Wednesday, October 10, 2012

20121010 1806 FCPO EOD Daily Chart Study.


FCPO closed : 2457, changed : +19 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : rising higher, seller reducing exposure.
Support : 2450, 2400, 2350, 2300 level.
Resistance : 2490, 2520, 2550, 2570 level.
Comment :
FCPO closed recorded gains with improved volume exchanged. Soy oil currently registering small gain after overnight closed 0.5% higher while crude oil price retreating lower after yesterday gains.
Price traded wildly today between gains and losses on lower exports tax focus, higher crude oil price, rising inventories and production official September data plus slower cargo surveyor exports figures.
Daily chart reading continue suggesting a pullback correction downside biased market development with MACD indicator having positive cross up.
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.

20121010 1721 FKLI EOD Daily Chart Study.


FKLI closed : 1661 changed : +0.5 point, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histogram : weakening, buyer taking profit.
Support : 1660, 1657, 1651, 1645 level.
Resistance : 1670, 1680, 1690, 1700 level.
Comment :
FKLI closed 1 tick higher with thin volume traded doing 1.5 point premium compare to cash market that closed little higher. Overnight U.S. markets declined lower and today Asia markets also ended in negative territory while European markets currently trading weaker.
Global markets sentiment turned negative on slower global economy growth concern and IMF statement on European banks may need to sell off 4.5 trillion worth of assets.
FKLI daily chart study still calling a pullback correction upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20121010 1545 Global Markets & Commodities Related News.

STOCKS: Asian shares fell, with Japan's stocks sliding more than 1.5 percent to a two-month low, and the safe-haven dollar firmed on concerns that the corporate results season will reveal weaker earnings in the face of flagging global economic growth.. European stock index futures pointed to a lower open, with stocks set to lose ground for the third consecutive session as investors fret about corporate results as the earnings season gets under way. U.S. stocks fell on Tuesday, led by losses in technology after brokerage downgrades of Intel and other major companies as worries increased about third-quarter U.S. earnings. (Reuters)

FOREX: The euro dropped to its lowest since the start of month against the dollar and the yen, as investors shied away from risk on concerns about weak earnings in the United States due to a slowdown in global growth.(Reuters)


FOREX-Euro slips, tries to hold above 200-day average
TOKYO, Oct 10 (Reuters) - The euro dropped to its lowest since Oct. 1 against the dollar and the yen, as investors shied away from risk on concerns about weak earnings in the United States due to slowing global growth.
Asian shares followed a drop on Wall Street overnight, when technology stocks fell on brokerage downgrades of Intel and other major companies, as worries mounted about third-quarter U.S. earnings, which firms began reporting on Tuesday.


Global financial confidence "very fragile", euro crisis key threat-IMF(Reuters)
The International Monetary Fund urged European policymakers to deepen the financial and fiscal ties within the euro area with some urgency to restore sagging confidence in the global financial system.

Chevron warns on Q3 profit; Richmond out through Q4(Reuters)
Chevron Corp warned that third-quarter profits would be "substantially lower" than the previous quarter as a hurricane and maintenance curbed its oil and gas output and a fire hit its refining arm.

GRAINS: U.S. soybeans fell for the third straight session, with traders trimming positions ahead of a U.S. Department of Agriculture report expected to show increased production forecasts for the oilseed, while the grim outlook for global growth also weighed.(Reuters)

Untenable Thai rice scheme puts populist PM in bind(Reuters)
Thailand's government is under growing pressure to cut its guaranteed price for rice which is so high exports have slumped, and even some farmers accept a cut might be needed, but it may find it politically hard to back down.

POLL-U.S. crude stocks seen rising on higher imports last week(Reuters)
U.S. crude oil inventories were expected to have risen last week on additional imports, after two straight weeks of declines, a preliminary Reuters poll of analysts showed on Tuesday.

OIL: Brent crude slipped near $114 after a jump of 2 percent the previous day, with a cloudy economic outlook offsetting fears about disruptions to Middle East oil supply as a conflict between Turkey and Syria escalated.(Reuters)

Planes, autos help Alcoa to a quarterly profit(Reuters)
Stronger demand for aluminum products from airplane and automobile producers helped Alcoa Inc's third-quarter profit beat Wall Street's expectations despite weak aluminum prices and worries about China's slumping economy.


