

METALS-LME copper down ahead of EU summit; China demand eyed
SHANGHAI, June 27 (Reuters) - London copper dropped on Wednesday , snapping two straight days of gains, as investors shied away from riskier assets on growing conviction that a European summit this week will fail to  resolve the region's intractable debt crisis.
But expectations that top copper buyer China could be lured by low prices and start restocking could help check losses.

PRECIOUS-Gold ticks up in thin trade; deflation worry lingers
SINGAPORE, June 27 (Reuters) - Gold regained strength on Wednesday, although concerns European leaders would fail to come up with concrete measures to solve the region's debt crisis could prompt a flight to the safety of the U.S. dollar and dent bullion.
Inflation fears helped gold stretch its winning run to an 11th year in 2011, but markets are now worried that slowing global economic activity caused by the crisis could force jewellers, investors and speculators to curb spending.

Baltic index up on higher capesize rates
June 26 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose slightly on Tuesday as a decline in Panamax rates was offset by strength in other vessels.
"While steel prices have remained sluggish, reports indicate that Chinese traders are betting that high steel output will force steel mills into the spot market to restock," RS Platou analysts said in a note.

20120627 1117 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares flat, euro pressured on EU summit cynicism
TOKYO, June 27 (Reuters) - Asian shares were flat and the euro pressured as investors seemed convinced a European summit this week will fail to take concrete action to solve the euro debt crisis, with Germany staunchly opposed to sharing the region's debt burden.
"Investors are waiting for the conclusion of the EU summit, even though they aren't expecting anything concrete to come out of it," said Yoshihiro Ito, chief strategist at Okasan Online Securities, adding that there were few factors other than exchanges rates to influence trading this session.

COMMODITIES-Brent jumps on Norway strike; corn rides heat wave
NEW YORK, June 26 (Reuters) - Brent oil prices jumped more than 2 percent on Tuesday due to an oil workers strike in Norway and to tensions in the Middle East, while fear of crop destruction from a drought in America's grain belt drove corn up for a second day.
"It's difficult to become too bullish given the uncertainty still in Europe," said Tom Pawlicki, an analyst at trading platform, who regularly comments on U.S. crude.

OIL-Oil rises to $93, Norway strike cuts North Sea output
NEW YORK, June 26 (Reuters) - Brent oil futures jumped 2 percent to top $93 a barrel on Tuesday, widening its premium against U.S. crude as a growing strike by oil workers in Norway tightened North Sea supplies.
"Brent crude is up due to the ongoing strike by Norwegian oil workers that has shut some production," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

POLL-Lower US crude stocks seen as imports slow
June 26 (Reuters) - U.S. crude oil stockpiles were forecast to have fallen last week due to a drop in imports, an extended Reuters poll of analysts showed on Tuesday.
The average estimate from 12 analysts polled ahead of the weekly inventory reports, put crude stocks down by 500,000 barrels in the week to June 22.  

Oil companies resume US Gulf output after Debby
HOUSTON, June 26 (Reuters) - Oil and gas producers in the Gulf of Mexico continued to restart operations on Tuesday as Tropical Storm Debby, the first named storm of 2012 to disrupt the basin's energy operations, weakened and made landfall in Florida.
U.S. regulators said more than half of the Gulf's output that was shut for the storm had been restored by midday, reflecting rapid ramp-ups after Debby had moved east of the basin's energy infrastructure.

World oil supply up but spare capacity tight-EIA
WASHINGTON, June 26 (Reuters) - World oil inventories have risen over the past two months, aided   by increased output from Iraq and Libya, but spare production capacity remains tight, the U.S. government said on Tue sday.
Global fuels output exceeded consumption by an average of 1 million barrels per day in May and June, helping to push oil inventories higher and prices lower, the Energy Information Administration said in a report, obtained by Reuters ahead of its publication.

Oil supply surge could risk price collapse
WASHINGTON, June 26 (Reuters) - Global oil supplies are growing so fast that they could outstrip demand and lead to a collapse in world prices, a former energy executive who is now a Harvard research fellow said on Tuesday.
"Most analyses today are still marked by this obsession with oil running out," Leonardo Maugeri, formerly a senior manager at Italy-based oil and gas giant Eni SpA , said at a discussion at the Center for Strategic and International Studies think tank in Washington.

NATURAL GAS-Heat helps drive US natgas futures up for 4th day
NEW YORK, June 26 (Reuters) - U.S. natural gas futures ended higher on Tuesday for a fourth session, with the front month notching a five-month high as warm U.S. weather forecasts for the next two weeks were seen forcing more homeowners and businesses to crank up air conditioners.
"The storm (Debby) was not a huge deal. There's no other reason we're up other than (the heat)," a Chicago-based trader said.

EURO COAL-Prices rise $1-2, ARA trades at $90/T
LONDON, June 26 (Reuters) - Prompt European physical coal prices rose by $1-2 U.S. dollars a tonne on Tuesday as the market continued to look for clear direction.
"Fundamentally it's looking very slightly stronger but nobody wants to sell at the moment because there are just too many variables which could move prices in the next few months," one European trader said.

20120627 1016 Global Market Related News.

Cyprus bailout cost may be half its economy-official By Michele Kambas
NICOSIA, June 26 (Reuters) - Cyprus, the fifth euro zone country to seek emergency funding from Europe, may need a bailout of up to 10 billion euros, over half the size of its economy, officials said on Tuesday. The Mediterranean island, with a banking sector heavily exposed to debt-crippled Greece, said on Monday it was formally applying for help from the European Union's rescue funds. Cyprus is the euro zone's third smallest economy but it joins Greece, Ireland, Portugal and Spain in seeking EU rescue funds to try and stay afloat, and is the latest sign that policymakers have failed to stop the debt crisis spreading. European leaders will meet at a summit on Thursday and Friday but they are not expected to come up with a lasting solution to the region's problems that have also sent Italy's borrowing costs soaring. Two euro zone officials said that a package of up to 10 billion euros was being considered for the 17.3 billion euro Cyrpriot economy.
"The exact number has not been decided yet. It was to be 6 billion for the state financing and 2 billion for the banks but that is optimistic - it is more likely to be seven and three - up to 10 billion euros in total," one euro zone official said. A second official confirmed the amount was likely to be up to 10 billion euros, a massive bill for Cyprus. While the sum is easily within the range of the European Financial Stability Facility (EFSF) bailout fund, it may lead to demands for collateral or for private bondholders to take a write-down as they did in Greece. Greece's second 130 billion euros bailout is equal to about 60 percent of the country's gross domestic product and private bondholders were asked to contribute to making debt servicing more manageable through a debt restructuring.

Cyprus needs to plug a 1.8 billion euro regulatory capital shortfall in its second largest lender by June 30. Potential aid could be more comprehensive to cover fiscal requirements, Finance Minister Vassos Shiarly told Reuters. "For Spain it's about sectoral help for the banks. Cyprus is, in terms of volume, rather an island that we must help because it has been so handicapped by the Greek deficit at the moment," Austrian Finance Minister Maria Fekter said. Cyprus is thought to have applied to the EU for aid after exhausting attempts to secure loans from either China or Russia. Those efforts, however, will be ongoing. "We will continue efforts to secure a bilateral loan, which can be used accordingly," government spokesman Stefanos Stefanou said. Cyprus has been shut out of international capital markets for more than a year, with yields on its 10 year benchmark bond over 16 percent on Tuesday. Sidestepping EU aid earlier, it secured a 2.5 billion euro loan from Russia in late 2011.
The loan amount is expected to cover needs in 2012, but not in 2013, when Cyprus has 2.25 billion euros in refinancing, including a euro medium term note (EMTN) redemption. President Demetris Christofias, whose administration has been slammed by opposition for dragging its feet in both applying to the EU and taking measures earlier to shore up the island's economy, was to brief politicians later on Tuesday. Christofias has been accused by the opposition of being out of touch with reality and ignoring warning signs that the economy was in trouble, suggestions the government strongly denies. The bailout request comes as Cyprus prepares to assume the rotating EU presidency on July 1. "It is a tragic coincidence," Cyprus Parliamentary speaker Yiannakis Omirou told state radio.

DJ Credit Suisse to Cut up to 30% of Europe Investment-Bank Department Jobs -Sources CS.N CSGN.VX By Anita Greil and Dana Cimilluca
ZURICH--Credit Suisse Group AG (CS, CSGN.VX) is moving ahead with its plan to cut more than 3,500 jobs as it is set to shed up to 30% of senior jobs at its European investment-banking department, people close to the bank said Monday. Last year, Switzerland's second-largest bank disclosed plans to cut as much as 7% of its workforce. At the end of March, the bank said 2,000 of these jobs had already been eliminated. The next business to feel the axe is the investment-banking department in Europe, where between 20% and 30% of jobs will be eliminated, the people said. This business includes activities such as advisory, mergers and acquisitions, as well as equity and debt-capital markets. It is a unit of the broader investment bank, which includes fixed income, currency and equity trading.
The cuts come as Credit Suisse, like many of its rivals, is under pressure to reduce costs, as the industry never fully recovered from the 2008 financial crisis. Credit Suisse suffered a dismal second half in 2011, and earnings in the first quarter this year were lackluster. The second quarter promises to be no better, analysts said. The Zurich-based bank is also under pressure from shareholders to cut lavish pay for its bankers. More recently, Switzerland's central bank publicly urged Credit Suisse to shore up its capital base more quickly than planned to ensure it can withstand the effect on the banking sector should Europe's debt crisis intensify. After its Friday meeting last week, the bank's board took the unusual step of issuing a statement, saying it has full confidence in management's plans to strengthen capital and that it was confident with progress made toward meeting pending regulatory requirements.

