Monday, July 9, 2012

20120709 1812 FCPO EOD Daily Chart Study.

FCPO closed : 3153, changed : +23 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : weakening, buyer taking profit.
Support : 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270 level.
Comment :
FCPO closed recorded gains with slowing down volume changed hand. Soy oil currently recording substantial gains by more than 1.5% snapping back last Friday losses while crude oil price currently trading higher.
Price traded higher on weather concern factor with higher export and lower inventories speculation ahead of tomorrow official June 2012 MPOB data and release of 2 cargo surveyor exports figures for the period of 1 ~ 10 on July 2012. News wise, Reuters reported Bangladesh delays tender for 1,500 tonnes of palm olein.
Technical chart wise, market is still trading in a pullback correction upside biased market development.
When to buy : buy at support or weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120709 1734 FKLI EOD Daily Chart Study.

FKLI closed : 1620 changed : -4 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : turned downward, buyer taking profit.
Support : 1620, 1610, 1600, 1590 level.
Resistance : 1630, 1640, 1650, 1660 level.
Comment :
FKLI closed declined lower for the 1st time after 6 days upward climbs with lesser volume exchanged almost on par with cash market that also closed marginally lower. Last Friday U.S. markets closed recorded loss and today Asia markets ended in negative zone while European markets currently sliding lower.
World market sentiments turned negative on slower growth concern after U.S. reported fewer jobs created, Premier Wen said China economy face "relatively large" downward pressure, recorded lower than median estimate CPI data and severe fall in Japan machinery orders while in Europe, Spain's 10 years bond yield jumps to 7% and Germany reported better than forecast exports.
FKLI daily chart study adjusted to suggesting a pullback correction upside biased market development with last 2 candle sticks formed a bearish harami similar pattern.
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.

20120709 1722 Regional Markets EOD Daily Chart Study.

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

20120709 1659 Crude Palm Oil Related News.

VEGOILS: Global weather concerns lift palm oil futures DBYU2 FCPOc3 - RTRS 09-Jul-2012 12:57
U.S. dry weather, Indian monsoon short fall stirring markets Weather woes come as Asian festival season starts in July Coming up: Malaysia exports, MPOB stocks data on July 10
By Niluksi Koswanage
KUALA LUMPUR, July 9 (Reuters) - Malaysian crude palm oil futures rose nearly one percent on Monday on worries that unfavourable weather from the United States to India could crimp oilseed production and tighten global cooking oil supply during an Asian peak demand season.
A shortfall in India's monsoon rains is the latest weather concern to hit edible oil markets as summer-sown crops such as soybeans will be affected, forcing the world's largest edible oil importer to buy more alternative palm oil. (Full Story)
Palm oil, which has lost 0.5 percent so far this year, is also now rising due to the drought in the United States, which is hurting soybean yields.
"Palm oil is taking a free ride. It will take more of the market from soybean oil especially during the festival season on the Asian side," said a trader with a foreign commodities brokerage.
By the midday break, benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange rose 0.9 percent or 29 ringgit to 3,159 ringgit ($991) per tonne.
Traded volumes stood at 7,712 lots of 25 tonnes each, lower than the usual 12,500 lots.
Technicals, however appeared negative. Reuters analyst Wang Tao said the tropical oil will revisit a July 5 low of 3,095 ringgit, as it has completed a rebound from the June 14 low of 2,838 ringgit.
Traders are expecting a slew of Malaysian export data for the first ten days of July on Tuesday to show strong festival demand for the edible oil.
The Asian festival season starts with the Muslim observance of Ramadan, which begins around July 20, where a month of fasting in the day is followed by feasts in the evening.
The market is also on the lookout for industry regulator Malaysian Palm Oil Board's June palm oil stocks that will show a 14-month low due to strong demand chasing modest production growth.
Some analysts are on the watch for a brewing El Nino weather condition, which brings droughts to palm oil producing Southeast Asia. Malaysia-based OSK Investment Bank raised its average price assumption to palm oil to 2013 to factor in the weather anomaly.
Brent crude climbed toward $99 a barrel on Monday as failed labour talks in Norway stoked worries of a total output shutdown, while hopes China would ease monetary policy and improve fuel demand also supported prices. O/R
Other vegetable oil markets also focused on the weather in Asian trade. U.S. soyoil for July BOc1 delivery rose 1.6 percent and the most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange rose 0.5 percent.

20120709 1652 Global Market & Commodities Related News.

GLOBAL MARKETS: Asian shares slumped as sluggish U.S. jobs data and cooling inflation in China deepened worries about slowing global economic growth and reinforced risk aversion ahead of a meeting aimed at defining steps to shore up Europe's banks. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.9 percent after rising 1.6 percent for the first week of the third quarter.European stock futures pointed to a broadly flat open, following a steep sell-off in the previous session in the aftermath of sluggish U.S. jobs data, ahead of a batch of economic data out of China this week. U.S. stocks fell about 1 percent on Friday as another month of tepid jobs growth underlined fears the economy was stalling, though not to the point where more economic stimulus from the Federal Reserve was imminent.

China June inflation cools further to 2.2 percent
China's annual consumer inflation cooled to 2.2 percent in June, from May's 3.0 percent, official data showed on Monday, giving Beijing more scope to ease monetary policy to support growth without stoking upward price pressures.

Dismal U.S. hiring shows economy stuck in low gear
U.S. employers hired at a dismal pace in June, raising pressure on the Federal Reserve to do more to boost the economy and dealing another setback to President Barack Obama's reelection bid.

FOREX: The euro steadied after dropping to a two-year low against the dollar early, with little expected to emerge from a meeting of euro zone financial leaders later in the session. The single currency traded as low as $1.2225 in thin early trade as stops were triggered, but recovered to $1.2283.

FOREX-Euro steadies after hitting two-yr lows
TOKYO, July 9 (Reuters) - The euro steadied after dropping to a two-year low against the dollar early on Monday, with little expected to emerge from a meeting of euro zone financial leaders later in the session.  
The financial meeting will focus on follow-up steps to European leaders' plan revealed last month to shore up indebted states and banks, but the latest talks may only highlight the initial deal's limitations.

Argentine corn harvest slowed by moisture -gov't
Argentina's 2011/12 corn harvest made slow progress in the last week due to excess moisture that dates back to flooding in May, the Agriculture Ministry said on Friday.

GRAINS: U.S. new-crop corn jumped 3 percent to a contract high, leading strong gains for the grain complex as unfavorable weather across the United State's Midwest persists, threatening crop yields further. Front-month corn touched a high of $7.59-3/4 a bushel, not far from a record high of $7.99-3/4 set in June 2011 and spot-month soybeans rose to $16.48-3/4 a bushel, just below the all-time high of $16.63 notched in July of 2008.

Norway oil pay talks fail again, shutdown looms
Negotiations between Norway's offshore oil workers and employers over pay and pensions failed for a third time on Sunday, risking a total shutdown of oil and gas production from Tuesday, both sides involved in the talks said.

Strikers leave Argentina's biggest oil field
Striking workers have lifted a two-week protest at Argentina's biggest oil field, Cerro Dragon, that forced owner Pan American Energy to cut output, a union leader said on Friday.

OIL: Brent crude climbed toward $99 a barrel as failed labour talks in Norway stoked worries of a total output shutdown, while hopes that China would ease monetary policy and improve fuel demand also supported prices. Brent rose 54 cents to $98.73 a barrel after settling up a slight 0.4 percent last week in choppy trade. U.S. crude was up 33 cents to $84.78 after falling 0.6 percent last week.

Euro Coal-Physical prices ease with oil, gas, power
LONDON, July 6 (Reuters) - Physical prompt coal prices fell on Friday as energy markets responded to weak economic data, losing momentum that had driven  a rally earlier in the week.
September coal deliveries to Europe (ARA) were trading $1.5 a tonne below levels seen at the peak of this week's rally.

COLUMN-Iron ore defies commodity slowdown, for now
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, July 9 (Reuters) - It's not hard to find bearish views on the steel industry, given renewed recession in Europe and slower growth in China, but these seem in contrast to the resilience in the iron ore market.
China's steel production and consumption is maturing and unlikely to witness rapid growth in the future, while Europe's steel industry is in terminal decline and three-quarters of its capacity may be shut in the next two decades, Wolfgang Eder, the head of European steel body EUROFER said recently.

Low aluminum price seen hurting Alcoa profit
NEW YORK, July 6 (Reuters) - Aircraft and automobile makers may be using more aluminum, but as long as the metal's price remains near two-year lows, Alcoa Inc  will struggle, analysts said on Friday.
The average earnings estimate has been cut over the past week from 15 cents per share and Wall Street now expects Alcoa to post only a 5-cent per share second-quarter profit on Monday, according to Thomson Reuters I/B/E/S. That compares with 32 cents per share in the same quarter last year.

European crisis weighs on Aluminium Bahrain sales
ABU DHABI, July 8 (Reuters) - Aluminium Bahrain's   output edged up 1.7 percent in the first half of 2012 but sales were almost flat as weak economic growth in Europe dampened demand in the first quarter, Alba said on Sunday.
Production at one of the world's largest aluminium smelters was 443,533 tonnes in the first half of the year, against 436,256 tonnes in the same period of 2011, a company statement said.

Iron Ore-Shanghai rebar slips, iron ore traders wary
SHANGHAI/SINGAPORE, July 9 (Reuters) - Shanghai steel futures dropped for a second day on Monday as demand in the world's top steel consumer remained tepid, although Beijing may come up with more steps to revive growth after consumer and producer prices eased more than expected.
China's annual consumer inflation slowed to a 29-month low of 2.2 percent in June, while producer prices eased even faster to a 31-month trough.

COLUMN-Iron ore defies commodity slowdown, for now
LAUNCESTON, Australia, July 9 (Reuters) - It's not hard to find bearish views on the steel industry, given renewed recession in Europe and slower growth in China, but these seem in contrast to the resilience in the iron ore market.
China's steel production and consumption is maturing and unlikely to witness rapid growth in the future, while Europe's steel industry is in terminal decline and three-quarters of its capacity may be shut in the next two decades, Wolfgang Eder, the head of European steel body EUROFER said recently.

Australia's P.Hedland June iron ore shipments to China down
SYDNEY, July 9 (Reuters) - Iron ore shipments to China from Australia's Port H edland f ell b y 7 .6 p ercent in June from the previous month, according to port authority data.
Shipments to China retreated to 16 . 09 million tonnes from 17.42 million tonnes in May, the data showed. Iron ore shipments were still up 16 percent on June last year.

