Sugar Futures Settle at 20-Month Low

Raw-sugar futures tumbled below 20 cents a pound for the first time since September 2010 as Brazilian exporters sold sugar to take advantage of a weaker real versus the U.S. dollar.  Brazilian exporters and producers are selling sweetener stockpiled from last year's harvest, market participants said. They receive more reais for the dollar when the local currency weakens since agricultural exports are priced in dollars, they added.  The real topped $2.06 Tuesday for the first time since May 19, 2009.

Corn Falls as Rain May Ease Dry U.S. Soil; Soybeans Drop

Corn fell the most in more than four months and soybeans declined to the lowest in seven weeks on speculation that rain will improve prospects for newly planted crops in the U.S., the world’s biggest producer and exporter. As much as 3 inches (7.6 centimeters) of rain forecast from May 23 to May 24 will boost soil moisture from South Dakota to Iowa before moving east into Illinois and Wisconsin, Global Weather Monitoring said in a report today. A second storm will reach the Midwest beginning May 28. About 77 percent of U.S. corn was in good or excellent condition on May 20, the highest since 2007, the government said.  “The market is focused on the weather, and timely rains the next three weeks will quickly boost the odds in favor of a big corn harvest,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “These wetter forecasts are keeping pressure on the markets today.”

Asian Currencies Extend Rebound, Led by Ringgit, on Europe Talks

Asian currencies rose for a second day, led by Malaysia’s ringgit and South Korea’s won, as a global stocks rally and optimism Europe will tackle its debt crisis spurred risk-taking.  The Bloomberg-JPMorgan Asia Dollar Index and the MSCI Asia Pacific Index of shares extended rebounds from five-month lows and the Standard & Poor’s 500 Index had its biggest rally in more than two months in New York yesterday. Germany’s Finance Minister Wolfgang Schaeuble said after a meeting with his French counterpart Pierre Moscovici that the two nations will do “everything necessary” to ensure Greece remains in the euro. European Union leaders meet tomorrow for a summit in Brussels.

Gold Investors Seek Silver Lining

Some investors are fighting the tide of lower gold prices.  Gold is down 17% from its record high in August. Yet a few bullish investors including hedge funds are wagering on a reversal. Some are piling into less-risky options bets that would deliver huge profits if gold spikes over the next couple of months. Others are holding tight to exchange-traded funds that are a close substitute to holding the physical metal.

Ford Raised to Investment Grade by Moody’s, Regains Icon

Ford Motor Co. (F) was raised to investment grade by Moody’s Investors Service, enabling Chief Executive Officer Alan Mulally to reclaim assets including its blue oval logo put up as collateral to obtain $23.4 billion in loans in late 2006.  Moody’s boosted Ford’s senior unsecured ratings to Baa3 from Ba2 and raised its finance arm, Ford Motor Credit, to Baa3 from Ba1. Moody’s joined Fitch Ratings in assigning an investment-grade rating, and with two such ratings, Ford regains control of the logo and other assets, including factories, its Dearborn, Michigan, headquarters and vehicle trademarks.  Moody’s had ranked the second-largest U.S. automaker’s debt as junk since August 2005. Fitch returned Ford to investment grade in April after assigning it junk status in December 2005.  “The upgrade of Ford recognizes the strength of the company’s position in North America, its robust liquidity position, and our expectation that the company will continue to embrace sound operating and financial disciplines,” Moody’s said in an e-mailed statement. “We believe that these strengths will enable Ford to maintain an investment-grade profile in the face of the sector’s ongoing cyclicality and weakness in the European market.”  Moody’s said the outlook for Ford and Ford Credit is stable.

