Friday, October 5, 2012

20121005 1807 FCPO EOD Daily Chart Study.

FCPO closed : 2409, changed : +57 points, volume : higher. 
Bollinger band reading : pullback correction downside biased. 
MACD Histogram : recovering, seller taking profit. 
Support : 2400, 2350, 2300, 2250, 2230, 2200 level.
Resistance : 2350, 2400, 2450, 2490, 2520, 2550, 2570 level.
Comment :
FCPO closed recorded gains with better volume participation  Soy oil currently trading marginally lower after overnight closed recorded higher by more than 1% while crude oil price currently falling lower. 
Price continue to recover higher after recent plunge on short position covering ahead of the weekend while traders focus on government export tax proposal decision. Reuters survey released today projected higher output and inventories level. 
FCPO daily chart study continue to suggesting a pullback correction downside biased market development. 
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20121005 1738 FKLI EOD Daily Chart Study.

FKLI closed : 1662.5 changed : -3 points, volume : lower.
Bollinger band reading : pullback correction upside biased. 
MACD Histogram : turned downward, buyer taking profit. 
Support : 1660, 1657, 1651, 1645 level.
Resistance : 1670, 1680, 1690, 1700 level.
Comment :
FKLI closed recorded small loss with declined volume transacted doing 2 points premium compare to cash market that also marginally lower. Overnight U.S. market closed higher and today Asia markets ended mostly recorded gains while European markets currently trading higher. 
ECB bond buying pledge statement and better than estimates U.S. economic data send global markets trading higher. Back home, FKLI touched new high again and fell down into negative zone as investors realising profit ahead of the weekend.  
Daily chart reading revised 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.

20121005 1709 Global Markets & Commodities Related News.

STOCKS: Asian shares rose and European shares looked set to open higher ahead of the much awaited key U.S. jobs report, sustaining a positive mood after the European Central Bank said it stands ready to buy bonds of troubled euro zone countries. The S&P 500 extended gains to a fourth day on Thursday, putting it on the cusp of a new five-year high if Friday's jobs report shows encouraging signs for the labor market. (Reuters)

FOREX: The euro inched down but stayed near a two-week high versus the dollar, finding support after the European Central Bank said the previous day that it was ready to buy bonds of troubled euro zone members. (Reuters)

FOREX-Euro near 2-wk high; yen firms briefly after BOJ
SINGAPORE, Oct 5 (Reuters) - The euro inched down but stayed near a two-week high versus the dollar on Friday, finding support after the European Central Bank said the previous day that it was ready to buy bonds of troubled euro zone members.
"People who want to go short are looking to do so after a Spanish request for aid triggers a rally in the euro," the trader said, referring to traders who are eager to put on bearish bets against the single currency.

Draghi says ECB primed to buy bonds when ready
BRDO PRI KRANJU, Slovenia, Oct 4 (Reuters) - European Central Bank President Mario Draghi said on Thursday the ECB was primed to buy troubled euro zone bonds when conditions were right and that this had already calmed financial market tension.
Speaking at his regular monthly news conference, Draghi also said "significant progress" had been made in Spain to bring its finances into order, although more was needed.

U.S. jobless claims point to steady labor market
WASHINGTON, Oct 4 (Reuters) - The number of Americans filing new claims for unemployment  benefits rose only slightly last week after a big drop the week before, a hopeful sign the job market is still on the mend.
Other data on Thursday showed a sharp drop in new orders for U.S. factory goods, although orders outside the transportation sector rose for a second straight month, which should calm fears of a rapid loss of momentum in factory activity.

GRAINS: Chicago soybean futures edged higher, building on the last two sessions of gains with support from a revival in U.S. exports and a surprise decline in estimates for Canada's canola crop. Corn edged higher, in line with the trend in soybeans, but the market is on track to finish the week nearly flat as the record pace of the U.S. harvest kept a lid on prices. (Reuters)

CNOOC bid for Nexen raises tough issues: Canada PM (Reuters)
Canada said on Thursday that a $15.1 billion Chinese bid for domestic oil company Nexen Inc raised difficult policy questions, but the government gave no sign it would bow to an opposition demand to veto the deal.

OIL: Brent futures slipped below $112 per barrel, but they are on course to end a choppy week nearly flat as rising tensions in the Middle East battle with perennial worries about the global economy and oil demand. (Reuters)

Euro Coal-Prices rise by $1/T; oversupply fears ease
LONDON, Oct 4 (Reuters) - Prompt physical coal prices rose by as much as $1.00 a tonne on Thursday as traders bought to cover short positions and on optimism that prices are starting to recover from steep falls in the summer.
Prompt South African coal cargo prices dropped to a two-year low of $81.65 a tonne in June due to oversupply and a withdrawal by many buyers to the market's sidelines while they waited for prices to lower further.

U.S. coal stocks jump on Romney comments -analysts
Oct 4 (Reuters) - Mitt Romney's support of the coal industry during his debate with President Obama sent coal company stocks higher on Thursday, analysts said.
"It's amazing what 15 words about coal in a presidential debate can do for the stocks," said Michael Dudas of Sterne Agee.

Vale to halt output at Brazil iron ore pellet plants (Reuters)
Brazil's Vale SA said on Thursday that it plans to suspend operations at three Brazilian iron ore pellet plants and increase output of lower-value mine products as world steel demand slows.

BASE METALS: Copper edged up in line with a firmer euro after the European Central Bank said it was ready to buy bonds of troubled countries in the region, although volumes were low with top consumer China on a week-long holiday. (Reuters)

PRECIOUS METALS: Gold dipped slightly but held near the 11-month high as stimulus measures from major central banks continued to increase its appeal as an inflation hedge, while investors awaited more trading direction from key U.S. jobs data due later in the day. (Reuters)

COLUMN-LME volumes, new record, same old trends
--Andy Home is a Reuters columnist. The opinions expressed are his own--
LONDON, Oct 4 (Reuters) - The London Metal Exchange (LME) has just announced record volumes for the month of September.Last month's tally of 14.09 million lots brings the year-to-date total to 119.1 million lots, equivalent to $10.9 trillion in notional turnover.
It's a reassuring performance for the executives of the Hong Kong Exchanges and Clearing (HKEx) , who will no doubt be attending the annual LME Week events later this month to check on how their 1.388-billion pound acquisition is faring.

METALS-Copper steady on euro, U.S. jobs data in focus
SINGAPORE, Oct 5 (Reuters) - Copper steadied on Friday, supported by a firmer euro after the European Central Bank said it was ready to buy bonds of troubled countries in the region, although volumes were low with top consumer China on a week-long holiday.
"Fourth quarter the big focus is just whether the central bank action flows through to real demand," said Ivan Szpakowski, a Credit Suisse analyst in Singapore.

PRECIOUS-Gold hits 11-month high, extends gains to fifth day
SINGAPORE, Oct 5 (Reuters) - Gold hit an 11-month high on  Friday in its fifth day of gains as stimulus measures from major central banks continued to increase its appeal as an inflation  hedge, while investors awaited more trading direction from key  U.S. jobs data due later in the day.
"There doesn't seem to be anything else they can do besides  pumping more money into the economy," said Ronald Leung, a  dealer at Lee Cheong Gold Dealers in Hong Kong.

The Baltic index up for fifth day on higher rates for bigger vessels
Oct 4 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, gained for the fifth straight day on Wednesday, on account of gains in the front-haul market for both capesizes and panamaxes.
"Finally we can see some evidence of change in sentiment (for panamaxes). Atlantic seems to be bottoming out and coming up a small tick," ship broker Fearnleys said in a note.

20121005 1528 Palm Oil Related News.

Reuters Survey :
Malaysia Sep 2012 Crude Palm Oil
- Exports seen up 5.8% at 1.51 million tonnes from Aug 2012
- Stocks seen up 16.4% at 2.46 million tonnes from Aug 2012
- Output seen up 20% at 2 million tonnes from Aug 2012

VEGOILS-Palm oil up 4 pct, but heads for weekly loss; export tax eyed
Fri Oct 5, 2012 2:05am EDT
By Chew Yee Kiat
    SINGAPORE, Oct 5 (Reuters) - Malaysian palm oil futures
gained on Friday as steep losses earlier in the week continued
to lure buyers back into the market, while there was also some
positioning ahead of a government decision on a proposal to cut
palm oil export taxes.
    But prices are on still on track for a weekly drop of almost
4 percent, their third straight weekly decline.
    Palm oil shed more than 11 percent in the first two days of
the week, tumbling to a near 3-year low at 2,230 ringgit per
tonne on Wednesday, before paring losses later in the week.
    "This rebound is very much within anticipation, selling has
been exhausted," said a dealer with a foreign commodities
brokerage in Malaysia.
    "There's definitely short covering ahead of the weekend."
    By the midday break, the benchmark December contract
 on the Bursa Malaysia Derivatives Exchange surged 4.1
percent to 2,448 ringgit ($803) per tonne, after trading in a
range of 2,385-2,448 ringgit.
    Total traded volumes stood at 15,039 lots of 25 tonnes each,
higher than the usual 12,500 lots.
    Traders are awaiting a possible decision by the Malaysian
cabinet on a proposal to cut crude palm oil export taxes to 8-10
percent from a current 23 percent in a bid to counter
competition from top producer Indonesia.
    Technicals showed palm oil would rebound more to 2,503
ringgit as it has cleared a resistance at 2,399 ringgit, said
Reuters market analyst Wang Tao.
    After a steep decline in prices in recent weeks, analysts
are calling for a recovery by the end of the year.  
    "In our view, crude palm oil (CPO) prices are due for a
significant upward correction, to 3,250 ringgit by end Q4 from
current levels near 2,350 ringgit, after an excessive decline in
September and October," said Standard Chartered analyst Abah
Ofon in a research note.
    The recovery will be driven by a drop in Malaysian
production and Indonesian inventories in Q4 as well as
supportive external markets and bullish CPO price seasonality,
the note added.
    In a bearish sign for palm oil, Brent futures slipped below
$112 per barrel on Friday, but they are on course to end a
choppy week nearly flat as rising tensions in the Middle East
battle with perennial worries about the global economy and oil
    In other vegetable oils markets, U.S. soyoil for December
delivery gained 0.3 percent in Asian trade. The Dalian
Commodity Exchange is closed for a week-long holiday in China
and will resume trading on Oct. 8.  

