Friday, July 13, 2012

20120713 1821 FCPO EOD Daily Chart Study.

FCPO closed : 3065, changed : +53 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histogram : weakenning, buyer closing position.
Support : 3050, 3020, 2970, 2950 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed rebounded higher recovered big portion of yesterday loss with slower volume exchanged. Soy oil currently trading higher by more than 1% after overnight closed recorded loss while crude oil price currently rising higher.
Price recovering higher ahead of Monday exports data and after China recorded quarterly GDP that is within forecast despite India trade body reported slower but withhin average surveyed vegetable oil and refined palm oil imports.
FCPO daily chart study remained calling a side way range bound market development testing resistance level near middle Bollinger band.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120713 1730 FKLI EOD Daily Chart Study.

FKLI closed : 1626.5 changed : +3 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : weakening, buyer taking profit.
Support : 1620, 1610, 1600, 1590 level.
Resistance : 1630, 1640, 1650, 1660 level.
Comment :
FKLI closed recovered little higher with lesser volume traded doing par with cash market that closed slightly higher. Overnight U.S. markets continue recorded loss for the 6th day and today Asia markets ended rebounded higher while European markets currently trading higher.
Speculation play on further stimulus measure to be implement after China reported slowest quarterly GDP growth in 3 years send global market recovered higher.
Daily chart study continue to suggesting a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120713 1703 Regional Markets EOD Daily Chart Study.

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

20120713 1600 Global Market & Commodities Related News.

GLOBAL MARKETS: European stock index futures pointed to a higher open and were expected to keep Asia's positive tone, after China's second-quarter growth data met forecasts but kept expectations alive that officials will take more steps to support the world's second largest economy. U.S. stocks fell on Thursday, hit by more warnings in the technology sector, while a rally in Procter & Gamble helped the blue-chip Dow cut its loss.  

FOREX: The euro hovered near a two-year low after Moody's cut Italy's credit rating, while the Australian dollar rose as China's second-quarter growth met expectations.

FOREX-Aussie up after China GDP; Italy downgrade weighs on euro
SINGAPORE, July 13 (Reuters) - The euro hovered near a two-year low versus the dollar on Friday after Moody's cut Italy's credit rating, while the Australian dollar rose as China's second quarter growth met expectations.
The Australian dollar rose 0. 3 percent to $1.01 69 , boosted by data showing that China's economy grew 7.6 percent in the second quarter from a year earlier. China's economic health is always a key Australian dollar driver because China is Australia's single largest export market.

China Q2 GDP growth 7.6 pct, slowest in 3 years
China's economy grew 7.6 percent in the second quarter of 2012 from a year earlier, its slowest pace in three years, confirming expectations of a downward trajectory that leaves full-year growth on course for its softest showing since 1999.

US jobless claims fall as plants put off retooling
The number of Americans signing up for new jobless benefits fell to a four-year low last week but an unusual pattern for summer factory shutdowns suggested layoffs might pick up again in coming weeks.

Economic slowdown could cap oil prices, IEA says
Global economic slowdown could put a lid on oil prices but there is a risk "nasty supply surprises" could reignite a market rally, the International Energy Agency said on Thursday.

Chicago corn rose for a second straight day, extending its drought-driven rally over four weeks to 45 percent, with little relief expected for the crop which has been hit by the worst drought in the U.S. grain belt in 25 years.

Drought parches more of US Midwest, crops suffer
The worst drought in a quarter century tightened its grip on the Midwestern United States over the past week as sweltering temperatures and scant rainfall punished corn and soybean crops across the region, a report from climate experts said Thursday.

OIL: Brent crude held steady above $100 a barrel as supply disruptions in the North Sea and Iran offset concern over lower fuel demand in China, whose economy grew in the second quarter at its slowest in three years, roughly in line with market expectations.

Euro Coal-S.African prices fall $1-3/T
LONDON, July 12 (Reuters) - South African physical prompt coal prices dropped by $1 to $3 a tonne on Thursday, pulled lower by heavy selling in the swaps market, while buyers stayed on the sidelines.
South African bids fell by around $3 to $82-$83 a tonne FOB, a level close to the two-year low of $81.13 reached in mid-June.
"A support level is going to be found soon. We're close to it now and I don't think there's much room to fall," one European trader said.

Asia Coal-Prices fall to near $88/T on weak China demand
SINGAPORE, July 12 (Reuters) - Prompt Australian thermal coal prices fell to near $88 a tonne during the week, pressured by weak demand in China, industry experts said on Thursday.
Australia's Newcastle spot index  for the week closed at $88.26 per tonne on Thursday, down more than 2 percent from last week's $90.60, according to data provided by online trading platform globalCOAL.

China alumina imports seen strong in H2 at 2.5 mln T
HONG KONG, July 12 (Reuters) - China is likely to import at least 2.5 million tonnes of alumina in the second half of 2012, matching record high purchases so far this year, as domestic prices for the aluminium raw material remain above import costs, industry sources said.
China is the world's top aluminium producer. It used to be the world's leading alumina importer until last year, when local refineries boosted production.

China June daily steel output second highest on record
SHANGHAI, July 13 (Reuters) - China's average daily crude steel output hit 2.007 million tonnes in June, its second highest on record, as steel mills shrugged off slowing economic growth in the world's top steel-producing country in order to maximise market share.
Sluggish economic growth in China hurt steel demand throughout the first half of this year, but steel mills have kept utilisation rates high throughout June in a bid to maintain their thin profits.

China's Baosteel cuts main steel product prices for August
SHANGHAI, July 12 (Reuters) - China's biggest listed steelmaker, Baoshan Iron & Steel , will cut August prices of its main products by 4.6 percent to 5.6 percent, after its first reduction in 2012 this month, suggesting the company lacks confidence in the market near-term.
Baosteel's pricing decisions are generally regarded as a bellwether for the industry. While demand generally weakens in China's hot summer months as construction projects slow, sluggish economic growth and a fragile global economy are putting particular pressure on the company this year.

BASE METALS: London copper edged down as investors closed positions on caution ahead of data on China's second-quarter growth that markets fear could be its slowest in more than three years.

PRECIOUS METALS: Gold traded nearly flat, but remained on course for a second consecutive week of losses as worries about the euro zone debt crisis and the absence of stimulus measures in the United States buoyed the dollar and its safe haven appeal. Spot gold was little changed at $1,570.14 an ounce, heading for a weekly decline of 0.8 percent.

METALS-Copper steady after China GDP data shows slowing growth
SHANGHAI, July 13 (Reuters) - Copper steadied on Friday after briefly hitting a one-week high as investors digested the news that China's economy grew at its slowest pace in three years in the second quarter, boding ill for demand for industrial metals from the world's top consumer.
Three-month copper on the London Metal Exchange  rose to $7,605.50 per tonne, its highest since July 6, but pared gains afterwards, trading 0.3 percent up at $7,575 per tonne by 0411 GMT, on track for a slight 0.6 percent gain for the week.

PRECIOUS-Gold headed for 2nd losing week as dollar firms
SINGAPORE, July 13 (Reuters) - Gold traded nearly flat on Friday, but remained on course for a second consecutive week of losses as worries about the euro zone debt crisis and the absence of stimulus measures in the United States buoyed the dollar and its safe haven appeal.
Gold edged slightly higher right after China released its second-quarter growth data, which showed the world's second-largest economy grew at the slowest pace since early 2009 but may have stabilised.

Iron Ore-Shanghai rebar eyeing worst week since May
SINGAPORE, July 13 (Reuters) - China steel futures steadied on Friday, but were headed for their biggest weekly loss in nearly two months, reflecting persistently sluggish demand that is expected to keep spot iron ore prices under pressure.
China, the world's top steel consumer and producer, grew at its slowest pace in three years in the second quarter, at an annual rate of 7.6 percent.

Asia Dry Bulk-Panamax rates to edge up on China demand
SINGAPORE, July 12 (Reuters) - Rates for panamax ships on key Asian dry bulk freight routes are expected to edge up next week as Chinese demand for transpacific shipments recover from last month's lull, ship brokers said on Thursday.  
In the panamax market, the rate for vessels travelling via the transpacific route surged 15 percent to a two-month high of $8,359 a day on Wednesday from $7,255 last week. The market has rebounded more than 70 percent since hitting a three-year low of $4,895 last month.

20120713 1131 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares guarded before China data; Moody's cuts Italy
TOKYO, July 13 (Reuters) - Asian shares marked time with small gains ahead of China's second-quarter gross domestic product figures which could depress risk appetite while a Moody's downgrade of Italy's credit rating threatened to rekindle worries over Europe's debt crisis.
"A dismal print may fuel concerns for a 'hard landing', and market sentiment may weaken further," said David Song, currency analyst at DailyFX.

COMMODITIES-Oil jumps on Iran; corn up on renewed harvest worry
NEW YORK, July 12 (Reuters) - Oil rebounded from early losses to end up on Thursday on news of tighter sanctions against Iran, and corn recouped the prior session's losses after rains over drought-ravaged U.S. fields failed to ease worries about shrunken harvests.
"It was the rally near the close, on the news about the Iran sanctions, that pulled prices up after falling on worries about the global economy," said Matt Smith, analyst at Summit Energy in Louisville, Kentucky.

Long-term oil price expectations converge on $90-95
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, July 12 (Reuters) - In the first six months of 2012, the most remarkable thing about oil prices is not how volatile they have been but how stable.
Spot prices have been whipped around by supply disruptions in the North Sea, Yemen, Syria and Iran, as well as inventory building by Saudi Arabia, frenzied speculation about an imminent air strike on Iran, and the ebb and flow of hopes for the world economy.

OIL-Brent ends above $101 on US Iran sanctions, supply woes
NEW YORK, July 12 (Reuters) - Brent crude futures climbed above $101 a barrel on Thursday, as the U.S. government's announcement that it was tightening sanctions against Iran sparked a rally back from early losses on global economic worries.
"It was the rally near the close, on the news about the Iran sanctions, that pulled prices up after falling on worries about the global economy," said Matt Smith, analyst at Summit Energy in Louisville, Kentucky.

OPEC exports to rise in 4 weeks to July 28-analyst
LONDON, July 12 (Reuters) - Seaborne oil exports from OPEC, excluding Angola and Ecuador, will rise by 230,000 barrels per day (bpd) in the four weeks to July 28, an analyst who estimates future shipments said on Thursday.      
Exports will reach 24.00 million bpd on average, compared with 23.77 million bpd in the four weeks to June 30, UK consultancy Oil Movements said in its latest weekly estimate.  