20120627 1000 Malaysia Corporate Related News.

Muhibbah Engineering announced that CIMB is withdrawing its support for the proposed restructuring scheme of the Asia Petroleum Hub (APH) project. No further details but management is evaluating various courses of action. Further updates will be announced in due course. (BMSB)

UMW Holdings is investing US$214m (RM684m) to expand its drilling operations with the acquisition of offshore contractor S.D. Standard Drilling's unit and a mobile drilling rig. "The proposed acquisition is in line with the UMW Group's plan to raise revenue and profit contributions from the oil & gas division," it said. The rig is currently being constructed and is expected to be completed and delivered by February 2013. (Starbiz)

SP Setia president and CEO Tan Sri Liew Kee Sin has for the first time exercised the put option granted to him by PNB, a move that sees him reduce his interest in the property development company. According to filings, Liew on Mon transferred 45.19 million SP Setia shares, or a 2.35% stake, to PNB in exercising the put option extended to him under the management agreement dated Jan 20. The 2.35% block was worth RM178.53m based on the transacted price of RM3.95. Following Liew's exercising the option, he now holds a 5.88% stake in SP Setia while PNB and its unit trust funds under management collectively hold about 73.06%. (Financial Daily)

Puncak Niaga 's minority shareholders have urged the board to initiate legal action against Syabas to recoup the outstanding RM1.1bn. Puncak Niaga owns 70% of Syabas while 15% is held by Kumpulan Darul Ehsan and the remaining 15% by Kumpulan Perangsang Selangor. (Star)

The controversial plan by regulator Bank Negara Malaysia (BNM) to set up an Islamic mega bank using public funds could involve the purchase of an existing lender, Asian Finance Bank (AFB), say industry sources. The AFB is one of three foreign Islamic banks in Malaysia. But perhaps likely to be more troubling than the use of public funds is a move to offer Islamic banking expert Professor Datuk Dr Rifaat Ahmed Abdel Karim and other “promoters” of the idea up to nine per cent of the shares in the super bank, which is to be capitalised at US$1bn (RM3.2 bn). “BNM is looking at taking over AFB and turn it into an Islamic mega bank,” a banking industry source told The Malaysian Insider. It is said that Zeti came up with the idea to buy up AFB and turn it into an Islamic mega bank. AFB was incorporated in November 2005 and is backed by a consortium of shareholders — Qatar Islamic Bank (66.67%), RUSD Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain W.L.L (6.67%). It offers syariah-compliant products in consumer, corporate, commercial, treasury, investment banking and asset management services with two branches, one here and the other in Johor Baru. It also has a representative office in Jakarta. (Malaysian Insider)

Malaysia's Genting Group is seeking to increase its stake in Australian casino company Echo Entertainment Group above the 10% threshold, a state regulator said. The New South Wales Independent Liquor and Gaming Authority said it would consider Genting's application. (Starbiz)

The iconic Bukit Bintang Plaza located in the heart of KL and built more than 30 years ago will be demolished to make way for the KVMRT project, mall owner UDA Holdings confirmed. Senior vice-president Syed Ahmad Nazri Syed Kamaruzaman said tenants located outside the front portion of the mall have already been informed to vacate by the end of this month while the rest of the tenants would have to vacate the mall by end of this year. MRT Corp has given the mall operator until year-end to vacate the building.UDA would await a decision from the Finance Ministry on the application by Tradewinds to participate in the Bukit Bintang Plaza building reconstruction. (Star)

The Bank of East Asia (BEA) dispelled speculation that it plans to sell a 23.5% stake in Affin Holdings, a development that pours cold water of suggestions of a possible tie-up between the Armed Forces-backed bank and the Hong Leong group. BEA chairman Sir David Li said that the Hong Kong-based bank in fact hopes to increase its presence in Affin. (Financial Daily)

Tenaga Nasional Berhad who will buy imported gas in two months time is talking to the government on an extra RM1.66bn that will be charged under the market pricing portion of the deal. Tenaga said that Petronas will be able to deliver the volume of gas that is required but any gas amount above 1,100 mmscfd will be priced at the market price while volumes up to 1,100 mmscfd will priced at the government regulated price of RM13.70/mmbtu. Tenaga consumes between 1,200-1,250 mmscfd of gas and the price differential works out to be RM1.66bn. (Star Biz)

Malaysia Airlines (MAS) said the current overall booked load for the first seven A380 flights are encouraging, with departures from Kuala Lumpur registering 89% and London 87% seat factors. “In particular, the first five flights out of Kuala Lumpur are fully booked for First Class. Likewise for three of the seven flights out of London,” the airline said. MAS said the booked Business Class load for the first seven flights in each direction is around 85% from KL and 90% from London. By August this year, with the delivery of the second aircraft, MAS will operate daily A380 flights on the KL-London route. (Financial Daily)

Kalimantan, Sumatra and Papua in Indonesia still offer huge prospects in oil palm ventures both in the upstream and downstream operations for investors but they must carefully mitigate the roadblocks in the Indonesian palm oil industry in order to capitalise on the opportunities. PT Agro Harapan Lestari head of sustainability Edi Suhardi said investors, among others, would encounter lengthy and uncertain process to obtain permits, licences and approvals from relevant government authorities on company incorporation, land ownership and plantation operational licensing. “I believe the lengthy process can be mitigated by acquiring smallholders and local plantation companies or concessions, assuming that the locals have obtained the licences,” he said. (Starbiz)

Diverse issues on palm oil such as limited land supply, labour shortage, biomass utilisation, food security, certification standards, development in Indonesia's oil palm sector as well as Africa as the new frontier in global oil palm cultivation and investment hogged the limelight at the close of the 7th International Planters Conference (IPC 2012). At a panel discussion yesterday, conference participants were told that with the world demand for palm oil expected to continue registering strong growth, the industry players and investors needed to carefully strategise and well-positioned themselves to stay competitive and able to meet with the challenges and threats ahead. A panelist, Kuala Kepong Bhd (KLK) plantation director Roy Lim said given that “money does not grow on trees” in the case of palm oil, the labour shortage in the local plantations must be seriously addressed. While the long-term solution for Malaysia's labour shortage problem in the estates still has yet to be identified, he suggested the Government to open up more sources i.e. countries where foreign labours could be easily obtained. (Starbiz)

Sarawak Oil Palms Bhd (SOP) has commissioned its first refinery and fractionation plant as well as kernal crushing plant in Bintulu. Group executive chairman Tan Sri Ling Chiong Ho said the company had invested RM200m in these facilities. "India and China are the markets for the products from the refinery and the new plant," said Ling. The refinery and fractionation plant have processing capacity of 1,500 tonnes per day. (StarBiz)

Astro has asked banks to submit proposals by Wednesday for mandates to advise on its US$1bn (RM3.2bn) IPO in Kuala Lumpur. Ananda Krishnan, plans to re-list Astro All Asia Networks by end-September in a deal that would give the pay-TV firm a market capitalisation of up to US$4.7bn (RM15bn). (Singapore Business Times)

Beer smuggling is costing the Government RM500m a year in revenue from import and excise duty, according to industry sources. They expect the loss to increase with the illicit trade thriving because of the high demand for smuggled beer which costs between RM6 and RM6.50 less for a 500ml can. In many places it is sold for RM5.50 when it should cost more than RM10. The 320ml can of duty-paid beer costs between RM6 and RM7 at shops in the peninsula. In Sabah and Sarawak, where the smuggling is especially rampant, illicit beer is openly sold in shops in the cities and rural towns for as low as RM10 for three and sometimes even four cans of 320ml. The same price is offered in certain parts of the peninsula, including the Klang Valley. A survey conducted found that retailers in Sabah and Sarawak could not sell their duty-paid beers because of the huger market for the contraband stuff. Retailers interviewed in the two states said they were “forced” to sell smuggled beers because their customers refused to pay a high price for their drinks. (Star)

Censof Holdings Bhd, is eyeing to secure one or two more big government projects this year. Group MD Datuk Samsul Husin said the company had participated in the tender for both projects, and the result would be known by year-end. "They will be sizeable projects like what we had won in the past," he told reporters after the company's AGM. Censof has clinched multiple contracts, including the RM22.5m "Outcome Based Budgeting" project from the Ministry of Finance and Social Security Organisation's social security information management system, worth a total of RM33.5m. Samsul said other than the two big projects, the company is also keen on undertaking smaller contracts to help sustain its financial performance. "We are anticipating growth this year. But whether it is single-digit or double-digit, we do not know yet" he said. (Bernama)

Pelikan International Corp Bhd expects to return to the black in 2013 as it reorganises its structure and divests non-core businesses. Coupled with its move to shut, relocate and merge several of its plants and letting go an estimated 350 employees, Pelikan expects to be on a better footing towards the end of the current financial year. All the measures to be taken would result in cost saving for the group, says Pelikan president Loo Hooi Keat, who spoke to reporters yesterday after the group's AGM. (BT)