Iron ore at 10-week high on China restocking, stimulus hopes
SINGAPORE, Oct 10 (Reuters) - Chinese steel futures rose to two-month highs driven by hopes of more stimulus measures from Beijing to aid a slowing economy and backing further gains in iron ore prices that have leapt by more than 12 percent in the past two days.
Chinese steel producers, the world's biggest buyers of iron ore, returned to the spot market this week hungry for the raw material after last week's National Day holiday, helping push iron ore prices to their highest in 10 weeks.


BASE METALS: London copper dipped slightly as persistent worries over global economic growth outweighed fresh signs of pro-growth policies by top metals consumer China.(Reuters)

PRECIOUS METALS: Gold hovered above $1,760 an ounce after three consecutive sessions of losses, as a murky outlook for global growth buoyed the dollar, putting pressure on bullion.(Reuters)

METALS-London copper firms on China policies; China data eyed
SHANGHAI, Oct 10 (Reuters) - London copper edged up as fresh signs of pro-growth policies by top metals consumer China outweighed worries over the global economy and sagging metals demand.
Chinese state-backed media on Wednesday pointed to fresh policies to stabilise the world's second-largest economy, with one saying major insurance firms had boosted their combined stock holdings by more than 10 billion yuan ($1.6 billion) over the last three trading days and will continue to support blue chip stocks and stock markets. Another paper said China is likely to offer incentives to spur vehicle sales in rural areas to boost consumption and support a slowing economy.

PRECIOUS-Gold steady but pressured by stronger dollar, growth worries
SINGAPORE, Oct 10 (Reuters) - Gold hovered above $1,760 an ounce after three consecutive sessions of losses, as a murky outlook for global growth buoyed the dollar, putting pressure on bullion.
The greenback rose to its highest in nearly a month against a basket of currencies, making dollar-priced commodities more expensive for buyers holding other currencies.


Baltic index down as capesize rates fall
Oct 9 (Reuters) - The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry commodities, fell on Tuesday as a rise in rates for panamax vessels was offset by a drop in capesizes.
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 0.91 percent to 875 points.

20121010 1510 Palm Oil Related News.


VEGOILS-Palm oil edges to 1-week top, record stocks may cap gains
Wed Oct 10, 2012 1:56am EDT
* September stocks jump 17 percent to record 2.48 million
tonnes
    * Palm oil to end rebound around 2,503 ringgit -technicals
    * Malaysia's Oct 1-10 exports slip 1 pct -ITS

 (Updates prices, adds details)
    By Chew Yee Kiat
    SINGAPORE, Oct 10 (Reuters) - Malaysian palm oil futures
edged up on Wednesday to their highest in more than a week,
tracking other vegetable oil markets, though gains were limited
as traders stayed cautious ahead of stocks data.
    Malaysia's palm oil stocks in September surged 17.4 percent
from a month ago to a record 2.48 million tonnes, the Malaysian
Palm Oil Board said after the midday break.
    The rise in September stocks exceeded market expectations of
2.46 million tonnes and could weigh on the market later when it
reopens.
    Prices fell to a near 3-year low last week but have since
been recovering steadily on bargain-hunting and prospects of a a
cut in export tax by the Malaysian government.  
    "The market is still rangebound, trading between 2,400 and
2,500 ringgit," said a trader with a foreign commodities
brokerage in Malaysia. "Prices were supported as U.S. soybean
oil was up last night and Dalian soybean oil was also up a
little bit."
    By the midday break, the benchmark December contract
 on the Bursa Malaysia Derivatives Exchange had edged up
0.7 percent to 2,456 ringgit ($798) per tonne. Prices earlier
went as high as 2,476 ringgit, a level last seen on Oct. 1.
    Total traded volumes stood at 17,513 lots of 25 tonnes each,
higher than the usual 12,500 lots.
    Malaysia's palm oil exports for Oct. 1-10 fall 1 percent to
448,624 tonnes from a month ago, cargo surveyor Intertek Testing
Services said on Wednesday.
    Another cargo surveyor, Societe Generale de Surveillance,
will release exports data later in the day.
    Technical analysis showed palm oil was expected to end its
current rebound around a resistance at 2,503 ringgit per tonne,
and fall towards 2,230 ringgit, said Reuters market analyst Wang
Tao.
    In a bearish sign for palm oil, Brent crude slipped near
$114 on Wednesday, with a cloudy economic outlook offsetting
fears about disruptions to Middle East oil supply as a conflict
between Turkey and Syria escalated.
    In other vegetable oil markets, U.S. soyoil for December
delivery edged up 0.1 percent in Asian trade. The most
active January 2013 soybean oil contract on the Dalian
Commodity Exchange gained 0.3 percent.