Honbridge picks pipeline for Brazil iron mine -paper
RIO DE JANEIRO, July 7 (Reuters) - Hong Kong's Honbridge Holdings Ltd  plans to build a 420-kilometre (260-mile) pipeline to ship iron-ore from a mine in Brazil's Minas Gerais state to a port on the country's Atlantic coast, the Estado de Minas newspaper reported on Saturday.
The pipeline will carry a slurry of water and fine, processed iron ore to the port of Ilheus in Brazil's Bahia state, as part of Honbridge $3.6 billion Sul America de Metais (SAM) project, the paper said, citing Minas Gerais officials.

BASE METALS: London copper was steady as data showing China's inflation cooled in June triggered hopes for policy easing by the top consumer of the metal, offsetting a bleak U.S. jobs report that drove down prices in the prior session. Three-month copper on the LME edged up 0.1 percent to $7,538.75 per tonne, snapping three sessions of losses. The most-active October copper contract on the SFE fell 1.1 percent to 55,130 yuan per tonne.

PRECIOUS METALS: Gold steadied around $1580 an ounce, failing to find direction on uncertainty over whether the U.S. jobs data would prompt any imminent policy action. Spot gold was trading around $1581.65 an ounce. U.S. gold futures contract for August delivery was up 0.2 percent to $1,581.20.

METALS-LME copper steady after China inflation data
SHANGHAI, July 9 (Reuters) - London copper was steady on Monday as data showing China's inflation cooled in June triggered hopes for policy easing by the top consumer of the metal, offsetting a bleak U.S. jobs report that drove down prices in the prior session.
China's annual consumer inflation came in at 2.2 percent, from May's 3.0 percent, leaving room for Beijing to ease policy without stoking upward price pressures and helping most commodities recover from previous session's losses triggered by the dismal U.S. jobs data.

PRECIOUS-Gold extends losses to 3rd session after US data
SINGAPORE, July 9 (Reuters) - Gold inched down on Monday, extending losses to a third session, on a lack of conviction the U.S. Federal Reserve would take measures to stimulate the economy anytime soon even after a disappointing jobs report.
U.S. non-farm payrolls increased by just 80,000 in June, lower than a forecast of 90,000, raising pressure on the Fed to do more to help the frail recovery.

Baltic index up on better rates for bigger vessels
July 6(Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose Friday as rates for both capesize and panamax vessels improved.
The overall index, which reflects the daily freight market  prices for capesize, panamax, supramax and handysize dry bulk  transport vessels, was up 1.7 percent to 1,157 points. The index has risen 15.2 percent on week.

20120709 1116 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares, euro slump on growth worry after weak US jobs
TOKYO, July 9 (Reuters) - Asian shares slumped after sluggish U.S. jobs data deepened worries about slowing global economic growth, and reinforced risk aversion ahead of China inflation figures and a meeting aimed at defining steps to shore up Europe's banks.
"The focus has clearly shifted to economic fundamentals," said Park Suk-hyun, an analyst at KTB Securities, noting that the market will likely face pressure with a raft of Chinese data due throughout the week.

COMMODITIES-Oil, metals crumple on US jobs data; grain rally stalls
NEW YORK, July 6 (Reuters) - Commodities tumbled on Friday by their most this year, eroding their second successive weekly gain after dismal U.S. jobs data fueled worries about the global economy and raw materials demand.
"Overall, it was another lackluster report but should not change forecasts for Fed action in any meaningful way," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C.

OIL-Oil falls as tepid US jobs growth disappoints
NEW YORK, July 6 (Reuters) - Brent crude prices fell sharply o n F riday after a report showing tepid U.S. jobs growth in June reinforced concerns that a sluggish global economy will curb demand for petroleum.
"People were looking for something better, some indicator that may show we're crawling out of this trough," said Nigel Gault, chief U.S. economist at IHS Global Insight. "But everything here says we're still in it."

NATURAL GAS-US natural gas drops nearly 6 pct, recoils from $3
NEW YORK, July 6 (Reuters) - U.S. natural gas futures fell nearly 6 percent on Friday after briefly hitting $3 for the first time since January as pressure from a forecast for cooler weather and reduced power demand outweighed a bullish government storage report.
"After an initial spike in prices, the prompt contract appeared to have hit very strong resistance at $3 (per million British thermal units) and the August contract in turn fell by 10 cents an hour after the (storage) data release," Citi analysts said in a note.

EURO COAL-Physical prices ease with oil, gas, power
LONDON, July 6 (Reuters) - Physical prompt coal prices fell on Friday as energy markets responded to weak economic data, losing momentum that had driven  a rally earlier in the week.
September coal deliveries to Europe (ARA) were trading $1.5 a tonne below levels seen at the peak of this week's rally.

20120709 1028 Local & Global Economy Related News.

Bank Negara Malaysia's (BNM) international reserves amounted to RM428.8bn (US$134.2bn) as at 29 Jun 2012, compared to RM417.3bn (US$136bn) as at 15 Jun 2012. The reserves position was sufficient to finance 9.4 months of retained imports and was 4.3 times the short-term external debt. (BNM)

Foreign funds and local retail investors sold more Malaysian equities in Jun than they bought despite the benchmark FBM KLCI Index moving up about 2% during the month, according to figures provided by Bursa Malaysia. Local institutions, however, were net buyers of equities to the tune of RM1.8bn. Jun trade statistics show that foreign institutions sold RM8.9bn worth of shares in Jun and bought RM8.1bn. Local retail investors sold RM4.8bn and bought RM4.4bn. Local institutions sold RM13.2bn and bought RM15bn. (Malaysian Insider)

The government will consider revising the price of RON95 petrol if the world oil price drops to a certain level, Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said. The government could not simply reduce the price of RON95 petrol although the world price of crude oil has dropped. The government needed to study the matter first before making a decision to reduce the price of RON95 as it was subsidised fuel, he said. As of 7 July, the price for the subsidised RON95 is still maintained at RM1.90 per litre and the government still bears the subsidy of 53 sen per litre for RON95, he said. The government had until now, borne RM6.6bn in subsidies for RON95, he added. The price of RON95 would remain at RM1.90 a litre even if global fuel prices were to increase, he said. (BT, Malaysian Insider)

Malaysia aims to become an initial public offering (IPO) centre to enable it to compete with other capital markets on a global scale. The Capital Market Task Force will come up with a blueprint to further enhance Malaysian capital markets, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said Saturday. The task force will hold its first meeting soon, he said. About 10 members from the relevant sectors will be included in the task force. “After the formation of the committee, we will organise labs. There will be seven or eight labs to touch on the various parts of the capital markets," he said. The Securities Commission (SC) will be the secretariat of the task force. (Bernama, The Star)

The unemployment rate in Malaysia has dropped from 3.1% to 2.9% so far this year, said Deputy Finance Minister Datuk Donald Lim Siang Chai. On other matter, he said the level of investor confidence in Malaysia was reflected in the surge of inflowing foreign direct investments (FDI). According to the United Nations Conference on Trade and Development (Unctad) 2012 World Investment Report, FDI in Malaysia had leapt to US$11.97bn (RM35.7bn) compared with US$9.1bn (RM28.8bn) in 2010 and US$1.45bn (RM4.59bn) in 2009. The Ministry of International Trade and Industry reported that the manufacturing sector accounted for the largest share of FDI and that 72% of total trade came from Asian countries. (The Star)

Malaysia is on track to exceed last year's foreign direct investment (FDI) inflow of US$11.97bn, said International Trade and Industry Minister, Datuk Seri Mustapa Mohamed. "We know it’s tough, but on the basis of what we have been receiving in terms of applications, enquiries and approvals so far, interest continues to be strong,” he said. According to Unctad report, Malaysia was ranked third for FDI inflow into Asean last year, with Singapore and Indonesia positioned at the top with US$64bn and US$18.91bn respectively, while Thailand occupied fourth spot at US$9.57bn. (Bernama)

US President Barack Obama expanded trade complaints against China, accusing the nation of imposing unfair taxes on American vehicles. (Bloomberg)

US nonfarm payrolls increased 80,000 in Jun (a revised 77,000 in May), undershooting consensus of 90,000. The unemployment rate remained at 8.2%, matching May and the consensus, whilst average hourly earnings grew 0.3% mom (a revised 0.2% in May), overshooting consensus of 0.2%. Private payrolls advanced 84,000 in Jun after gaining 105,000 the prior month. Expectations were for a 100,000 increase, whilst the average workweek edged up to 34.5 hours from 34.4 in May. The market median forecast was for 34.4 hours. (Bloomberg)

China Premier Wen Jiabao said downward pressure on the economy is still “relatively large” and the government will intensify fine-tuning of policies even as measures taken since April are helping stabilize a slowdown. (Bloomberg)

China will have difficulty meeting its 10% trade growth target this year, Vice Premier Wang Qishan said, adding that China would import more high-tech equipment, manufacturing components, energy and consumer goods, while helping small- and medium-sized exporters cope with a credit squeeze. (Reuters)

ECB President Mario Draghi said any future role the institution might play in supervising euro-area banks must not endanger its independence, asserting that “there should be no contamination between the two areas and we’ll certainly find ways to make sure that this is so.” (Bloomberg)

The IMF will reduce its estimate for global growth this year on weakness in investment, jobs and manufacturing in Europe, the US, Brazil, India and China, Managing Director Christine Lagarde said. (Bloomberg)

Italian Prime Minister Mario Monti denounced unnamed "northern" EU states for taking positions that contributed to spikes in borrowing costs for Italy and Spain. (AFP)

The Italian government agreed on a series of measures to slash public spending by €26bn over three years, including major payroll cuts, with much of the savings to be found in the health and public administration budgets. (AFP)

Greece's newly elected prime minister Antonis Samaras said he would ramp up privatizations, close down dozens of state agencies and overhaul the country's dysfunctional public sector. (WSJ)

Senior euro-zone finance officials, working to create a single overarching bank supervisor for the euro-zone, are settling on a framework that would create a new agency reporting to the ECB to police the largest banks in the currency union, people involved in the discussions said. (WSJ)

Japan’s leading economic index rose to 95.9 in May (95.6 in Apr), exceeding consensus expectations of a decline to 95. (RTTNews)

Japan’s government could run out of money by the end of Oct, halting all state spending including salaries, pensions and unemployment benefits, because of a standoff in parliament that has blocked a bill to finance the deficit, warned Finance Minister Jun Azumi. (Reuters)

Indonesia’s balance of payments in 2Q12 continues to be at a deficit but has declined compared to the first quarter with US$1.03bn, said Anny Ratnawati, Deputy Minister of Finance. (IFT)

Car sales in Indonesia rose to 534,876 units in the first six months compared to 417,672 in first half of 2011. A total of 101,639 cars were sold in Jun, a record high, according to data from the Association of Indonesian Automotive Industries (Gaikindo). (Jakarta Globe)

In Vietnam, Deputy Prime Minister Vu Van Ninh said the country may miss its 6% growth target and the central bank told lenders to cut borrowing costs on existing loans to help businesses. (Bloomberg)

Vietnam’s economy will continue to face difficulties in 2H12 although it is gradually regaining stability, forecast the National Financial Supervisory Commission who also predicted that average inflation in the last six months would not exceed 0.5% a month and the accumulated rate at year-end would be less than 6% (The Saigon Times)

The Philippines’ foreign reserves inched higher to US$76.3bn in Jun from US$76bn in May. (Bloomberg)

In the Philippines, the central bank said it will prohibit foreign funds from investing in its special deposit accounts to stem gains in the peso. (Bloomberg)

20120709 1028 Malaysia Corporate Related News.