TSH Resources Bhd has made a voluntary conditional offer to acquire oil palm planter Pontian United Plantations Bhd (PUP) in a deal worth RM625m. TSH has offered RM90 a share for the 6.94m shares or 80.28% it does not currently hold. The RM90/share purchase consideration will be paid with RM45.06 in cash and RM44.94 via the issuance of 21 TSH shares priced at RM2.14 per share. TSH said the cash portion of the offer will be funded with bank borrowings. (Malaysian Reserve)

Iris Corporation Bhd (ICB) has been appointed by Pahang State Secretary Office (PSK) to be the turnkey contractor for the development of a modern integrated farm in Kampung Sungai Kepong, Lipis, Pahang, for RM23m. The farm, known as the Rimbunan Kaseh Programme, is expected to be completed within 60 days from the delivery of the land by PSK by August. (BT)

Silver Bird Group Bhd plunged into a second quarter pre-tax loss of RM295m because of lower earnings from its consumer food division, and losses from seven dormant subsidiaries. The consumer food division posted revenues of RM31m, 34% yoy lower. The company said the pre-tax loss included adjustment made for the financial irregularities identified in the forensic report.(BT)

SEGi International has entered into a conditional sale and purchase agreement with Bandar Setia Alam Sdn Bhd for the acquisition of a freehold commercial land for RM52.27m. “The group plans to set up, develop and construct a purpose built campus for its proposed international school after taking into consideration the present rising demand for international schools in the Klang Valley.” (Malaysian Reserve)

IGB Corp Bhd is expecting to raise some RM800m in cash from the upcoming listing of its retail real estate investment trust (REIT), which is expected to happen in mid-August. IGB Corp group managing director Robert Tan said the proceeds would be used for future expansion activities, which “are in the pipeline.” Tan also confirmed a recent StarBiz report that said IGB Corp was mulling over another two REITs to unlock the value of its office and hotel assets. “If this (the listing of the retail REIT) goes well, we will look at the possibility of the office/commercial and hotel/hospitality REITs. “It is a question of the timeline or timing. Now, the demand is good for a retail REIT but an office REIT is not the flavour of the month. “Also, the office/commercial and hotel/hospitality REITs would have different investors with different expectations,” he said after the group's EGM. To recap, the listing of IGB's maiden REIT, the retail REIT, in the third quarter of this year is to unlock the value of its two prime retail assets - Mid Valley Megamall and The Gardens Mall. Tan also said IGB Corp was looking at mergers and acquisitions, both locally and abroad. “We are in an opportunistic mode,” he said. Tan also said the group would continue to focus on centrally located city hotels. “We do not want to compete with resort operators. “We will continue to focus on our strength, which is city hotels. “Location is central,” he added. (Starbiz)

Glomac Bhd is looking at mergers and acquisitions (M&A) to help raise its market capitalisation (market cap) to more than RM1bn over the next two to three years. Group managing director and chief executive officer, Datuk FD Iskandar, however, declined to comment if the group was in negotiations with any party. "We can hit RM1bn through M&A or organic growth. The M&A will depend on the business model and it can be with listed companies," said Iskandar. (BT)

Scomi Marine plans to spend US$45m to buy two new vessels to increase the efficiency of its offshore support services division, said President Mukhnizam Mahmud. "We hope these two new vessels can be put into work by year-end," he said. The group recently sold three of its old vessels, putting the number of existing vessels at 11. On profitability, Mukhnizam expects the group to still make profits this year, driven by its current contracts and its coal transportation operations in Indonesia. (Bernama)

Mitsubishi Motors Malaysia (MMM) plans to launch its first fully electric car in Malaysia, the i-Mitsubishi Innovative Electric Vehicle (i-MiEV) by year-end, said CEO Tetsuya Oda. He said, however, the company is now in the final stages of market research to determine the vehicle pricing for Malaysia. (Malaysian Reserve)

United Malayan Land: Upbeat on RM1bn projects
United Malayan Land (UMLand) is upbeat on its plan to launch over 1,500 units of mixed properties with an estimated GDV of about RM1bn this year. Its group CEO Chia Lui Meng said the projects, both township and niche, were mostly located within  Iskandar Malaysia and are expected to enhance the group's earnings for the next two years. He also said that as of May 2012, the group's total sales stood at RM650m with additional RM260munrecognised sales. Lui added that UMLand's recent launches such as the Somerset Puteri Harbour, Johor and Suasana Bukit Ceylon in Kuala Lumpur, have been enjoying excellent take up rates with more than 80% units sold within 4 months. Chia said on average, the group's profit margin stood at 20% to 25% for residential and 30% to 35% for commercial projects.(Business Times)

Scomi Engineering: Monorail project in Brazil to commence next month
Scomi Group's unit, Scomi Engineering, will commence construction of a monorail project in Sao Paolo, Brazil, next month, says Group CEO Shah Hakim Zain. He said the total value for the project is RM2.7bn, of which their portion is RM600m. He said manufacturing activities would be undertaken at a plant located in Palmares and delivery of the first monorail vehicle was scheduled for April next year. The entire project is expected to be completed by 2015. Meanwhile, Shah said the group would continue to invest between RM20m and RM30m annually on research and development. (Bernama)

AmanahRaya REIT: Selling Wisma UEP for RM40m
AmanahRaya REIT is disposing of its Wisma UEP building to Tenaga Nasional for RM40m. It said the proposed disposal was in line with its plan to streamline its portfolio. It said there is limited upside potential growth to Wisma UEP, with occupancy of less than 50% since September 2011. (Bernama)

Naim Indah Corp: Not taking legal action over termination of agreement
An official from Naim Indah Corp (Nicorp) who declined to be named said the company does not intend to take legal action over the termination of the letter of invitation from Aspire Rich Sdn Bhd to participate in the liquefied petroleum gas (LPG) business. Nicorp had said in an earlier announcement that it would seek legal advice in relation to the letter of invitation issued by Aspire Rich Sdn Bhd. (Financial Daily)

PFCE: Sees good prospects in oil & gas industry following RTO exercise
PFCE (formerly known as APP Industries) hopes to be able to be profitable next year after the completion of a reverse takeover (RTO) exercise this year, which is expected to transform PFCE into one of the leading players in the oil and gas industry. The RTO will involve the injection of PFC Engineering Sdn Bhd, a locally established Bumiputera group of companies offering integrated engineering services for the oil and gas industry into PFCE. (Bernama)

Goh Ban Huat: Intends to develop land in Segambut
Goh Ban Huat (GHB) plans to venture into property development within the next 3 to 5 years. The company has 5.92ha of prime land located in Jalan Segambut, Kuala Lumpur, on which its manufacturing plant is built.GBH director Thor Poh Seng said the company  is currently doing some conceptual planning. However, he said the management feel that there is an oversupply of condominiums in Segambut and Mont Kiara. As such, he said the company will time its property development plans appropriately. (Financial Daily)

Telecommunication: Fight for cellular subscribers for home services will get tough
Experts said the fight  among cellular companies for subscribers in home services segment will only get tough when Maxis Bhd and Celcom Axiata Bhd are able to offer a complete products and that may take some time. Till then, they said Telekom Malaysia (TM) would continue to dominate the market. However, Maxis recently tested the ground by slashing its rates to RM118 a month for its 10Mbps offering (part of the home services package) and is said to have got “encouraging response.  The number of new adds is something Maxis is not willing to share but those in the know claim that Maxis' move to slash rates to below what TM is offering certainly had irked the incumbent, more so since Maxis is riding on TM's highspeed broadband (HSBB) network to offer the services. (StarBiz)

SOP: Commissions refinery and fractionation plant. Sarawak Oil Palms Bhd (SOP), which has ventured downstream in palm oil processing, has just commissioned its first refinery and fractionation plant as well as kernel crushing plant in Bintulu. Its fifth palm oil mill with a capacity of 60t/hr in Kemena, Bintulu would be operational by July 2012. The sixth palm oil mill in Baram, Miri is expected to be operational by the second half of 2013. (Source: The Star)

Affin: BEA stake not for sale. The Bank of East Asia (BEA) dispelled speculation that it plans to sell its 23.5% stake in Affin Holdings Bhd. BEA considers its shareholding in Affin a strategic investment and, in fact, plans to increase its interest to 25%.(Source: The Edge Financial Daily)

20120627 1000 Local & Global Economy Related News.