Two Parties Left in Race for LME as CME Said Removed

IntercontinentalExchange Inc. (ICE) and Hong Kong Exchanges & Clearing Ltd. are the two companies left bidding for the London Metal Exchange, the world’s biggest metals market, after the CME Group Inc. (CME) was said to be removed.  CME, the world’s biggest futures exchange, is no longer in the running to buy the LME, according to two people with direct knowledge of the matter, who declined to be identified because the information isn’t public. Two parties are still in the bidding process, according to an e-mailed statement from the bourse today, which didn’t name any companies.  Discussions with the two remaining bidders will “involve obtaining a detailed understanding of their plans for the future governance and operation of the market and the deliver-ability of their respective proposals, as well as the value offered,” the LME said in the statement. The process will continue over the coming weeks, the bourse said.

Metals Decline as Wheat Rebounds: Commodities at Close

The Standard & Poor’s GSCI gauge of 24 commodities dropped 0.6 percent to 629.65 at 5:31 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was down 0.7 percent at 1,490.406.

NATURAL GAS

Natural gas rose in New York for the second time in three days on speculation that warmer-than-normal weather heading into June will help drive demand from power plants and trim a supply surplus.
Natural gas for June delivery gained 7 cents, or 2.7 percent, to $2.679 per million British thermal units at 10:01 a.m. on the New York Mercantile Exchange. The futures have declined 10 percent this year. Prices climbed to $2.742 per million Btu on May 18, the highest settlement since Jan. 11.

US STOCKS-Futures turn higher after Best Buy results

U.S. stock index futures rose on Tuesday, erasing earlier losses, after shares of No. 1 consumer electronics chain Best Buy jumped following earnings and revenue that topped expectations.  Futures had started off weak on news that Japan's sovereign rating was cut by Fitch as a political stalemate dimmed chances the country could curb its snowballing debt.  But the market trimmed losses to trade higher after Best Buy Co Inc posted earnings, excluding items, of 72 cents a share, up from 65 cents a share a year ago, and higher than Wall Street's expectation of 59 cents share. The stock was up 7 percent at $19.39 in premarket trade.

Money Markets- Calmer before EU summit, but Greek worries remain

Speculation that European leaders will come up with growth-boosting measures brought some relief to euro zone money markets on Tuesday, but tensions are expected to pick up again as the Greek elections draw near.  At an informal summit on Wednesday, policymakers are also expected to discuss the idea of common euro zone bonds. The sound of these words is appealing to markets, but many analysts warn that Germany's long-standing position against the idea of debt mutualisation is unlikely to change.  Measures of money market stress have eased this week, after a speedy increase earlier this month on the back of a higher perceived risk of Greece leaving the euro zone.

Bankers Under Fire as Facebook Slips 11%

Criticism of the Facebook Inc. FB -5.64% stock deal grew as the shares dropped below their offering price in their first full day of trading Monday, wiping $11.5 billion off the social network's market value.
The company, its investment bankers and the Nasdaq Stock Market came under fire for failing to ensure a smooth debut for one of the most anticipated deals in recent memory. Facebook shares, which began trading Friday at $38 and managed to add just 23 cents by the end of that day, fell 11% Monday to $34.03.

Brazil Set to Lose Out as Thailand Meets Chinese Sugar Demand

A delay in harvesting the sugar cane crop in Brazil will see the world’s largest producer lose market share in China, set to be one of the season’s biggest importers, as Thailand increases its shipments to the Asian nation.  Thailand is forecast to ship 600,000 metric tons of raw sugar to China in the first half of the year, according to Thai Sugar Trading Corp., the country’s largest exporter. That would be the most since at least 2005 and almost a fifth of all the sugar China will need to buy this year. Last year, its shipments to China totaled 277,572 tons of sweeteners, according to Thailand’s Office of Cane & Sugar Board.

OIL FUTURES: Crude Higher In Asia On Optimism Before EU Summit, Fundamentals

Crude-oil futures edged higher in Asia Tuesday in line with optimism across markets surrounding Wednesday's euro-zone summit, even as analysts are increasingly expecting a recovery in oil prices due to bullish fundamentals.  On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $92.74 a barrel at 0649 GMT, up $0.17 in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.32 to $109.13 a barrel.