STOCKS NEWS INDONESIA-Bahana expects recovery in crude palm oil
Bahana Securities said crude palm oil (CPO) price may recover in the next few weeks as the current downturn is not sustainable, and it expects strong demand from India and China.
"We remain positive on the Indonesian CPO counters as all CPO counters have underperformed the index by 8 percent in the last one month on seasonally low CPO price," Bahana Securities analyst Leonardo Henry Gavaza, wrote in a note on Thursday.
The research house's top picks in the sector are PT Astra Agro Lestari Tbk and PT BW Plantation on positive growth outlook, recommends to buy the stocks.
At 13.35 a.m. (0635 GMT), the Jakarta Agriculture Index was up 0.26 percent, while the broader Jakarta Composite Index was up 0.38 percent.

20121005 1510 Global Markets & Energy Related News.

GLOBAL MARKETS-Asia shares gain after ECB assurances, US jobs next in focus
TOKYO, Oct 5 (Reuters) - Asian shares rose and the euro kept most of its overnight gains as investor risk aversion eased after the European Central Bank said it was ready to buy bonds of troubled euro zone countries, while markets awaited a key U.S. jobs report.
"Recent good news has been offset by Spanish delays to request help," Barclays Capital said in research note.

OIL-Brent slips towards $112 ahead of U.S. jobs data
SINGAPORE, Oct 5 (Reuters) - Brent futures slipped towards $112 per barrel on Friday, but is on course to end a choppy week nearly flat as rising tensions in the Middle East battled with perennial worries about the global economy and oil demand.
"The softness we're seeing could be a combination of profit-booking and nervousness ahead of the non-farm payrolls data," said Ben le Brun, a market analyst with OptionsXpress in Sydney.

NATURAL GAS-US natgas futures end up in seesaw trade, EIAs seen bearish
NEW YORK, Oct 4 (Reuters) - U.S. natural gas futures ended slightly higher on Thursday in a seesaw session, as traders shrugged off a bearish weekly inventory report and focused instead on cooler weather forecasts for next week and better heating demand as winter approaches.
"The prompt NYMEX natural gas contract sold off immediately after the EIA revealed a larger than expected ... injection into storage," Mike Tran, at CIBC World Markets, said in a report.

EURO COAL-Prices rise by $1/T; oversupply fears ease
LONDON, Oct 4 (Reuters) - Prompt physical coal prices rose by as much as $1.00 a tonne on Thursday as traders bought to cover short positions and on optimism that prices are starting to recover from steep falls in the summer.
"A trader was let down on a late October cargo and needed to cover to meet a commitment, so paid up," one European trader said.

20121005 1015 Local & Global Economy Related News.

The government plans to reduce corporate taxes in the short to medium term to raise the country’s competitiveness as an attractive global business destination, said  PM Datuk Seri Najib Tun Razak. He said introducing a lower corporate tax regime in the future will ensure companies have more income for reinvestment to grow their businesses – a move which will further improve the dynamics and competitiveness of the country’s private sector. Malaysia’s corporate tax is currently at 25% (vs. 26% in 2008 and 27% in 2007), similar to Indonesia’s, while Singapore’s rate is at 17%, Thailand at 23% and Hong Kong at 16.5%. (Financial Daily)

The Inland Revenue Board (IRB) targets direct tax collection of RM117bn this year, Deputy Finance Minister Datuk Donald Lim Siang Chai  said yesterday. From 2008 to 2011, IRB's total direct tax collection was RM342bn, he said. Lim said IRB's moves to boost the collection include focusing on auditing of companies that are exposed to high risks and tax evasion, investigating those who have not declared their real income and focusing on the collection of stamp duties and real property gains tax. (BT)

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, rose to an average of 216 points in Sep after remaining stable at 213 points in Aug, remaining close to levels reached during the 2008 food crisis. (Reuters)

US jobless claims rose to 367,000 in the 29 Sep week (a revised 363,000 in the earlier week), still less than the 370,000 level that analysts were expecting. (Bloomberg)

US factory orders fell 5.2% mom in Aug (a revised +2.6% in Jul), better than the consensus estimate of -6.0%. (Bloomberg)

The  US National Federation of Independent Business said the  net change in employment per firm slipped 0.23 last month after declining 0.05 in Aug, the third straight month of weakening. (Reuters)

The US Challenger Job-Cut report revealed that announced layoffs were at the 33,816 level in Sep (32,239 in Aug). (Bloomberg)

The European Central Bank (ECB) kept its main refinancing rate on hold at 0.75%, judging that for now there was no need to cut rates below what are already historic lows despite ongoing worries about the poor outlook for growth in the eurozone. No country has yet applied for the ECB’s so-called Outright Monetary Transactions or OMT programme, which faced fierce opposition from the Bundesbank and German commentators. (FT)

European Central Bank President Mario Draghi said the bank's new bond-buying program is ready to activate, and put the onus on vulnerable countries such as Spain to first seek and receive assistance from other euro-zone governments. (WSJ)

The Bank of England kept the main interest rate at a record low 0.50% and to stick by its current Quantitative Easing (QE) stimulus amount of 375 billion pounds ($604 billion, 467 billion euros). (CNA)

The International Monetary Fund won’t disburse its share of the Greek bailout if the country’s debt is not deemed sustainable  or if other creditors don’t pledge to fill a financing gap in the aid package, a fund spokesman said.(Bloomberg)

According to the new  2012 APEC Economic Policy Report, APEC economies have improved their  ease of doing business by 8.2% between 2009 and 2011. (CNA)

Indonesia’s foreign reserves rose to US$110.17bn in Sep (US$108.99bn in Aug). (Bloomberg)

India’s service sector purchasing managers’ index rose to 55.8 in Sep from 55 in Aug, the fastest pace in seven months. (Bloomberg)

India's cabinet approved raising the limit on foreign ownership of local insurance companies to 49% from 26%. It also permitted overseas investors to own up to a 49% stake in  domestic pension-fund managers—the first such investment that has been allowed. (WSJ)

Applications for Thailand’s Board of Investment privileges from Jan to Sep rose 97% yoy to  top  THB804bn, exceeding the set target of  THB800bn, whilst the number of projects rose from the same period last year by 21.6% to 1,302. (Bangkok Post)

The  Industrial Estate Authority of Thailand (IEAT) alerted industrial estate operators to get ready for upcoming  heavy rainfall as the agency expressed concerns about estates in eastern Bangkok where permanent dykes have not been built. (Bangkok Post)

Lower domestic interest rates could help cushion the economy from the heavier impacts of the global downturn next year, as local inflationary pressure is likely to decline, says  Bank of Thailand governor Prasarn Trairatvorakul. (Bangkok Post)

Vietnam’s National Financial Supervisory Committee proposed more attention be paid to the monetary market, warning in a recent report that the economy had seen  alarming signs when it came to  interest rates and  inflation. (Vietnam News)

The Asian Development Bank lowered its forecast for Vietnam’s growth this year to 5.1% (from 5.7% in the Apr estimate) and 5.7% for 2013 (from 6.2%) on the back of continued weakness in external markets and domestic credit. (Vietnam News)

20121005 1014 Malaysia Corporate Related News.