Businessman Datuk K.K. Eswaran will emerge as the major shareholder in Asian Broadcasting Network Sdn Bhd (ABN), holding between 60%-70% equity stake in the new digital cable television company that is set to launch its services soon. Those in the know say that an announcement on the purchase of shares in ABN by Eswaran is likely to be made over the next few days. Eswaran has been linked to ABN when the company announced plans to roll out digital cable TV services. The link is the two common directors that Nilamas Sdn Bhd and Pinehill has. They are former top civil servants Tan Sri Mohamad Noor Abdul Rahim and Datuk Nik Mohd Amin Nik Abu Bakar.The digital cable TV venture was first parked in Nilamas Sdn Bhd, which got the five-year licences to offer the services. For the digital cable TV offering, the set-up cost is expected to be more than RM2bn over a five-year period and the company is looking to fund the venture via a 40:60 equity-debt combination. It has Motorola Mobility of the United States as its main technical partner and Fibrecom as its backhaul provider. The company has signed several agreements with content providers. ABN has set up a broadcasting centre in Puchong and it aims to offer affordable pay-TV services with some 100 channels at launch, and over 200 channels within two years of operations. It is also wiring up parts of the country with coaxial fibre as part of its last-mile fibre connectivity to enable users to subscribe to its digital TV services. (Starbiz)

MMC Corp Bhd is considering the privatisation of its 62.82%-owned subsidiary Aliran Ihsan Resources Bhd. Both MMC and Aliran had notified Bursa Malaysia of this intention. Aliran's market capitalisation is at RM463m based on its last closing price. Its other significant shareholders are Lembaga Tabung Haji, Effective Strategy Sdn Bhd and Public Dividend Select Fund based on its reported holdings on its annual report. (Starbiz)

Flat steel producers will meet with the Ministry of International Trade and Industry (Miti) this week to discuss some policy changes that could possible shape a new landscape for the sector. The recommendations of the Boston Consulting Group (BCG) will be discussed at the meeting. BCG had presented its recommendations to the Economic Council, chaired by the prime minister, on 19 Jun 2012. (Financial Daily)

Hua Yang Bhd is looking forward to another year of impressive sales and earnings growth, says group CFO May Chan. It plans to launch projects with a combined gross development value (GDV) of RM815m for its current financial year ending Mar-2013. Chan says this will more than double the RM400m GDV of properties launched by Hua Yang in its previous financial year. The bulk of Hua Yang's sales in FY2013 will be from its Klang Valley developments, namely Phase 4 of One South in Seri Kembangan (GDV of RM200m), new leasehold service apartments in Shah Alam (GDV of RM175m) and Desa Pandan (GDV of RM160m). Presently, the group has an undeveloped land bank of 766 acres which has an estimated GDV of RM2.4bn across the Klang Valley, Johor, Perak and Negri Sembilan. Concerning dividend payouts, Chan says the group usually pays out 25% of net profit as dividends. For FY2012, the group has proposed a gross first and final 15sen DPS, which translates to a net dividend payout ratio of 30% of net earnings. “This is the highest ever dividend payout”, says May. (Starbiz)

“The A380 is our latest flagship aircraft offering new levels of comfort, luxury and convenience for long-haul travel,” said MAS group CEO Ahmad Jauhari Yahya. Although not a magic wand that will instantly turn the ailing airline into profitability, the A380s will go some way in improving the airlines operating profits in the longer run. The A380 aircraft are more efficient as they fly more passengers at lower costs. Ahmad Jauhari had revealed that MAS had a target of returning to profitability by 2014 through plans such as drastic cost per ASK reduction by 20% and to increase RASK by 10%. On it talks with Ministry of Finance to sell and lease back its six new A380s and two new A330s from a SPV, Ahmad Jauhari said he expected the deal to be finalised within two months. (Star Biz)

Canada’s Bombardier is in talks with AirAsia about a more densely packed 160-seat version of its Cseries jet, in a surprise bid to loosen the stranglehold held by Airbus. “We’ve got Bombardier’s chief executive Pierre Beaudoin brought us a very interesting product for a 160-seat Bombardier and we’re looking at that,” Tan Sri Tony Fernandes said. Fernandes said talks were also continuing with Airbus over the purchase of at least 50 more A320 jets with another 50 options, a potential order of US$4bn. (Financial Daily)

Malaysia Airlines (MAS), currently the only carrier providing daily direct full service evening frequencies between Kuala Lumpur and Mumbai, Chennai, Bengaluru and Hyderabad, will introduce new daytime frequencies effective Sept 1. MAS had identified the vast growth potential in the Indian routes. (Malaysian Reserve)

Felda Global Ventures Holdings Bhd (FGV) is in talks with the relevant parties and is optimistic of entering the African market early 2013. Group president Datuk Sabri Ahmad said Africa would be challenging but the business expansion would be crucial for FGV's eight-year plan - to grow eight times by 2020. He said FGV was already providing plantation management advise to plantation in Sierra Leone. One of the strategies FGV has in mind is to enter the African nations by building oil mills first. Sabri said as land in Asean was getting scarce, Africa would be important to the group. (StarBiz)

Aside from expansion of its core business in oil palm plantation, Felda Global Ventures Holdings Bhd's fully-owned subsidiaries are also looking beyond the Malaysian shores. Felda-Johore Bulkers Sdn Bhd (FJB) chief executive officer Azman Ahmad said the bulking unit was considering expansion into other Asean countries and Africa. However, such plans are only viable if FJB has its own cargo vessels and facilities for shipping oils. FJB is the world's largest vegetable oil terminal with 495 storage tanks and a 863,000 tonne storage capacity at any one time. Currently, it handles 40% of Malaysia's total palm oil exports. Felda Global Ventures group president Datuk Sabri Ahmad said the group was "now in the first phase, looking at Asean to become the regional champion." Felda's Delima Oil Products Sdn Bhd now exports 10% of its cooking oil products and Sabri said the group hoped to raise the export bulk to 30% within the next three years. (StarBiz)

Maxis has introduced an exciting new Home Wireless Internet plans offering more value for money package in line with the growing needs of heavy wireless data users. In a statement, Maxis said the improved plans offer customers double the quota with a total of up to 48GB at no additional monthly fees. Head of Maxis Home Ebru Dorman said: "We are giving our customers enhanced plans, delivering peace of mind while downloading during off-peak hours. The Maxis Home Wireless Internet plans include the 4GB plan at RM59 per month, 20GB at RM99 per month and 48GB plan at RM169 per month. From July 1, existing Home Wireless Internet customers will be automatically upgraded to enjoy the additional quota starting from their next bill cycle, without any extra charges. (Bernama)

Tissue paper manufacturer NTPM Holdings Bhd is investing about RM30m in 2012 and 2013 to grow its business in the country, with plans to expand it's presence in the southern region, and in Sabah and Sarawak. NTPM's MD Lee See Jin said the expansion exercise includes setting up a production line at its plant in Nibong Tebal this year, and establishing warehouses in Sabah and Sarawak next year. The company already acquired a fiveacre site in Sabah and another site in Johor, where warehouses will be built. “About RM15m is for the new tissue paper production line, to be set up this year, to increase our production capacity by another 30 tonnes per day. This will raise the total tissue paper production capacity per day to 285 tonnes.“The line should be ready for operations in early 2013,” he says. (Starbiz)

With many new IPTV players expressing interest in entering the TV broadcasting industry, sports content is often touted as “killer content” to increase viewership and subscription. However, a recent study by global research firm Nielsen suggests that sports many not be that big a game changer after all. If statistics are to be believed, more Malaysians watched movies rather than sports via TV in April this year, in stark contrast to the often-held belief that sports is a key factor to achieve a large subscription base. “Based on target audience aged four and above, an average of 9,000 viewers have seen sports genre programmes on all released channels per minute per programme for the month of April, Nielsen said. This represents less than 0.1% of the total population of over 20m viewers in the country. Astro’s subscribers, aged four and above, an average 7,000 viewers watched sports content per minute per programme for the month of April. Last year, about 6,000 viewers watched sports content. In the same survey, 45,000 viewers watched movies in April. Drama series attracted 44,000 viewers during the same month. (Malaysian Reserve)

Gabungan AQRS focuses on PPP projects
Gabungan AQRS Bhd, a construction outfit that is en route to a Main Market listing end-July, has set its focus on government-initiated public-private sector partnership (PPP) under the 10th Malaysia Plan. Its CEO Alvin Ng said Gabungan would not only look at the available PPP projects but also try and initiate its own PPP projects. (FinancialDaily)

Bombardier swoops on AirAsia at Silverstone summit
Canada’s Bombardier is in talks with AirAsia about a more densely packed 160-seat version of its C-Series jet, in a surprise bid to loosen the stranglehold on Asia’s largest low-cost carrier held by European giant Airbus. AirAsia founder and Formula One boss Tan Sri Tony Fernandes discussed the proposal with Bombardier chief executive Pierre Beaudoin during preparations for yesterday’s British Grand Prix at Silverstone, the two company leaders told Reuters on the eve of the Farnborough Airshow. (FinancialDaily)

Allianz hopes to sustain double-digit earnings
Allianz Malaysia Bhd hopes to sustain its double-digit earnings for this year amid uncertainty in global economic growth. Chief executive officer, Jens Reisch, said that the company is growing in the lower double-digit at the moment and aims to outperform the market and its peers, supported by the low penetration of life insurance. (Malaysian Reserve)