Iran fuel oil exports plummet in June-industry data
DUBAI, July 12 (Reuters) - Iran's fuel oil exports fell nearly 50 percent from May to June, according to industry sources, adding to declines earlier this year and to the strain on Tehran's finances as sanctions have hit its oil trade.
Fuel oil exports from the OPEC member, a major supplier to Asia and Middle East, sank to 396,000 tonnes in June from around 777,000 tonnes in May, according to a firm that tracks oil shipments.

India's main Iran oil buyer may cut July imports - sources
NEW DELHI, July 12 (Reuters) - India's biggest buyer of Iranian oil may only import one-fifth of the 3.3 million barrels of crude it had scheduled for July due to insurance and shipping difficulties caused by European Union sanctions on Tehran, industry sources said.
The possible drop in imports by state-owned refiner Mangalore Refinery and Petrochemicals Ltd (MRPL)  underscores the problems the EU sanctions, which ban most of the world's major insurance firms from covering shipments of Iranian oil, have created for Iran's major Asian customers China, India and Japan since coming into effect on July 1.

NATURAL GAS-US natgas futures end higher after early selling on EIAs
NEW YORK, July 12 (Reuters) - U.S. natural gas futures, off early after a bearish weekly inventory report, ended slightly higher on Thursday on technical buying and warm U.S. weather forecasts for the next two weeks that should boost air conditioning demand.
"The market fell initially because the (EIA storage) build was above expectations, but when you take a step back, it was really a bullish number," a Houston analyst said, noting the injection came in well below the historical norm for that week.

EURO COAL-S.African prices fall $1-3/T
LONDON, July 12 (Reuters) - South African physical prompt coal prices dropped by $1 to $3 a tonne on Thursday, pulled lower by heavy selling in the swaps market, while buyers stayed on the sidelines.
"A support level is going to be found soon. We're close to it now and I don't think there's much room to fall," one European trader said.

20120713 1023 Global Economy Related News.

Bank Indonesia (BI) held its benchmark reference rate at 5.75%, a decision predicted by economists. BI’s growth outlook was trimmed to 6.1-6.5% from 6.3-6.7% for2012, as exports weakened. (Bloomberg)

Indonesia’s government is not confident that 2012 growth could reach the 6.5% target. Agus Martowardojo, Minister of Finance, said economic growth in 2012 is estimated to only reach 6.3%. (IFT)

Production at factories, utilities and mines in India rose 2.4% yoy in May after a revised 0.9% decline in Apr. The median estimate was for a 1.8% climb. (Bloomberg)

The Bank of Japan expanded its asset-purchase program to ¥45tr (US$564bn) from ¥40tr. Seven of 17 economists surveyed by Bloomberg News predicted monetary easing. The loan facility was cut to ¥25tr from ¥30tr. (Bloomberg)

Bank of Korea lowered the benchmark seven-day repurchase rate by a 25bps to 3%, the first cut since Feb 2009. (Bloomberg)

China’s banks extended Rmb919.8bn (US$144.3bn) of local-currency loans. That compares with the Rmb880bn median forecast. Broad money supply rose 13.6% yoy in Jun (+13.2% in May). Foreign reserves fell to US$3.24tr in Jun from US$3.31tr in May, a record qoq drop. (Bloomberg)

China's mergers and acquisitions (M&A) activity has slowed down from last year. Deal volumes secured in Greater China slipped to 71 in the first half of 2012, from 121 a year ago, according to global law firm Allen & Overy's latest M&A Index. (Channel News Asia)

China: Q2 economic growth around 7.5%, says government think-tank
China's economy may have grown around 7.5% in the second quarter and nearly 8% in the first half, and will recover steadily in the second half as policy stimulus gains traction, a senior economist at the cabinet's think-tank said today. The assessment comes a day before China reports its second quarter growth rate. The think tank's view roughly matches a Reuters poll, which forecast that for April-June, the economy expanded 7.6% from a year earlier – the slowest pace since the first quarter of 2009. (Reuters)

China: Power use up 5.2% in May, summer shortages seen easing
Chinese power consumption growth recovered to 5.2% in May from 3.7% in April, but summer shortages are unlikely with industrial electricity use still sluggish, official data showed. Total consumption reached 406.1bn kWh during the month, with industrial utilization at 362.3bn kWh, up 4.6% compared to May last year. Over the first five months, industrial usage reached 1.7tn kWh, up 4.6% on the year, a marked improvement on the 2.1% growth seen from January to April. (Reuters)

Economic growth in Thailand could be restricted drastically to 4-4.5% this year, from an earlier projection of 5.6-5.8%, if the Constitution Court rules today to dissolve the Pheu Thai Party, leading to political turmoil, according to the University of the Thai Chamber of Commerce. (The Nation)

The University of the Thai Chamber of Commerce survey showed consumers are complaining that their income does is not rising enough to cover the rising cost of living caused by the domino effect of rising production costs from the increase in the minimum wage, although the government has put in place a variety of measures to rein in the price rise. (The Nation)

Data from the Bangko Sentral ng Pilipinas showed that gross portfolio inflows for the month reached US$1.215bn, while outflows amounted to US$1.223bn. This resulted in a net outflow of US$7.69m. (Philippine Daily Inquirer)

Developing Asia expected to grow 6.6% this yr and 7.1% in 2013, Asian Development Bank President Haruhiko Kuroda said. (Bloomberg)

Industrial production in the euro area rose by 0.6% mom in May, after it fell 1.1% in Apr. (Bloomberg)

The US Bloomberg Consumer Comfort Index held at minus 37.5 in the week ended 8 Jul. Some 86% of those surveyed said the economy was in bad shape, 21% pts higher than the average since 1985. (Bloomberg)

Claims for jobless insurance in the US declined 26,000 in the week ended 7 Jul to 350,000, the fewest since Mar 2008. Economists projected 372,000 claims. (Bloomberg)

The 2.7% mom plunge in the US import-price index was the biggest since Dec 2008 and followed a 1.2% drop in May and greater than the median estimate of -1.8%. (Bloomberg)

US job openings climbed by 195,000 to 3.64m, partially countering the 294,000 drop seen in Apr. (Bloomberg)

US home foreclosure filings rose in 2Q for the first time in two years. During the April-June period, 311,010 properties started the foreclosure process, a 9% qoq increase, said RealtyTrac, a publisher of foreclosure data. (Channel News Asia)

US: June import prices tumble on plunge in oil costs
Import prices fell last month by the most in more than three years mostly due to a plunge in the cost of imported oil, further icing inflation pressures. Overall import prices dropped 2.7%. It was the third straight month of declining prices for goods and services bought abroad. Import prices have only risen once in the last seven months. June's decline was the steepest since December 2008. (MarketWatch)

US: Confidence in stagnates as employment slows
Consumer confidence stagnated last week as scant improvement in the labour market left Americans more discouraged about the economy. The Bloomberg Consumer Comfort Index held at minus 37.5 in the week ended 8 July. Some 86% of those surveyed said the economy was in bad shape, 21ppt higher than the average since 1985. (Bloomberg)

US: Jobless claims drop 26,000 to 350,000
First time filings for unemployment benefits fell last week to the lowest level in more than four years, but the decline likely stemmed from fewer auto sector layoffs than normal and other onetime factors that could soon be reversed. Jobless claims sank 26,000 to a seasonally adjusted 350,000 in the week ended 7 July. (MarketWatch)

Greek coalition leaders agreed to press ahead with reforms after an official at the state-asset sale fund said Greece won’t be able to raise €3.2bn (US$3.9bn), facing the risk of running out of money and defaulting while seeking to qualify for €4.2bn in aid. (Bloomberg)

Global oil demand is expected to rise by 1m bpd in 2013 (+1.1%) to 90.9m bpd, faster than growth this year, but "well below" the levels seen before the financial crisis as economic recovery remains muted, the International Energy Agency said. (WSJ)

Greatest fear for global economy is a “disorderly materialisation” of all risks including risks to the US and European economies, which will work against the buffer that has been built, International Monetary Fund Managing Director Christine Lagarde said. (Bloomberg)

20120713 1023 Malaysia Corporate Related News.

IHH Healthcare Bhd's institutional price has been fixed at RM2.80/share following the completion of the bookbuilding under the global institutional tranche. IHH said on Thursday the final retail price and cornerstone price were fixed at RM2.80 per share. This was RM0.05 below the indicative price of RM2.85/share. IHH offered 2.23bn shares under its dual listing on Bursa Malaysia and Singapore Exchange. The IPO entailed a 1.8bn public issue by IHH and an offer for sale of 434.6m shares by major shareholder Khazanah Nasional Bhd.Of the combined 2.23bn shares, 1.39bn were for cornerstone investors and 498m for local and foreign institutional investors including those approved by the Ministry of International Trade and Industry (MITI). (Starbiz)

The Royal Bank of Scotland (RBS) has excluded its India operations from an earlier sale and purchase agreement for various Asia Pacific cash equities and associated investment banking businesses to the CIMB Group. "This termination of the proposed sale of RBS' cash equities, equity capital markets and M&A corporate finance business in India is due to an unexpected legal issue arising in connection with the sale of the Indian businesses by RBS," said CIMB Group on Thursday. Group CEO of CIMB Group, Datuk Seri Nazir Razak said the group remained committed to having an Indian component to its Asia Pacific Investment banking platform. "We see this as a temporary delay in our Indian build-up as we will now have to follow the same process as Korea, which was excluded from the RBS transaction from the outset, and proceed to establish our own operation by applying for a new licence or purchasing an entity with an existing licence," he said. (StarBiz)

Singapore’s CapitaLand sold its 20.7% stake in United Malayan Land Bhd (UMLand) to a private firm, Seleksi Juang Sdn Bhd, that is now making a takeover offer for the rest of UMLand. It intends to take UMLand private at RM2.50/share, a 5.9% premium to its last traded share price of RM2.36. It bought the stake from CapitaLand also at RM2.50 a share, or RM156.4m in total, in a direct business transaction yesterday. Seleksi Juang’s shareholders include Datuk Ng Eng Tee, who is UMLand’s major shareholder and deputy chairman and executive director. (BT)

WCT Bhd yesterday landed a RM391m contract for the proposed fourth lane widening of the North-South Highway along the Nilai-Seremban stretch. WCT said the contract sum for Package E - between Nilai and Seremban - included a provisional sum of RM10m and prime cost sum of RM216m respectively. The works are expected to be completed by December 2014. (Financial Daily)