The issuance of an Islamic mega bank licence in Malaysia is to increase the international dimension of Islamic Finance in the Malaysian financial system and thus enhance Malaysia’s global economic and financial interlinkages with other parts of the world. Entities applying for such licences are required to meet all the existing rules and regulations set forth by Bank Negara Malaysia. A full licence will only be awarded once all legal and regulatory requirements are met. Applications are market driven and private sector led. (Bank Negara Malaysia)

The controversial plan by regulator Bank Negara Malaysia (BNM) to set up an Islamic mega bank using public funds could involve the purchase of an existing lender, Asian Finance Bank (AFB), said industry sources. The AFB is one of three foreign Islamic banks in Malaysia. AFB was incorporated in Nov 2005 and is backed by a consortium of shareholders — Qatar Islamic Bank (66.67%), RUSD Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain W.L.L (6.67%). It is understood that KWAP agreed to fund a due diligence on the takeover of AFB to the tune of US$1bn. The central bank has declined comment on the matter. (Malaysian Insider)

The new Malaysian banknote series will be issued into circulation from 16 July. The central bank said following the initial announcement in May, it has been engaging over the last few months with relevant stakeholders to facilitate a smooth introduction of the new banknotes series. (Bank Negara Malaysia)

Malaysia is ranked the safest of 19 upper-middle income nations in the world, according to the World Justice Project's Rule of Law Index 2011 report. Home Ministry secretary-general Datuk Abdul Rahim Mohd Radzi said Malaysia was also deemed the 12th safest country, faring better than the US and Britain. The Government Transformation Programme and Crime Reduction NKRA have received international recognition, he said. (Bernama)

The Customs Department has collected RM15bn so far this year, RM716m more than the amount for the same period last year, said its director-general Datuk Khazali Ahmad. Based on the current amount collected, Customs is confident of achieving the year's projected figure of RM33bn in taxes and duties compared with RM30.3bn last year. (Bernama)

Southeast Asian banks have witnessed relative improvement in the underlying credit fundamentals, especially when compared with their global peers, said Moody's Investors Service. (The Nation)

China plans to unveil new measures aimed at boosting the flow of its currency between Hong Kong and the mainland, with plans to relax the Rmb20,000 (US$3,142) daily conversion limit for Hong Kong residents amongst the initiatives, according to persons in the know. (WSJ)

Chinese Premier Wen Jiabao proposed a possible free trade pact between the Asian powerhouse and South American nations that make up the Mercosur regional trade bloc. (AFP)

China can achieve a 10% gain in exports and imports this year if the world economy doesn’t worsen further, commerce ministry spokesman Shen Danyang said, adding that trade growth had “sound momentum” in Jun. (Bloomberg)

Japanese Prime Minister Yoshihiko Noda’s bill to double Japan’s 5% sales tax passed the lower house of parliament by a vote of 363-96 after months of wrangling, intensifying a ruling party split that could threaten its majority. (Bloomberg)

Japan's June small business confidence index fell by 1.0 point to 46.2 in Jun from 47.2 in May. (Bloomberg)

Japan’s corporate service price index rose 0.1% yoy in May (0.2% in Apr), the second straight month of increase but below forecasts for an increase of 0.3%. (RTTNews)

South Korea said it would be forced to halt imports of Iranian oil from July because of European Union sanctions. It had also agreed on a free-trade pact with Colombia that is expected to be signed in 2H12. (AFP)

Indonesian President Susilo Bambang Yudhoyono has affirmed his commitment to renegotiating mining contracts that are disadvantageous to Indonesia. (The Jakarta Globe)

Thailand’s Ministry of Commerce is confident that exports will rise by 15% this year on clear signs of recovery in the automobile and auto-parts, electronics and appliances, and food industries. (Thai Financial Post)

Thailand’s cabinet agreed to extend the exemption of diesel from excise tax for another month, to 31 Jul from 30 Jun. (Bangkok Post)

The Thai government has called a meeting of nine ministries related to the economy today to discuss measures to deal with the looming impact of the eurozone debt crisis on the Thai economy. One of the issues that may be discussed is further implementation of the minimum wage hike. (Bangkok Post)

Thailand’s Monetary Policy Committee is expecting the annual inflation rate to stabilize at 3%, which is conducive to investment and is enough to handle impacts of the global economic crisis. (Thai Financial Post)

The Philippine budget deficit soared in May to PHP19.90bn, although Finance Secretary Cesar Purisima insisted the deficit was manageable, expressing confidence the full-year fund shortfall would stay within 2.6% of GDP, or PHP279bn. (Business Inquirer)

Philippine imports fell 13.7% yoy in Apr (-3.3% in Mar), with electronics falling 22.1% to US$1.32bn (US$1.69bn in Apr 2011). Exports increased by only 7.6% to US$4.64bn from US$4.31bn in Apr 2011, bringing the balance of trade to a deficit of US$135m, sharply lower than the -US$1.22bn in Apr 2011. (Business Inquirer)

Europe’s financial crisis isn’t affecting the ability of speculative grade US companies to meet debt obligations, keeping the default rate below the historical average, according to Moody’s Investors Service. (Bloomberg)

Fitch upheld the Netherlands' top 'AAA' credit rating as the country has a credible deficit reduction plan in place despite the collapse of the government and fresh elections, whilst Banca Monte dei Paschi di Siena, the world's oldest bank, may be forced to request over €3bn in state aid. (AFP)

The supervision of euro-zone banks should be transferred to a European supervisor, possibly the European Central Bank, in return for allowing the bloc's bailout fund to help with insuring deposits and financing the liquidation of failing lenders, the European Union's top officials proposed in a report. (WSJ)

US Republican and Democratic congressional leaders are weighing whether to delay automatic federal spending cuts until Mar 2013 from Jan 2013, according to a House aide and industry officials who were briefed on the discussions. (Bloomberg)

The lengthy spells many Americans are spending without work risk leaving a lasting scar of higher unemployment on the US economy and training programs are needed to avert the damage, the OECD said, adding that policies should be adopted to make higher-income Americans pay more in taxes to help boost the US economy. (Reuters, AP)

US Conference Board consumer confidence index fell to 62.0 in Jun from a revised 64.4 in May, undershooting consensus of 63.5. (Bloomberg)

The US S&P/Case-Shiller 20-city home price index gained 0.7% mom in Apr (a revised 0.7% in Mar), exceeding consensus of 0.4%, whilst on a yoy basis, the measure fell 1.9% (a revised -2.6% in Mar), better than consensus of -2.3%. (Bloomberg)

The US ICSC-Goldman store sales index gained 2.0% wow in the 23 Jun week (0.0% in the prior week), whilst on a yoy basis, the measure increased 2.7% (3.6% in the earlier week). (Bloomberg)

US state tax revenue rose only 4.5% yoy in 1Q12 (more than 10% in 1Q11), the 10th straight quarter of growth. (Reuters)

The US faces 20% odds of a return to recession, Standard & Poor's said, although it said a slow recovery remains the company's baseline forecast for the world's biggest economy. (Reuters)

The US net investment position declined last year by US$1.56tr, the biggest ever one-year drop, to -US$4.03tr, the largest shortfall on record, the Commerce Department said. (Reuters)

US businesses numbered 7.4m in 2010, down by 36,800 from the previous year. The decline between 2008 and 2009 was 168,000 establishments. Total employment was 112m in 2010, a decline of 2.5m workers. The drop from 2008 to 2009, at the height of the recession, was 6.4m employees. (Reuters)

20120627 0952 Global Market Related News.

Asia Stocks Fluctuate as Europe Concern Offsets U.S. Data (Source: Bloomberg)
Asian stocks swung between gains and losses as speculation the U.S. housing market is bottoming and China may step up efforts to support its economy tempered concern that Europe’s debt crisis is deepening as leaders of the stricken region prepare for another summit this week. Boral Ltd. (BLD), the Australian seller of building materials, slumped 4.4 percent after cutting its profit forecast. Japan Tobacco Inc. (2914), Asia’s largest cigarette maker by market value, climbed 2.2 percent as investors soughts shares of companies with earnings less tied to economic growth. Oracle Corp. Japan advanced 3.1 percent as its profit forecast topped estimates. The MSCI Asia Pacific Index (MXAP) was little changed at 113.21 at 9:56 a.m. in Tokyo, before markets in China and Hong Kong opened. The gauge fell 0.5 percent this year through yesterday amid concern that growth in the U.S. and China is slowing as Europe’s debt crisis spreads from the periphery to core countries like Spain and Italy.
“Markets have already priced in a lot of the bad news,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “All you need for a rally in equities is for the backdrop to become less bad. When the housing sector improves it has a strong trickle-down effect to the wider U.S. economy. But there’s still a struggle with what’s going on in Europe.”

No Second-Half Rally for China’s Stocks, Top Fund Manager Says (Source: Bloomberg)
China’s economy will probably stay in the “doldrums” in coming months, preventing a second-half rally for the nation’s equities, according to the country’s best-performing fund manager. The government will do just enough to prevent the world’s second-biggest economy from slowing further instead of taking more aggressive measures to boost growth, Yu Guang of Invesco Great Wall Fund Management Co. in Shenzhen, said in an e-mailed interview on June 21. Property, auto and household-appliance stocks may outperform even as the overall market stalls, said Yu, whose Core Competitiveness Fund has returned 25 percent this year, ranking it first among 714 China-based mutual funds, according to data compiled by Bloomberg as of June 25.
China’s economy grew 8.1 percent in the first quarter, the slowest pace in almost three years, as slowing global growth dragged on the nation’s exports. The Shanghai Composite Index (SHCOMP) has fallen 6.3 percent in June, poised to be Asia’s worst- performing benchmark index for the month, as a manufacturing slump and concern Europe’s debt crisis is curbing exports overshadowed the first cut in interest rates since 2008. The tumble in stocks pared the Shanghai gauge’s gain in 2012 to 1 percent. “Stocks will be range-bound in the second half of the year,” Yu said, declining to give equity-index forecasts or name any stock picks. “China’s economy will remain in the doldrums for a while, in line with the trend of the global economy. It’s difficult to see either a big decline or a big rally.”