The key KLCI powered to a new record as plantation stocks lifted the 30-stock barometer by 12.31pts or nearly 1% to 1,662.06 in mid-afternoon trade. At the close, the index gained 11.72pts or 0.71% to 1,661.47 after news that the Cabinet could decide as early as today on a proposal to slash export taxes for palm oil, giving a fillip to blue-chip planters. (Starbiz)

Local palm oil refiners have been able to return to profitability in recent weeks following a steep fall in the crude palm oil (CPO) prices which has reversed earlier negative profit margins. The positive profit margins were achieved as prices for CPO fell while the prices for its finished products refined palm oil olein price remained stable, thus broadening their profit margin. Palm Oil Refiners Association of Malaysia (Poram) chief executive officer Mohamad Jaafar Ahmad said the profit margins could be in the range of 1% to 2% depending on various factors, adding that the ideal  figure is between 5% and 6%. (Malaysian Reserve)

The proposed cut on export duty for crude palm oil (CPO), from 23% to between 8% and 10%, may not have the desired effect on downstream players seeking an abolishment of duty-free quotas for the commodity. The Palm Oil Refiners Association of Malaysia (Poram) said the tax reduction would not be effective unless the duty-free quotas for CPO exports were also suspended. Nonetheless, the association has described the proposed tax cut as a step in the right direction. (Financial Daily)

Felda Global Ventures Holdings Bhd (FGV) says it has not appointed any company to build biogas plants at its mills. Referring to report published in a local newspaper on Monday, it said to date no decision had been made with regard to the award of the contract. It was reported that  Weida (M) Bhd would build a biogas plant under a pilot project for FGV to treat palm oil mill effluence. (StarBiz)

Kuala Lumpur Kepong Bhd (KLK) is venturing into Papua New Guinea (PNG) to plant oil palms. The group said it is planning to buy a company that has leasehold rights over 44,342 hectares of agriculture land there.KLK is expected to pay US$8.7m (RM27m) to Hii Eii Sing, a Malaysian national, to secure 51% control of Collingwood Plantations Pte Ltd (CPPL). KLK has so far planted up around 205,000ha in Malaysia and Indonesia. KLK plantations director Roy Lim Kiam Chye said: "It's a greenfield venture. If and when this deal completes in the 1Q13, it'll bump up our plantation landbank by 20% to around 290,000ha." (BT)

Local palm oil refiners have been able to return to profitability in recent weeks following a steep fall in the crude palm oil (CPO) prices and vehicle components for original equipment manufacturers in Malaysia. OSI and Faurecia will set up a 35%:65% JV company, Faurecia HICOM Emissions Control Technologies (M) Sdn Bhd (Faurecia HICOM) to undertake the activities. (BT)

The UEM Group yesterday said it will sell its 100% stake in Special Builders Sdn Bhd via an open tender to a qualified Bumiputera entrepreneur. Special Builders provides end-of-life vehicle recycling, recovery and disposal (ELV) services. ―It was chosen for this divestment exercise as it could offer an opportunity for the acquiring party to tap into the future upside of ELV services in Malaysia,‖ UEM said in a statement. Special Builders operates a plant in Bandar Proton, Tanjung Malim in Perak. Its revenue comes mainly from selling scrap metal and parts from scrapped vehicles. (BT)

The absence of  Petronas from a high-level meeting to discuss a proposed stabilisation fund seems to suggest that the establishment of a mechanism to compensate Tenaga Nasional Bhd for purchasing gas at market rates is not likely to be put in place soon. According to Petronas, the company was not invited to the 24 Sep meeting held by the Economic Council. Without the stabilisation fund industry observers point out that it would delay the import of liquefied natural gas that is needed to make up for the shortfall in local supply. (Financial Daily)

The total cost of vehicle ownership is among the lowest in the Asean region according to a comparative analysis by the Ministry of International Trade and Industry (MITI). In a statement yesterday, MITI said the total cost of vehicle ownership includes the cost of the vehicle, petrol, insurance and road tax. The price of subsidised RON95 in Malaysia is RM1.90 per litre compared to RM3.80 in Thailand, RM3.35 in Indonesia, RM5.10 in Singapore, RM3.60 in Vietnam and RM3.20 in the Philippines. Average road tax and insurance is also among the lowest at RM398 for road tax and RM3,062 for insurance. This compares to RM2,756 and RM7,960 respectively in Singapore, RM1,837 and RM4,593 in Indonesia, RM459 and RM6,736 in Thailand and RM306 and RM2,847 in the Philippines. (Bernama)

Malaysia's life insurance business is expected to grow by 9-10% next year on strong demand from the middle class, coupled with brisk economic growth. A spokesman for the Life Insurance Association of Malaysia (Liam) said the growth would be helped by fresh graduates buying insurance for saving and protection purposes. (BT, Bernama)

Malaysia expects to wrap up discussions on timber exports with the European Union soon, in a bid to ensure timber products from the country will have a smooth entry in to the European market. Products made from legally-harvested timber will be accorded "green lane treatment" for exports into the EU under the agreement. (StarBiz)

Newspapers' reach has breached free-to-air (FTA) television for the first time according to Carat Media Services. While FTA TV reach was flat in the first half year, Pay TV has shown improvement. The bigger issue about newspapers is growing readership coupled with declining reading time. (Financial Daily)

Export-Import Bank of Malaysia (Exim Bank) has extended credit facilities of US$95m to PT Lintas Marga Sedaya to part finance the development of the Cikampek-Palimanan toll road in Indonesia. The bank, together with 21 other banking and financial institutions signed credit facilities agreement worth RM2.9bn in Jakarta to finance the Cikampet-Palimanan toll highway that requires a total investment of RM4.15bn. (BT)

Astro IPO at RM3 per share Astro has set its IPO price at RM3 for retail, institutional, cornerstone and bumiputra investors. It will raise some RM4.6bn, making it ASEAN’s third largest IPO this year. At RM3, Astro will be valued at RM15.8bn. In comparison, Astro All-Asia Networks was taken private at RM8.3bn. (StarBiz)

20121005 1007 Global Market Related News.

Asia FX By Cornelius Luca - Thu 04 Oct 2012 16:49:15 CT (Source:CME/
All the European and commodity currencies ended higher and even the yen closed off its worst levels. The market will now focus on the US non-farm payrolls, particularly since it will be the second last before the presidential elections. The US stock markets advanced. Gold, oil and silver ended up as well. The short-term outlook for most of the major foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is short on all foreign currencies. Good luck!

US: The initial jobless claims edged up to 367,000 from the previous week's revised figure of 363,000 (from the 359,000 originally reported).
US: Factory orders contracted 5.2% in August after expanding 2.8% in July.
Canada: The Ivey Purchasing Managers Index rose to 68.5 in September from 65.2 in August.

Today's economic calendar
Japan: The BoJ will leave interest rate at 0.1%
Japan: Coincident index / leading economic index for August

Asian Stocks Rise as U.S. Economic Data Beats Estimates (Bloomberg)
Asian stocks rose, with a regional benchmark index heading for its highest close in a week, as reports on U.S. jobs and service industries beat expectations, easing concern the world’s biggest economy is slowing. Toyota Motor Corp. (7203), the world’s largest carmaker by market value, climbed 3 percent in Tokyo. Fisher & Paykel Appliances Holdings Ltd. advanced 3.7 percent in Wellington after directors of the refrigerator maker rejected a bid from China’s Haier Corp., saying it is too low. Swire Properties Ltd. fell 2.9 percent after the controlling shareholder of the Hong Kong office landlord said it’s selling shares at a discount. The MSCI Asia Pacific Index (MXAP) increased 0.6 percent to 122.20 as of 6:05 p.m. in Tokyo, with almost two shares rising for each that fell. The regional index gained 4 percent in September amid speculation China will add to stimulus measures, following moves by central banks in the U.S. and Japan, to ease monetary policy through so-called quantitative easing.
U.S. jobs data “was a little bit better than expectations and that’s positive,” said George Boubouras, Melbourne-based head of investment strategy at the Australian wealth-management unit of UBS AG. The Swiss bank has about $1.5 trillion in assets under management. “Stimulus is there for a reason.”

Japan Stocks Rise on ECB Bond Pledge, U.S. Economic Data (Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average heading for the first weekly gain in three weeks, after European Central Bank President Mario Draghi said it stands ready to buy bonds and on U.S. economic data that beat expectations. Brother Industries Ltd., an office-equipment company that gets almost 30 percent of its sales in Europe, climbed 2.8 percent. Bridgestone Corp., a tiremaker that counts on the Americas as its biggest market, rose 2 percent on U.S. jobless claims and factory orders that were better than forecast. EAccess Ltd., a telecom being bought by Softbank Corp., is poised to soar after the trading limit on the stock was raised. The stock has surged 118 percent this week. The Nikkei 225 gained 0.5 percent to 8,867.20 as of 9:26 a.m. in Tokyo, poised to rise less than 0.1 percent on the week. Volume on the gauge was more than 10 percent above the 30-day average ahead of the close of the Bank of Japan’s two-day policy meeting today.
The broader Topix Index rose 0.3 percent to 737.26, with about two shares rising for each that fell. “The market is telling us there won’t be an additional blowup or crisis in Europe in the near term,” said Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about $1 billion. “Equity markets are turning up. It almost doesn’t matter which market you look at.”

U.S. Stocks Rise on Economic Reports Amid Draghi Comments (Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a fourth day, as reports on jobless claims and factory orders were better than forecast and the European Central Bank said it stands ready to buy bonds. All 10 industry groups in the S&P 500 advanced. Financial and commodity shares rose the most, climbing at least 1 percent, as Bank of America Corp. (BAC) and Consol Energy Inc. (CNX) rallied more than 3.3 percent. Gap Inc. (GPS) and Target Corp. (TGT) gained among retailers after monthly same-store sales topped estimates. Ryder System Inc. (R) jumped 6 percent amid an analyst upgrade. The S&P 500 increased 0.7 percent to 1,461.40 at 4 p.m. in New York. The benchmark index for American equities has rallied 1.4 percent this week. The Dow Jones Industrial Average rose 80.75 points, or 0.6 percent, to 13,575.36 today. Volume for exchange-listed stocks in the U.S. was 6.1 billion shares, or 2.2 percent above the three-month average.
“In the last several weeks, we have coordinated global monetary stimulus, and that’s starting to show up in the change of trends in American economic statistics,” Douglas Cote, chief market strategist at New York-based ING U.S. Investment Management, said in a phone interview. His firm oversees about $165 billion. “Employment, manufacturing, services and consumer sentiment have all gone from weakening to strengthening.” U.S. stocks rose as Labor Department figures showed applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. Orders placed with U.S. factories fell 5.2 percent in August, the Commerce Department said. The median forecast of economists in a Bloomberg News survey called for a decline of 5.9 percent.