Muhibbah Engineering (M) Bhd plans to bid for sub-contracting works for the A$43bn (RM136.7bn) Gorgon LNG jetty and marine structure project in Australia, a key official said. The engineering and construction group has won two contracts for the project. It won a RM40m contract in Mar-2010, and the second job, valued at RM150m, in early 2011. The contracts are to pre-assemble heavy lifting facility and tug pen breakwater caissons and preparation of shipping barges for the project. "Since most of the main packages for the Gorgon project has been awarded, we are now looking at the possibility of securing sub-contracting jobs, mainly structural steel fabrication work," said Muhibbah Engineering's business development director Mac Chung Jin. In Dec-2011, Muhibbah Engineering's JV company, Monadelphous Muhibbah Marine joint venture, was awarded a RM1.05bn contract to construct the approach jetty and ship berth in Queensland, Australia. The joint venture is a 50:50 venture with Australian-listed Monadelphous Group Ltd's wholly owned unit Monadelphous Engineering Pty Ltd. (BT)

The Singaporean Casino Regulatory Authority (CRA) is said to be probing Resorts World Sentosa (RWS) over alleged reimbursements of casino entry levies. Singapore's TODAY newspaper reported that the investigation which started almost a year ago allegedly revealed "hundreds of illegal reimbursements". "The probe is believed to have prompted the integrated resort to suspend several senior executives including one senior vice-president," the report said. (Starbiz)

Lembaga Tabung Haji (LTH) is well placed to disburse higher dividends this year to depositors following attractive return on investments coupled with proceeds from the sale of its stake in a plantation company in Indonesia. "Last year, we declared a 6% dividend, (and) hopefully, this year, we should be able to maintain our performance," says CEO Datuk Ismee Ismail. As of Feb, there were 6.9m depositors in LTH. On the RM3bn proposed sale of its 95 per cent stake in PT TH Indo Plantations, Ismee said the buyer has been given until the end of August to complete the due diligence process.(BT)

ST Aerospace and AirAsia have signed a 10-year agreement for component repair management maintenance-by-the-hour (MBH) for its A320 aircraft. The agreement is worth US$80m. ST Aerospace is currently supporting AirAsia on an existing MBH programme for 100 aircraft. With this contract, ST Aerospace will effectively support 175 of AirAsia’s A320 aircraft. (Bernama)

Malaysia Airlines was awarded an exclusive top-tier five-star rating at the Skytrax World Airline Awards. The airline also picked up World’s Best Airline Cabin Crew and Best Airline Signature Dish for its satay, served in business and first-class cabins. (The Star)

The Malaysian Rubber Export Promotion Council (MREPC) expects natural rubber prices to hover at a lower range for the rest of the year in anticipation that a still weak global economic backdrop will rub demand for commodities. The MREPC said that natural rubber latex prices will average RM6.0-7.0/kg in the 2H12 compared with RM7.00-7.85/kg in the 1H12. This compares with an average of RM8.90/kg in 2011. The council said that this will be a positive for glove manufacturers given that natural latex accounts for 60% of total costs. (Financial Daily)

The Faculty of Behavioural Sciences at HELP University launched the Maser of Applied Psychology in Coaching, a course jointly developed with the Corporate Coach Academy Of Malaysia. HELP University has one of the largest undergraduate psychology programmes in Asia with over 1,100 full-time students majoring in psychology. (Financial Daily)

Packet One Networks (P1) broadband services are now available in Sabah, with the company aiming to provide up to 80% of household coverage in Kota Kinabalu by year-end. P1, which has over 400,000 subscribers currently, has said it will commit RM30m to provide East Malaysians with 4G broadband service. (The Sun)

Plantation outfit TDM Bhd is working hard to raise its image among local investors, who may have veered away due to the counter's legacy issues, according to CEO Badrul Hisham Mahari. "The image of the company was not very positive in the past, and this is a newly improved company. We have been changing things over the past five to six years, and this will eventually get through to the public," said Badrul. (Financial Daily)

KKB Engineering has received a letter of intent for the supply of steel pipe piles worth RM28m. The job is scheduled to commence within 3Q this year with supply to be completed in 1Q13. (Financial Daily)

The ninth generation Honda Civic made its local debut with distributor Honda Malaysia expecting sales of over 6,000 units in its first year. The sales target will help Honda Malaysia achieve a leading 40% share of the non-national mid-size cars segment. The company is confident that with an impressive stable of hybrid models, it can cross the 10,000 units sales mark for such green vehicles in a year's time. (BT)

Mass Rapid Transit (MRT Corp) has awarded four more work packages worth RM767m to TSR Bina SB, IJM Construction SB and another construction outfit for the Sungai Buloh-Kajang (SBK) line. In a statement, MRT Corp said the packages were awarded following a meeting of the One-Stop Procurement Committee (OSTC) in Putrajaya, which was chaired by Finance Minister II Datuk Seri Ahmad Husni Mohamad Hanadzlah. Out of RM767m, TSR Bina's work package is worth RM329.9m, Naim Engineering’s work package worth RM208.2m and IJM Construction’s work package worth RM228.9m. (StarBiz)

Starhill REIT distributes 3.62 sen
Starhill REIT announced a final income distribution of 3.62 sen per unit for the six-month period from 1 Jan till 30 June. The total payout amount translates to RM48m. For the six-months ended 31 Dec, Starhill REIT had paid out a 4.01 sen interim dividend. In total, its income distribution for its financial year ended 30 June 2012 stands at 7.63 sen per unit, compared to 6.49 sen per unit in the previous year. “The completion this financial year of the rebranding exercise to transform the trust into a pure-play hospitality REIT marks a turning point. Starhill REIT’s property portfolio has now been fully rationalised to focus on prime, yield-accretive hotel and hospitality-related assets. This has enabled us to achieve a 32% increase in the total income distribution from the trust to RM101.1m,” Tan Sri Francis Yeoh said in a statement. (StarBiz)

20120712 1015 Global Market Related News.

Asia FX By Cornelius Luca - Thu 12 Jul 2012 16:54:03 CT (Source: CME/
The financial markets continued to avoid risk on Thursday amid lack of Fed easing and increasing unemployment. However, losses were small, as the initial shock dissipated. The European currencies and the Australian dollar deepened losses after the falling on Wednesday. The US stock indexes fell slightly, but the gold/oil ratio declined.
The short-term outlook for the European and commodity currencies is sideways, but they are due for a minor correction. 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: First time claims unemployment benefits unexpectedly fell to 350,000 in the week ended July 7th, due to seasonal distortions, from the previous week's revised figure of 376,000.
Canada: The new housing price index rose by 0.3% in May after rising 0.2% in April.

Today's economic calendar
China:   Gross Domestic Product
China:   Industrial production in June
China: Retail sales in June
Japan: Industrial production in May

Asian Stocks Swing Between Gains, Losses Before China GDP (Source: Bloomberg)
Asian stocks swung between gains and losses ahead of a report today that is forecast to show China’s economy is slowing, and as South Korea cut this year’s growth forecast and Singapore’s economy shrank last quarter. Dentsu Inc. (4324), a Japanese advertising company, sank 5.3 percent after agreeing to buy Britain’s Aegis Group Plc. Korea Zinc Co., the refined zinc producer, climbed 1.3 percent in Seoul after Shinyoung Securities Co. said the company’s second- quarter operating profit will probably exceed consensus estimates. China Pacific Insurance (Group) Co., an insurer, may be active in Hong Kong after saying it expects its first-half profit to drop about 55 percent. The MSCI Asia Pacific Index (MXAP) was little changed at 114.66 as of 9:42 a.m. in Tokyo, headed for a 3.3 percent decline for the week. It earlier fell as much as 0.1 percent. About twice as many shares rose as fell in the measure before markets in China, Hong Kong and Singapore open.
“Concern is mounting about a slowdown in the global economy,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc., Japan’s biggest brokerage. “Should Chinese data slow more than expected, that would boost bets about policy measures such as interest-rate cuts and public investment.” The MSCI Asia Pacific Index fell 11 percent from this year’s high on Feb. 29 through yesterday, as Europe’s spreading debt crisis weighed on growth and corporate earnings. Shares in the measure are valued at 11.7 times estimated earnings on average, compared with 12.8 times for the Standard & Poor’s 500 Index and 10.6 times for the Stoxx Europe 600 Index.

Japanese Stocks Swing From Gains, Losses on Chinese Loans (Source: Bloomberg)
July 13 (Bloomberg) -- Japanese stocks swung between gains and losses after a report showed China’s new loans exceeded estimates ahead of economic growth data to be released today. Shares fell earlier after Italy’s sovereign debt rating was cut by Moody’s Investors Service. Fanuc Corp. (6954), which provides robotics for Chinese factories, rose 1.2 percent. Mitsui O.S.K. Lines Ltd. led shipping companies lower after a key gauge of cargo rates fell. Dentsu Inc. fell 6 percent after the 111-year-old advertising company agreeing to buy Britain’s Aegis Group Plc in a 3.16 billion- pound ($4.9 billion) deal, the biggest in Dentsu’s history.
The Nikkei 225 Stock Average (NKY) added 0.1 percent to 8,728.23 as of 9:35 a.m. in Tokyo after falling as much as 0.3 percent. The gauge is headed for a 3.2 percent slide this week, which would be the first weekly loss in six weeks. Volume was 38 percent above the 30-day average as traders settled on the price of Nikkei 225 options for July. The broader Topix Index was little changed at 747.80. “Concern is mounting about a slowdown in the global economy,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc., Japan’s biggest brokerage. “Should Chinese data slow more than expected, that would boost bets about policy measures such as interest-rate cuts and public investment.”
A Chinese government report today is expected show the nation’s economic growth rate fell below 8 percent for the first time since 2009, according to the median estimate in a Bloomberg News survey of economists. Data on industrial production and retail sales are also due to be released today.

S&P 500 Has Longest Slump Since May on Economic Concern (Source: Bloomberg)
U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the longest slump since May, as concern intensified about a slowdown in the global economic recovery and American corporate earnings. Equities pared earlier losses as Procter & Gamble Co. (PG) and Merck & Co. rallied more than 3.7 percent, while an S&P index of homebuilders jumped 2.4 percent. Bank of America Corp. (BAC) and Morgan Stanley (MS) slipped at least 1.9 percent, pacing declines among banks. Supervalu (SVU) Inc. sank 49 percent after the third- largest U.S. grocery chain said it will review strategic alternatives for the business and suspended its dividend.
The S&P 500 (SPX) slid 0.5 percent to 1,334.76 at 4 p.m. New York time, paring a drop of as much as 1.2 percent. The benchmark index for American equities retreated for a sixth straight day, losing 2.9 percent over the period. The Dow Jones Industrial Average fell 31.26 points, or 0.3 percent, to 12,573.27, after losing more than 112 points. Volume for exchange-listed stocks in the U.S. was 6.5 billion shares, 3.3 percent below the three- month average. “There’s a worldwide slowdown,” Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, said in a phone interview. The firm oversees $40 billion. “Wall Street analysts have been reducing their second- quarter earnings estimates as companies have guided them lower. Profit growth, which has been a main driver for the market, will be less supportive going forward.”