Japan Stocks Drop as Rising Europe Yields Offset U.S. Home Data (Source: Bloomberg)
Japanese stocks declined for a fourth day after Italian and Spanish bond yields jumped at debt sales, overshadowing the slowest decline in U.S. home prices in more than a year. Canon Inc. (7751), which depends on Europe for almost a third of its sales, sank 2.6 percent. Keihin Corp. lost 2.3 percent after Deutsche Bank AG cut the partsmaker’s equity rating to “hold.” Osaka Gas Co. climbed for a second day after saying it aims for 10 times growth at its Chinese subsidiary by 2016. The Nikkei 225 Stock Average (NKY) fell 0.1 percent to 8,653.87 as of 9:33 a.m. in Tokyo, with volume 32 percent below the 30- day average for the time of day, according to data compiled by Bloomberg. Borrowing costs for Italy and Spain increased at debt auctions yesterday ahead of a summit of European leaders -- the 19th since the crisis began -- this week.
“Investors are finding it difficult to take positions,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., which oversees about $75 billion. “The U.S. is overcoming its structural problems of deteriorating home markets, but at the same time we don’t see signs of improvement in Europe’s debt crisis.”

U.S. Stocks Advance as Home Data Tempers Economic Concern (Source: Bloomberg)
U.S. stocks advanced, rebounding from yesterday’s selloff, as optimism about the housing market tempered concern about a worsening of Europe’s debt crisis. News Corp. rose 8.3 percent as Rupert Murdoch’s company said it’s considering splitting into two publicly held corporations. Apollo Group Inc. (APOL), the largest U.S. for-profit college chain, surged 10 percent after beating earnings and revenue estimates and raising its forecast. A measure of homebuilders in Standard & Poor’s indexes jumped 3.8 percent as housing prices dropped at the slowest pace in more than a year. The S&P 500 (SPX) rose 0.5 percent to 1,319.99 at 4 p.m. New York time. It tumbled 1.6 percent yesterday. The Dow Jones Industrial Average increased 32.01 points, or 0.3 percent, to 12,534.67. Volume for exchange-listed stocks in the U.S. was about 6 billion shares, or 12 percent below the three-month average.
“There are lots of variables at play,” said Keith Wirtz, who oversees $15 billion as chief investment officer for Fifth Third Asset Management in Cincinnati. He spoke in a phone interview. “People are looking at signs of stabilization in the housing market, there’s the European summit this week, it’s almost quarter end. It’s going to be a volatile week.”

Most European Stocks Drop on Spain Debt, U.S. Confidence (Source: Bloomberg)
Most European stocks declined as demand fell at a Spanish debt auction, U.S. consumer confidence sank to a five-month low and Germany criticized European Union proposals to address the financial crisis for putting too much emphasis on debt sharing. Infineon Technologies AG (IFX) tumbled the most in three years after cutting its sales forecast. Bayerische Motoren Werke AG (BMW) slid 2.3 percent as Citigroup Inc. downgraded the world’s biggest maker of luxury vehicles. Stagecoach Group Plc (SGC) gained 5.5 percent after earnings beat analysts’ estimates. The Stoxx Europe 600 Index (SXXP) fell 0.1 percent to 242.6 at the close of trading, as two shares declined for each that increased. The measure fluctuated between gains and losses at least 20 times today. The gauge has fallen 2.8 percent over the past four days as EU leaders prepared to begin a two-day summit in Brussels on June 28, the 19th meeting since the euro-region debt crisis broke out in early 2010.
“Stocks have ended in a soft manner today with clients holding back from taking on risk ahead of the EU summit later this week,” Ishaq Siddiqi, a market strategist at ETX Capital in London, wrote in note. “Worries that leaders are set to disappoint continue to grow, as Germany refrains from its stance on euro bonds.”

Emerging Stocks Rise From Three-Week Low on American Home Prices (Source: Bloomberg)
Emerging-market stocks rose from a three-week low after residential real estate prices in the U.S. fell less than expected, overshadowing concern about Europe’s debt crisis and a EU summit starting June 28. The MSCI Emerging Markets Index (MXEF) added 0.3 percent to 906.85 by the close in New York, snapping a three-day drop and rising from the lowest level since June 6 yesterday. Telecommunication companies led the advance as OAO Rostelecom (RTKM), Russia’s dominant fixed-line phone company, surged 1.9 percent to lift Russia’s Micex Index from a three-week low. Oi SA (OIBR4) rose in Sao Paulo while Cia Hering tumbled. The S&P/Case-Shiller index of property values in 20 U.S. cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010. The median forecast was for a 2.5 percent drop. European Union leaders will hold a two-day summit to find a solution to the debt crisis. Brent oil in London advanced for a third day.
“The Case-Shiller numbers are supporting the positive market trend for today and fit in with the general picture that the U.S. is doing better,” Daniel Lenz, the emerging markets chief strategist at DZ Bank AG in Frankfurt, said by phone today. “Markets like when things are a little better than expected. There is also some hope ahead of the summit, though we don’t expect a huge breakthrough.”

Treasuries Snap Loss on Speculation Manufacturing to Slow (Source: Bloomberg)
Treasuries snapped a loss from yesterday before a U.S. report that economists said will show orders for durable goods failed to make up for the worst four months since the recession. U.S. government securities returned 3.2 percent this quarter through yesterday, according to Bank of America Merrill Lynch indexes, driven by demand for the relative safety of Treasuries as economic growth ebbed and European governments struggled to pay their debts. The MSCI All-Country World Index of stocks handed investors an 8.9 percent loss. The U.S. is scheduled to sell $35 billion of five-year notes today. “I’m bullish,” said Tsutomu Komiya, who helps oversee the equivalent of $111.2 billion as an investor in Tokyo at Daiwa Asset Management Co., a unit of Japan’s second-biggest brokerage. “The economy is improving, but the growth rate is worse than expected. Demand is strong because Treasuries are the safe haven.”
Ten-year notes yielded 1.61 percent as of 9:40 a.m. in Tokyo, according to Bloomberg Bond Trader data. The record low yield was 1.44 percent set June 1. The price of the 1.75 percent note due in May 2022 was 101 7/32.

FOREX-Euro held down by receding EU expectations
LONDON, June 26 (Reuters) - The euro was pinned down near a two-week low against the dollar, as rising peripheral euro zone debt yields added to concerns that an upcoming European summit was unlikely to produce anything substantial to solve the region's crisis.
"There are vague proposals on the table for discussion towards a closer fiscal union but frankly it is tough to see anything concrete coming out of the summit," said Chris Walker, currency strategist at UBS.
"Given the markets are already bearish on the euro, there is a risk of a short squeeze, but that would be good opportunity to sell the euro."

Euro Remains Lower Against Yen Before Merkel, Hollande Meeting (Source: Bloomberg)
The euro was 0.4 percent from a one- week low against the yen before German Chancellor Angela Merkel and French President Francois Hollande meet today before a European Union summit. The 17-nation currency remained lower versus the dollar following a two-day decline amid concern the summit starting tomorrow will fail to push Europe toward a resolution of its debt crisis. The dollar maintained a loss against the yen from yesterday ahead of U.S. data this week that economists said will show consumer spending stalled. “We can’t really think of a plausible scenario where the euro makes sustained gains,” said Sean Callow, a senior currency strategist in Sydney at Westpac Banking Corp. (WBC), Australia’s second-biggest lender. “We don’t expect anything” from the EU summit.
The euro fell 0.2 percent to 99.16 yen as of 9:38 a.m. in Tokyo from the close in New York yesterday when it slid as much as 0.9 percent to 98.75, the lowest since June 18. It traded at $1.2487 after losing 0.6 percent over the prior two days to $1.2491. The dollar slid 0.1 percent to 79.41 yen following a 0.2 percent decline yesterday.

Yen Gains, South Korean Stocks Drop Before Europe Crisis Summit (Source: Bloomberg)
The yen strengthened for a third day and South Korean stocks fell before a European summit on the region’s debt crisis. Corn dropped for the first time in four days. Japan’s currency rose 0.2 percent versus the dollar and gained against 16 major peers as of 9:57 a.m. in Tokyo. South Korea’s Kospi Index (KOSPI) dropped 0.8 percent. Futures on the Standard and Poor’s 500 Index slipped 0.1 percent, with the benchmark U.S. equities gauge headed for a 6.3 percent decline this quarter. Corn slid 0.8 percent after surging the previous three days amid dry weather that has devastated crops.
Spanish and Italian bond yields jumped yesterday as German Chancellor Angela Merkel repeated her opposition to a shared debt burden in Europe before a meeting of the region’s leaders starting tomorrow. Data yesterday showed U.S. housing prices fell at the slowest pace since 2010, while a measure of consumer confidence slipped to a five-month low. In Japan, Prime Minister Yoshihiko Noda moved closer to passing a sales tax increase at the cost of dividing his party. “Investors are in sort of a stalemate,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages almost $100 billion. “We’ve seen numerous summits come and go. They usually deliver something but it’s often no more than the bare minimum.”