Emerging Stocks Jump as ECB Bond Buying Plan Boosts Risk (Bloomberg)
Emerging-market stocks climbed from a one-week low as the European Central Bank’s commitment to buy government bonds buoyed the outlook for the global economy and boosted appetite for riskier assets. The MSCI Emerging Markets Index (MXEF) rose 0.3 percent to 1,005.52, rising for the fifth time in six days. The BSE India Sensitive Index (VXEEM) surpassed 19,000 for the first time since July 2011 as India considers more measures to attract foreign investment. Equity indexes in Hungary, Colombia and Mexico also gained. The Micex Index in Moscow slipped 1.1 percent as power company stocks retreated while the Bovespa stock gauge lost 0.3 percent in Brazil. The ECB is ready to purchase sovereign debt once necessary conditions are in place, President Mario Draghi said today, as the pan-European regulator seeks to ease borrowing costs for debt-saddled nations such as Spain.
A less-than-estimated increase in U.S. jobless claims also supported developing market equities, as the 21 countries in the MSCI gauge send about 13 percent of exports there, World Trade Organization data show. “To get a reassuring message from the ECB is viewed as a solid backdrop for risk,” Benoit Anne, the head of emerging- market strategy at Societe Generale SA, said by phone from London. “If we have growth fundamentals improving in America it’s a major signal that the global economy may bottom out soon.”

Canada Stocks Rise to Three-Week High as ECB Is Set to Buy Debt (Bloomberg)
Canadian stocks rose to their highest level in almost three weeks after European Central Bank President Mario Draghi said the bank is ready to buy government bonds as soon as the necessary conditions are fulfilled. Enbridge Inc. (ENB) rose 1.8 percent after analysts at BMO Capital Markets and UBS AG raised their rating on the stock on an improved company outlook. Dundee Industrial Real Estate Investment Trust jumped 9 percent in its first day of trading on the Toronto Stock Exchange. The Standard & Poor’s/TSX Composite Index (SPTSX) gained 88.21 points, or 0.7 percent, to 12,447.68 in Toronto. The benchmark index has risen 4.1 percent this year. Mining and telephone stocks led the advance today as eight of 10 industries rose.
“Draghi’s comments definitely help,” said Bruce Campbell, president of Campbell & Lee Investment Management Inc., in an interview from Oakville, Ontario. “It’s fairly obvious Spain needs some bailout help. We can argue what the number is, but because of what he’s said he’ll do and what he’s already done, it’s become self-fulfilling.” The ECB is ready to start buying government bonds as soon as the necessary conditions are fulfilled by any countries needing assistance, Draghi said today at a press conference in Ljubljana, Slovenia. The central bank is ready to undertake purchases “once all the prerequisites are in place,” Draghi said, after policy makers left the benchmark rate at a historic low of 0.75 percent.

European Stocks Close Little Changed; Halfords Rallies (Bloomberg)
European stocks closed little changed as the European Central Bank and the Bank of England left their benchmark interest rates on hold. Nobel Biocare Holding AG (NOBN) slid 4.3 percent as the health- care company said a deteriorating Japanese market will hurt full-year profit. ThyssenKrupp AG (TKA) gained 2.3 percent on a report that Korean steelmaker Posco submitted a letter of intent for its American unit. Halfords Group Plc (HFD) surged the most ever after saying earnings will be in the upper half of its forecast. The Stoxx Europe 600 Index (SXXP) decreased less than 0.1 percent to 271.33 at the close of trading, having fluctuated between gains and losses at least 20 times. The gauge has still climbed 11 percent this year as ECB policy makers agreed on an unlimited asset-purchase program to bring down borrowing costs in Spain and Italy and the Federal Reserve announced a third round of quantitative easing.
“In the absence of any positive news from Spain, or any news that might help set the direction, markets are languishing a bit,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “Looking ahead, we have the payrolls from the U.S. tomorrow that might help.” The ECB kept its benchmark interest rate at a record low of 0.75 percent, as predicted by 48 of 52 economists in a Bloomberg survey. The central bank is ready to start buying government bonds as soon as the necessary conditions are fulfilled, President Mario Draghi said today at a press conference in Ljubljana, Slovenia. The Bank of England maintained its bond-purchase target at 375 billion pounds ($604 billion) and held interest rates at 0.5 percent, as economists had forecast.

Yen Near 2-Week Low on Stimulus Bets Before BOJ Decision (Bloomberg)
The yen was 0.3 percent from the weakest level in more than two weeks before the Bank of Japan (8301) concludes a meeting today amid speculation policy makers will take steps to bolster growth. The Japanese currency slid versus most of its 16 major counterparts, extending a weekly decline, as economic data over the past week added to the case for the BOJ to expand stimulus after officials increased its asset-purchase program last month. The euro was within 0.1 percent of a two-week high after European Central Bank President Mario Draghi said the bank is ready to start buying government bonds as part of a program to help ease borrowing costs for debt-ridden nations in the region.
“There are expectations for further easing by the BOJ, leading to some selling in the yen,” said Takuya Kawabata, a researcher at Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency margin company. “The ECB’s bond-buying decision has been welcomed by the markets. The risk- averse trade has been receded and we’re seeing a firmer euro.” The yen fetched 78.49 per dollar as of 7:53 a.m. in Tokyo from 78.48 yesterday, when it touched 78.72, the weakest since Sept. 19. It was at 102.20 per euro from 102.17 yesterday, when it completed a six-day decline. The euro was little changed at $1.3021. It rose to as high as $1.3032 yesterday, the strongest since Sept. 21.

FOREX-Euro gains, yen falls before ECB, BOJ meetings
LONDON, Oct 4 (Reuters) - The euro rose, hitting two-week highs against the Japanese yen, the British pound and the Swiss franc before a European Central Bank policy meeting where rates are expected to be left on hold.
"For the next 24 hours going into the BOJ meeting the yen is the weak link, while people are hesitant to put on long dollar positions ahead of U.S. non-farm payrolls data," said Niels Christensen, currency strategist at Nordea in Copenhagen.

Consumer Confidence in U.S. Climbs for a Sixth Week: Economy (Bloomberg)
Consumer confidence in the U.S. climbed for a sixth straight week, the longest such stretch since early 2006, as Americans grew more secure about their finances. The Bloomberg Consumer Comfort Index rose in the week ended Sept. 30 to minus 36.9, a three-month high, from minus 39.6 in the previous period. Households were also less pessimistic about the buying climate and the economy. Another report showed claims for jobless benefits increased last week from a two-month low. Fifty percent of those surveyed had “positive” views of their finances, the most since July, helping explain a pickup in September chain-store sales that beat analysts’ forecasts. Higher home values, rising stocks and stable gasoline prices may be alleviating some of the anxiety caused by an unemployment rate stuck above 8 percent since February 2009.
“The improvement hasn’t been huge, but it’s definitely noticeable,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “There feels like there’s a little more traction.” First-time jobless claims climbed by 4,000 to 367,000 in the week ended Sept. 29, according to a report today from the Labor Department. A Labor Department report tomorrow may show employers took on 115,000 workers in September, more than the prior month, while the jobless rate rose to 8.2 percent from 8.1 percent, according to the Bloomberg survey median.

Initial Jobless Claims in U.S. Increase From Two-Month Low (Bloomberg)
The number of Americans filing first- time claims for unemployment insurance payments rose last week, highlighting an uneven improvement in the labor market. Applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. The prior week’s reading was the lowest in two months. The pace of dismissals may clear the way for bigger hiring gains should U.S. lawmakers find a way to resolve the fiscal cliff of tax increase and spending cuts that will take effect next year if they fail to act. A Labor Department report tomorrow may show employers took on 115,000 workers in September, more than the prior month, while the jobless rate rose to 8.2 percent from 8.1 percent, according to the Bloomberg survey median.
“We’re not going anywhere quickly in the jobs market,” said Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who predicted applications would rise to 368,000. “The job market is just more of the same. Layoffs aren’t the big problem, it’s the lack of hiring.” Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.5 percent to 1,452.4 at 8:42 a.m. in New York as investors awaited tomorrow’s employment report. Estimates for first-time claims ranged from 355,000 to 380,000 in the Bloomberg survey of 51 economists. The Labor Department initially reported the prior week’s applications at 359,000.

Jobless Data Seen Aiding Romney If Rate Soars From 8.1% (Bloomberg)
Only a dramatic shift in unemployment rates would alter the presidential campaign, though the jobs figures due this morning might slow or sustain Republican candidate Mitt Romney’s momentum coming out of the first debate. It would take a jarring signal, such as a surge in unemployment to 8.5 percent or a decline below 8 percent, to change the economic perceptions of significant numbers of voters so late in the campaign, said Alan Abramowitz, a political scientist at Emory University in Atlanta. “It probably matters less at this point, because so few voters are moveable,” said Abramowitz, creator of an election forecasting model based on economic indicators and polling data that has predicted the popular vote winner in the last six presidential elections.
Forecasters anticipate the September unemployment rate will rise to 8.2 percent from 8.1 percent in August and the economy will add 115,000 new jobs, according to the median prediction of economists surveyed by Bloomberg News. The jobless rate has fluctuated between 8.1 percent and 8.3 percent since the beginning of the year. Abramowitz’s “Time For Change” model forecasts a 67 percent probability President Barack Obama will be re-elected and projects a victory margin of 1.2 percentage points.