Canadian Stocks Fall as Commodity Shares Slump on Economy (Source: Bloomberg)
Canadian stocks fell as banks and commodity producers slumped amid concern the global economic recovery is slowing down. Canadian Natural Resources Ltd. (CNQ) and Suncor Energy Inc. (SU), two of the nation’s largest energy providers, each declined 1.4 percent. Goldcorp Inc. lost 0.4 percent as the metal slipped on the Comex for the third day. Royal Bank of Canada, the nation’s largest lender, fell 1.2 percent. Bank and energy stocks were the biggest drag on the Standard & Poor’s/TSX Composite Index (SPTSX), with all 10 industries falling. The S&P/TSX slumped 119.17 points, or 1 percent, to 11,425.47, after rising 0.3 percent yesterday. The benchmark index has dropped 4.4 percent in 2012. “You can see how sentiment is very negative right now,” Jason Hornett, who co-manages C$250 million for Calgary-based Bissett Investment Management, said in a phone interview. “We’re going to feel the pain in energy and materials stocks more than the U.S. equity indexes because we have more exposure.”
Global equities fell amid further signs that the economic recovery is faltering. Bank of America Corp. strategists reduced earnings estimates for S&P 500 companies for this year and next, citing Europe’s debt crisis and slowing growth in China. Data due tonight may show China’s economic growth fell below 8 percent for the first time since 2009, according to the median estimate in a Bloomberg News survey. Royal Bank of Canada fell 1.2 percent to C$52.18. Toronto- Dominion Bank, the second-largest, dropped 0.7 percent to C$79.25. Bank of Nova Scotia slipped 1.4 percent to C$52.32.

European Stocks Decline as Fed Damps Stimulus Optimism (Source: Bloomberg)
European stocks declined the most in more than two weeks as minutes released by the Federal Reserve disappointed investors seeking a more definitive signal for further quantitative-easing measures. Temenos Group AG plunged 28 percent to a three-year low after reducing its estimate for 2012 revenue growth and saying its chief executive officer quit. Ashmore Group Plc (ASHM) dropped 6.7 percent after the fund manager reported a drop in assets. Aegis Group Plc surged 45 percent, the most in 21 years, after Japan’s Dentsu Inc. agreed to buy the company. The Stoxx Europe 600 Index (SXXP) fell 1.1 percent to 252.89 at the close in London, the biggest retreat since June 25. The benchmark measure has retreated 0.6 percent this week, after a five-week rally, as concern mounted the slowing economic growth will curb earnings in the U.S. and Europe.
“It was clear that the Fed would not take any actions because they already have the Operation Twist program,” said Andreas Lipkow, an equity trader at MWB Fairtrade Wertpapierhandelsbank AG in Frankfurt. “Some market participants hoped that the Fed would give some signals for further actions.” The Federal Open Market Committee said on June 20 it will expand Operation Twist to extend the maturities of assets on its balance sheet, and it stands ready to take further action as needed.

Dollar Index May Climb More, JPMorgan Says: Technical Analysis (Source: Bloomberg)
The Dollar Index may extend its climb beyond a two-year high after rising above a key technical level, according to JPMorgan Chase Co. The gauge closed yesterday at 83.568, breaking through a resistance level at 83.55 as it exceeded its June 1 high, Niall O’Connor, a New York-based technical analyst at the firm, wrote today in a client note. It now may rise to 84.93, he said in an interview. The dollar has gained as the euro and higher-yielding currencies have slid amid European financial turmoil, he said. “The dollar’s strength has been through the euro’s weakness, and the Dollar Index has been range-bound,” O’Connor said. “Now, we’re starting to see other dollar pairs weaken against the dollar, like we’ve seen in the commodity currencies today, so it’s more confirmation of a broader dollar move.”
The index rose as much as 0.3 percent today to 83.829, the highest since July 2010. The greenback strengthened against all of its 16 most-traded counterparts tracked by Bloomberg except the yen. The Australian and New Zealand dollars, whose countries export commodities, fell against most peers. Intercontinental Exchange Inc. uses the Dollar Index to track the greenback against the currencies of six major U.S. trading partners. The 84.93 level, the highest since June 2010, is the 76.4 percent Fibonacci retracement of a two-year decline. A drop below 82.95 may signal a short-term end to the rally, O’Connor said. Resistance is a level on a chart where sell orders may be clustered. Fibonacci analysis is based on the theory that prices increase or decrease by certain percentages after reaching new highs or lows. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.

Pound Falls to Five-Week Low Versus Dollar on Recession Concern (Source: Bloomberg)
The pound fell to its lowest level in five weeks versus the dollar on concern efforts to pull the U.K. out of its first double-dip recession since the 1970s will be hampered by the euro-area crisis and declining global growth. Sterling slid for a third day against the U.S. currency after PricewaterhouseCoopers LLP said British businesses should prepare for the possibility of a “prolonged recession” if Europe’s sovereign-debt turmoil worsens. Ten-year yields fell to the least since June 1 after the U.K. sold bonds maturing in 2022 at a record-low yield. “Given the situation in Europe, the U.K. recession may not end until next year, and that is an optimistic scenario,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “The pound will weaken alongside the euro, while the dollar is strengthening broadly as risk aversion is creeping back into the market.”
The pound fell 0.5 percent to $1.5417 at 4.30 p.m. London time after weakening to $1.5394, the lowest level since June 6. The U.K. currency fell 0.2 percent to 79.06 pence per euro. It appreciated to 78.71 yesterday, the strongest since Nov. 3, 2008. The pound may find support at last month’s low of $1.5269 and this year’s low of $1.5235, and later $1.5192, the 61.8 percent Fibonacci retracement of its rally between May 2010 and April 2011, according to data compiled by Bloomberg.

FOREX-Euro at 2-year low vs firmer dollar; yen gainsc
LONDON, July 12 (Reuters) - The euro fell to a two-year low against a broadly firmer dollar after minutes from the Federal Reserve dampened prospects of more U.S. monetary stimulus in coming months, weighing on riskier assets and growth-linked currencies. "Risk aversion is creeping back into the market. There is disappointment that the BoJ left policy unchanged and the Fed gave no clear signal that further quantitative easing was likely to be forthcoming in August," said Lee Hardman, currency economist at BTMU.

Treasury Yield Is 3 Basis Points From Low Before PPI Data (Source: Bloomberg)
Treasury 10-year yields were three basis points from the record low before a report today that economists said will show inflation is slowing. U.S. government securities headed for a third weekly gain after Moody’s Investors Service cut Italy’s debt rating and a report in Singapore showed the economy unexpectedly shrank, fueling demand for the safest assets. The difference between yields on 10-year notes and same-maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices, was 2.05 percentage points, versus the average over the past decade of 2.15 percentage points. “The inflation numbers continue to decline,” said Hiromasa Nakamura, who helps oversee the equivalent of $41.5 billion as an investor at Mizuho Asset Management Co. in Tokyo. “This month yields will probably reach a record low.” Benchmark 10-year notes yielded 1.47 percent as of 10:01 a.m. in Tokyo, according to Bloomberg Bond Trader prices.
The all-time low was 1.44 percent on June 1. The 1.75 percent security maturing in May 2022 changed hands at 102 18/32 today. Labor Department figures today will probably show the U.S. producer price index slid for a third month in June with a 0.5 percent decline, according to the median estimate of economists surveyed by Bloomberg News. Consumer prices were probably unchanged, after falling 0.3 percent in May, based on a separate survey before the July 17 report. Moody’s lowered Italy’s government bond rating by two steps to Baa2, citing weakening economic growth and rising unemployment, according to a statement issued in Frankfurt today.

Bond Danger Reaches Record High as Yields Lure: Credit Markets (Source: Bloomberg)
Corporate bonds have never been more perilous for investors who are scooping up longer-maturity debt at the fastest pace since 2008 in a bet the Federal Reserve will keep interest rates at record lows through late 2014. The duration of global company bonds, a measure of the securities’ price sensitivity to yield changes that rises with longer maturities, reached a record high yesterday, according to Bank of America Merrill Lynch index data. An investor holding $10 million of United Technologies Corp. (UTX)’s 4.5 percent debentures due 2042 would lose about $565,000 if the yield increased to 4 percent from 3.7 percent now. While the Fed has said its benchmark rate will likely remain in a range of zero to 0.25 percent through late 2014, Goldman Sachs Group Inc. and Bank of America Corp. say the central bank won’t move until the middle of 2015 as the economy slows. The International Monetary Fund will cut its 3.5 percent estimate for global growth this year, Managing Director Christine Lagarde said last week.
Bond buyers are “reading the tea leaves from the Federal Reserve to mean that there’s no near-term danger of policy rates rising,” Martin Fridson, global credit strategist at BNP Paribas Investment Partners, said in a telephone interview from New York. “As the pressure mounts to get yield, investors one way or another come up with a way to go out longer than they traditionally have.”

Aussie, Kiwi Set for Weekly Drop on China Growth Concerns (Source: Bloomberg)
The Australian and New Zealand dollars headed for their second week of losses amid signs China’s economy is slowing, dimming the outlook for the South Pacific nations’ exports to Asia’s biggest economy. The so-called Aussie held onto the biggest decline against the yen since May as Asian shares failed to rally for a seventh day before data forecast to show growth in China’s gross domestic product in the second quarter was the slowest in three years. The Reserve Bank of New Zealand will announce today data on government debt held by international investors last month. “We expect China’s Q2 GDP to disappoint,” said Gavin Stacey, the Sydney-based chief rate strategist at Barclays Plc. “That would be disappointing for the market and therefore would likely hit the Australian dollar.”
Australia’s currency was at $1.0128 at 10:54 a.m. in Sydney from $1.0139 at the close yesterday, set for a 0.8 percent drop this week. It was little changed at 80.39 yen, after weakening 1.7 percent yesterday, the sharpest decline since May 30. The New Zealand dollar traded little changed at 78.92 U.S. cents, having depreciated 1.1 percent since July 6, and fetched 62.61 yen from 62.62. The yield on Australia’s one-year government notes slid as much as four basis points, or 0.04 percentage point, to an all- time low of 2.277 percent. The 10-year rate fell three basis points to 2.86 percent, the least since June 5.