Consumer Confidence in U.S. Declines to a Five-Month Low (Source: Bloomberg)
Confidence among U.S. consumers dropped in June for a fourth consecutive month as mounting concern over jobs and incomes dimmed the outlook for spending. The Conference Board’s sentiment index fell to 62, a five- month low, from a revised 64.4 in May, figures from the New York-based private research group showed today. Another report showed home prices were stabilizing. The slide in confidence raises the risk that the slowdown in hiring revealed by last month’s jobs report will cause households to retrench, restraining the spending that accounts for about 70 percent of the economy. The weak labor market is overshadowing the benefit of the lowest gasoline prices in five months, one reason why companies like Ford Motor Co. (F) are keeping an eye on attitudes.
“The employment situation continues to weigh on consumer minds,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, who correctly forecast the confidence index. “Usually consumers react to falling gasoline prices by increasing their spending, but this time around it looks like they’re a little bit cautious.”

Congress Said to Consider Delaying Automatic Budget Cuts (Source: Bloomberg)
Republican and Democratic congressional leaders are weighing whether to delay automatic federal spending cuts until March 2013, according to a House aide and industry officials who were briefed on the discussions. The $1.2 trillion in automatic spending cuts over a decade, half of which would affect the Defense Department, are scheduled to begin in January 2013. At the same time, lawmakers must decide what to do about income tax cuts and other tax breaks scheduled to expire at the end of the year. Leaders in both chambers are discussing whether to propose a catch-all bill that would delay the automatic cuts, fund the government through March or later and temporarily extend the George W. Bush-era tax cuts and other tax laws, said the House aide and industry officials, who asked to speak on condition of anonymity.
“It is being seriously considered as one of the options and there is no doubt about that,” Steve Bell, the senior director of the Economic Policy Project at the Bipartisan Policy Center, said in an interview. The measure would follow a short-term stopgap spending bill to keep the government operating after the start of the new fiscal year on Oct. 1, the people said.

Home Prices in U.S. Cities Fall at Slowest Pace Since ’10 (Source: Bloomberg)
Residential real estate prices fell in April at the slowest pace in more than a year, adding to signs the U.S. housing market was firming. The S&P/Case-Shiller index of property values in 20 cities dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010, after decreasing 2.6 percent in the year ended March, the group said today in New York. The median forecast of 28 economists in a Bloomberg News survey projected a 2.5 percent drop. A turnaround in prices is a necessary step toward luring more buyers and sustaining demand for housing, which is starting to stabilize after precipitating the last recession almost five years ago. Record-low borrowing costs, due in part to Federal Reserve efforts to hold down long-term rates, may keep promoting home sales in the presence of an 8.2 percent unemployment rate.
“Housing has picked up since the middle of last year,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York, who correctly forecast the monthly gain in prices. “Sales have improved and the inventory of homes for sale has been falling, which has brought a bit more balance into the market and fed into a bit of stabilization of prices.”

Noda Victory on Japan Sales Tax Legislation Risks Party Majority (Source: Bloomberg)
Japanese Prime Minister Yoshihiko Noda’s biggest step yet toward winning a sales tax increase aimed at reining in the nation’s public debt came at the cost of alienating one-fifth of his party’s lower house lawmakers. While the chamber yesterday approved legislation to double the 5 percent levy by October 2015, 57 lawmakers in the ruling Democratic Party of Japan voted no, and former DPJ leader Ichiro Ozawa signaled he may leave. If he takes more than 50 followers with him, it could endanger the party’s majority. Noda, who called the rebellion “unfortunate,” now must hold together a deal with the opposition Liberal Democratic Party to win passage for the bill in the upper house. With the Diet session extended until Sept. 8, weeks of political wrangling may be in store for a country that has seen six prime ministers since 2006.
“Noda got the bill passed, which is what he wanted, but it came at a very high price,” said Koichi Nakano, a political science professor at Sophia University in Tokyo. “Now he has to decide whether to play hardball and expel the rebels, which could imperil the bill, or try to be more conciliatory and buy some time.”

Singh Takes on India Finance Role After Mukherjee’s Resignation (Source: Bloomberg)
Pranab Mukherjee resigned as India’s finance minister to vie for the presidency, prompting Prime Minister Manmohan Singh to take charge of the portfolio as he tries to revive a faltering economy. Singh will head the ministry until Mukherjee’s successor is appointed, Pankaj Pachauri, communications adviser to the prime minister’s office, said in New Delhi yesterday. Singh was finance minister in the 1990s, sparking an economic turnaround that now faces one of its sternest tests. Mukherjee, the ruling Congress party’s nominee for the presidential poll in July, quit earlier yesterday. Mukherjee departs with the government projecting record borrowing to plug its budget deficit and as political gridlock hampers efforts to spur investment and ease bottlenecks stoking elevated inflation. The veteran politician’s attempt on June 25 to halt a slump in the rupee by allowing foreigners to buy more bonds fizzled, leaving the currency close to its weakest level against the dollar as his three-year tenure ends.
Singh’s decision to refrain from appointing a successor immediately implies he “wants to keep the portfolio with himself for some time to push stalled reforms and lift the slowing economy in order to boost confidence” said Satish Misra, an analyst at the New Delhi-based Observer Research Foundation.

Singapore Homes Most Affordable as Rents Climb: Mortgages (Source: Bloomberg)
Shivram Anantharaman paid a monthly rent of S$2,650 ($2,069) until March. Now, he’s paying S$40 less every month after buying a three-bedroom condominium in Singapore’s East Coast region. “The clincher in Singapore is that monthly installments toward repayment of your loan are lower than what you would pay in rent,” said Anantharaman, a private banker at ICICI Bank Ltd., who took out a S$1.04 million mortgage for his S$1.3 million property late last year. “It’s one of the few countries in the world where that is possible,” because of the low interest rates, he said. Homebuyers like Anantharaman are taking advantage of mortgage rates at an all-time low in the Southeast Asian island- state, even as prices are almost at a record high and the government introduced measures to cool the property market. Home affordability in Singapore has risen to the highest in a decade because of historically low interest rates and flexible payment options available to buyers, according to Jefferies Group Inc.

Draghi May Enter Twilight Zone Where Bernanke Fears to Tread (Source: Bloomberg)
European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve. While cutting ECB rates may boost confidence, stimulate lending and foster growth, it could also involve reducing the bank’s deposit rate to zero or even lower. Once an obstacle for policy makers because it risks hurting the money markets they’re trying to revive, cutting the deposit rate from 0.25 percent is no longer a taboo, two euro-area central bank officials said on June 15. “The European recession is worsening, the ECB has to do more,” said Julian Callow, chief European economist at Barclays Capital in London, who forecasts rates will be cut at the ECB’s next policy meeting on July 5. “A negative deposit rate is something they need to consider but taking it to zero as a first step is more likely.”
Should Draghi elect to cut the deposit rate to zero or lower, he’ll be entering territory few policy makers have dared to venture. Sweden’s Riksbank in July 2009 became the world’s first central bank to charge financial institutions for the money they deposited with it overnight. The Fed rejected cutting its deposit rate from 0.25 percent last year. With Europe’s debt crisis damping inflation pressures and curbing growth, the ECB may feel the benefits outweigh the negatives.

Cyprus’s Sylikiotis in China to Explore Ground for Loan (Source: Bloomberg)
Cyprus hasn’t specified a figure for a possible rescue package it requested from euro-area countries yesterday, which could involve the International Monetary Fund, the east Mediterranean island’s finance minister said. “Neither ourselves nor the people we are talking to have ever raised the question of the amount,” Vassos Shiarly told reporters today. “It is a matter that will be determined in the process that will follow.” Negotiations will begin “as soon as Europe and ourselves are ready to negotiate,” he said, adding that the IMF’s involvement “is something that is being discussed at the moment”. Cyprus, which has been shut out of markets since May last year, is the fifth euro-area member to seek a European rescue after Greece, Ireland, Portugal and Spain. The euro area’s third-smallest economy has also been cut to junk by all rating companies.

Hungary Holds Interest Rate at EU’s Highest for 6th Month (Source: Bloomberg)
Hungary’s central bank left its benchmark interest rate at the European Union’s highest level as a surging forint and a looming recession balanced concern over the fastest inflation in the 27-member bloc. The Magyar Nemzeti Bank voted “overwhelmingly” to keep the two-week deposit rate at 7 percent today for a sixth month, after considering a proposal for a quarter-point cut, President Andras Simor told reporters in Budapest. That matched the forecast of all 27 economists in a Bloomberg survey. The government and central bank last week agreed on amendments to a central bank law to unblock bailout talks, stalled for seven months as lenders including the International Monetary Fund said the legislation threatened monetary-policy independence. Progress toward aid talks, along with the election of pro-bailout parties in Greece this month, helped the forint rally.
“The council will consider a reduction in interest rates if Hungary’s risk premium falls persistently and substantially and the outlook for inflation improves,” the rate-setting Monetary Council said in a statement.