OECD asks Indonesia to reconsider farm import curbs
By Michael Taylor
JAKARTA | Wed Oct 10, 2012 12:41am EDT
(Reuters) - Indonesia must reform export taxes and import curbs on farm commodities to spur investment in the sector and improve national food security, the OECD grouping of the world's top economies said on Wednesday.

Agriculture contributes around 15 percent to the GDP of Indonesia, Southeast Asia's largest economy, employing about 42 million people of a population of roughly 240 million.

Import protection hinders competitiveness of the farm sector, limits productivity and growth and increases food costs for poor consumers, the Organisation for Economic Cooperation and Development said in a review of Indonesia's farm policies.

"If the aim is to improve access to food for Indonesian consumers, you wouldn't think raising the price of that food would be a good place to start," Ken Ash, director of the OECD trade and agriculture directorate, told Reuters in an interview.

"That's exactly what an import measure does, whether a tariff, quantitative restriction or standard constraint at the border."

CRISIS POLICY REFORMS SEEN REVERSED

Indonesia sets import limits and tariffs on several food items such as sugar, wheat, rice and soybeans, although it often scraps them when global prices spike.

Last week, an industry group in the country, Asia's top importer of wheat, urged the government to fix a 20 percent import tariff on wheat flour to protect domestic grain millers.

Although it is the world's biggest sugar buyer, Indonesia restricts imports of the sweetener to protect local farmers and aid domestic sugarcane mills.

The OECD report said many of the agriculture policy reforms introduced by Indonesia in line with IMF loan conditions after the 1998 Asian financial crisis had now largely been reversed.

Among these were the abolition of national purchase agency Bulog's monopoly on many farm imports, reducing tariffs and eliminating fertilizer subsidies.

"You may try to protect some processors, but at the cost of the consumer," said Andrzej Kwiecinski, a senior farm policy analyst at the Paris-based policy laboratory for the world's top economies.

Export taxes on agricultural products are hurting the country's primary producers, while also making the sector unfriendly for investors, OECD's Ash said.

Indonesia, the world's tenth largest agricultural producer, is the top producer of palm oil and the third largest cocoa grower.

But it has introduced export taxes on palm oil and cocoa beans to ensure domestic supplies, boost revenues and support domestic processing industries.

"In doing that, there is a discouragement that's being given to the primary producer," added Ash.

"If you have money and want to invest, are you going to invest in an environment that allows you to take advantage of domestic and international opportunities by moving across borders ... or in a country that is blocked?"

To increase investment in its agriculture sector, Indonesia could reduce export taxes, enforce forest laws, improve its infrastructure, enable easier access to credit, tackle land rights issues and increase funding on agriculture research.

Other suggestions in the report include replacing Indonesia's costly fertilizer subsidies with a voucher scheme, improving water supplies, and offering greater education and help to agriculture workers who want to leave the sector.

TACKLING POVERTY

Economic growth in the world's fourth most populous country is estimated to surpass 6 percent this year, but around half of its people still live on less than $2 per day.

Spikes in global food prices, such as those in soybeans and corn this year, often hit Indonesia's rural poor the hardest.

To help combat this, the country has extended the role of Bulog beyond rice in order to build bigger food stockpiles.

While it was feasible to ensure emergency reserves of food commodities to combat price spikes, Ash said, policies that tried to manage market forces were usually an expensive failure.

Indonesia has also set itself a number of self-sufficiency targets for 2014, such as beef, rice and corn, but the OECD said such a focus was misplaced, with a greater emphasis needed on food diversity away from rice.

The country, self-sufficient in rice in the 1980s before farmland was converted to build housing for a booming population, has tried to rein in rice consumption and expand paddy fields, but still relies on imports to keep up stocks.

Indonesia could replace its rice for the poor scheme with cash payments to give households greater choice and help reduce their dependence on the staple grain, the study said.

"It would be better to provide direct income support and to leave the people the choice of what they would like to buy," said Kwiecinski.

"If you want to diversify, you should change the system of supporting both rice consumers and producers, and look closer at other commodities which would bring higher incomes."

20121010 1455 Global Markets & Energy Related News.