Perodua sees up to 25% sales growth in Sarawak
Perusahaan Otomobil Kedua SB (Perodua) is targeting 18%-25% growth in sales of its vehicles in the next few years in Sarawak, helped by improved purchasing power and infrastructure. Managing director Datuk Aminar Rashid Salleh said the company sold 7,263 vehicles in Sarawak in the first six months of this year, comprising 3,280 Viva, 2,487 Myvi and 1,496 Alza units, up 3-4% over the same period last year. (BT)

More spark for power sector soon
Malaysia’s power sector, which has been grappling with inconsistent gas supply in the first half of the year, is expected to see brighter days now that issues are steadily being resolved. Energy Commission chief executive officer Datuk Ahmad Fauzi Hasan said the country’s electricity demand is expected to sizzle, with annual growth ranging between 3-4% until 2020. (BT)

China company wins RM230m deal
OSK Property Holdings Bhd has awarded a RM230m contract to Beijing Urban Construction Group (BUGG) to redevelop The Atria, which is worth RM1bn. The developer is reconstructing The Atria in Damansara Jaya, Selangor, building two 16-level SOFO (Small Office Flexible Office) suites and a four-storey retail podium. OSK Property bought The Atria a popular neighbourhood shopping centre, in 2007 for RM75m. The building was established in the 1980s. (BT)

MAS: MASkargo commences freighter flight to Colombo
MASkargo Sdn Bhd, the freight unit of Malaysia Airlines, has launched its first A330-200 freighter flight to Colombo, Sri Lanka. In a statement last Friday, MASkargo said that the new freighter was scheduled to fly into Bandaranaike International Airport from here every Friday and back  in  the following day. Its senior vice-president,  Mr  Jamaludin Ismail, said  that MASkargo foresees a huge potential for it to grow in this market with Sri Lanka's impressive GDP of 7.9% in 1Q 2012. (Bernama)

UEM Group: Extends MD/CEO contract
The board of directors of conglomerate UEM Group has extended the employment contract of the company's group MD/CEO Datuk Izzaddin Idris for another three years effective July 7. Izzaddin, an accountant by training, sits on the board of UEM Land Holdings and Plus Malaysia as well as ACWA Power International, a Saudi-based independent water and power producer. (StarBiz)

ECM Libra: Lim Kian Onn ups stake
ECM Libra Financial Group Bhd's co-founder and major shareholder Lim Kian Onn has raised his stake in the financial services company with the acquisition of 5.2m shares from the market in recent days, filings to the stock exchange showed. He now has a 9.81% direct stake and 0.54% indirect stake in the company. (StarBiz)

WCT: Extends timeframe for acquisition of Timor Barat
WCT and the parties involved had extended the timeframe to Aug 15 to fulfill the conditions precedent to its acquisition of Timor Barat Properties Sdn Bhd. In filings with Bursa Malaysia, RHB Investment Bank, on behalf of the company, said the parties had mutually agreed through a letter dated June 26 to extend the timeframe from July 13. (StarBiz)

Tiong Nam Logistics: Mega logistics REIT on the cards
The major shareholder of Tiong Nam Logistics, a leading transport and logistics company, is exploring a real estate investment trust (REIT) that could involve the warehouses and properties  that  the company  has leased out for logistics purposes,  according to source. Should the proposal come to fruition, the result would be the largest logistics REIT with a potential valuation of over RM1.0bn. The financial executive says the bulk of the assets to be injected into the proposed REIT, which is slated for a listing next year, is to come from Ong Yoong Nyock and his wife Yong Kwee Lin’s (the major shareholder of Tiong Nam Logistics with a 15.24% stake) privately held businesses. Maybank Investment Bank is said to have won the mandate to handle the listing of the REIT. (The Edge Weekly)

Bursa Malaysia: Plugs loophole in property deals
After Ho Hup Construction and Malton resolved out of court a lengthy dispute involving a lucrative 60-acre piece of land, it has come to light that the authorities have plugged a loophole so that listed companies have greater control over assets held at the subsidiary level. The move is seen as a way of ensuring that the Ho Hup-Malton fiasco does not happen again. To this end, Bursa Malaysia amended the Listing Requirements to beef up corporate governance involving listed companies that assign away their development rights  – “all or substantially all its rights, benefits or control in an assets”. (The Edge Weekly)

Fajarbaru: Enters new phase of growth
Fajarbaru Builder Group is moving into property development after having been in the construction business for more than 38 years.  The group’s MD and CEO, Datuk Low Keng Kok, says that it is a natural progression for any construction company to go into property development. In the last three year, Fajarbaru has spent RM77m on purchasing a total of 12.6 acres in Sentul, Puchong and Melaka. The group plans to launch properties with a gross development value of at least RM850m on the land. Low says  he will launch  property projects in Sentul and Puchong by next year. (The Edge Weekly)

Petra Energy: In talks on RSC job
Petra Enegry is in talks with Canada-ased Coastal Energy Co on the prospect of participating in the risk service contract (RSC) that Petronas has awarded to the latter for marginal fields developments locally. When contacted, top officials of Petra Energy confirmed the talks but declined to furnish details,  acknowledging that nothing has been firmed up yet. (Financial Daily)

Aliran Ihsan Resources: May be privatized by MMC Corporation
MMC Corporation is considering the privatisation of its 62.8%-owned subsidiary Aliran Ihsan Resources. Both MMC and Aliran had notified Bursa Malaysia of this intention Friday and, in view of this, both had also requested a suspension in the trading of their shares on Monday for the whole trading day. Aliran's market capitalisation is at RM463.3m based on its last closing price. Its other significant shareholders are Lembaga Tabung Haji, Effective Strategy Sdn Bhd and Public Dividend Select Fund based on its reported holdings on its annual report. (StarBiz)

Ideal Jacobs: Could see the entry of new shareholder?
Ideal Jacobs could see the entry of new shareholders after its major owner and directors actively pared down stakes in the company earlier last month. In filings with Bursa Malaysia between May 31 and June 4,  its major shareholder, US-based Ideal Jacobs Corp (IJC), and directors Meng Bin and Hing Kin Tat disposed of a total of 21.6m shares or 18.0% stake in the company. The disposals by Meng and Hing were deemed interest, via shares transacted by their spouses. IJC disposed of 12.2m shares in the local unit, paring down its stake to 30.4% from 40.6% while group CEO Meng reduced his deemed interest to 22.9% from 27.0%. Meanwhile, Hing sold his entire deemed interest of 4.5m shares, equivalent to a 3.7% stake in Ideal Jacobs. (Financial Daily)

Oil & Gas: Coastal Energy signs contract with Petronas
Coastal Energy Co has entered into a small field risk service contract (RSC) with Petroliam Nasional Bhd (Petronas) for the development and production of petroleum from the Kapal, Banang and Meranti cluster of small fields offshore Peninsular Malaysia. Coastal (with 100% equity interest under the small field RSC) would be the operator of the cluster fields. In accordance with the RSC, the company is also finalising an arrangement to allow a Malaysian company to participate in the contract for 30.0% to 40.0% equity interest. According to Coastal's website, the company would provide the upfront development capital, undertake the development drilling and production of the fields. Petronas will remain the owner of the project. (StarBiz)

20120709 1010 Global Market Related News.

Asia FX By Cornelius Luca - Sun 08 Jul 2012 17:14:59 CT (Source : CME)
The foreign currencies open little changed ahead of the Chinese economic data after the worse than expected nonfarm payrolls report sent the European and commodity currencies in a tail spin on Friday. While disappointing, this report is unlikely to tip the Fed's hand to further help the deteriorating US economy. After all, the Fed is running out of bullets. The short-term outlook for most of the European and commodity currencies is sideways with additional downside risk. The medium-term outlook for most of the foreign currencies is bearish. The LGR short-term model is short on the European currencies and yen.  Good luck!
US: The non-farm payroll employment rose by only 80,000 jobs in June, below expectations for an increase of 100,000 jobs. The report for May was revised to +77,000 jobs from 69,000 jobs originally reported, and the report for April was revised to +68,000 jobs from 77,000 jobs. The unemployment rate remained unchanged at 8.2%.
Canada: Building permits rose 7.4% in May after contracting -4.4% in April.
Canada: The unemployment rate slipped to 7.2% in June from 7.3% in May.
Canada: The Ivey PMI fell to 55.3 in June from 60.5 in May.

Today's economic calendar
    China: Consumer Price Index in June
    China: Producer Price Index in June
    Japan:  Machinery orders in May
    Japan: Merchandise trade balance for May
    Japan: Eco watchers survey

Asia Stocks Drop as U.S., Japan Data Fuels Growth Concern (Source: Bloomberg)
Asian stocks fell for a third day amid concern slower growth is damaging earnings after Premier Wen Jiabao said China’s economy faces “relatively large” downward pressure and Japanese machinery orders fell more than expected following a disappointing U.S. jobs report. Komatsu Ltd. (6301), a Japanese maker of construction equipment, lost 3.1 percent. BHP Billiton Ltd. (BHP), the world’s biggest mining company, slid 1.6 percent as metals prices dropped. Iluka Resources Ltd. (ILU) tumbled 18 percent after the Australian miner said revenue will miss estimates. Chinese developers traded in Hong Kong may be active after Wen pledged to stabilize home prices. The MSCI Asia Pacific Index (MXAP) declined 0.8 percent to 117.68 as of 9:40 a.m. in Tokyo before markets in China and Hong Kong opened. Four stocks dropped for each that rose. The gauge has fallen 8.8 percent from this year’s high in February amid concern economic expansion is faltering in China and the U.S. as Europe’s debt crisis deepens.
“Long-term growth issues remain,” said Masahiko Ejiri, a senior fund manager in Tokyo at Mizuho Asset Management Co., which oversees $39 billion. “I’m negative on the macro-economic environment and I’m staying defensively positioned. There needs to be more stimulus from authorities to address slowing growth.”