Romney Puts Race Against Obama Back on Track in Debate (Bloomberg)
Mitt Romney aggressively challenged President Barack Obama in their first debate, seeking to recharge his campaign after weeks of setbacks, while a subdued incumbent largely passed up chances to attack a rival he said was hiding his full plans. “I just don’t know how the president could have come into office, facing 23 million people out of work, rising unemployment, an economic crisis at the kitchen table, and spend his energy and passion for two years fighting for Obamacare instead of fighting for jobs for the American people,” Romney said, referring to the health-care overhaul the president championed. “It has killed jobs.” Working to present a moderate image to undecided voters and calm anxiety about his candidacy in Republican circles, the former Massachusetts governor offered no new specifics about his proposals on tax cuts, government regulations or health care. When Obama pressed him on that point during the debate, Romney accused the president of mischaracterizing his plans.
“You may keep referring to it as a $5 trillion tax cut, but that’s not my plan,” Romney said at one point. Later, sparring with Obama over the Dodd-Frank financial-regulation law, Romney responded to the president with: “That’s just not the facts.” Obama said Romney’s tax and health-care proposals would harm the middle class, and that voters should be concerned about the lack of details available to them before the election.

Bullard Says Investors Doubt Fed to Hold Inflation to 2% (Bloomberg)
Federal Reserve Bank of St. Louis President James Bullard said measures of inflation expectations indicate bond holders have doubts the central bank will hold price increases within its 2 percent goal. “Distant inflation expectations from the TIPS market seem to suggest that investors do not completely trust the Fed to deliver on its 2 percent inflation target,” Bullard said today in a speech in Memphis, Tennessee, referring to Treasury Inflation-Protected Securities. Bullard’s comments echoed Dallas Fed President Richard Fisher’s concern about rising expectations following the Federal Open Market Committee’s decision last month to start an asset purchase program. Policy makers said they could change the size of the central bank’s monthly asset purchases to reduce any risks from the program, including higher inflation or a disruption to financial markets, according to minutes of the Sept. 12-13 meeting released today.
The five-year, five-year forward break-even rate, which projects the pace of price increases starting in 2017, rose to 2.88 percent on Sept. 14, the day after the FOMC announced a third round of quantitative easing. That was up half a percentage point from July 26. It dropped to 2.77 percent on Oct. 2. Bullard, who doesn’t vote on monetary policy this year, said inflation “is sometimes seen as a way to partially default on existing nominal debts,” and said that approach would hurt savers, mostly older U.S. households, in his prepared remarks to the Economic Club of Memphis.

Hong Kong Luxury Sales Fall as Chinese Curb Spending (Bloomberg)
Shoppers from China’s mainland curbed spending at Hong Kong luxury stores during the Golden Week holiday, reflecting growing pressure on the city’s economy from faltering tourist demand. Purchase of luxury goods by mainland visitors in Hong Kong is set to fall at least 10 percent from a year ago during this week’s holiday, said Joseph Tung, executive director of the Travel Industry Council. The decline comes even as the number of tourists coming from China increases. Lower spending in Hong Kong hurts consumer companies from U.K.’s Burberry Group Plc. (BRBY) to luxury watchseller Hengdeli Holdings Ltd. (3389) that have invested in stores to profit from Chinese visitors to the city. Weaker retail sales add to the risk of a recession in Hong Kong, where the economy shrank 0.1 percent in the second quarter from the previous three months on declining exports.
“The number of big-ticket transactions has shrunk,” said CCB International Securities Ltd. analyst Forrest Chan, referring to holiday spending. “Fewer people will spend several hundred thousand bucks for a luxury watch. The macro-economic situation is dreadful.” The eight-day Golden Week national holiday, a shopping and travel season for Chinese consumers, began on Sept. 30. Shoppers are pulling back amid a slump in exports and a contraction in manufacturing in the world’s second largest economy.

IMF Won’t Disburse Greek Loan If Debt Not Sustainable (Bloomberg)
The International Monetary Fund won’t disburse its share of the Greek bailout if the country’s debt is not deemed sustainable or if other creditors don’t pledge to fill a financing gap in the aid package, a fund spokesman said. IMF Managing Director Christine Lagarde last week warned that the level of Greek debt would have “to be addressed,” pushing European policy makers to consider writing off some of the aid to the country. While the fund is sticking to a target of 120 percent of gross domestic product by 2020, the Greek government forecast this week that public debt will climb to 179.3 percent of GDP in 2013. For the loan “to move forward, we need two key elements -- we need the debt sustainability and the financing assurances and both of those things need to be in place,” IMF spokesman Gerry Rice told reporters in Washington today. “As to how these requirements will be fulfilled in the context of the current review, we still have to discuss this with the Greek authorities and the European partners.”
While Lagarde also said last week Greece faces a financing shortfall that won’t be solved with just the budget measures currently being discussed, the IMF has indicated that any additional aid will have to come from Europe. Rice said today he couldn’t give a date for the end of talks taking place in Athens, even though “urgency is of the essence.” His comments on the IMF’s requirements for disbursement suggest that an agreement on measures to reduce the deficit won’t suffice to unblock the funds as part of the 130 billion-euro package ($169 billion). Regarding Spain, Rice said that an IMF team will visit Madrid from Oct. 15 to Oct. 26 to monitor the country’s banking bailout and will submit its report to the government and the European Commission.

Draghi Says ECB Stands Ready to Start Buying Govt Bonds (Bloomberg)
European Central Bank President Mario Draghi said the bank is ready to start buying government bonds as soon as the necessary conditions are fulfilled, putting the onus on Spain to decide whether it wants a bailout.
The ECB is ready to undertake Outright Monetary Transactions “once all the prerequisites are in place,” Draghi said today at a press conference in Ljubljana, Slovenia, after policy makers left the benchmark rate at a historic low of 0.75 percent. The plan has “helped to alleviate tensions over the past few weeks” and “now it’s really in the hands of governments.”
A month after Draghi unveiled the unprecedented bond- purchase plan to lower yields on government debt, Spain, the country most likely to take up the offer, is still mulling whether it wants to accept the conditions attached. At the same time, the euro-area economy probably entered a recession in the third quarter as the sovereign debt crisis damped spending and investment.
“With the OMT, the ECB has tackled and exorcised fears of an imminent eurozone break-up,” said Carsten Brzeski, senior European economist at ING Group in Brussels. With governments now under pressure to act, “for the time being, the ECB can lean back, watch and twiddle thumbs.”

No Rate Cut?
The euro extended gains as Draghi spoke, rising to $1.2992 for a 0.7 percent advance on the day. Separately, the Bank of England held its bond-purchase target at 375 billion pounds ($603 billion) today and kept its key rate at 0.5 percent. Under Draghi’s OMT plan, a country must make a formal request to Europe’s bailout fund to buy its debt on the primary market before the ECB considers buying bonds on the secondary market. Spanish Finance Minister Luis de Guindos has said officials are still considering whether they need European Union aid. While bond markets have rallied since Draghi pledged on July 26 to “do whatever it takes” to preserve the euro, Spanish bonds fell for a second day today as the nation sold 3.99 billion euros ($5.2 billion) of two-, three- and five-year securities. Spain sold three-year notes at an average yield of 3.956 percent, up from 3.845 percent at the previous sale on Sept. 20.

Draghi Says Next Move Not His as Spain Resists Bailout (Bloomberg)
European Central Bank President Mario Draghi signaled European governments can’t expect much more help from him until they make the next move. Draghi said nine times during a 54-minute press conference in Slovenia yesterday that the ECB won’t start intervening in bond markets until governments like Spain request a bailout and agree to conditions. He also ruled out allowing the ECB to take losses in any further Greek debt restructuring and damped speculation of another ECB interest-rate cut. “Draghi’s message to governments was that he’s not going to do any more for the time being,” said Jacques Cailloux, chief European economist at Nomura International Plc in London. “The ECB is ready, if needed, but their preference is probably not to have to intervene at all.”
That message puts the onus firmly on Spain to request aid from Europe’s bailout fund and sign up to conditions -- a pre- requisite for the ECB to consider bond purchases. The prime ministers of Italy, Spain, and France may have Draghi’s imperative on their minds when they meet at a summit of Mediterranean leaders in Malta today. Draghi said his bond-purchase plan, called Outright Monetary Transactions, has already lowered borrowing costs for sovereigns across Europe. “Today we are ready with our OMT,” he said. “Now it’s really in the hands of governments.”

EU Doubts on Deficit Cutting May Hinder Spain’s Path to Bailout (Bloomberg)
European officials’ concern over’s Spain’s ability to reach its 2013 deficit-reduction target may obstruct Prime Minister Mariano Rajoy’s path toward a possible bailout. Olli Rehn, the European commissioner in charge of policing budget rules, told Spanish officials their plans to reduce the shortfall to 4.5 percent of gross domestic product next year are based on excessively optimistic assumptions about economic growth, two people familiar with the issue said. Central bank governor Luis Maria Linde, who met Rehn on his Oct. 1 visit to Madrid, echoed that view in comments to lawmakers yesterday. There’s “a potential slowdown in Spain’s application for a European program,” Thomas Costerg, an economist at Standard Chartered Bank in London, said yesterday by e-mail. “There is a rising fear that the 2013 budget and the stress tests may have been some sort of window dressing to get European assistance.”
While European Central Bank President Mario Draghi said yesterday the ECB is ready to start buying bonds of sovereigns that qualify for aid, Spanish officials have backed away from the offer this week. Rajoy on Oct. 2 denied reports a rescue request was imminent. Economy Minister Luis de Guindos last night said no bailout was needed. Spanish bonds have dropped for two days since Rajoy’s statement, with the yield on 10-year notes rising 15 basis points to reach 5.90 percent yesterday.