GLOBAL MARKETS-Asia shares fall as economy gloom hits techs, miners
Asian shares fell, led by losses in technology and materials stocks after brokerage downgrades for top chip maker Intel Corp  and a warning from global miner Rio Tinto  about the uncertain near-term outlook.
"History is not on the side of those who expect the market to continue to prosper once the earnings cycle has turned," said John Higgins, senior markets economist at Capital Economics, in a note.

OIL-Oil rises 2 pct on Mideast tension, Saudi comments eyed
Oil prices jumped, snapping two sessions of losses, as escalating turmoil on the border of Turkey and Syria heightened concerns of a supply disruption in a tense Middle East.
"Oil product inventories are also an issue for the market," said Tim Evans, energy analyst at Citi Futures Perspective, commenting on why U.S. crude prices outpaced Brent's rise in midday trading in New York.
"Gasoline inventories nationally are barely above the level of September the 21st, which was the lowest since October 2008."

POLL-US crude stocks seen rising on higher imports last week
Oct 9 (Reuters) - U.S. crude oil inventories were expected to have risen last week on additional imports, after two straight weeks of declines, a preliminary Reuters poll of analysts showed on Tuesday.
The poll of 11 analysts forecast weekly U.S. stockpiles data would show crude inventories up 1 million barrels for week ended Oct. 5. Nine analysts predicted a build in stockpiles in the data, delayed by one day this week due to the Columbus Day holiday on Monday.

NATURAL GAS-Change in computer weather models firms US natgas futures
U.S. natural gas futures reversed course and ended higher after early selling, backed by a colder turn in computer weather model projections released at midday.
"It's all about weather, and it looks like the noon (computer) run turned a bit colder for the 11- to 15-day forecast," a New York-based trader said.

EURO COAL-Prices rise slightly despite heavy swaps selling
Prompt physical coal prices rose by 25-60 U.S. cents a tonne on Tuesday, with few trades reported.
Reports that one-third of striking truck drivers in South Africa have returned to work eased some of the concerns in the swaps market that wildcat strikes could spread to coal and disrupt exports.
"Some of the (South African) strikers are going back to work and there's much less anxiety in the market now, and you can see that in the swaps selling," one trader said.

20121010 1453 Local & Global Economy Related News.


Electricity tariff rate will remain at its current level until Jun next year, Minister of Energy, Green Technology and Water, Datuk Peter Chin Fah Kui, said yesterday. He said the earlier plan of the government was to review the tariff every six months but the final authority was the Cabinet and it had rejected the plan. The last time the government increased electricity tariffs was in Jun last year, following an increase in the natural gas price for the power sector. Chin also said the renegotiation of the power purchase agreements (PPA) for independent power producers will result in a more competitive rate. "We should wait for the Energy Commission to make the appropriate announcement soon," he said, declining to comment further. (BT)

The  government is stepping up cooperation with fellow leading  rubber producers Thailand and Indonesia to stabilise the commodity's price in the world market. Rural and Regional Development Minister Datuk Seri Mohd Shafie Apdal said the cooperation is vital as the rubber price may fall with over production and consumers may switch to synthetic rubber if the price is too high. (Bernama)

The US NFIB Small Business Optimism Index edged down to 92.8 in Sep from 92.9 in Aug, undershooting consensus of 93.3. (Bloomberg)The US ICSC-Goldman Store Sales Index  gained 0.2% wow in the 6 Oct week (-0.3% in the earlier week), whilst on a yoy basis, the measure increased 2.8% (2.4% in the prior week). (Bloomberg)

US Treasury Secretary Timothy Geithner praised recent measures to combat the  eurozone's debt problems, saying the bloc was on "a more promising path" to resolving the crisis. (AFP)

Under the 2010 Dodd-Frank financial overhaul, the  biggest US banks will have to run two internal "stress tests" each year and publish some of the results on their websites. Under the new rules, banks with more than US$10bn in assets will conduct at least one company-run test each year. Bank-holding companies with more than US$50bn in assets and overseen by the Federal Reserve will have to perform two internal stress tests and one Fed-run test each year. The Fed announced new rounds of stress-tests for big American banks, with tests conducted on the 19 largest banks by this year and on other banks in the US$50bn-plus category in Sep 2013. (AFP, WSJ)

The world's two largest advanced economies, the US and Japan, face growing long-term risks from investors fleeing trouble spots around the world, the IMF warned. The Fund added that territorial disputes involving three of Asia's largest economies could spill over from the regional level to undermine the global economy. (WSJ)