Hollande Reality Makes French Debt Less Attractive (Source: Bloomberg)
During his first two weeks in office, President Francois Hollande saw French borrowing costs go in one direction, and that was down. Not anymore. The yield on the French benchmark 10-year bond advanced to 2.63 percent at 4:00 p.m. in Paris, up from a euro-era low of 2.071 percent on June 1. It was as high as 2.902 percent on May 15, when Hollande took office. The rate is at risk of rising further with French banks vulnerable to the region’s debt-ridden nations as economic growth stalls. Investors already demand more than 6 percent to buy 10-year Spanish securities and almost as much for similar Italian debt. While Hollande has sought to reassure investors in France’s 1.35 trillion-euro ($1.7 trillion) sovereign debt market by repeatedly pledging to cut France’s budget deficit, the financial turmoil to the south makes his task more difficult.
“France has been out of the spotlight, but once the sheer misery of Spain and Italy is figured in, the next target will be France,” said Bill Blain, a Newedge Group Ltd. strategist in London. “I’m seeing a very small number of international institutional players buying French debt. People are very nervous.”

King Is Pessimistic on Euro Crisis as Global Economy Teeters (Source: Bloomberg)
Bank of England Governor Mervyn King said his vote for more stimulus this month reflected his worries about a deteriorating global economic outlook at a time when he’s pessimistic that Europe’s debt crisis can be resolved. “What’s concerned me in the last several months, and why I voted for easing in policy, is the worsening in the position in Asia and other emerging markets,” King told lawmakers in London today. Another reason is that “my colleagues in the U.S. are more concerned than they were at the beginning of the year about what’s happening in the American economy. It’s not a comfortable position,” he said. King was defeated at this month’s policy meeting in a push to expand the bank’s bond-purchase program by 50 billion pounds ($78 billion) to 375 billion pounds, with a majority on the panel preferring no change. In the last six weeks, investor concern grew that a Greek election result may lead to its expulsion from the euro, while Spain asked for a bailout.
“I’m very struck by how much has changed” since the bank published forecasts on May 16, King said. “I am pessimistic, and I am particularly concerned because for two years now we’ve seen the situation in the euro area get worse, the problems have been pushed down the road.”

20120627 0951 Global Commodities Related News.

DTN Closing Grain Comments 06/26 15:10 : Corn Prices Still Revealing Bullish Weather Concerns (Source: CME)
Bullish weather concerns for pollinating corn continued to motivate traders Tuesday, but the corn market avoided a second straight limit-up day. Other grain markets either slumped or posted relatively minor gains. Outside markets were mixed, the U.S. dollar index was weaker and the Dow Jones Industrial Average was higher.

CropCAST Agricultural Weather Outlook : Major Driver - El Nino/Southern Oscillation (ENSO) (Source: CME)
Corn and soybean planting began very early this year and progressed at a near record pace thanks to record warmth across the central U.S.
Corn and soybean planting progressed well ahead of the 5 year average and much faster than last year’s pace, when heavy spring rains and melting snow cover slowed planting in the northern Plains and Ohio Valley.
CropCAST expects planted acreage for corn to increase from USDA’s March report, but soybean acreage to be near or slightly below USDA’s March estimate.

Pro Farmer: After the Bell Wheat Recap (Source: CME)
Chicago and Kansas City wheat futures saw a choppy day of trade, but ended with slight to moderate gains. Minneapolis enjoyed double-digit gains most of the day, with the exception being the front-month contract, which ended 27 cents lower amid liquidation. Wheat largely followed corn today, with late-session strength in the corn market pulling wheat higher.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 6 at 747, 8 1/4 off the high and 21 1/2 up from the low. December Wheat closed up 7 at 766 1/4. This was 21 3/4 up from the low and 6 1/2 off the high. September Chicago wheat traded higher into the close. Short covering in wheat was noted, following the gap higher open in corn this morning. Wheat futures traded lower to start the session on profit taking and news that India sold 200,000 tonnes of new crop wheat to the Middle East and rains were forecasted for drier areas of the Black Sea this week. Statistics Canada will release all wheat planting intentions tomorrow. Traders believe Canadian wheat planted acreage will decline. Friday's USDA Planting intentions are expected to show an increase in U.S. spring wheat plantings from the March estimate. September Chicago wheat made new highs for the move and pushed to the highest level since September and closed positive on the day on follow through support from the corn market. The market is now up 6 of the past 7 sessions. September Oats closed up 5 1/4 at 329 1/4. This was 4 1/4 up from the low and 17 1/4 off the high.

Pro Farmer: After the Bell Corn Recap (Source: CME)
Corn futures rallied into the close to finish near their highs. July corn closed 15 cents higher, while the September through July 2013 contracts ended with gains of 15 1/2 to 30 cents. Traders were again focused on building weather premium today as the 6-10 day forecast calls for heat to build in the Corn Belt with limited precip chances

Corn Market Recap for 6/26/2012 (Source: CME)
September Corn finished up 28 at 619 1/4, 3/4 off the high and 26 1/2 up from the low. December Corn closed up 29 1/4 at 623 1/4. This was 27 up from the low and 1 1/2 off the high. The corn market was trading sharply higher heading into the closing bell with December up 30 cents on the day. Corn bulls took profits midday on a slightly wetter 1 to 5 day weather forecast for parts of the Corn Belt but buyers reentered the market soon there-after. The afternoon 1-5 day update shows wetter conditions in northern Illinois, northern Indiana, and Wisconsin. The updated weather model also shows drier conditions for northeastern Missouri, central Illinois, and eastern South Dakota. Temperatures will reach triple digits in Central Illinois, Thursday and a warmer trend is expected for the central Midwest to finish out the week. December corn posted a new 9 month high for the move as market participants reduce new crop yield estimates ahead of the Grain Stocks and Planting Intentions report this Friday. September Rice finished up 0.09 at 15.03, 0.12 off the high and equal to the low.

Heat Wave Wilts Corn as Supplies Diminish Most Since 1996 (Source: Bloomberg)
Corn supplies in the U.S., the world’s biggest exporter, are declining at the fastest pace since 1996 just as a Midwest heat wave damages the world’s largest harvest for a third consecutive year. Stockpiles were probably 3.168 billion bushels (80.47 million metric tons) on June 1, 47 percent less than on March 1, the average of 22 analyst estimates compiled by Bloomberg shows. The worst Midwest drought in more than a decade is wilting a harvest that the U.S. Department of Agriculture says will be the biggest ever. The agency updates its inventory estimate June 29 and its production forecast two weeks later. Futures surged 23 percent since reaching a 20-month low June 15, and Morgan Stanley expects prices to advance another 12 percent to $7 a bushel in two months if the drought persists. The rally is boosting global food costs that the United Nations estimates dropped 14 percent from a record in February 2011 and widening losses for ethanol producers including Decatur, Illinois-based Archer Daniels Midland Co. “We have a potential disaster developing for the U.S. corn supply,” said Peter Meyer, the senior director for agricultural commodities at PIRA Energy Group in New York who cut his corn- crop forecast after surveying fields in Illinois, Indiana and Ohio last week. “This year may be the worst yet.”

COLUMN-Corn options outpace futures on crop fears
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
CHICAGO, June 26 (Reuters) - Traditionally, the Holy Grail for a grain trader was a limit move in your favor of the markets that you trade. And corn futures' limit-up surge on Monday on the back of hot and dry weather forecasts just as the crop enters its most rain-dependant development phase was certainly music to corn bulls' ears.
But the roughly 7 percent gains seen in corn futures prices Monday pale in comparison to the gains posted in the options arena, where $7 December corn calls surged by more than 100 percent in value to highlight how the options arena may offer outsized return potential should corn traders remain skittish about weather threats to the emerging crop.

Corn at 7-mth top on crop damage; wheat, soybeans fall
SYDNEY, June 26 (Reuters) - U.S. new-crop corn rose more than 2 percent to the highest since early November after corn quality deteriorated more than analysts expected, while wheat fell after touching a near nine-month high as traders locked in profits.
"We are seeing some profit-taking across wheat and soybeans after some very strong gains in the last few sessions," said Victor Thianpiriya, an agricultural commodity analyst at ANZ.

U.S. crops bake, raising fears of smaller yields
CHICAGO, June 25 (Reuters) - 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.
Updated forecasts at midday indicated good rains could move through the eastern Midwest by the weekend or early next week -- a big change from early morning outlooks that were bone dry through the next week to 10 says.

Spain drought hits EU's wheat, barley yield outlooks
BRUSSELS, June 25 (Reuters) - Persistent drought conditions in Spain led the European Commission's crop-monitoring unit to cut its forecast for the average yield of this year's EU soft wheat and barley crops.
The overall yield for the EU's main soft wheat crop was put at 5.60 tonnes per hectare for 2012, down slightly from 5.62 tonnes in the previous May forecast and 0.2 percent higher than in 2011.

Indonesians find campaign to curb rice hard to digest
JAKARTA, June 26 (Reuters) - After a hard morning's toil, most Indonesians like to refuel with a lunch that includes a generous helping of rice. But if it is a Tuesday, they will be out of luck at stalls in a suburb of Jakarta after the local mayor took the novel step of declaring it a "no rice day".
The move, part of a wider push to cut consumption as a step towards self-sufficiency in rice, has not gone down well with street vendor Toni, who said his customers have little appetite for alternatives to the staple grain.