Poland Signals November Cut After Holding Borrowing Costs (Bloomberg)
Poland’s central bank signaled it may cut borrowing costs next month if the economy slows further after unexpectedly leaving them at the highest level since 2009 for a fourth meeting. The Narodowy Bank Polski kept the benchmark seven-day interest rate at 4.75 percent yesterday. Eight economists in a Bloomberg survey predicted no change, while 27 expected a 25 basis-point reduction that would have reversed a rate increase in May, the only one by a central bank in the European Union this year. The NBP last lowered the benchmark in June, 2009. While central banks around the world have eased monetary policy to avert a recession, Poland has kept rates at the highest in three years to tame inflation, even after Governor Marek Belka signaled the need to reduce them amid Europe’s debt crisis. Poland’s expansion eased in the second quarter to 2.4 percent from a year earlier, the slowest since 2009.
“Inflation is still high and we wanted to make sure the trend of weakening economic growth will persist,” Belka said at a news conference yesterday. The central bank “will ease monetary policy” next month should data show the economy slowing further and limited inflation risks, according to an e- mailed statement after today’s meeting. The zloty traded at 4.091 per euro at 3:39 p.m. in Warsaw, down from 4.081 yesterday, when it rose 0.7 percent to post the biggest one-day gain in three weeks. The five-year government bond yield climbed 3 basis points to 4.24 percent.

BOE Maintains Bond-Buying Plan as Split Over QE Looms: Economy (Bloomberg)
Bank of England officials voted to complete their latest round of stimulus amid intensifying dissent on inflation risks that threatens to cause a rift on future aid for the economy. Governor Mervyn King’s nine-member Monetary Policy Committee left the bond-purchase target at 375 billion pounds ($604 billion), as forecast by all 40 economists in a Bloomberg News survey. By next month’s meeting, they’ll have finished spending the 50 billion-pound round they started in July, forcing a decision on whether more stimulus is needed. Rising commodity costs are feeding price pressures, and policy maker Ben Broadbent has said the BOE’s capacity to add to quantitative easing is limited by faster-than-expected inflation. Chief Economist Spencer Dale warned last month of the risks from prolonged loose policy. Their stance may not be enough to overcome the views of a majority of officials who have said it’s likely that more stimulus will be required.
“Next month’s decision will take place against a background which might make members think a bit harder as to whether more QE is justified,” said Philip Shaw, an economist at Investec Securities in London. “We still expect the MPC to sanction a further 50 billion pounds, but the decision could be a close call.” Bank of England policy makers also left their key interest rate at a record low of 0.5 percent. The pound rose 0.4 percent against the dollar today and was at $1.6145 as of 2:35 p.m. Gilts declined, pushing the 10-year yield up 3 basis points to 1.71 percent. It fell to the lowest in more than three weeks yesterday as investors sought the relative safety of U.K. debt amid the euro-area turmoil.

ECB Holds Interest Rates as Spain Keeps Draghi Waiting (Bloomberg)
The European Central Bank kept interest rates on hold today as President Mario Draghi waits for Spain to decide if it needs his help. Policy makers meeting in Ljubljana, Slovenia, left the benchmark rate at a historic low of 0.75 percent, as predicted by 48 of 52 economists in a Bloomberg News survey. Four forecast a cut to 0.5 percent. Draghi will brief reporters on the decision, taken at one of the ECB’s twice-yearly meetings outside Frankfurt, at 2:30 p.m. A month after Draghi unveiled an unprecedented plan to buy the bonds of euro-area countries still mired in the sovereign debt crisis, Spain, the country most likely to take up the offer, is still mulling whether it wants to accept the conditions attached. At the same time, the euro-area economy probably entered a recession in the third quarter as the crisis damped spending and investment.
“From an economic perspective, we don’t need another ECB rate cut,” said Christian Melzer, an economist at Dekabank in Frankfurt. “The focus isn’t on rate changes but on Spain and a possible request for aid paving the way for the ECB bond program. It’s up to Spain to make a move now.”

Draghi Stares at Spain as Brinkmanship Keeps ECB Waiting (Bloomberg)
Mario Draghi is waiting for Spain to get back to him on whether his plan to save the euro is needed. One month after the European Central Bank president unveiled an unprecedented bond purchase program to rescue Europe’s embattled southern fringe, Spanish Prime Minister Mariano Rajoy is showing reluctance to ask for the aid he pushed for with Italy on concern about the terms attached to it. As ECB policy makers meet in Slovenia today, Spanish two-year note yields are more than 50 basis points higher than the five-month low touched on Sept. 7, the day following their last decision. “We’re back at this game of brinkmanship between the ECB and governments again, and it’s a case of who makes some concessions first,” said Nick Matthews, senior European economist at Nomura International Plc in London. “The markets will continue to play a significant role here and Draghi needs them to turn up the pressure.”
Spanish bonds extended losses today after an auction of two-, three- and five-year securities failed to exceed the maximum target of 4 billion euros ($5.2 billion) and the benchmark three-year yield rose. While Finance Minister Luis De Guindos has said officials are still considering whether they actually need ECB help, Catalan President Artur Mas urged Rajoy to ask for a bailout as he rejected the deficit limits for his region next year. Spain can’t overcome its economic crisis without help, Mas said in the statement published yesterday.

20121005 1007 Global Commodities Related News.

DTN Closing Grain Comments 10/04 14:40 (CME)
Beans Extend Wednesday's Rally
The soybean market added sharp gains to Wednesday's recovery rally on continued support from commercial traders. Wheat and corn had a disappointing day, closing well off session highs given the sharp sell-off in the U.S. dollar index.

Pro Farmer: After The Bell Wheat Recap (CME)
Nearby wheat futures enjoyed gains most of the day, but the market softened into the close to end roughly 3 to 5 cents lower in most contracts at all three locations. Wheat futures benefited from spillover support from soybeans and heightened global wheat stocks concerns much of the day. December Chicago wheat ended low-range and within the bottom portion of their long-standing consolidation trading range.

Wheat Market Recap Report (CME)
December Wheat finished down 3 3/4 at 869 1/4, 13 1/2 off the high and 2 1/2 up from the low. March Wheat closed down 4 1/4 at 879 3/4. This was 1 3/4 up from the low and 13 off the high.
December Chicago wheat finished the day lower despite a sharply lower US Dollar and a surging crude oil market. The stronger trade early on for corn and soybeans helped support but gains eroded near the close which might suggest a bearish bias by some. Statistics Canada reported Canadian wheat production at 26.7 million tonnes in 2012 vs. 26.26 in 2011 but slightly below market expectations. The lower than expected production estimate helped support the KC and Minneapolis wheat markets midday. Export sales for the week ending September 27th came in below market expectations which are adding a negative bias to price action. Net weekly export sales for wheat, came in at 307,000 tonnes for the current marketing year and none for the next marketing year. As of September 27th, cumulative wheat sales stand at 40% of the USDA forecast for the current marketing year vs. a 5 year average of 55%. The slow pace of exports might be adding momentum to the bear camp but wheat prices continue to narrow their premium to corn which could imply greater use of feed wheat in the coming quarter. December Oats closed up 7 1/2 at 370 3/4. This was 8 3/4 up from the low and 3 1/4 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
Corn futures favored a firmer tone most of the day, but softened into the close to finish narrowly mixed through the July contract. Deferred futures ended 6 1/4 to 7 3/4 cents lower. Concerns about tight supplies, spillover from sharp gains in the soybean pit and positive outside markets provided support to corn futures at times today. But market bulls are hesitant to extend long positions following last Friday's limit higher move due to signs of demand destruction.

Corn Market Recap for 10/4/2012 (CME)
December Corn finished up 1/4 at 757, 10 1/2 off the high and 4 up from the low. March Corn closed down 1/4 at 757 1/4. This was 3 1/2 up from the low and 10 off the high.
December corn traded mixed on the day and settled near the unchanged. Early support was linked to an explosive soybean market and a sharply lower US Dollar. Bulls believe the USDA may take down the average US corn yield and production next week while bears point to a slow export pace and cheaper South American corn. Net weekly export sales for corn, came in at 326,900 tonnes for the current marketing year and none for the next marketing year. This was slightly above market expectations. As of September 27th, cumulative corn sales stand at 33% of the USDA forecast for current marketing year vs. a 5 year average of 37%. Corn saw pressure late in the session as the wheat market sagged lower and after the US Grains Council reported that the 2012 China corn crop may produce 5-6 million tonnes more than in 2011. The USDA currently has the crop at 200 million tonnes. Long term pressure in corn may come from the fact that officials in Mexico are considering allowing corn imports from Argentina a month after approving imports of grain from Brazil. The US is the main supplier of corn to Mexico but rising food prices around the world have given reason for many world buyers to consider other origins. This could limit price gains going forward. November Rice finished up 0.13 at 15.37, equal to the high and 0.07 up from the low.