ECB president Mario Draghi is urging eurozone leaders to move ahead quickly and put the  ECB in charge of supervising banks - a key step in overcoming the continent's crisis over too much government debt. (Agencies)

The  IMF has warned that unless the  eurozone resolves its capital crisis, European banks’ balance sheets will contract severely, further damaging growth and pushing unemployment beyond already record highs in the region. (FT)

The  IMF said it now expects the combined  GDP of the euro zone's 17 members to fall by 0.4% this year, and grow by 0.2% next. In Jul, it forecast a contraction of 0.3% this year, and a rebound of 0.7% next. (WSJ)

German Chancellor Angela Merkel told Greece that the "tough path" of painful spending cuts will pay off, as tens of thousands protested in a show of anger against her visit to the eurozone's most indebted nation. (AFP)

Greece's international creditors of the EU and IMF gave Athens an  18 Oct deadline, date of the next European Union summit, to "implement" reforms in exchange for fresh financial assistance. (AFP)

The People's Bank of China used financial instruments known as  reverse repurchase agreements, or reverse repos, a type of short-term loan to commercial banks, to inject  Rmb265bn into the money market, adding to the Rmb2.418tr injected since late Jun. (WSJ)

The  currencies of China, Malaysia and Thailand are  undervalued relative to the economies' medium-term fundamentals, and the countries should focus on fiscal policy to support growth, the IMF said. (WSJ)

China is set to become the  world's second biggest market for luxury goods after the US in five years, overtaking France, Britain, Italy and Japan, an industry report by Euromonitor said. (AFP)

The  average price of housing in  major Chinese cities in Sep was Rmb8,753 (US$1,384) psm, 0.17% mom (+0.24% in Aug) more than Rmb8,738 in Aug, according to a survey of property developers and real-estate firms released by China Real Estate Index System. (WSJ)

Japan and South Korea said they will let a  US$57bn expansion of a currency-swap agreement expire on  31 Oct, amid tensions between Asia’s second and fourth- biggest economies over disputed islands. (Bloomberg)

Japan’s current-account surplus expanded 4.2% yoy in Aug to ¥454.7bn (¥625.4bn in Jul), the first monthly rise since Feb 2011 and is higher than expectations of ¥442.0bn. (AFP)

South Korea’s finance minister Bahk Jae Wan said his nation’s economic growth will improve this quarter and policy makers should limit the scale of stimulus measures, adding that ―mobilising all available fiscal, monetary and financial policy means in a bold move with a large size may have harmful effects.‖ (Bloomberg)

US Treasury Secretary Timothy Geithner welcomed a burst of economic reforms in India which open the door wider to foreign firms, after criticising in April a deteriorating investment outlook. (AFP)

The  IMF forecast 4.9%  GDP expansion in India in 2012, a downward revision of 1.3 percentage points from the Jul forecast  — the worst mid-year recast by the IMF for any major economy. (WSJ)

Iraq could more than double its current daily oil production by 2020, vastly boosting its economy and helping to bring stability to global energy markets, the International Energy Agency forecast. (AFP)

Saudi Oil Minister Ali al-Naimi said that the oil-rich Gulf kingdom will work to satisfy global energy markets and to "moderate" prices. (AFP)

Thailand's government expects losses of about THB80bn from its  rice intervention scheme  as of Sep 2012, commerce minister Boonsong Teriyapirom said, a cost that may increase pressure on the state to scale back the programme. (Reuters)

The government estimates that  Indonesia’s unemployment will fall to 5.8-6.1% in 2013 to boost economic growth by 6.8%. (IFT)

Japan is ready to provide US$13bn of funding for infrastructure projects in Indonesia, as part of its contribution to a jointly funded Rp410tr (US$42.75bn) development plan for the greater Jakarta area. (Reuters)

Domestic motorbike sales in Indonesia fell 14% yoy in Sep, a smaller drop than Aug's 36.8% fall. (Reuters)

Vietnam’s domestic vehicle sales declined 31.3% yoy in Sep, a less steep fall compared with Aug (-32.9%). (Bloomberg)

The World Bank has lowered its economic growth forecast for Vietnam to 5.2% from its earlier forecast of 5.7% given in May, citing unfavorable environments in the region and the world. (Saigon Times)

Vietnam’s Business Confidence Index fell 13 points from 2Q12 in 3Q12 to 107, but many enterprises expressed an optimistic view about recovery if the Government continued to carry out macro-economic stabilization policies.(Saigon Times)

Myanmar President Thein Sein agreed  with his  South Korean counterpart Lee Myung-Bak to negotiate an investment guarantee pact, during talks which focused on economic ties. (AFP)

20121010 1452 Malaysia Corporate Related News.