Japan Stocks Fall on U.S. Jobs, Japan Machinery Orders  (Source: Bloomberg)
Japanese stocks fell for a third day after the U.S. added fewer jobs than expected, raising concern the world’s largest economy is slowing, and as a report showed Japan’s machinery orders in May fell more than expected. Nissan Motor Co. (7201), a carmaker that counts North America as its biggest market, slid 1.6 percent. Komatsu Ltd. (6301), a construction equipment maker, sank 3.1 percent. Daiei Inc. tumbled 6.8 percent after the retailer posted a first-quarter operating loss. Inpex Corp., the nation’s top oil explorer by market value, slid 2.2 percent after crude prices fell. The Nikkei 225 Stock Average (NKY) fell 1 percent to 8,934.64 as of 10:07 a.m. in Tokyo, with volume more than 20 percent below the 30-day average. The broader Topix (TPX) Index lost 0.8 percent to 765.74, with more than two shares falling for each that rose.
“Positive expectations toward the U.S. economy are falling off,” Tomomi Yamashita, a senior fund manager at Shinkin Asset Management Co. in Tokyo, which oversees $6.6 billion. Japan’s machine orders are “enormously bad. The global economy is moving in bad direction.” Japan’s machinery orders, an indicator of capital spending, fell 14.8 percent in May from the previous month, the Cabinet Office said, Economists had been expecting a 2.6 percent decline. The nation’s current-account surplus was the smallest in May since at least 1996.

U.S. Stocks Fall for Week as Jobs Data, ECB Damp Optimism  (Source: Bloomberg)
U.S. stocks fell for the week, after the Standard & Poor’s 500 Index reached a two-month high, as jobs data heightened concern about a slowing economy and Europe’s efforts to tame its debt crisis disappointed investors. Industrial and financial stocks lost the most in the S&P 500 in the holiday-shortened week, sinking more than 1.2 percent, as eight out of 10 industries in the benchmark index retreated. JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC) and General Electric Co. (GE) led declines in the Dow Jones Industrial Average. Netflix Inc. (NFLX) surged 20 percent after an analyst said the company’s online audience exceeds cable and TV networks. The S&P 500 lost 0.6 percent to 1,354.68 for the week, trimming its gain for the year to 7.7 percent. The Dow dropped 107.62 points, or 0.8 percent, to 12,772.47. Global stocks surged the previous week, with the S&P 500 rallying 2 percent, amid optimism that an agreement by European leaders would help contain the region’s debt crisis.
“The jobs report is the single most important economic statistic and unfortunately it’s not showing signs of health, which is weighing down on stocks,” said Lawrence Creatura, who helps oversee $363.6 billion as a Rochester, New York-based fund manager at Federated Investors Inc. “Europe has become a multi- year yo-yo of increasing expectations and subsequent disappointment.”

European Stocks Advance for Fifth Week; Arkema Rallies  (Source: Bloomberg)
European stocks rose for a fifth week as investors bet central banks would add to measures to stimulate economic growth, with the Stoxx Europe 600 Index paring some gains on concern that risks to a recovery remain. Arkema SA (AKE) jumped 15 percent after FT Alphaville reported the French maker of specialty chemicals and additives received takeover approaches. GKN Plc (GKN), the British maker of parts for Airbus SAS airplanes, surged 15 percent after buying Volvo AB’s aircraft-engine unit. The Stoxx 600 climbed 1.3 percent to 254.4 this week, for the longest stretch of gains since January. The benchmark measure has rallied 8.8 percent from this year’s low on June 4 after policy makers, meeting in Brussels last month, eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy.
“Monetary easing by the U.K., China’s anticipated rate cut and the lingering good sentiment after the EU summit supported the markets,” said Manish Singh, the London-based head of investment at Crossbridge Capital, which has more than $2 billion under management. “There’s an accepted view that bad news is also good news. So bad economic data made some investors think there’s help on the way.”

U.K. Stocks Drop as U.S. Jobs Report Misses Estimates  (Source: Bloomberg)
U.K. stocks dropped from a two-month high as a report showed that the U.S. economy added fewer jobs last month than economists had estimated. Rio Tinto Group declined 2.8 percent as commodity producers retreated. Aviva Plc (AV/) rose 1.2 percent after selling more shares in Delta Lloyd NV than previously planned. The FTSE 100 Index (UKX) lost 30 points, or 0.5 percent, to 5,662.63 at the close in London. The gauge has still added 1.7 percent this week, its biggest weekly gain since the beginning of June as the Bank of England increased its bond-buying program and surveys of manufacturing in economies from China to the euro area beat economists’ estimates. The broader FTSE All-Share Index also dropped 0.5 percent today, while Ireland’s ISEQ Index slipped 1.6 percent.
“The U.S. numbers are disappointing, not just at the headline level, but also at the private employment level,” said Gerard Lane, a strategist at Shore Capital Group Ltd. in Liverpool, England. “The news is not bad enough to lead to quantitative easing, and it’s not good news.” A U.S. Labor Department report today showed that employers in the world’s largest economy hired fewer workers in June than economists had forecast. Payrolls rose 80,000 last month after increasing a revised 77,000 in May, the release showed. Economists had projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. The unemployment rate remained at 8.2 percent.

U.S. Yield Is 11 Basis Points From Low on QE3 Outlook  (Source: Bloomberg)
Treasury yields were 11 basis points from the record low on speculation the Federal Reserve will start a third round of bond purchases to sustain the economic expansion following a smaller-than-forecast June jobs gain. “The Fed is likely to ease further,” Jan Hatzius, the chief economist at Goldman Sachs Group Inc. in New York, wrote in a report yesterday. The company is one of the 21 primary dealers that underwrite the U.S. debt. The central bank bought $2.3 trillion of securities in two rounds of so-called quantitative easing, known as QE1 and QE2, from 2008 to 2011 to support the economy. U.S. payrolls rose by 80,000 last month, the Labor Department reported July 6, versus 100,000 projected by economists. “Friday’s data will bring QE3,” said Kim Youngsung, the head of fixed income in Seoul at Samsung Asset Management Co., South Korea’s largest private bond investor with the equivalent of $98.8 billion in assets. “Everybody wants to buy U.S. Treasuries” as a haven, he said. “The price will go higher.”
Benchmark 10-year yields were little changed at 1.55 percent as of 10:04 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.75 percent security due in May 2022 was 101 27/32. The all-time low yield was 1.44 percent set June 1. A basis point is 0.01 percentage point.

FOREX-Euro stays weak as market awaits U.S. jobs data
LONDON, July 6 (Reuters) - The euro stayed close to a five-week low against the dollar, a day after an interest rate cut by the European Central Bank further dampened the common currency's appeal and as the market awaited key U.S. jobs data.
"If non-farm payrolls are strong enough to suggest there will be no QE from the Fed, the dollar will strengthen. If they are weaker then the dollar will fall as the Fed will just be playing catch-up with the rest of the world," said ING head of currency strategy Chris Turner.

Aussie Dollar Weakens as Stock Declines Sap Yield Demand  (Source: Bloomberg)
Australia’s dollar fell against most of its major peers as Asian stocks extended a global rout and amid concerns China’s economy is slowing, sapping demand for higher-yielding currencies. The Australian and New Zealand currencies dropped on July 6 after a report showed U.S. jobs growth last month was weaker than economists expected. China’s Premier Wen Jiabao said downward pressure on the nation’s economy is still “relatively large,” the official Xinhua News Agency said yesterday. China will report a series of economic figures this week, beginning with inflation data today that showed consumer prices rose 2.2 percent in June from a year earlier.
“In the near term, we could expect to see the Australian dollar continuing to come lower in what may be a fairly risk- averse market environment,” said Ray Attrill, global co-head of foreign-exchange strategy at National Australia Bank Ltd. (NAB) Wen’s comments “play to the view that when we get the latest China activity numbers this week, they may disappoint to the downside.” The so-called Aussie lost 0.3 percent to $1.0186 as of 11:34 a.m. in Sydney. It fell as much as 0.5 percent to 80.96 yen, the weakest since June 29, before trading 0.4 percent lower at 81.05 yen. New Zealand’s dollar slid 0.2 percent to 79.59 U.S. cents. The so-called kiwi dropped 0.3 percent to 63.35 yen after touching 63.30, the lowest this month.

Euro Touches 2-Year Low Before Finance Ministers Meet  (Source: Bloomberg)
The euro touched its lowest level in two years before regional finance ministers gather in Brussels today to discuss crisis-fighting measures adopted by heads of government at a summit last month. The 17-nation currency weakened versus most of its 16 major counterparts before a bill sale in Italy this week. The yen advanced against all of its most-traded peers after Japan released trade data for May and as Asian stocks extended losses in global equity markets from last week, boosting demand for haven assets. Australia’s dollar fell for a second day after Chinese Premier Wen Jiabao said downward pressure on the economy is still “relatively large.” “The risk around the finance ministers’ meeting is that we see more cracks appearing in European unity and perhaps a delay in implementation of the measures agreed on at the summit,” said Mike Jones, a Wellington-based currency strategist at Bank of New Zealand Ltd. “That’s taking some toll on the euro.”
The euro earlier slid to as low as $1.2251, the weakest since July 2010, before trading at $1.2281 as of 9:12 a.m. in Tokyo, 0.1 percent lower than the close on July 6. The shared currency lost 0.3 percent to 97.65 yen. The yen gained 0.2 percent to 79.52 per dollar. The so-called Aussie declined 0.1 percent to $1.0205.

Most-Accurate Forecasters See Euro Bottom  (Source: Bloomberg)
The world’s most-accurate foreign- exchange strategists say the worst is over for the euro this year, putting them at odds with traders who see more pain as the region’s economy shrinks and the sovereign debt crisis deepens. Led by Wells Fargo & Co. and Westpac Banking Corp. -- which correctly called the euro’s weakness last quarter -- the five best firms as measured by Bloomberg expect Europe’s 17-nation common currency to end the year at about $1.26, up from $1.2291 last week. That’s above the $1.24 median estimate in a survey of 55 strategists by Bloomberg News. After sliding in April and May, the euro’s drop slowed in June against a basket of currencies tracked by Bloomberg as European Union leaders approved measures making it easier for Spain and Italy to obtain aid, setting the stage for greater fiscal cooperation in a region where five nations have sought bailouts.
While strategists are optimistic, derivatives show traders are about the most bearish ever on the euro versus the dollar over the next 12 months compared with the next 90 days. “We expect within the ebb and flow of the European debt crisis that things will get better rather than worse this year,” said Nick Bennenbroek, the head of currency strategy in New York at Wells Fargo. “Not only were the decisions that were taken in June by European leaders positive, but we continue to see supportive movements from the central bank as well.”