Yen Gains to Six-Week High Versus Euro on Growth Outlook (Source: Bloomberg)
The yen climbed to the strongest level in six weeks against the euro and gained versus all its most-traded counterparts as signs global growth is slowing underpinned demand for the relative safety of the currency. The dollar rose versus most major peers as the euro slid below $1.22 for the first time since July 2010 and the pound dropped on concern the European crisis remains unresolved. The Bank of Japan (8301) refrained from expanding stimulus, adding to haven demand. The Australian dollar tumbled after employers cut jobs, while Canada’s currency erased losses as crude oil, the nation’s biggest export, ended a retreat. “The Bank of Japan to some degree disappointed with its report today,” Shaun Osborne, chief currency strategist at Toronto-Dominion Bank (TD)’s TD Securities unit, said in a telephone interview. “There was some additional easing, but it was really just a shuffling of the deck. Markets were a bit disappointed that there was no new money involved.”
The yen gained 0.9 percent to 96.80 per euro at 5 p.m. New York time after appreciating earlier to 96.43, the strongest level since June 1. The Japanese currency advanced 0.6 percent to 79.31 per dollar. The euro weakened 0.3 percent to $1.2203 after sliding to as low as $1.2167. Japan’s currency rose versus the dollar as the extra yield investors receive for investing in two-year U.S. Treasuries versus comparable Japanese government bonds fell to the lowest in a month, limiting dollar-denominated assets’ appeal. The yield spread was 16 basis points, or 0.16 percentage point.

Yen Trades Near 6-Week High Versus Euro on Growth Concern (Source: Bloomberg)
The yen traded 0.4 percent from the strongest level in six weeks against the euro as signs global growth is slowing boosted demand for haven assets. The yen was set to gain versus all 16 major peers this week before data forecast to show China’s gross domestic product growth and industrial production slowed and U.S. consumer confidence stagnated. The euro was 0.2 percent from a two-year low against the dollar after Moody’s Investors Services cut Italy’s bond rating before the nation sells debt today. “Most developed economies around the world are either in contraction or experiencing only very modest growth,” said Andrew Salter, a strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Sydney. “Most investors that are looking for a global recovery are looking towards China to supply it. If we do get a Chinese GDP number that is weaker, there’ll be a move into currencies that are traditional safe havens” such as the yen and the dollar, he said.
The yen traded at 96.79 per euro as of 10:12 a.m. in Tokyo from 96.80 yesterday, when it reached 96.43, the strongest level since June 1. Japan’s currency is set for a 1.1 percent gain this week. The yen was little changed at 79.38 per dollar from yesterday, when it advanced 0.6 percent. It’s poised for a 0.4 percent weekly gain. The euro bought $1.2195 from $1.2203 yesterday, when it touched $1.2167, the least since June 2010.

China New Yuan Loans Top Forecasts; Forex Reserves Shrink (Source: Bloomberg)
China’s new loans exceeded estimates in June, boosting odds the government will secure an economic rebound after growth probably slowed for a sixth quarter. Banks extended 919.8 billion yuan ($144.3 billion) of local-currency loans, the People’s Bank of China said yesterday. That compares with the 880 billion yuan median forecast in a Bloomberg News survey. Foreign-exchange reserves fell to $3.24 trillion at the end of June, the central bank said, a record quarter-to-quarter drop. The pickup in lending bolsters Premier Wen Jiabao’s case that easing policies, including the first interest-rate cuts since 2008, are showing results and that the economy has stabilized. The government will report data today that will probably show second-quarter growth of 7.7 percent, according to analyst estimates, a three-year low that Nomura Holdings Inc. says may mark the bottom of the slowdown.
“The data confirms our view that further rate cuts are not needed and thus are unlikely,” Dariusz Kowalczyk, a Hong Kong- based senior economist and strategist at Credit Agricole CIB, said in a research note yesterday.

Consumer Comfort in U.S. Stagnates Amid Unemployment (Source: Bloomberg)
Consumer confidence stagnated last week as scant improvement in the labor market left Americans more discouraged about the economy. The Bloomberg Consumer Comfort Index held at minus 37.5 in the week ended July 8. Some 86 percent of those surveyed said the economy was in bad shape, 21 percentage points higher than the average since 1985. “Consumers remain generally downbeat about the economy and expectations for the future,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Given slower job growth and the recent stabilization of oil and gasoline prices near current levels, there is little impetus to support an improvement in overall sentiment in the near term.” Gasoline prices that are no longer falling along with the labor market’s worst quarterly performance since the first three months of 2010 risk stifling the consumer spending that accounts for 70 percent of the U.S. economy.
Flagging sentiment stretches around the globe, according to a Pew Research Center report that showed Europe’s debt crisis is taking a toll.

Fed’s Williams Sees 8% Unemployment Into 2013 (Source: Bloomberg)
Federal Reserve Bank of San Francisco President John Williams said he expects the unemployment rate to remain at or above 8 percent into next year as the economy enters a period of slower job growth. “Progress on bringing down the unemployment rate has probably slowed to a snail’s pace and perhaps even stalled,” Williams said today in the text of a speech in Portland, Oregon. The policy-setting Federal Open Market Committee extended its Operation Twist program last month to lower longer-term interest rates and bolster growth. A few members of the FOMC said the Fed will probably need to ease policy further to move the economy toward its target for full employment and stable prices, according to minutes of that meeting released yesterday.
The jobless rate is “still much too high, and economic growth is far short of what’s needed to keep bringing it down quickly,” Williams said in remarks similar to a speech he gave in Coeur D’Alene, Idaho, on July 9. “We stand ready to do what is necessary to attain our goals of maximum employment and price stability.” Minutes of the June 19-20 meeting highlighted Fed officials’ concerns over the tempering economic outlook. Fifteen participants said the risks to the economy were weighted to the downside in June, up from eight in April, yesterday’s release showed. Two said additional bond purchases are appropriate while two others said they would be warranted in the absence of “satisfactory” employment gains.

Job Openings in U.S. Rose in May After April Plunge (Source: Bloomberg)
Job openings increased in May after plunging the prior month, easing concern the U.S. job market was faltering. The number of positions waiting to be filled climbed by 195,000 to 3.64 million, partially countering the 294,000 drop seen in April, the Labor Department said today in Washington. Another report showed confidence among small companies slumped in June. Increasing demand for workers indicates some companies see an opportunity to expand as sales improve. At the same time, the report showed firings also picked up, indicating the European debt crisis and slowing growth in emerging markets like China may be prompting some employers to cut back. “The labor market still looks pretty tenuous,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. The April report “sent some worrying signals that maybe things were in free fall. You have the May report and you can see businesses were turning a bit more cautious, but they weren’t completely pulling back.”

Import Prices in U.S. Fell in June by Most Since 2008 (Source: Bloomberg)
Prices of goods imported into the U.S. decreased more than forecast in June as declining energy costs curbed inflation. The 2.7 percent plunge in the import-price index was the biggest since December 2008 and followed a 1.2 percent drop in May, Labor Department figures showed today in Washington. Prices excluding fuel fell 0.3 percent, the most in almost two years. The cost of goods and materials that the world’s largest economy purchases from abroad may remain depressed as cooling markets from Europe to Asia restrain demand for commodities like oil. A rising dollar also means American companies can hold the line on prices, consistent with Federal Reserve policy makers’ projections that inflation will ebb. “Global demand is leaning toward slower growth,” said Jonathan Basile, an economist at Credit Suisse in New York. “Prices are under control. The Fed doesn’t have to worry about inflation.”
Import costs were projected to decline 1.8 percent, according to the median forecast of 47 economists in a Bloomberg News survey. Projections ranged from decreases of 0.4 percent to 2.8 percent.

Jobless Claims in U.S. Plunge on Fewer Auto Shutdowns (Source: Bloomberg)
Fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, reflecting the volatility of applications during the annual auto-plant retooling period. Applications for jobless benefits decreased by 26,000 in the week ended July 7 to 350,000, the fewest since March 2008, Labor Department figures showed today. Economists forecast 372,000 claims, according to the median estimate in a Bloomberg News survey. Last week’s distortion is likely to unwind slowly over coming weeks, a Labor Department spokesman said as the data was released to the press. Automakers including Chrysler Group LLC, Ford Motor Co. (F) and Nissan Motor Co. are keeping more plants than normal open during this time of year to fulfill demand and replenish inventories. For that reason, it may take time to determine if the labor market is making any progress.
“You can never take claims at face value because of the July shutdowns,” said Jonathan Basile, an economist at Credit Suisse in New York, who projected the number of applications would drop to 355,000. “We are in a period of uncertainty. This makes for a situation where businesses will hold off on taking risks regarding investment and payrolls.” Prices of imported goods decreased more than forecast in June as declining energy costs curbed inflation, another Labor Department report showed. The 2.7 percent plunge in the import- price index was the biggest since December 2008 and followed a 1.2 percent drop in May. Prices excluding fuel fell 0.3 percent, the most in almost two years.

BOJ Refrains From Adding Stimulus, Spurring Stock Decline (Source: Bloomberg)
The Bank of Japan refrained from expanding monetary stimulus as signs of strength in the domestic economy outweighed the threat from Europe’s debt crisis. The bank expanded its asset-purchase program to 45 trillion yen ($564 billion) from 40 trillion yen, according to a policy statement released in Tokyo today. Seven of 17 economists surveyed by Bloomberg News predicted monetary easing. The loan facility was cut to 25 trillion yen from 30 trillion yen. Stocks fell after the decision, which followed South Korea’s central bank unexpectedly lowering borrowing costs today and China cutting interest rates last week. Japanese Finance Minister Jun Azumi this morning called for the central bank to do more to boost the world’s third-biggest economy and meet a 1 percent inflation goal.
“This is simply a technical move that shouldn’t be considered to be monetary easing,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. in Tokyo, and a former BOJ official. “Some market participants will be disappointed to see that the BOJ didn’t ease policy.” The central bank this month raised its economic evaluation of all regions for the first time in more than two years, citing improvements in consumer spending and rebuilding demand from last year’s earthquake.