Sunway Bhd, the parent of Sunway REIT, is disposing Sunway Medical Centre (SMC) to Sunway REIT for RM310m funded by debt and equity. SMC will subsequently lease back the property from Sunway REIT based on a triple net lease basis  for the first 10 years with the option to renew another 10 years, and annual rental rate of RM19m for the first year with an increment of 3.5% p.a. The acquisition will increase Sunway REIT's asset size to RM4.9bn from RM4.6bn and maintain its position as Malaysia's largest REIT by assets. (StarBiz)

Tenaga Nasional Bhd has won a bid to build and operate a RM3bn gas-fired power plant to meet rising energy needs as the country’s economy grows. The 1,071-megawatt plant is expected to begin operations in March 2016 in Prai, in Malaysia’s northern Penang state, according to the Energy Commission, an industry regulator which awarded the contract. The Energy Commission also extended power purchase agreements for three existing gas-fired plants.  Genting Sanyen Power  and Segari Energy Ventures were given  10-year extensions, while Tenaga was granted a five-year renewal for its facility in Pasir Gudang, Johor. Segari Energy Ventures belongs is owned by Malakoff Bhd. Gas used to fuel these stations will no longer be subsidized, he said. (Bloomberg, Energy Commission)

The electricity tariff rate will remain at its current level until June next year, Minister of Energy, Green Technology and Water, Datuk Peter Chin Fah Kui, said. He said the earlier plan of the government was to review the tariff every six months but the final authority was the Cabinet and it had rejected the plan. Chin disclosed that his ministry had presented the paper on the tariff recently to the National Economic Council. ―Cabinet does not approve it. So I think there will not be any review and the tariff will not be changed,‖ he said. The last time the government increased electricity tariffs was in June last year, following an increase in the natural gas price for the power sector. Chin also said the renegotiation of the power purchase agreements (PPA) for independent power producers will result in a more competitive rate. (Malaysian Insider)

Opcom Holdings has received a RM92.5m contract from  Telekom Malaysia for the supply of single mode optical fiber cables and other cables to Telekom. The contract is for a period of three years, commencing from Sep 12. The award is expected to contribute positively towards Opcom Group’s earnings and net assets for the three-year period. (BT)

Structural steel player  Eversendai is confident of securing contracts worth RM500m in Malaysia within the next few months, Exec. Chairman/Group MD Datuk A.K. Nathan Said. "We will bring the experience we have gained overseas into the country and perhaps change the construction approach itself." he said. "Presently, we have RM1.7bn worth of jobs in hand and we have bid for some RM12bn worth of jobs, which would last us for three years." he said. "There are certain difficulties in terms of  the global environment but our excellent reputation has placed us in good position to garner support from clients." he said. (Bernama)

Astro Digital a subsidiary of  Astro Malaysia Holdings Bhd has entered into a strategic collaboration with Google to extend the distribution of its Astro branded content to Malaysia and the rest of the world via  YouTube. The agreement would capitalise on new technologies and develop new products to expand Astro Malaysia's customer reach and enhance its service proposition to consumers. Six full-length catch-up channels will be available on YouTube within a week from broadcast. (Bernama)


Standard & Poor's Ratings Services has revised the outlook on MISC to stable from negative after its proposed disposal of a semi-floating production system to reduce its debts. The ratings agency said it had also affirmed its "BBB" long-term corporate credit rating on the company. S&P revised the outlook on MISC because it expects the company to use the proceeds from a proposed asset sale to reduce leverage. (Star Biz)


Multi-Purpose Holdings Bhd is exiting its stockbroking business by selling A.A. Anthony Securities Sdn Bhd (AAA) for between RM150m and RM155m and a premium of RM15m. MPHB said it had signed a conditional share purchase agreement with UOB Kay-Hian Holdings Ltd to dispose of AAA for cash consideration based on the audited net tangible asset and a premium of RM15m. "This proposed disposal forms part of MPHB's plan to streamline the business operations and strategy of the MPHB Group," it said. MPHB added the disposal would enable it to focus in the gaming business after the proposed disposal and proposed demerger of the gaming business and SPV Capital businesses, which comprises of financial services and other investments. "The proposed disposal also presents an opportunity for the MPHB Group to unlock its investment in AAA," it said. (Bizstar)