China Must Prevent Rebound in Property Prices, Wen Says  (Source: Bloomberg)
Chinese Premier Wen Jiabao said downward pressure on the economy is still “relatively large” and the government will intensify fine-tuning of policies even as measures taken since April are helping stabilize a slowdown. Wen’s comments, four days after the central bank announced the second interest-rate cut in a month, were made during an inspection tour of eastern Jiangsu province, the official Xinhua News Agency reported yesterday. The premier also pledged to “unswervingly” continue property controls and prevent prices from rebounding, Xinhua said. Asia’s largest economy probably grew at the slowest pace in three years in the second quarter, underscoring the risks to a global recovery already threatened by a worsening crisis in the euro area and faltering employment gains in the U.S. The International Monetary Fund next week will cut its world-growth estimate this year, with Managing Director Christine Lagarde warning the outlook has “regrettably become more worrisome.”
“The big downside risks to economic growth increase the pressure for monetary easing,” economists Peng Wensheng and Zhao Yang from Beijing-based China International Capital Corp. said in a July 6 note. “Based on the recent developments in the global economy, we believe major central banks will take more conventional and unconventional measures in coming months to loosen monetary conditions and encourage bank lending.”

Hong Kong May Revise Growth Forecast on Global Recovery   (Source: Bloomberg)
Hong Kong and Vietnam signaled growth may fall short of government forecasts this year as Asian policy makers stepped up efforts to protect their economies and currency markets from the worsening global outlook. Hong Kong may revise its 2012 economic forecast next month, Financial Secretary John Tsang said on July 7. In Vietnam, Deputy Prime Minister Vu Van Ninh said the country may miss its growth target and the central bank told lenders to cut borrowing costs on existing loans to help businesses. The Philippines unveiled plans to contain currency gains that may hurt exports. Interest-rate cuts by central banks in China and Europe last week underscore the risks to the world economy as the euro area’s fiscal crisis deepens, U.S. employment gains falter and Asia’s expansion slows. The International Monetary Fund will reduce its estimate for global growth this year, Managing Director Christine Lagarde said July 6 ahead of the publication of the lender’s updated economic outlook next week.
“Given the ongoing deterioration in Eurozone and U.S. growth indicators in recent months, there is little prospect for a material improvement” in emerging market exports while domestic demand also “looks set to remain soft in the near- term,” Nick Chamie, global head of foreign-exchange strategy at Royal Bank of Canada in Toronto, said in a July 6 note. “We see further evidence that growth weakness will extend well into” the third quarter.

Japan Plan to Buy Disputed Islands Draws China’s Condemnation  (Source: Bloomberg)
A Japanese government plan to buy uninhabited islands owned by a private investor provoked condemnation from China, which also claims it owns the rocky outcroppings, the latest flare-up in a dispute over territory and resources in the East China Sea. Prime Minister Yoshihiko Noda on July 7 said the government is considering a purchase of the islands, Kyodo News reported. China’s Foreign Ministry responded with a statement that the islets belong to China and “can’t be bought or sold.” The dispute over who controls the islands, known as Senkaku in Japanese and Daioyu in Chinese, escalated in April after Tokyo Governor Shintaro Ishihara said he wanted to use public money to buy them. Sovereignty over the area, which has undersea natural gas and oil fields, has been a flash point between the world’s second- and third-largest economies.
“Clearly the reason why the Senkaku Islands are a big bone of contention is the potential for resources,” said Jeff Kingston, head of the Asian Studies program at Temple University in Tokyo. “Governor Ishihara has caused a headache for the government and what they’re trying to do is engage in damage control by getting the islands out of the grips of Ishihara, who’s trying to politicize this for his own gain.”

Japan’s Current-Account Surplus Slides as Orders Point to Slump  (Source: Bloomberg)
Japan’s current-account surplus was the smallest in May since at least 1996 and machinery orders fell the most in more than five years, adding to signs a slump in demand is threatening the nation’s rebound. The excess in the widest measure of the nation’s trade shrank 62.6 percent from a year earlier to 215.1 billion yen ($2.7 billion), the Ministry of Finance said in Tokyo today. The median estimate of 24 economists surveyed by Bloomberg News was for a surplus of 493.1 billion yen. Machinery orders, an indicator of capital spending, fell 14.8 percent in May from the previous month, the Cabinet Office said, the biggest drop since comparable data were made available in 2005.
Japan’s trade position has weakened due to growing energy imports after last year’s earthquake and nuclear meltdown and also the yen’s gain of 4.9 percent against the dollar since mid- March. Prime Minister Yoshihiko Noda gave approval for a restart of reactors at the Ohi nuclear plant, which resumed power generation last week, to avoid power shortages and rolling blackouts over the summer. “The restart of a Ohi nuclear reactor itself will only have limited impact on energy imports,” unless there will be more developments on a restart of other nuclear plants, Itochu’s Maruyama said.

Korean Government Bonds Advance, Won Falls, as U.S. Data Weakens  (Source: Bloomberg)
South Korea’s government bonds rose, sending three-year yields to the lowest since 2010, and the won slid as U.S. payroll gains trailed estimates, heightening concern growth in the world’s biggest economy is slowing. The 80,000 gain in employment for June followed a 77,000 increase in May and compares with a 100,000 jump projected in a Bloomberg News survey, U.S Labor Department figures showed on July 6. The euro touched a two-year low and the Kospi (KOSPI) Index of shares fell for a second day. The Bank of Korea will probably hold the benchmark rate at 3.25 percent for a 13th month at the July 12 meeting, according to all seven economists surveyed by Bloomberg News.
“Demand for South Korean bonds is strong, and with global economy data deteriorating, it looks like some investors are betting the Bank of Korea will cut rates,” said Hwang Jae Hong, who oversees 12 trillion won ($10.5 billion) as head of fixed income at UBS Hana Asset Management in Seoul. “I don’t think the central bank will lower the benchmark rate as long as Europe comes up with ways to delay the crisis.” The yield on the government’s 3.25 percent bonds due June 2015 slid two basis points, or 0.02 percentage point, to 3.21 percent as of 9:21 a.m. in Seoul, Korea Exchange Inc. prices show. That’s the lowest rate for a benchmark three-year bond since December 2010. Ten-year government notes fell three basis points to 3.51 percent, a record low. Three-year debt futures advanced 0.06 to 104.98 and the one-year interest-rate swap slid one basis point to 3.31 percent.

North Korean Economy Rebounds on Farm Output, South Says  (Source: Bloomberg)
North Korea’s economy rebounded last year on a recovery in agriculture, bolstering Kim Jong Un after he succeeded his father to lead the nation where a past famine killed an estimated 3 million people. Gross domestic product in the communist nation increased 0.8 percent in 2011 after a 0.5 percent decline in 2010, according to an estimate published by the Bank of Korea in Seoul. The nation’s economy has contracted during four of the last six years, the bank’s data show. “The manufacturing sector declined, but the agricultural industry enjoyed better weather and more use of fertilizer,” the Bank of Korea said in an e-mailed statement. North Korea is projected to keep growing under the new leader as its economic ties with China and Russia develop.
“Mineral exports to China and dollars brought in by North Korean workers sent to China and Russia would have driven the country’s GDP growth,” said Koh Yu Hwan, a professor of North Korean studies at Dongguk University in Seoul. “North Korea is expected to be economically stronger under Kim Jong Un as it continues to increase transactions with its allies.”

Franco-German Amity Needed for Strengthened Euro, Leaders Say  (Source: Bloomberg)
French President Francois Hollande and German Chancellor Angela Merkel said friendship between their nations is critical to saving the common currency, putting aside until today their differences on solving the euro debt crisis. The leaders of the European Union’s two biggest economies met yesterday in the eastern French city of Reims to celebrate the moment 50 years ago when their predecessors, Charles de Gaulle and Konrad Adenauer, signed a reconciliation treaty and buried the enmity that had sparked three wars in 90 years. Resolving divisions between the two countries will be at the heart of euro-area finance ministers’ talks in Brussels today and during a subsequent gathering on July 20. The two meetings follow clashes between Hollande and Merkel at the June 28-29 European summit, where the German chancellor faced pressure from France, Italy and Spain to agree greater burden sharing for the currency zone’s debt burden.
“At each step of European construction, the German-French friendship was the base,” Hollande said outside Reims cathedral yesterday as he stood alongside Merkel under rainy skies. “I propose to you that we open a new door to even tighter friendship.” European Union leaders agreed at the June summit to ease the way to direct financing for troubled banks, to start work on Europe-wide bank supervision, and to ease access to the EU’s bailout mechanisms. Finance ministers have been asked to hammer out the details.

Moscovici Expects Tangible Progress on Euro Accord Execution (Source: Bloomberg)
French Finance Minister Pierre Moscovici said he expects euro area finance ministers to make “tangible progress” on implementing an accord reached by heads of government on June 29. “It’s very important that we give tangible signals that what was said at the European Council will be translated into action,” Moscovici told journalists in Aix-en-Provence, France. “I have no doubt that that will happen.” The euro group will begin work tomorrow on how to give support to Spanish banks, and will also consider matters of unifying euro area bank supervision and giving support to Italy in the bond market. Moscovici said he met with Italian Prime Minister Mario Monti this morning and that they agreed on the analysis of the situation. Asked whether France is ready to cede sovereignty to help end the European sovereign debt crisis, Moscovici said that he prefers to call it “sharing sovereignty.”

Norway Banks Under Pressure as Asset-Bubble Risks Swell (Source: Bloomberg)
Norway’s Finance Minister Sigbjoern Johnsen is putting pressure on the country’s banks to rein in mortgage lending to over-indebted households as the government grapples with the growing threat of a property bubble. Banks have “an obligation to say to people I think that by taking a loan this size you might get water over your head,” Johnsen said in an interview in Oslo. “Norwegian households have never had such a high proportion of debt compared to their net income, so that requires a keen eye and some concern.” The country’s financial regulator and economists including Yale University’s Robert Shiller have urged Norway’s government to take seriously the threat of a full-blown housing bubble and its disruptive potential. Europe’s second-largest oil and gas exporter has watched property values soar even during the euro area's debt crisis, as borrowers lean on near record-low interest rates and Europe’s lowest unemployment rate.
Norway’s housing market boom has seen property prices surge almost 30 percent since 2008, while the country’s household debt burden will surpass 200 percent of disposable incomes next year, according to central bank estimates.

Hollande Says Euro Banking Union is First Step to Budget Union  (Source: Bloomberg)
French President Francois Hollande said the proposed banking union agreed at the June 29 European summit is the “first step to a budgetary union, which will open the way to stability, growth, and tighter ties.” He said France and Germany must defend the euro with “strict rules and powerful instruments.” Hollande spoke in the eastern French city of Reims alongside German Chancellor Angela Merkel at a ceremony commemorating the 50th anniversary of the German-French reconciliation treaty.