Russia's Siberia rains ease, yields down in south
MOSCOW, June 26 (Reuters) - Rain is expected in Russia's southern agricultural regions in the coming days, although a dry spell persists in some regions of Siberia, where the harvest will start later, the state weather forecaster and an analyst said on Tuesday.
Logistical constraints mean little of Siberia's wheat is exported, so a drought there is unlikely to have a major effect on export volumes, unlike the spring drought in the southern breadbasket, where the winter wheat harvest is under way and rain is expected to help spring crops.

China's Wen signs accords, eyes Argentina's corn
BUENOS AIRES, June 25 (Reuters) - 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.
Argentina signed a deal with China on corn exports earlier this year, raising market expectations that Argentine corn would soon start heading to the world's most populous country.

Sugar, coffee firm, buoyed by weak dollar
LONDON, June 26 (Reuters) - Arabica coffee, raw sugar and cocoa futures on ICE edged up, supported by a weaker dollar and firmer financial markets, with sugar buoyed by delays in shipments in top producer Brazil. Arabica coffee futures extended gains after Monday's rise of nearly 2 percent, supported by concern that the Brazilian rains may have caused damage to the current crop's quality.

Cheaper coffee helps Egberts take on Kraft
LONDON/AMSTERDAM, June 26 (Reuters) - Cheaper arabica beans and ambitious goals have given Dutch group D.E. Master Blenders 1753 , maker of Douwe Egberts, a lift as it tries to overtake rival Kraft  to become the second largest player in the coffee world.
It has the freedom and war chest to take on Kraft and emulate world No 1 Nestle  as it invests in its one-cup Senseo system, looks to expand outside Western Europe and perk up instant coffee output.

Vietnam June coffee exports surge to 3.17 mln bags
HANOI, June 26 (Reuters) - Vietnam's coffee exports in June are set to surge to 190,000 tonnes, or 3.17 million bags, from 67,300 tonnes in June last year, well above market expectations, the Agriculture Ministry  said on Tuesday.
The estimated volume, compared with 204,000 tonnes exported in May, would bring coffee shipments in the first half of 2012 to 1.09 million tonnes, or 18.17 million 60-kg bags, up 26.5 percent from the same period last year, the ministry said in its monthly report.

Thai rubber intervention plan lags, China sales eyed
BANGKOK, June 26 (Reuters) - Thailand has bought only a fraction of the 200,000 tonnes of rubber sheet it planned to purchase under a government intervention scheme and is now looking for sales to China to help prop up prices, the deputy agriculture minister said.
The government had approved a 15 billion baht ($471 million) budget in January to buy rubber from farmers in a bid to push up unsmoked rubber sheet (USS3) prices to above 120 baht per kg. But prices have continued to fall with the current 88 baht per kg even lower than January's 115 baht.

Cameroon robusta coffee exports plunge 46 pct in May
YAOUNDE, June 25 (Reuters) - Cameroon robusta coffee exports hit 11,755 tonnes by the end of May since the season started in December, falling 46.26 percent from the 21,872 tonnes exported during the same period a year ago, figures National Cocoa and Coffee Board showed on Monday.
The national regulator NCCB as well as industry body Cocoa and Coffee Interprofessional Board blamed the drop in exports on farmers stockpiling produce because of a fall in prices on the world market.

Rain helps cocoa in west Ivory Coast, hurts in east
ABIDJAN, June 25 (Reuters) - Abundant rains last week in Ivory Coast benefited cocoa crops in  western regions in the last stage of the mid crop but triggered concerns in eastern regions about black pod disease, farmers and analysts said on Monday.
A five-month drought from November to March has lowered output expectations for the world's top cocoa producer's April-to-September mid-crop harvest. But abundant rains have returned in recent months.

Brazil rains to increase sugar output -Datagro
LONDON, June 25 (Reuters) - Wet weather in centre-south Brazil this month will boost sugar production in 2012/13 and mean that the harvest will go on longer than initially expected, a leading sugar analyst said on Monday.
The rain has delayed harvesting and led to a big lineup of vessels at Brazilian sugar ports, underpinning raw sugar futures prices on ICE, which are trading at below two-month highs.

Oil Trades Near Two-Day High on Economic Reports, Iran (Source: Bloomberg)
Oil traded near the highest level in two days in New York before reports that may show the U.S. economy improving and as Iran signaled that crude exports will fall as much as 30 percent starting next week. Futures were little changed after advancing as much as 0.3 percent. Iran’s exports will “gradually” decline because of maintenance on oil fields and reservoirs just as a European Union embargo begins, Deputy Oil Minister Ahmad Ghalebani said in Moscow yesterday. Brent crude traded near a one-week high in London. U.S. durable goods orders and pending homes sales probably rose in May, according to Bloomberg News surveys before data today. Oil for August delivery was at $79.34 a barrel, down 2 cents, in electronic trading on the New York Mercantile Exchange at 10:24 a.m. Sydney time. The contract yesterday rose 15 cents, or 0.2 percent, to $79.36, the highest close since June 22. Prices have fallen 23 percent this quarter, the biggest drop since the final three months of 2008.
Brent oil for August settlement slid 21 cents to $92.81 a barrel on the London-based ICE Futures Europe exchange, after surging 2.2 percent yesterday. The European benchmark’s premium to West Texas Intermediate was at $13.47, from $13.66 yesterday. Ghalebani said that “maybe, yes” Iran’s field maintenance was timed to coincide with the EU sanctions. The ban on oil imports from the second biggest exporter in the Organization of Petroleum Exporting Countries starts on July 1 as part of Western pressure to halt the Persian Gulf nation’s nuclear program.

Oil forecasters play snakes and ladders
--John Kemp is a Reuters market analyst. The views expressed are his own.--
LONDON, June 25 (Reuters) - With just a few days to go, researchers from Barclays and Deutsche Bank have emerged as the most accurate oil price forecasters in the first half of 2012, seizing the crown from 2011 champions Goldman Sachs, based on Brent prices since the start of January.
Back in December, Barclays  and Deutsche  were among the most bullish forecasters, predicting front-month Brent futures prices  would average $115 per barrel in 2012, up from $111, and well above the mean forecast of $105.

Oil- Oil rises towards $92 ahead of EU meeting
LONDON, June 26 (Reuters) - Oil climbed towards $92 per barrel as the prospect of a decline in U.S. crude stockpiles offset concern that a meeting of European leaders would fail to resolve the region's debt crisis.
"Markets appear to be in risk-off mode, pricing in for disappointment ahead of the EU summit," ANZ analysts led by Mark Pervan said in a note.
"We think any progress could result in a commodity market rally, particularly in oil prices."

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.

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.

Indonesia refinery operations unaffected by workers' protest
JAKARTA, June 26 (Reuters) - Hundreds of workers at Indonesia's Balongan refinery held a protest on Tuesday but it did not affect operations at the 125,000 barrels per day (bpd) plant, state energy firm PT Pertamina said.
The protest in Balongan and Jatibarang, in West Java, was staged by contractors who demanded to be promoted to full staff at Pertamina, officials speaking for the company said.

20120627 0951 Soy Oil & Palm Oil Related News.

Pro Farmer: After the Bell Soybean Recap (Source: CME)
Soybean futures were briefly firmer today, but ended near session lows to finish mostly 10 1/4 to 14 1/4 cents lower. Profit-taking was the center of traders' attention today following yesterday's sharp gains. Choppy outside markets provided traders little concrete direction, although investors are nervous as they don't expect this week's meeting among euro-zone leaders to provide an immediate solution to the bloc's debt worries.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished down 10 3/4 at 1456 1/4, 23 1/4 off the high and 6 1/4 up from the low. November Soybeans closed down 11 3/4 at 1413 3/4. This was 7 1/2 up from the low and 25 off the high. August Soymeal closed down 4.9 at 425.2. This was 4.1 up from the low and 8.8 off the high. August Soybean Oil finished down 0.39 at 51.06, 0.68 off the high and 0.15 up from the low. Soybeans slipped lower towards the tail end of the trading session. The November soybean contract was trading down 12 cents near the close. The soybean complex saw profit taking ahead of the USDA Grain Stocks and Planting Intentions report on Friday. Market participants believe the USDA will likely increase soybean planted acreage from their March intentions. The afternoon 1-5 day weather update shows wetter conditions in northern Illinois, northern Indiana, and Wisconsin. The updated weather model also shows drier conditions for northeastern Missouri, central Illinois, and eastern South Dakota. November soybeans posted a new contract high and new high for the move but closed in the lower end of its daily range.

VEGOILS-Palm oil futures retreat ahead of EU summit
SINGAPORE, June 26 (Reuters) - Malaysian crude palm oil futures eased as investors turned sceptical ahead of a European leaders summit later this week that looks unlikely to present concrete measures to solve the region's debt crisis.
"Market is trading in a tight range today, indicating traders were cautious and chose to stay at the sidelines ahead of the EU summit later in the week," said a dealer with a foreign commodities brokerage in Malaysia.

Brazil new-crop soy sales stay strong - Celeres
SAO PAULO, June 25 (Reuters) - Brazilian soybean producers have begun selling the 2012/13 crop earlier than ever before with 31 percent of next season's output already taken, four months before planting starts, local grains analysts Celeres said on Monday.  
Strong soybean prices and a weak real against the dollar have induced local growers to lock in forward sales of the current and future crop at record levels, Celeres said.