LBS Bina Group Bhd's controlling shareholder Intelrich Sdn Bhd intends to mop up more shares on the open market to raise its shareholding in the property group. Managing director Datuk Lim Hock San, who also heads the Lim family's investment vehicle Intelrich, said LBS shares are "undervalued" at the current price. (Financial Daily)

Gadang Holdings Bhd said the estimated provisional contract that it secured from  Petroliam Nasional Bhd for preparation work for the refinery and petrochemical integrated development (Rapid) project is RM312.8m. Last Friday, Gadang announced that its wholly-owned unit, Gadang Engineering (M) Sdn Bhd, has accepted the Letter of Award from Petronas for the provision of Phase 1 site preparation work for the proposed Rapid project — Package 1. (BT)

Esthetics International Group Bhd (EIG) will suspend the distribution of Dermalogica skincare products in China due to challenges with product registration. Following the decision, EIG said the South China Distributorship Agreement, which grants the exclusive rights to EIG to distribute in South China, will be discontinued effective Dec 31. (BT)

20121010 0958 Global Market Related News.


Asia FX By Cornelius Luca - Tue 09 Oct 2012 16:27:11 CT (Source:CME/www.lucafxta.com)
The financial markets remained adverse to risk because of expectations for weak third quarter earnings in the US. The foreign currencies ended divergently again, with the European currencies and yen down and the commodity currencies mixed. The US stock indexes sank. Gold fell and oil advanced. The short-term outlook for 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!

Overnight
Canada: Housing starts fell to 220.2K in September from 225.3K in August.

Today's economic calendar
UK: NIESR GDP estimate for September
Australia: Westpac consumer confidence for October
Japan: Machine tool orders for September

Asian Stocks Drop as China Slowdown Weighs on Earnings (Bloomberg)
Asian stocks fell, with the regional benchmark index heading for a one-month low, on concern China’s economic slowdown and its territorial dispute with Japan are weighing on corporate earnings. Komatsu Ltd. (6301), a maker of construction equipment that gets about 14 of sales from China, slid 2.9 percent in Tokyo. Toyota Motor Corp. slipped 1.9 percent, pacing declines among Japanese carmakers that reported their biggest drop in China sales since at least 2008. Korea Electric Power Corp. sank 3 percent in Seoul after shareholder KR&C offered to sell shares in the utility company. The MSCI Asia Pacific Index (MXAP) dropped 0.7 percent to 120.80 as of 9:25 a.m. in Tokyo, heading for its lowest close since Sept. 12. Markets in China and Hong Kong have yet to open. Alcoa Inc., the largest U.S. aluminum producer, cut its forecast for global consumption of the metal as the Chinese economy slows.
“We are clearly seeing the impact of a Chinese slowdown globally and it’s indicated in Alcoa’s numbers,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “Equity markets have had a very strong run. So, it won’t be surprising if they go through some correction. In a sense, actually a correction will be healthy.”

Japan Stocks Decline on China Slowdown, Earnings Concern (Bloomberg)
Oct. 10 (Bloomberg) -- Japanese stocks fell, with the Nikkei 225 (NKY) Stock Average headed for its lowest close in two months, on concern China’s economic slowdown and its territorial dispute with Japan are weighing on corporate earnings. Furukawa-Sky Aluminum Corp. (5741) lost as much as 1.7 percent after industry bellwether Alcoa Inc. cut its forecast for global consumption of aluminum as China’s economy slows. Nissan Motor Co. (7201), Japan’s third-largest carmaker by market value, slid 1.6 percent after reporting its biggest drop in China sales since at least 2008. The Nikkei 225 dropped 1.3 percent to 8,653.17 as of 9:10 a.m. in Tokyo, headed for the lowest close since Aug. 3. Trading volume was 25 percent above the 30-day average. The broader Topix Index retreated 1.2 percent to 718.65, with more than five stocks falling for each that rose.
“We are clearly seeing the impact of a Chinese slowdown globally and it’s indicated in Alcoa’s numbers,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “Equity markets have had a very strong run, so it won’t be surprising if they go through some correction. In a sense, actually a correction will be healthy.”