Monsanto sees US 2013 corn acres steady at 96 mln acres (Reuters)
Monsanto Co., the world's largest seed company, said on Wednesday that U.S. corn and soybean plantings in 2013 are likely to be similar to what was seen this year, though soybean acres may climb.

INTERVIEW-Mexico considers allowing Argentina corn imports (Reuters)
Mexico is considering allowing corn imports from Argentina, a month after approving shipments of the grain from Brazil, an official at the country's food safety agency said on Wednesday.

GRAINS: U.S. soybeans edged higher, rising for a second consecutive day on bargain hunting by end-users and investors after prices slid to a three-month low in the previous session, although gains were capped by harvest pressure. Corn lost more ground, weighed down by a decline in U.S. ethanol production and record pace of the Midwest harvest. Wheat also eased, tracking corn and as Egypt continued to bypass U.S. wheat in tenders. (Reuters)

Food Prices Jump to Six-Month High as Dairy Costs Rise (Bloomberg)
World food prices rose in September to the highest in six months as dairy and meat producers passed on higher feed costs to consumers, the United Nations’ Food & Agriculture Organization said. An index of 55 food items tracked by the FAO rose to 215.8 points from a restated 212.8 points in August, the Rome-based agency reported on its website today. Dairy costs jumped the most in more than two years. Livestock breeders and dairy farmers are passing on the higher cost of feed, after grain prices jumped in June and July, according to Abdolreza Abbassian, an economist at the FAO in the Italian capital. Higher prices don’t mean a food crisis is imminent, he said today by phone. “Despite a very difficult market, the fundamentals that suggest a food crisis are just not there,” Abbassian said. “Market sentiment is now accepting high prices more as a rule than as an exception.”
The FAO dairy-price index jumped 6.9 percent to 187.7 points from 175.6 in August, the biggest advance since April 2010, the data showed. The index for meat prices rose 2.1 percent to 175, climbing for a second month. The world cereal-price index rose to 262.6 points from 259.9 points the previous month to reach the highest level since April last year. The index for grain prices in July surged 17 percent, the biggest jump since February 2008. “We expected this for both meat and dairy, you have a lag with this big increase in input cost from the grain sector,” Abbassian said. “There will be a limit to how much it goes up. By how much you can raise prices without consumers cutting consumption remains an issue.”

Weather trims Ivorian cocoa output by 2 pct (Reuters)
Cocoa output from the world's top grower Ivory Coast slipped by a smaller-than-expected 2.3 percent in the 2011-12 season as a decline in smuggling masked weather-related production losses, sector regulator CCC said on Wednesday.

SOFTS: Raw sugar futures on ICE touched an eight-week high in early trading , and arabica coffee and cocoa edged up in light volumes, supported by a softer dollar and stronger financial markets. (Reuters)

U.S. ethanol output drops 3 pct to two-year low (Reuters)
U.S. ethanol production fell for the third straight week to the lowest level since the government began releasing the weekly data more than two years ago, the Energy Information Administration said on Wednesday.

U.S. Natural Gas Rises on Outlook for Colder Weather (Bloomberg)
Natural gas futures advanced for the seventh time in eight days as an expected blast of cold air signaled stronger demand for heating fuel. Gas gained 0.3 percent as the National Weather Service predicted below-normal temperatures for most of the lower 48 states over the next six to 10 days. Prices retreated from steeper gains after the Energy Department said supplies rose 77 billion cubic feet last week, above the median of 26 analyst forecasts showing an increase of 73 billion. “It’s a shoving match between the bulls and the bears,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “This is a seasonal play as supply is secured for the winter and speculators look to make end users pay up for it. You have so much supply in the ground so people are really bearish on the market rallies.”
Natural gas for November delivery gained 1.1 cents to settle at $3.406 per million British thermal units on the New York Mercantile Exchange after rising as high as $3.464. The futures have climbed 14 percent this year. November $3 puts, bets that prices will fall, were the most active gas options in electronic trading. They fell 0.7 cent to 1.7 cents on volume of 1,411 contracts as of 2:40 p.m. Puts accounted for 63 percent of options volume. The discount for November futures widened to 0.6 cent versus December contracts from yesterday to 27.4 cents.
The low temperature in Detroit on Oct. 12 may be 37 degrees Fahrenheit (3 Celsius), 9 below normal, and New York City may drop 8 below the usual reading to 43 degrees, according to AccuWeather Inc. in State College, Pennsylvania.

Oil Falls After Surging on Middle East, Heads for Weekly Decline (Bloomberg)
Oil fell in New York and headed for a third weekly decline on speculation the biggest gain in two months yesterday was exaggerated amid rising supplies. Futures slid as much as 0.4 percent after surging 4.1 percent yesterday on concern tension between Turkey and Syria will disrupt Middle East output. Saudi Arabia, OPEC’s biggest crude producer, sees no difficulty in meeting demand, according to Oil Minister Ali al-Naimi. Iraq’s exports will increase to 200,000 barrels a day from 170,000 “within days,” Oil Minister Abdul Kareem al-Luaibi said. Prices may drop next week as U.S. production rises, a Bloomberg survey showed. “The situation with the oil market is that current and forecast future demand levels over the next 12 months are well covered by supply and that’s been the driving factor behind the decline we’re seeing in recent weeks,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The most likely scenario is that this will continue to be the case.”
Crude for November delivery fell as much as 36 cents to $91.35 a barrel and was at $91.43 in electronic trading on the New York Mercantile Exchange at 10:04 a.m. in Tokyo. The contract rose $3.57 to $91.71 yesterday. Prices are down 0.8 percent this week, for the longest run of weekly declines since June, and 7.5 percent this year. Brent oil for November settlement was down 45 cents, or 0.4 percent, at $112.13 after advancing $4.41 yesterday on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $20.70 to New York-traded West Texas Intermediate grade.

U.S. crude inventories rose last week, products fell -API
NEW YORK, Oct 2(Reuters) - U.S. crude oil inventories rose less than expected last week while oil product stockpiles fell slightly, data from the American Petroleum Institute showed on Tuesday.
Crude inventories rose 462,000 barrels in the week to Sept. 28, compared with analysts' expectations for a build of 1.5 million barrels, the API reported.

U.S. Oil Output at 14-Year High, Poised to Climb Further  (CME)
Shale Drilling Investments Will Yield Significant Increases
U.S. crude oil production, already at the highest level in 14 years, probably will increase further amid stepped-up horizontal drilling to tap "tight" oil formations in North Dakota and other areas, the Energy Information Administration said in its This Week in Petroleum Report.
Since the start of 2009, North Dakota's oil production has more than tripled, to nearly 675,000 barrels a day, primarily because of increased drilling in the Bakken shale formation. Combined, Montana and North Dakota output may approach 1.1 million barrels a day in January 2014, up 49% from 738,000 currently.
"Companies are making significant capital investments in horizontal drilling rigs and deploying them to tight oil plays," the EIA said. "Development of tight formations will lead to continuing significant increases in U.S. oil production in the coming years."
Additionally, Texas is pumping more oil from its Permian Basin region. During the first eight months of 2012, total U.S. oil production averaged 6.21 million barrels a day. If sustained over the full year, production would be the highest since an average of 6.25 million barrels a day in 1998.

OIL-Oil rallies to $109 as risk appetite returns
LONDON, Oct 4 (Reuters) - Brent crude oil rose towards $109 per barrel as expectations Spain would seek a bailout and better U.S. data encouraged investors back into riskier assets such as oil and commodities.
"There was no really convincing explanation for the fall in price yesterday," said Carsten Fritsch, analyst at Commerzbank. "We are seeing a counter-movement, a slight counter-movement, after the exaggerated decline in price."

Recap Energy Market Report (CME)
November crude oil trended higher throughout the US trading session and managed to overtake Wednesday's high in the process. There seemed to be a number of positive catalysts supporting the day's advance, including weakness in the US dollar, bargain hunting after yesterday's downdraft and gains in the product markets. There were also a number of headlines circulating over the conflict between Syria and Turkey, as well as US officials investigating the Embassy bomb site in Benghazi from the September 11 attack. Reports of a fire at a large Texas refinery offered support to the US gasoline market, which seemed to provide an added lift to crude oil prices.

Copper Rises as Low European Rates Boost Demand Outlook (Bloomberg)
Copper futures advanced for the fifth time in six sessions as European policy makers held borrowing costs at record lows, bolstering prospects for metal demand. The European Central Bank left its benchmark interest rate at 0.75 percent, and the Bank of England held its key rate at 0.5 percent. The dollar headed for the biggest drop in three weeks against a basket of currencies, boosting the appeal of commodities as alternative investments. The Standard & Poor’s 500 Index of equities rose for the fourth straight day. “The positive equity story reflects both a growth and risk story and also expectations of more liquidity, and those same expectations drive other risk assets, in particular copper,” said Justin Smirk, an analyst at Westpac Banking Corp. (WBC) in Sydney and the most accurate forecaster for industrial metals in Bloomberg rankings in the past eight quarters.
Copper futures for December delivery rose 0.1 percent to settle at $3.786 a pound at 1:23 p.m. on the Comex in New York. The price has gained 10 percent this year on speculation that government stimulus plans will shore up their economies. On the London Metal Exchange, copper for delivery in three months climbed 0.1 percent to $8,300 a metric ton ($3.76 a pound). Aluminum, nickel, tin advanced, while lead and zinc fell.