Bank of Korea Trims 2012 Growth Forecast After Rate Cut (Source: Bloomberg)
The Bank of Korea reduced its 2012 economic-growth forecast for the second time this year, a day after it unexpectedly cut interest rates and signaled it would act preemptively to protect against slowing global growth. South Korea’s economy will expand 3 percent this year, the central bank said today in a statement, an estimate lowered from a 3.5 percent prediction made in April and 3.7 percent in December. Consumer prices are expected to rise 2.7 percent, down from an earlier forecast of a 3.2 percent price gain. Bank of Korea Governor Kim Choong Soo said yesterday the board cut its benchmark rate a quarter percentage point in response to “deteriorating external conditions.” The won dropped the most since May 16 yesterday, leading Asian currencies lower amid mounting concern the global economy is faltering.
“It’s quite a big cut to the growth estimate, suggesting weakening exports are beginning to erode domestic demand and there won’t be a quick fix,” said Park Sang Hyun, chief economist at HI Investment & Securities Co. in Seoul. “The BOK may cut interest rates again as early as August and sometime in the fourth quarter as growth momentum is losing steam quite fast while prices are pretty stable.”

Singapore GDP Unexpectedly Shrinks as Europe Crimps Exports (Source: Bloomberg)
Singapore’s economy unexpectedly contracted last quarter as manufacturing fell, adding to signs of a deepening slowdown in Asian expansion as Europe’s debt crisis curbs demand for the region’s goods. Gross domestic product fell an annualized 1.1 percent in the three months through June from the previous quarter, when it climbed a revised 9.4 percent, the Trade Ministry said in an e- mailed statement today. The median of 14 estimates in a Bloomberg News survey was for a 0.6 percent gain. The economy expanded 1.9 percent from a year earlier.
The Asian Development Bank cut its growth forecast for the region yesterday and South Korea unexpectedly reduced interest rates as it joined countries from Brazil to China in easing borrowing costs this month to protect their economies. Singapore’s exports declined in May from the previous month, and the government has highlighted the risk of a worsening in the European turmoil even after a growth rebound in the first quarter prompted the island’s central bank to tighten policy. “The growth momentum has clearly come off due to the softening of industrial production and non-oil domestic exports so far this year,” Aninda Mitra, a Singapore-based economist at Australia & New Zealand Banking Group Ltd., said before the report. “What may help Singapore is not so much government support but a pick-up in Chinese growth in the second half as its recent monetary easing and fiscal spending starts to take effect.”

Samaras Pledges Greek Budget Reforms as Doubts Rise on Goals (Source: Bloomberg)
Greece’s government will implement reforms to convince the European Union and the International Monetary Fund of the need for more time to reduce the budget deficit as officials confirmed the country will fall short of promised funds from the sale of state assets this year. Prime Minister Antonis Samaras and coalition partners Evangelos Venizelos, the head of the Pasok party, and Democratic Left leader Fotis Kouvelis agreed yesterday to press ahead with reforms after an official at the state-asset sale fund said Greece won’t be able to raise 3.2 billion euros ($3.9 billion). “We must pursue reforms, we must convince them that the recession is worse than expected, we must sell state assets, to prove our credibility,” Venizelos told reporters in Athens after the meeting. “Talks are never easy. It is important to present the right arguments.”
Samaras’s government faces the risk of running out of money and defaulting while seeking to qualify for 4.2 billion euros in aid. That payment, which was due in late June as the first tranche of a 31 billion-euro transfer, was stalled because parliamentary elections delayed a review of Greece’s progress on fiscal-austerity conditions.

Hollande’s Pledge to Block Firings Defied by Peugeot’s Reality (Source: Bloomberg)
PSA Peugeot Citroen (UG)’s plan to close a factory in France for the first time in two decades represents the biggest challenge to Socialist President Francois Hollande’s promise to prevent a wave of job cuts. For Hollande, who pledged during his campaign to block what he called an expected “parade of firings,” the cuts by France's largest carmaker leave him squeezed between businesses seeking measures to spur growth and demands of his union supporters. Peugeot, whose announcement yesterday brought its job cuts to 14,000, is hardly alone. Air France-KLM Group (AF) is eliminating more than 5,000 slots. Drugmaker Sanofi (SAN) may reduce staff by more than 2,000. Economists say more mass firings are likely as growth grinds to a halt. “There’s going to be an avalanche of job cuts and the expectations of public opinion are huge,” said Jerome Fouquet, a director of pollster Ifop in Paris, who says that unemployment is the top concern among voters. “This puts the government in a very difficult position.”
The French economy, Europe’s second biggest, failed to grow in the first three months of the year. The Bank of France estimates that it probably shrank in the second quarter for the first time since 2009. The number of people looking for work in France was 2.92 million in May, more than at any time since 1999. The unemployment rate is 10 percent.

Peugeot to Shut Plant to Raise Job Cuts to 14,000 Posts (Source: Bloomberg)
PSA Peugeot Citroen (UG), Europe’s second-biggest carmaker, will shut the first auto factory in France in 20 years and reduce its workforce by 6.7 percent in an effort to stem widening operating losses. The automaker will cut a total of 14,000 jobs, with 8,000 additional positions being eliminated on top of the 6,000 posts already announced last year, Chief Executive Officer Philippe Varin said today at a press conference in Paris. French Prime Minister Jean-Marc Ayrault called the factory closing and workforce reductions a “true shock” for employees. Peugeot, Renault SA (RNO) and Fiat SpA (F) have posted the biggest sales declines this year in Europe, where Peugeot now expects the market to contract 8 percent. Moody’s Investors Service in March was the last of the three main credit-reporting companies to cut Peugeot’s debt rating to junk.
“Peugeot is struggling with the power of Volkswagen, especially on the credit side, as VW benefits from lower costs of financing,” said Kristina Church, a Barclays analyst in London with an “underweight/neutral” rating on Peugeot shares. “More importantly, Peugeot still has an issue with overcapacity and is in a worse position than Renault.”

20120713 1014 Global Commodities Related News.

Evolving Hedge Funds Come Out Fighting (Source: CME)
It has been a scandal-packed few months for the European financial services community, with few outside of the industry having anything positive to say, but one sector, which has had to deal with negative headlines in the recent past, has come out fighting by portraying the valuable role it plays in society. The Alternative Investment Management Association (AIMA), the global hedge fund industry association, has highlighted the important role hedge funds are increasingly playing such as managing investments for pension funds, university endowments, charitable foundations and other socially-important institutional investors. "When people in Europe ask what social value is provided by Europe's hedge fund industry, they are asking a perfectly legitimate question," said Andrew Baker, AIMA's chief executive. "And our answer to that question is really very simple. Not only is our industry responsible for 50,000 jobs in Europe, but because institutional investors are increasingly investing in hedge funds, our industry plays a major part in protecting the pensions of ordinary European citizens, boosting the resources of universities and charities and cutting the cost of insurance premiums." After the Bernard Madoff scandal first broke in December 2008, with the U.S. businessman pleading guilty in March 2009 to operating a Ponzi scheme considered to be the largest financial fraud in U.S. history, the perception of the hedge fund industry took a battering from the world's media. Although Madoff did not run a hedge fund himself, hundreds of hedge funds invested in his Ponzi scheme with prosecutors estimating that the size of the fraud was $64.8 billion. But AIMA, which this week issued a paper highlighting the social and economic value provided by the hedge fund industry, estimates that there are 50,000 people employed directly or indirectly by the hedge fund industry in Europe–the first such statistic of its kind produced–and 300,000 worldwide. Additionally, AIMA's paper looked to debunk a number of popular myths about the industry, such as that the industry is "unregulated", takes excessive risks and is "secretive". The Alternative Investment Fund Managers (AIFMD) Directive, which will, for the first time, put hedge funds and other private equity vehicles under European Union supervision, has caused some consternation within the hedge fund industry and is set to go live from 2013. "The hedge fund industry suffered big disappointments over AIFMD, but it is coming in now and we will be prepared for it," one hedge fund executive, based in London, told Markets Media. "But I wouldn't say it will be a revolution, more an evolution in the way we operate. Also, the more institutional money that hedge funds attract–because they demand better quality, better systems and more transparency–means that hedge funds have had to set themselves up in a better way anyway." Meanwhile, hedge funds posted meager gains in June to close the first half of the year with modest gains of 1.7%, according Chicago-based Hedge Fund Research (HFR), a provider of data and analysis for the alternative investment industry. Last month, the average hedge fund posted gains of 0.05%, according to HFR, although the benchmark S&P 500 stock index rose 4.12% in June and was up 9.48% year-to-date as of June 30. "Hedge fund performance in the first half of 2012 reflects the challenging and volatile environment created by the combination of slowing global growth, persistently low levels of investor risk tolerance and the wide-ranging impacts of the European financial crisis across asset classes and global regions," said Kenneth J Heinz, president of HFR. Not all strategies have performed badly though, with fixed income-based relative value arbitrage strategies up 4.3% for the year so far and event-driven strategies up 2.4% for the same period. "The broad based gains concentrated in relative value arbitrage and event-driven strategies reflect not only defensive positioning with regard to the European sovereign debt crisis, but caution with regard to regulatory and shareholder reaction to developments at specific financial institutions. Performance also reflects continued evolution of the hedge fund industry toward lower equity market beta strategies; we expect hedge fund industry growth to continue along these dynamics in coming quarters."

DTN Closing Grain Comments 07/12 14:57 : Corn, Wheat Sharply Higher (Source: CME)
Corn ended its two-day losing streak in a big way by closing sharply higher on continued support from a lack of rain in the forecast. Wheat also had a strong day fueled by crop concerns globally and the possibility of increasing feed demand. Soybeans lagged well behind as investors continue to mostly sit on the sideline.

Wheat Market Recap Report (Source: CME)
September Wheat finished up 20 1/2 at 846 3/4, 11 1/4 off the high and 26 1/2 up from the low. December Wheat closed up 21 1/2 at 859 3/4. This was 26 1/4 up from the low and 10 1/4 off the high. Chicago wheat was up 23 cents late in the session and managed to push out to new 11 month highs. Minneapolis wheat was also up strong which KC lagged gains in the other wheats by about 5 cents. The continued surge in corn prices on fears of broadening pollination problems in Iowa next week helped to support active buying. The USDA lowered US and world ending stocks yesterday and commercial traders see the need for a further 3-5 million tonne drop in global production from the USDA estimate from yesterday. In addition, surging feedgrain prices suggest a significant increase in global wheat feeding for livestock. Net weekly export sales for wheat came in at 311,800 metric tonnes which was well below trade expectations. As of July 5th, cumulative wheat sales stand at 22.8% of the USDA forecast for 2012/2013 (current) marketing year versus a 5 year average of 25.7%. Sales of 533,000 metric tonnes are needed each week to reach the USDA forecast. Iraq is tendering to buy 50,000 tonnes of wheat. Surging corn prices and ideas that US wheat sales will pick-up in the weeks ahead helped to support. European milling wheat futures closed sharply higher and pushed to new 16 month highs. September Oats closed up 6 1/4 at 370 1/2. This was 10 3/4 up from the low and 1 1/2 off the high.