20120709 1009 Global Commodities Related News.

Commodities Fall Most in Two Weeks on U.S., Europe Economic Woes  (Source: Bloomberg)
Commodities fell the most in two weeks as signs of a faltering U.S. economy and escalating debt woes in Europe signaled less demand for energy and metals. The Standard & Poor’s GSCI Spot Index (MXWD) of 24 raw materials declined 2.4 percent to settle at 605.15 at 4:17 p.m. in New York, the biggest decline since June 21. Crude oil and gold dropped the most in two weeks, and industrial metals including lead, aluminum and copper slumped. Employers in the U.S. hired fewer workers than forecast in June, indicting the labor market is making little progress toward reducing joblessness, government data showed today. Global equities extended losses, and Spain’s 10-year bond yields reached 7 percent as industrial production fell for the ninth straight month. The dollar rallied, eroding the appeal of raw materials.
“We had some weakness in Europe in the form of rising rates on Spanish debt, and then we had the disappointing payroll number here,” Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, said in a telephone interview. “Going into the weekend, it’s ‘risk off’ for commodities.” The GSCI index has dropped 6.2 percent this year, led by cotton, coffee and oil. The MSCI All-Country World Index has gained 3.9 percent, and Treasuries returned 2 percent, a Bank of America Corp. index showed.

DTN Closing Grain Comments 07/06 14:56 : Grains Take a Breather Friday (Source: CME)
The grain complex took a step back Friday on noncommercial long-liquidation tied in large part to an overbought technical condition. From the mid-June lows through Thursday's close, corn and Chicago wheat had rallied over $2.00; beans had gained almost the same. And while markets have more room to correct, the increasingly bullish fundamental argument should mean renewed buying interest isn't far off.

Wheat Market Recap Report (Source: CME)
September Wheat finished down 31 3/4 at 806 1/4, 30 3/4 off the high and 2 1/4 up from the low. December Wheat closed down 25 1/4 at 821 3/4. This was 3 1/4 up from the low and 24 1/4 off the high. Wheat traded sharply lower heading throughout the trading session today as pressure spilled over from the corn pit and perhaps from a general deterioration of global macro economic expectations. Unwinding of bull spreads might have been prevalent in the market as broad based profit taking might have been taking hold. The market looks ahead to a very volatile next week of trading with Crop Condition reports Monday and the USDA Supply and Demand and Crop Production reports on Wednesday. The trade will likely focus on U.S. demand shifts and world production forecasts for the Black Sea Region. Weekly export sales for the week ending June 28th came in at 418,900 tonnes for the 2012/13 marketing year and none for the next marketing year for a total of 418,900. Reported sales were on the high end of trade estimates. As of June 28, cumulative wheat sales stand at 22.8% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 23.5%. Sales of 500,000 metric tonnes are needed each week to reach the USDA forecast. Outside markets added pressure to wheat prices today with the U.S. Dollar trading sharply higher and energy markets also tracking moderately lower on the day. September Oats closed down 3 1/2 at 361 3/4. This was 4 1/2 up from the low and 9 1/4 off the high.

Corn Market Recap for 7/6/2012 (Source: CME)
September Corn finished down 13 1/2 at 695 1/4, 12 3/4 off the high and 6 up from the low. December Corn closed down 15 1/2 at 693. This was 5 1/4 up from the low and 14 3/4 off the high. Corn traded sharply lower throughout the trading session but prices generally managed to respect the prior session's low. Pressure in the corn market was linked to a surging U.S. Dollar and broad based commodity price pressures after a poor unemployment report this morning. Weather maps were largely unchanged from previous forecast but cooler temperatures potentials next week seemed to prompt some long profit taking ahead of the weekend. In looking forward the forecasts still call for mostly dry conditions in the Midwest. The southeast and delta are expected to see some showers next week but the coverage and amounts are generally expected to be restricted. A large percentage of the expected precipitation over the next two weeks will likely be light and overall coverage will have limited impact on soil moisture conditions. Traders bought into the weakness this morning on thoughts that crop condition ratings will be revised sharply lower again on Monday afternoon. A private forecast today pegged the average corn yield lower to 153.5, which was 1.4 bushels/acre below that company's prior estimate. Weekly export sales for corn were abysmal; providing additional evidence of the lack of demand at these price levels but at the same time this action displays the strength of this supply driven rally. For the week ending June 28th, net weekly export sales for corn, came in at 19,300 tonnes for the 2011/12 marketing year and 134,200 tonnes for the 2012/13 marketing year for a total of 153,500 tonnes. This was well below trade estimates. As of June 28, cumulative corn sales stand at 92.9% of the USDA forecast for 2011/12 (current) marketing year versus a 5 year average of 95.9%. The market is expecting a volatile trade next week with updated Crop Condition reports on Monday and the USDA Supply and Demand and Crop Production reports on Wednesday. September Rice finished down 0.095 at 15.055, 0.035 off the high and 0.075 up from the low.

U.S. Corn Growers Farming in Hell as Midwest Heat Spreads  (Source: Bloomberg)
The worst U.S. drought since Ronald Reagan was president is withering the world’s largest corn crop, and the speed of the damage may spur the government to make a record cut in its July estimate for domestic inventories. Tumbling yields will combine with the greatest-ever global demand to leave U.S. stockpiles on Sept. 1, 2013, at 1.216 billion bushels (30.89 million metric tons), according to the average of 31 analyst estimates compiled by Bloomberg. That’s 35 percent below the U.S. Department of Agriculture’s June 12 forecast, implying the biggest reduction since at least 1973. The USDA updates its harvest and inventory estimates July 11. Crops on July 1 were in the worst condition since 1988, and a Midwest heat wave last week set or tied 1,067 temperature records, government data show. Prices surged 37 percent in three weeks, and Rabobank International said June 28 that corn may rise 15 percent more by December to near a record $8 a bushel.
The gain is threatening to boost food costs the United Nations says fell 15 percent from a record in February 2011 and feed prices for meat producers including Smithfield Foods Inc. (SFD) “The drought is much worse than last year and approaching the 1988 disaster,” said John Cory, the chief executive officer of Rochester, Indiana-based grain processor Prairie Mills Products LLC. “There are crops that won’t make it. The dairy and livestock industries are going to get hit very hard. People are just beginning to realize the depth of the problem.”

Corn dips after drought-led rally, up 38 pct in 3 weeks
SINGAPORE, July 6 (Reuters) - Chicago corn slid almost 2 percent after recent steep gains, although prices were set for their biggest three-week rally in 3-1/2 years, sparked by the worst U.S. Midwest drought in nearly a quarter century.
"It is a little bit of a quiet which is not unexpected, given the extent of the rally that we have seen, although fundamentally the core issues within the grain market remain firmly entrenched," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia.

U.S. crops shrivel in record heat, rains coming-forecasters
CHICAGO, July 5 (Reuters) - The U.S. Midwest will remain extremely hot and dry the next few days, adding more stress to crops already damaged by a summer heat wave, but some relief rains are expected over the weekend, forecasters said.
All-time high temperatures were forecast for many Midwest c ities on Thursday. The midday temperature in Chicago was 99 degrees Fahrenheit (37 Celsius) and forecast to break 100. It was 100 F in Des Moines, Iowa, at midday and 97 in Columbus, Ohio.

Poor rains may cut India's pulses output, rice unhurt
MUMBAI, July 6 (Reuters) - Poor rains in India's key pulse-producing southern and western states have affected sowing and could trim output in the 2012-13 year that began on July 1, the country's farm minister said on Friday.
Lower output of pulses could force India, the world's largest producer and consumer, to import more lentils thereby adding to inflation woes.

Brazil corn output to jump as U.S. crop suffers
BRASILIA/SAO PAULO, July 5 (Reuters) - Brazil boosted its corn harvest estimate by 2.5 percent to a record 69.48 million tonnes on Thursday, a welcome increase as a heat wave threatens United States grains.
The estimate for the corn crop would represent a leap of more than 20 percent from the previous season, when output reached 57.4 million tonnes, and is up from a June estimate of 67.8 million tonnes, government crop supply agency Conab said in its 10th revised estimate for 2011/12 grain output.

FranceAgriMer sees wheat crop rising to 35.9 mln t
PARIS, July 6 (Reuters) - Farm office FranceAgriMer expects this year's French soft wheat crop to rise 5.7 percent to 35.9 million tonnes from 34 million harvested in 2011, data published by the office on Friday showed.
The forecast was the office's first official projection of the 2012 wheat crop in France, the European Union's top producer and exporter of the staple grain.

Ukraine to pay off China loan with maize - minister
KIEV, July 6 (Reuters) - Ukraine will supply 2.0 million to 2.5 million tonnes of maize to China every year to pay off a $3 billion loan, Ukrainian Farm Minister Mykola Prysyazhnyuk was quoted as saying on Friday.
China's Eximbank plans to lend Ukraine up to $3 billion to finance agricultural projects. The farm ministry and the bank signed a memorandum of understanding on June 28 and are now finalising the deal. It gave no details of the loan.

Analyst cuts Ukraine 2012/13 grain export f'cast
KIEV, July 6 (Reuters) - Analyst ProAgro revised down on Friday its forecast for Ukraine's grain exports to 20.9 million tonnes in the July-June 2012/13 season from the previous outlook of about 23 million tonnes due to a possible fall in harvest.
The agriculture consultancy said in a report it expected that the exports of wheat would total 4.6 million tonnes, barley 1.8 million tonnes and maize 14 million tonnes.

Argentina wheat plantings seen falling 20 percent
BUENOS AIRES, July 5 (Reuters) - Argentina's 2012/13 wheat plantings are set to fall 20 percent this season to 3.7 million hectares, even less than previously forecast, despite favorable crop weather, the Buenos Aires Grains Exchange said on Thursday.
Argentina is the world's sixth-biggest wheat exporter and the key supplier to neighboring Brazil but growers have been planting less of the crop in recent years because of poor prices in the local market that they blame on government export curbs.

EU soft wheat exports fall to 12.5 mln t in 2011/12
PARIS, July 5 (Reuters) - The European Union cleared a total of 12.5 million tonnes of soft wheat export licences in the 2011/12 season to June 30, down from 18.5 million tonnes in 2010/11, official data showed on Thursday.
The EU awarded 3 million tonnes of maize export licences in 2011/12, up from 1 million in 2010/11, and 2.9 million tonnes of barley export licences, down from 4.6 million, the data showed.