Silver Market Recap Report (CME)
The silver market was pulled up in sync with the gold market but the technical advances in silver weren't nearly as significant as those posted on the gold charts. Certainly silver was benefiting from the weakness in the dollar, but having the added advantage of a flurry of dovish foreign central bank statements probably served to embolden the buyers of silver today. As mentioned in the mid day coverage an apparent escalation of tensions in the South African mining sector probably provided some indirect lift to silver prices today. In the end, a risk-on day with higher equities and higher physical commodity prices created a bullish environment for silver.

Gold Market Recap Report (CME)
The gold market did forge a fresh new high for the move and in the process the December contract reached up to the highest level since February. In addition to ongoing easing dialogue from the ECB and BOE, the gold market was also cheered by US data that was weak but wasn't as weak as expected. News of violence in South African mining areas is another factor that probably added to the upward march on the charts. In fact, given the upside breakout it is also likely that some of the buying in gold today was technically motivated. Some players are suggesting that rising gold prices might actually serve to embolden the Unions wage requests and make the wage negotiations even more troublesome.

Gold Traders More Bullish as Holdings Reach Record: Commodities (Bloomberg)
Gold traders are the most bullish in three weeks as investors’ bullion holdings expanded to a record after central banks pledged to do more to spur economic growth. Twenty of 32 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors are holding the most metal ever through gold-backed exchange-traded products after buying 85.4 metric tons last month, the most since July 2011. Hedge funds’ bets on a rally are the biggest in seven months, U.S. Commodity Futures Trading Commission data show.
The European Central Bank held interest rates at a record low yesterday after agreeing on an unlimited bond-purchase program last month and the Federal Reserve announced a third round of quantitative easing. The Bank of Japan has said it will add to a fund that buys assets and China approved a $158 billion subways-to-roads construction plan. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011. “More and more people are going to anticipate inflation in the future because of quantitative easing and the amount of debt we’ve got in the system,” said Frederique Dubrion, the Geneva- based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “We can print whatever amount of money we need, but you can’t print gold. It’s nobody’s liability, it’s a hard currency.”

Gold Jumps to Highest Since November on ECB’s Bond Plan (Bloomberg)
Gold futures jumped to the highest in almost 11 months as the European Central Bank said it is ready to start buying government bonds, boosting demand for the metal as a store of value. Silver, platinum and palladium also gained. The ECB will begin purchases “once all the prerequisites are in place,” President Mario Draghi said today after policy makers left the benchmark interest rate at a historic low of 0.75 percent. In the third quarter, gold gained 11 percent, the most since June 2010, as the Federal Reserve announced a third round of U.S. monetary stimulus. “A global accommodative stance will continue to support gold,” William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. Gold futures for December delivery climbed 0.9 percent to settle at $1,796.50 an ounce at 1:43 p.m. on the Comex in New York. Earlier, the price reached $1,797.70, the highest for a most-active contract since Nov. 9.
UBS AG said in a report that its physical gold sales to India yesterday were the highest since April as the rupee strengthened against the dollar. Silver futures for December delivery advanced 1.2 percent to $35.101 an ounce on the Comex, the highest settlement since March 1. Platinum futures for January delivery rose 1.8 percent to $1,725.10 an ounce on the New York Mercantile Exchange, the highest settlement since Sept. 21, 2011. Palladium futures for December delivery jumped 2.6 percent to $674.75 an ounce on the Nymex, the biggest gain since Sept. 10.

20121005 1007 Soy Oil & Palm Oil Related News.

Palm Oil Poised to Decline After Rebound, Mistry Predicts (Bloomberg)
Palm oil, the most-used cooking oil, is set to resume its decline in the next few days after a bounce, said Dorab Mistry, director at Godrej International Ltd. Prices may decline to $749 a metric ton for cargoes delivered in Rotterdam because the export tax in Indonesia, the biggest producer, drops to zero at that level, said Mistry in response to e-mailed questions from Bloomberg. He correctly predicted a slump in futures in July. Crude palm oil was at $800 in Rotterdam yesterday, data compiled by Bloomberg show. Futures on the Malaysia Derivatives Exchange, the global benchmark, have plunged 22 percent since the end of August as slowing demand increased stockpiles in Indonesia and Malaysia, the biggest producers. Declining prices may reduce revenues for companies including Sime Darby Bhd (SIME) and IOI Corp. and help cap increases in global food costs.
“A bounce is to be expected and natural,” said Mistry. “The market should resume its journey to $749 cif Rotterdam in the next few days. I’m pessimistic about the macro scenario.” With a decline to $749 and no export tax, palm oil producers in Indonesia would be “better off than at present,” said Mistry. “It also means that Malaysian refiners become competitive once again.” The contract for December delivery ended little changed at 2,352 ringgit after trading between a 2.3 percent gain and a 1.3 percent loss. Futures fell 8.5 percent to close at a three-year low of 2,255 ringgit on Oct. 2. That was the biggest drop for the most-active contract since October 2008.

Tax Proposal
Indonesia reduced taxes last year to boost exports of processed oil, increasing competition for refiners in Malaysia. When prices of crude and refined palm oil and olein drop below $750 a ton, no export duty is imposed. The country will maintain its export-tax policy, Deputy Trade Minister Bayu Krisnamurthi told reporters in Jakarta today. A proposal to cut export taxes on crude palm oil to between 8 percent and 10 percent from the current 23 percent will be presented to the Malaysian cabinet tomorrow, Plantations Minister Bernard Dompok said late yesterday. “Indonesian refineries’ competitive advantage comes from their ability to buy CPO cheaper” because the domestic price is reduced by the amount of the export duty, Alvin Tai, an analyst at OSK Investment Bank Bhd., said today.
The price plunge will give some relief to Malaysian refiners in the short term,said Mohammad Jaaffar Ahmad, chief executive of Palm Oil Refiners Association of Malaysia. Even at these prices, Indonesian refiners had an advantage of at least $40 a ton in production costs, he said. Stockpiles in Malaysia will continue to expand in October, November and December and may reach as high as 3 million tons by January, Mistry said Sept. 23. Inventories in Indonesia have hovered between 3.5 million tons and 4 million tons since 2010 as against popular estimates of 1.5 million tons to 2 million tons, he said.

Soybeans Gain a Second Day as Price Drop May Boost Import Demand (Bloomberg)
Soybeans rose for second day in Chicago on speculation import demand may strengthen after prices fell from a record. Soybeans have dropped 14 percent from the all-time high of $17.89 a bushel on Sept. 4. Global exports will climb 4.1 percent to a record 93.7 million metric tons in 2012-13, the U.S. Department of Agriculture forecasts. China bought 110,000 tons from U.S. exporters and another 180,000 tons, the USDA said on Sept. 27 and Sept. 28. “There have been some pretty heavy exports lately so some demand is being met,” William Adams, a fund manager at Resilience AG in Zurich, said today by phone. “If there is a good season in Australia and South America, we could see some more weakness.” Soybeans for delivery in November climbed 0.9 percent to $15.46 a bushel on the Chicago Board of Trade at 12:39 p.m. in London. The oilseed yesterday advanced 0.1 percent after dropping 4.4 percent in two sessions.
Taiwan bought 60,000 tons of Brazilian soybeans from Bunge Ltd. for delivery in February at a tender today, the Breakfast Soybean Procurement Association-Taichung Group said by e-mail. Corn for December delivery gained 0.6 percent to $7.6125 a bushel and wheat for delivery in the same month was up 0.2 percent at $8.7475 a bushel. Milling wheat futures jumped 0.9 percent on NYSE Liffe in Paris.

Pro Farmer: After The Bell Soybean Recap (CME)
Soybean futures enjoyed strong gains throughout the day, but the market moved well off its highs after midday to settle 17 to 19 3/4 cents higher in the November through March contracts. Soybean futures surged following the release of USDA's Weekly Export Sales Report this morning, but saw settled off the daily high amid light profit-taking.

Soybean Complex Market Recap (CME)
November Soybeans finished up 19 3/4 at 1551 1/2, 17 1/4 off the high and 20 1/2 up from the low. January Soybeans closed up 18 3/4 at 1551. This was 19 up from the low and 16 1/2 off the high. December Soymeal closed up 4.5 at 468.9. This was 5.0 up from the low and 7.9 off the high. December Soybean Oil finished up 0.71 at 51.44, 0.34 off the high and 0.83 up from the low.
November soybeans traded sharply higher early in the session but gains eroded into the close and the market closed off session highs, but still in positive territory. The lower US dollar and a relentless export sales pace by the US added to the supportive tone. Some traders believe that despite the possibility of a yield increase in next week's USDA report; the likelihood of increased demand could mean extra supply will not improve this year's US soybean carryout drastically. The soybean market reported an explosive weekly export sales number this morning with sales for soybeans coming in at 1,296,600 tonnes for the current marketing year and 6,300 for the next marketing year. As of September 27th, cumulative soybean sales stand at 82% of the USDA forecast for the current marketing year vs. a 5 year average of 43%. Only 108,000 tonnes of sales are needed each week to reach the USDA forecast. Total net soybean meal sales were pegged at 375,100 tonnes and total net soybean oil sales at 3,300 tonnes. Traders reported that basis in the Gulf of Mexico held steady to firm on good demand which is s short term positive for the soybean market.

EDIBLE OIL: Malaysian palm oil futures ended flat, as traders awaited a government decision on a proposal to cut export tax on the crude shipments that could help spur exports at a time when stocks are rising at a faster pace. (Reuters)