Corn Market Recap for 7/12/2012 (Source: CME)
September Corn finished up 28 1/2 at 732 1/2, 6 off the high and 28 up from the low. December Corn closed up 28 1/4 at 732 1/4. This was 27 1/4 up from the low and 7 off the high. December corn closed sharply higher on the session as fund and speculative buying emerged despite the bearish technical action from yesterday. Weather fears persist with a special focus on pollinating corn in Iowa. Parts of Iowa may get up to 1/2 inch of rain into early next week but forecast models are mixed with the idea. Temperatures look to surge into the 100's and with extremely dry topsoil (88% of the state showing short to very short topsoil conditions as compared with 15% as the 5-year average) traders see very poor weather for pollination which could lead to permanent yield loss. Rain is expected for the eastern Corn Belt for the second half of next week but traders see rains in this region as beneficial but not so much for corn yield which was already permanently damaged in the Eastern Corn Belt. Net weekly export sales for corn, came in at 172,700 metric tonnes for the current marketing year and 492,100 for the next marketing year for a total of 664,800 which was higher than expected. As of July 5, cumulative corn sales stand at 96.2% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 97.0%. Sales of 184,000 metric tonnes are needed each week to reach the USDA forecast. Ideas that crop conditions will continue to deteriorate until meaningful rainfall hits the Midwest has helped support. December corn has rallied as much as 54 cents off of yesterday's lows. September Rice finished down 0.115 at 14.995, 0.155 off the high and 0.125 up from the low.

USDA yield cut shifts corn's focus to demand
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
CHICAGO, July 11 (Reuters) - The U.S. Department of Agriculture surprised traders Wednesday by aggressively slashing its forecasts for U.S. corn yields sooner than usual in its reporting cycle, and before it has had the chance to conduct actual field surveys that it typically relies on to refine output projections.
But the bigger surprise may have been the shift in market focus from depleting supplies to waning consumption, as the USDA's latest crop balance sheets suggest demand destruction is already under way.

Crop Prices Rally as Expanding U.S. Drought Cuts Harvest Outlook (Source: Bloomberg)
Corn and soybeans rose for the first time in three days as an expanding drought in the U.S. Midwest increased the chances that yield losses will exceed government forecasts. Wheat also rallied. Most of the Midwest will get less than 20 percent of normal rain in the next five days, and temperatures will rise above 100 degrees Fahrenheit (35 degrees Celsius) in the four days ending July 18, according to T-storm Weather LLC. As much as 51 percent of the region got less than 25 percent of average rain in the past 14 days. The ratings of the corn and soybean crops are the lowest since 1988, government data show. “The warmer temperatures will increase yield losses for corn and raise the risks for soybeans,” Ron Mortensen, the president of Advantage Ag Strategies Ltd. in Fort Dodge, Iowa, said in a telephone interview. “Soil moisture is empty, and you can see the crops declining daily. Crops will get smaller without a dramatic increase in rain in the next two weeks.”
Corn futures for December delivery advanced 4 percent to close at $7.3225 a bushel at 2 p.m. on the Chicago Board of Trade. The price has jumped 44 percent since June 15, reaching $7.48 yesterday, the highest for a most-active contract since Sept. 13. Soybean futures for November delivery rose 0.4 percent to $15.29 a bushel. Yesterday, the oilseed reached $15.75, the highest since July 2008. Wheat futures for September delivery gained 2.5 percent to $8.4675 a bushel, the third gain this week. Earlier, the price reached $8.58, the highest since April 2011.

US corn firm on yield losses, soy falls for 3rd day
SINGAPORE, July 12 (Reuters) - Chicago corn rose 0.8 percent recouping some of last session's losses with support from U.S. government's estimates showing deeper reduction in yields although gains were capped by forecasts of rains in parts of the grain belt.
"The USDA report maintains a very bullish bias in the grains and oilseeds markets," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia.

Goldman cuts U.S. corn yield forecast, ups price view
July 12 (Reuters) - Investment bank Goldman Sachs cut its U.S. corn yield forecast for the second time in less than two weeks to 143.5 bushels per acre from 153.5 bushels per acre and raised its price forecasts for corn, soybean and wheat due to a drought in the U.S. Midwest.
The worst Midwest drought in a quarter century is doing more damage to U.S. crops than previously expected with the U.S. Department of Agriculture (USDA) slashing its estimate for what was supposed to be a record harvest.

Vietnam H1 rice exports drop to 3.82 mln T-customs
HANOI, July 12 (Reuters) - Vietnam's rice exports in the first half of this year dropped 6 percent from a year ago to 3.82 million tonnes, but sales to China soared five-fold year-on-year, the customs office said on Thursday.
Rice exports to China between January and June surged to 1.08 million tonnes from 222,000 tonnes from the same year-ago period, the customs office said.

Strategie Grains cuts EU 2012 grain crop estimates
PARIS, July 12 (Reuters) - Analyst Strategie Grains on Thursday cut its 2012 estimates for major grain crops in the European Union to take account of weather problems across the bloc, both drought and excessive rain, and warned of further reductions.
The main cut concerned the maize crop, seen 850,000 tonnes lower than last month at 65.1 million tonnes, now down 2 percent on 2011, following hot and dry weather in central and southeastern Europe.

U.S. corn crop on razor's edge as drought continues
MYSTIC, Iowa, July 11 (Reuters) - Scorching heat and rain-less skies continued to frustrate U.S. Midwestern farmers on Wednesday, with damage to the corn and soybean crops growing more dire by the day.
"There are a lot of people thinking of chopping their corn up and feeding it to cows," said University of Missouri Professor of Plant Sciences William Wiebold.

Midwest drought slashes US corn estimate, jolts market
WASHINGTON, July 11 (Reuters) - The worst Midwest drought in a quarter century is doing more damage to U.S. crops than previously expected with the government on Wednesday slashing its estimate for what was supposed to be a record harvest.
The U.S. Department of Agriculture said the corn crop will average just 146 bushels an acre, down 20 bushels from its June estimate and a much more dramatic drop than analysts had projected.

Bad weather in south hits yields, wheat quality
MOSCOW, July 11 (Reuters) - Inclement weather in Russia's southernmost agricultural regions has slashed yields of grains and legumes to 2.5 tonnes per hectare from 4.1 tonnes last year, early harvest data gathered by Russia's Agriculture Ministry showed.
As of July 11, Russia had harvested grain and legumes from 9.4 percent of the total target area, bringing in 10.6 million tonnes compared with 1.9 million tonnes a year earlier after a harsh drought hit the south in the middle of spring.

Disaster Declared in 26 States as Drought Sears U.S. (Source: Bloomberg)
More than 1,000 counties in 26 states are being named natural-disaster areas, the biggest such declaration ever by the U.S. Department of Agriculture, as drought grips the Midwest. The declaration makes farmers and ranchers in 1,016 counties -- about a third of those in the entire country -- eligible for low-interest loans to help them weather the drought, wildfires and other disasters, Agriculture Secretary Tom Vilsack said today. The USDA is also changing procedures to allow disaster claims to be processed more quickly and reducing the penalty ranchers are assessed for allowing livestock to graze on land set aside for conservation. “Agriculture remains a bright spot in our nation’s economy,” Vilsack said. “We need to be cognizant of the fact that drought and weather conditions have severely impacted farmers around the country.” The declaration is effective as of tomorrow.
Moderate to extreme drought now covers about 53 percent of the Midwest, the country’s main growing region, fueling crop- price gains that are the biggest this year among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index. The rallies are boosting costs for companies from McDonald’s Corp. (MCD) and Coca-Cola Co. (KO) to Archer Daniels Midland Co. (ADM) and Smithfield Foods Inc. (SFD)

SOFTS-Cocoa slides after plunge in Europe Q2 grind
LONDON, July 12 (Reuters) - Cocoa futures on ICE fell sharply in early trade after a much deeper than expected drop in the European second-quarter cocoa grind, a key measure of demand.
Raw sugar futures inched higher with upside potential limited by prospects for a big global surplus of the sweetener in 2012/13, and coffee dipped in light volumes.

Ivorian cocoa arrivals 1,047,364 T by Mar 31 -CCC
ABIDJAN, July 12 (Reuters) - Cocoa arrivals at ports in top grower Ivory Coast reached 1,047,364 tonnes by March 31, up from 1,038,929 tonnes in the same period a year ago, according to data from the Coffee and Cocoa Council (CCC) obtained by Reuters on Thursday.
The figure represents the total cocoa purchases made during the 2011/2012 main crop, which is marketed from October through March.

Vietnam June coffee exports fall 30.8 pct m/m -customs
HANOI, July 12 (Reuters) - Vietnam's actual coffee export loadings in June fell 30.8 percent from May to 140,900 tonnes, or 2.35 million 60-kg bags, Vietnam Customs said on Thursday, above market expectations.
Coffee exports in the first half of 2012 jumped 20.4 percent from the same period last year to nearly 1.05 million tonnes, or 17.5 million bags, the finance ministry-run customs department said in its monthly report.

Vietnam to help Angola rejuvenate coffee production
HANOI, July 12 (Reuters) - Vietnam, the world's second-largest coffee producer after Brazil, will help Angola revitalise its war-ravaged coffee production by planting the commodity on 100,000 hectares over the next decade, officials said on Thursday.
Prior to 1975 Angola ranked as the world's fourth-biggest coffee producer with annual shipments of around 4 million bags. But a civil war between 1975 and 2002 destroyed the southern African country's coffee sector.

German Q2 2012 cocoa grind down 16.73 pct on year
HAMBURG, July 12 (Reuters) - Germany's second quarter 2012 cocoa grind fell 16.73 percent on the year to 84,643 tonnes, the association of German confectionery producers BDSI said on Thursday.
Observers  had expected weak cocoa grinding figures because of sluggish chocolate sales.

Brazil exports 1.63 mln bags green coffee in June-Cecafe
SAO PAULO, July 11 (Reuters) - Brazilian green coffee exports reached 1.63 million bags in June, down 10 percent from the 1.82 million in the same month of 2010, the coffee exporters association Cecafe said on Wednesday.
Brazil's coffee crop, whose output varies in a biennial cycle with production rising one year and falling the next, pr oduced 4 3 .48 million 60-kg bags in the 2011/12 July-June low-crop year, compared with the 39.47 million bags from 2009/10.