Sugar rises, weather concerns eyed, coffee slips
LONDON, July 6 (Reuters) - Raw sugar futures on ICE rose as adverse weather in top producers Brazil and India underpinned prices, while coffee and cocoa futures edged lower. Sugar futures rose as dealers eyed weather concerns in top producers including Brazil, where harvest has been hampered by unseasonably wet weather, and India, where poor monsoon rains caused worry.

ICO pegs '11/12 world coffee output at 131.3 mln bags
LONDON, July 6 (Reuters) - World 2011/12 coffee output was trimmed slightly to 131.3 million 60-kg bags, from the previous month's estimate of 131.9 million bags, the International Coffee Organization (ICO) said. This is 2.3 percent down on 2010/11 global production.

Thailand seeks regional benchmark rubber export price
BANGKOK, July 6 (Reuters) - Thailand, the world's biggest rubber producer and exporter, is asking other major producers Malaysia and Indonesia to help it set a benchmark rubber export price, which has fallen by almost a fifth since its peak this year due to weak demand.
"Attempts by Thailand alone can not push up prices as there are external factors weighing on rubber prices, especially the euro zone debt crisis," Thai Deputy Agriculture Minister Nattawut Saikuar told reporters on Friday.

Brazil’s Cocoa Processing Declined 4.8% in Second Quarter  (Source: Bloomberg)
Brazil’s cocoa grindings in the second quarter totaled about 57,702 metric tons, 4.8 percent lower than the same period a year earlier, according to an e- mail from Thomas Hartmann, an analyst who compiles the nation’s cocoa statistics. The total for June was 19,136 tons, down 5.6 percent from the same month last year, according to the e-mail. “The drop of volume for the second month in a row could be a signal of the falling demand on the domestic market,” he said. Hartmann is a board member of the Commercial Association of Bahia, Brazil’s biggest growing region, and is in charge of the group’s statistical service on the nation’s cocoa output.

Sugar Bulls Strongest in Six Months on Brazil Rain: Commodities  (Source: Bloomberg)
Sugar traders are the most bullish in six months after prices moved to within five percentage points of exiting a year-long bear market as rain delayed cane processing in Brazil, the biggest producer. Nine of 11 analysts surveyed by Bloomberg said they expect raw sugar to keep rallying next week and two were bearish, the highest proportion of bulls since Jan. 6. Futures reached an 11- week high of 22.69 cents a pound in New York yesterday. Hedge funds increased wagers on rising prices by 29 percent to the highest since April in the week ended June 26, U.S. Commodity Futures Trading Commission data show.
The sweetener has been in a bear market since September as forecasters from Rabobank International to Macquarie Group Ltd. predicted a third annual glut. Prices rallied 15 percent since the start of June after above-average rainfall in Brazil’s main growing region increased concern about shortages. Copersucar SA, which owns mills in the country, said July 2 it took delivery of about 112,000 metric tons of raw sugar against the ICE Futures U.S. exchange’s expired July contract. “The sugar turnaround has been fast because the short-term supply issues in Brazil are bullish,” said Keith Flury, an analyst at Rabobank in London. “We are in a weather market.”

Pre-election protests hit Libyan crude output
TRIPOLI, July 6 (Reuters) - Libyan oil output has been reduced by 300,000 barrels per day (bpd) as protests by groups demanding greater autonomy for eastern Libya a day before national elections have blocked operations at some oil terminals, an official said.
The protests, combined with other storage and market-related factors, have pushed output down to 1.3 million bpd from the level of nearly 1.6 million bpd to which production has steadily climbed since the end of last year's civil war.

India cuts June Iran oil imports 18 pct y/y -trade
NEW DELHI, July 6 (Reuters) - India's oil imports from Iran fell 18.2 percent in June from a year earlier in a third straight monthly decline, although the pace slowed as refiners built stocks ahead of Western sanctions against Tehran's nuclear programme that took effect by July.
The sanctions are designed to restrict the flow of funds to Iran because the West believes the Islamic Republic is trying to build nuclear weapons, but Tehran says its nuclear program is for civilian purposes.

Norway government seen intervening to end oil strike
OSLO, July 6 (Reuters) - The Norwegian government could wade into a dispute between offshore oil workers and employers over pensions as early as Friday, analysts said, to force an end to a strike which has cut crude and gas output and kept oil markets on edge.
Such a move would avert a total shutdown of production on the Norwegian continental shelf after the oil industry upped the ante on Thursday with a lockout of offshore workers, easing nerves over production in the world's eighth-biggest crude exporter.

OIL-Oil drops below $100 as Norway strike nears end
LONDON, July 6 (Reuters) - Oil fell below $100 a barrel on expectations the Norwegian government would end an oil workers' strike and as enthusiasm over central bank rate cuts waned.
"Brent is supported by the escalation of the labour dispute in Norway, but the focus remains on demand," said Victor Shum, a senior partner at oil consultancy Purvin & Gertz.

Oil Trades Near One-Week Low on Concern Slowdown to Curb Demand  (Source: Bloomberg)
Oil traded near the lowest level in a week in New York on speculation fuel demand may falter amid a global economic slowdown. Futures were little changed after declining 3.2 percent on July 6. Japanese machinery orders fell the most in more than five years in May, while the U.S. added fewer jobs than forecast in June, separate reports showed. Downward pressure on the Chinese economy is still “relatively large,” Premier Wen Jiabao said, according to the official Xinhua News Agency. Three Libyan oil ports resumed export operations after a halt because of protests, according to National Oil Corp. “Downward momentum would come from problems with the economy, and those aren’t going away,” Jarmo Kotilaine, the chief economist at Jeddah-based National Commercial Bank who forecasts Brent crude will trade in a range of $90 to $110 a barrel, said by telephone yesterday. “We will continue to see volatility without any obvious trend.”
West Texas Intermediate oil for August delivery was at $84.55 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange at 11:18 a.m. Sydney time. The contract slid $2.77 on July 6 to close at $84.45, the lowest settlement since July 2. Prices are 14 percent lower this year.

Indonesia’s Tin Exports to Drop as Low Prices Curb Output  (Source: Bloomberg)
Refined-tin shipments from Indonesia, the largest exporter, probably dropped to the lowest level in five months in June as miners reduced production because of lower prices and bad weather disrupted ore supplies to smelters. Exports fell 7.2 percent to 7,300 metric tons last month from 7,866 tons in May, according to the median estimate of four smelter executives and an analyst in a Bloomberg survey. That’s the least since shipments of 5,380 tons in January and compares with sales of 10,875 tons in June 2011. The Trade Ministry is expected to release the data next week.
Prices have plunged 27 percent from a six-month high in February on concern the debt crisis in Europe and slower growth in China may erode demand for the metal used in soldering and packaging. Falling supplies may limit the slump, helping boost revenues at producers including Malaysia Smelting Corp. (SMELT) and PT Timah (TINS), the world’s second and third-largest producers. Prices below $20,000 ton have some adverse impact on small-scale production in Indonesia, according to ITRI Ltd. Last month’s shipments may be as low as 7,000 tons, Peter Kettle, research manager at the St. Albans, England-based ITRI, said by e-mail July 2. “My reason is lower prices resulting in lower volumes through the independent smelters.”

Copper Futures Decline in London for Fourth Day, Falling 0.2%  (Source: Bloomberg)
Copper for three-month delivery dropped as much as 0.2 percent to $7,513 a metric ton on the London Metal Exchange, falling for a fourth day. The metal traded at $7,519.75 at 8:06 a.m. Singapore time.

20120709 1009 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished down 15 3/4 at 1567 1/4, 15 3/4 off the high and 5 1/2 up from the low. November Soybeans closed down 20 3/4 at 1505 3/4. This was 1 1/4 up from the low and 20 1/4 off the high. August Soymeal closed down 4.3 at 461.5. This was 0.7 up from the low and 5.8 off the high. August Soybean Oil finished down 0.89 at 53.44, 0.96 off the high and 0.07 up from the low. November soybeans traded moderately lower heading into the late afternoon trade. Soybean meal and oil both followed soybean sharply lower to end the week on a back foot. Weather maps show a break from the record temperatures next week with a chance for better rainfall in the southeast and delta. A large percentage of the expected precipitation over the next two weeks will likely be light and overall coverage will have limited impact on soil moisture conditions. The precipitation in the southern U.S. and delta should help soybean crop conditions. Another private analyst revised their average soybean yield lower at 42 bushels/acre vs. their June estimate of 42.7 bushels/acre. August soybeans gained on the September and November options after the USDA reported that U.S. exporters sold 120,000 tonnes of soybeans to China for the 2011/12 marketing year. Export sales for the week ending June 28th, came in at 298,700 tonnes for the 2011/12 marketing year and 1,464,700 tonnes for 2012/13 for a total of 1,763,400 tonnes. This was more than the double the size of the high end of trade expectations. Cumulative soybean sales stand at 103.6% of the USDA forecast for 2011/2012 (current) marketing year vs. a 5 year average of 99.8%. Net soybean meal sales came in at 156,700 tonnes for 2011/12 marketing year and 21,100 tonnes for the 2012/13 marketing year for a total of 177,800 tonnes. Net soybean oil sales came in at 6,800 tonnes for the current marketing year and none for the 2012/13 marketing year, for a total of 6,800 tonnes. Weakness in soybeans was also due to a surging U.S. Dollar and broad based commodity pressure. The market is expecting a very volatile trade next week with updated Crop Condition reports on Monday and the USDA Supply and Demand and Crop Production reports on Wednesday.

Palm ends off 5-week high, demand hopes cap losses
SINGAPORE, July 6 (Reuters) - Malaysian crude palm oil futures eased from a fresh five-week high as some traders booked profits from an overbought market, although expectations of strong demand curbed losses.
"The uptrend is definitely still intact with traders speculating on the adverse weather and generally lower end-stock," said a dealer with a foreign commodities brokerage in Malaysia.

India's June oilmeal exports up 22 pct yr/yr-trade body
MUMBAI, July 6 (Reuters) - India's oilmeal exports rose 22 percent to 305,525 tonnes in June from 250,335 tonnes a year earlier, a leading trade body said on Friday, led by a strong demand in soymeal.
Soymeal exports, which account for the bulk of sales, rose to 180,987 tonnes in June from 117,600 tonnes a year ago, the Solvent Extractors' Association of India (SEA) said in a statement.