Slowdown could cap oil prices but still risks –IEA
July 12 (Reuters) - Global economic slowdown could put a lid on oil prices but there is a risk that "nasty supply surprises" could reignite a market rally, the International Energy Agency said on Thursday.
The agency, which advises industrialised countries on energy policy, said market fundamentals had "clearly eased since the start of the year" and that oil stocks had built up significantly over the last few months.

US crude inventories fall sharply, products build
July 11 (Reuters) - U.S. crude oil stocks fell more than expected last week after crude imports dipped and refiners boosted their processing rates, government data showed on Wednesday.
Meanwhile, stocks of refined products rose much more than analysts had forecast and U.S. crude futures pared some of their earlier gains following the weekly oil data.

OPEC sees 2013 oil demand growth slowing
LONDON, July 11 (Reuters) - World oil demand growth will slow in 2013 from the already weak 2012, OPEC said on Wednesday, citing Europe's debt worries, a faltering U.S economic recovery and deceleration of growth in emerging markets.
The Organization of the Petroleum Exporting Countries (OPEC), which produces a third of global oil, said healthy output levels from non-OPEC producers next year would be enough to cover the modest growth in demand without the need for OPEC itself to increase output.

Saudi cranks up June oil output, Iran slumps-OPEC
LONDON, July 11 (Reuters) - Top oil exporter Saudi Arabia ramped up output to record rates in June despite a big drop in oil prices as Iranian production sank to its lowest in more than 20 years, OPEC said on Wednesday.
Riyadh said it pumped 10.1 million barrels per day (bpd) last month, up 300,000 bpd on May, according to a monthly report from the Organization of the Petroleum Exporting Countries.

Iran oil trade skirts ship insurance ban
BEIJING/TOKYO, July 11 (Reuters) - Iran is shipping oil to China, its top buyer, despite a row over freight terms, and Japan has taken steps to resume imports in August as Tehran finds ways to get around Western sanctions on ship insurance for its drastically reduced shipments.
On Wednesday, industry sources said Japanese insurers were expanding their maritime coverage to allow more domestic tankers to transport Iranian crude and that Iranian shipments to China were flowing despite the dispute about terms.

US to announce settlement with BP over Texas City refinery
HOUSTON, July 11 (Reuters) - U.S. workplace safety regulators plan to announce a settlement on Thursday with BP Plc's  U.S. refining subsidiary over safety violations found at the company's Texas City, Texas, refinery in 2009, according to a statement issued Wednesday.
BP has been trying to sell the nation's sixth-largest refinery and a settlement would make the facility more attractive to potential buyers. Spokesmen for BP and the U.S. Labor Department declined comment.

Oil Drop as Demand Concern Outweighs Additional Iran Sanctions (Source: Bloomberg)
Oil fell for the first time in three days, paring a weekly gain, on speculation fuel demand will falter as Europe’s debt crisis curbs global economic growth. Futures slid as much as 0.6 percent. Moody’s Investors Service cut Italy’s government bond rating, citing a deteriorating near-term economic outlook. China, the world’s second-biggest crude user, may say today its economy expanded 7.7 percent in the second quarter, the slowest pace in more than three years, according to the median estimate of economists in a Bloomberg News survey. Crude closed at the highest price in a week yesterday after the U.S. announced new sanctions on Iran. “The risk for oil continues to be on the downside,” said David Lennox, an analyst at Fat Prophets in Sydney. “Look at the debt crisis in the European Union, the biggest regional user of petroleum, while the U.S. economy is very weak, the biggest user overall, and China is weakening. Add those together and you can see why oil has some downside risk, barring supply-side shocks.”
Oil for August delivery fell as much as 50 cents to $85.58 in electronic trading on the New York Mercantile Exchange and was at $85.74 at 9:35 a.m. Singapore time. The contract rose 27 cents yesterday to $86.08, the highest close since July 5. Prices are up 1.5 percent this week and 13 percent lower this year. Brent crude for August settlement fell 46 cents, or 0.5 percent, to $100.61 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $14.87. It closed at $14.99 yesterday, the highest level in a month.

OIL-Brent slips below $100 as Fed holds off stimulus
SINGAPORE, July 12 (Reuters) - Brent crude slipped below $100 per barrel, after a more than 2 percent rally in the prior session, as uncertainty over whether the U.S. Federal Reserve would launch more stimulus measures curbed investor appetite for riskier assets. "All across risk assets, including oil, investors are seeing the global economic outlook as a glass half-empty," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney. "There is a lot of caution ahead of the Chinese data."

Copper Traders Most Bearish in Six Weeks on Demand: Commodities (Source: Bloomberg)
Copper traders are the most bearish in six weeks on concern demand will slow in China, Europe and the U.S. at a time when hedge funds are betting on lower prices. Thirteen analysts surveyed by Bloomberg said they expect prices to drop next week and nine were bullish. A further six were neutral, making the proportion of bears the highest since June 1. Speculators have been wagering on a price drop since May and held a net-short position of 1,749 contacts on July 3, U.S. Commodity Futures Trading Commission data show. More than $1.2 trillion has been wiped from the value of global equities since early July amid concern growth is stalling. Federal Reserve policy makers said at their June meeting that strains from Europe’s debt crisis may spill over into the U.S. Copper imports to China, which accounts for about 40 percent of demand, slid to a 10-month low in June.
“People are quite concerned about slowing growth in China which leads to slowing demand for industrial metals,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “We should know about almost all the risks in Europe for now, but it’s definitely not positive. At the moment everything is sentiment driven.”

Gold 22% Rally to Record Seen by Eric Sprott: Commodities (Source: Bloomberg)
Gold will climb to a record by yearend as the global economy slows from the weight of too much debt, says Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc. (SII) “I just can’t imagine the demand for gold is going down,” he said in a July 9 interview at Bloomberg’s Toronto office. “I don’t personally see a solution to the problem that we’re in, the financial leveraging issue that we all have where everybody wants to shed debt and there’s no buyers.” Sprott’s company manages funds investing mainly in gold, silver, and precious-metals equities. He expects bullion will rise as investors seek the safest assets while governments spend to stimulate their economies, increasing chances that inflation will accelerate. Gold, which had advanced for 11 successive years, is little changed so far in 2012. It’s 19 percent lower than the record $1,923.70 an ounce traded on Sept. 6 in New York after investors favored buying the dollar amid Europe’s escalating debt crisis.
The metal “should go to new highs before yearend, that would be my guess,” said Sprott, 67. “Gold has blown away every financial market in the world since 2000, let’s not forget that.”

20120713 1014 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (Source: CME)
August Soybeans finished up 1 at 1572 1/2, 16 1/2 off the high and 13 1/4 up from the low. November Soybeans closed up 6 1/2 at 1529. This was 18 1/2 up from the low and 13 1/2 off the high. August Soymeal closed up 3.4 at 466.7. This was 5.7 up from the low and 3.3 off the high. August Soybean Oil finished down 0.48 at 53.34, 0.7 off the high and 0.26 up from the low. November soybeans closed moderately higher on the day but had a quiet inside trading session. Strong gains in corn and meal helped to support the market while oil recovered from sharp losses early to close just slightly lower on the day. A steep sell-off in palm oil overnight helped to pressure soybeans oil. The soybean market had "less" support than corn as traders see improved chances for a decent rain event for the second half of next week for Ill, Indiana and Ohio which could help stabilize soybean crops but may not help corn much. While outside market forces were extremely negative early in the day (weakness in stocks, energies, metals and a deflationary fear for the global economy), traders remain concerned with a threatening forecast for Iowa into next week. Some models show 1/4 to 1/2 inch of rain for Iowa into the weekend but temperatures are on the rise with mid-90's to low 100's for much of the state into the middle of next week. Traders see a continued rapid drop in crop conditions into next week for the western Corn Belt. Weekly export sales for soybeans came in at 332,100 metric tonnes for the current marketing year and 427,100 for the next marketing year for a total of 759,200 which was well above expectations. As of July 5th, cumulative soybean sales stand at 104.1% of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 100.1%. Meal sales came in at 95,700 metric tonnes for the current marketing year and 74,000 for the next marketing year for a total of 169,700. Sales of 58,000 metric tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 33,900 tonnes. Open interest was up 15,615 contracts for soybeans yesterday. Taiwan passed on a combo tender for soybeans and corn.

Cooking-Oil Imports by India Fall as Rupee Drop Deter Buyers (Source: Bloomberg)
Cooking-oil purchases by India, the world’s biggest consumer after China, probably dropped for the first time in five months in June after a plunge in the rupee to a record low deterred importers. Futures in Malaysia tumbled. Shipments slid to 850,000 metric tons last month from 862,550 tons a year earlier, according to the median estimate in a Bloomberg survey of five processors and brokers. Imports of crude and refined palm oil declined 16 percent to 600,000 tons from 712,356 tons, the survey showed. The Solvent Extractors’ Association of India will publish shipment data next week. Palm oil, used in candy and fuel, has slumped 17 percent from a 13-month high in April on concerns that a slowdown in China and the European debt crisis may curb demand. Lower Indian imports may boost inventories in Malaysia, second-largest palm oil supplier, as production enters the peak period. The rupee sank to a low of 57.3275 to a dollar on June 22, raising the cost of commodities priced in the U.S. currency.
“The rupee depreciation made imports expensive and kept importers away,” said Sandeep Bajoria, chief executive officer of Mumbai-based brokerage Sunvin Group. “Buyers were also holding back purchases to take advantage of the lower Indonesian export tax in July.” Indonesia cut the tax rate for exports of crude palm oil in July to 15 percent, a level last seen in January, from 19.5 percent in June, Deddy Saleh, director general of foreign trade at the Trade Ministry, said June 25. The base price to calculate the levy was cut to $944 a ton from $1,098, he said.

VEGOILS-Palm oil falls on U.S. wet weather forecast
SINGAPORE, July 12 (Reuters) - Malaysian crude palm oil futures tumbled as traders took profit partly on an updated weather forecast for rain in the drought-hit, soy-producing U.S. Midwest over the weekend that could ease concerns of tight oilseed supply.
"All the bullish factors have already been laid on the table, so traders just have to take profit and decide on what to do next," said a trader with a foreign commodities brokerage in Malaysia.

India's June refined palm oil imports seen down
NEW DELHI, July 11 (Reuters) - India's refined palm oil imports fell in June as the world's biggest vegetable oil importer looked likely to raise taxes to cut cheap supplies from Indonesia, traders surveyed by Reuters said.  
India's refined vegetable oil imports have been rising since October 2011 when Indonesia, the world's No. 1 palm oil producer, tweaked its export duties to make refined oils more attractive than crude palm oil to promote its own refineries.