S&P 500 Futures Advance After Alcoa’s Earnings Exceed Estimates (Bloomberg)
Standard & Poor’s 500 Index futures gained after Alcoa Inc. started the U.S. third-quarter earnings season by reporting profit and sales that beat analysts’ estimates. Alcoa, the first company in the Dow Jones Industrial Average to release quarterly results, was unchanged at $9.13 after the market close. DuPont Co., the most valuable U.S. chemicals producer, climbed 0.6 percent to $49.78. Home Depot Inc. (HD), the largest U.S. home improvement retailer, gained 0.1 percent to $61. Bank of America Corp. (BAC), the second-largest U.S. bank by assets, rose 0.3 percent to $9.24. Futures contracts on the S&P 500 (SPX) added 0.1 percent to 1,436.8 at 7:11 a.m. in Tokyo. The benchmark gauge for U.S. stocks declined 1 percent yesterday. Dow futures lost 4 points, or less than 0.1 percent, to 13,408.
“Investors are bracing for expectations going forward to be revised down for many companies,” Eric Teal, chief investment officer at First Citizens Bancshares Inc., which manages $4.5 billion in Raleigh, North Carolina, said in a telephone interview. “It is a good early indicator that Alcoa (AA) has been able to deliver some positive news.” Third-quarter profits and sales for the S&P 500 probably fell in unison for the first time in three years, according to analysts’ estimates compiled by Bloomberg. Per-share earnings may have dropped 1.7 percent on average after they were little changed in the second quarter. Sales may have slipped 0.6 percent, the data show. Alcoa’s net loss in the third quarter was $143 million, or 13 cents a share, the New York-based company said. Excluding legal and environmental remediation costs, it had per-share profit of 3 cents. The average of 18 estimates compiled by Bloomberg was for break-even earnings per share. Sales fell to $5.83 billion from $6.42 billion, beating the $5.56 billion average of 10 estimates. The S&P 500 has fallen for the past three days as the International Monetary Fund cut estimates for global growth. Nine out of 10 groups in the S&P 500 retreated yesterday as consumer discretionary and technology companies led declines.

U.S. Stocks Drop Before Alcoa Report as IMF Cuts Forecast (Bloomberg)
U.S. stocks dropped, sending the Standard & Poor’s 500 Index lower for a third day, after the International Monetary Fund cut estimates for global growth and investors awaited quarterly results from Alcoa Inc. (AA) Nine out of 10 groups in the S&P 500 retreated as consumer discretionary and technology companies led declines. Intel (INTC) Corp. slipped 2.7 percent as Sanford C. Bernstein & Co. downgraded the shares. Alcoa rose 0.6 percent at 4:25 p.m. New York time as the largest U.S. aluminum producer posted third-quarter earnings and sales that exceeded estimates. The S&P 500 declined 1 percent to 1,441.48 as of 4 p.m. in New York. The Dow Jones Industrial Average fell 110.12 points, or 0.8 percent, to 13,473.53. Volume for exchange-listed stocks in the U.S. was 5.8 billion shares, or about in line with the three-month average. “Everybody’s in a wait-and-see mode,” Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, said in a telephone interview. His firm oversees $14.7 billion. “We’re starting the earnings season and we’ll get a clear cut idea as to what’s going to unfold.” Third-quarter profits and sales for the S&P 500 (SPX) probably fell in unison for the first time in three years, according to analysts’ estimates compiled by Bloomberg. Per-share earnings may have dropped 1.7 percent on average after they were little changed in the second quarter. Sales may have slipped 0.6 percent, the data show.

European Stocks Retreat as EU Finance Ministers Meet (Bloomberg)
European stocks declined for a second day as the region’s finance ministers gathered in Luxembourg to discuss the sovereign-debt crisis. Bankia SA (BKIA) led the decline, falling to a two-month low. Alcatel-Lucent (ALU) SA dropped to the lowest in at least 23 years as Credit Suisse Group AG said weakness should continue into the third quarter. Vedanta Resources Plc led mining companies higher, limiting losses in Europe. European Central Bank President Mario Draghi said that the central bank’s prospective Outright Monetary Transactions are unlimited without being unconditional. The Stoxx Europe 600 Index slipped 0.5 percent to 270.20 in London. The gauge yesterday dropped 1 percent as the World Bank cut its East Asian growth forecast and has trimmed its advance this year to 10 percent.
“There is a real tug of war going on,” said Stewart Richardson, chief investment officer of RMG Wealth Management on Bloomberg Television in London. “On the one hand, fundamentals have been deteriorating. On the other hand you have money- printing that has been enough to send market higher. We are very cautious in the medium term and are waiting for a signal from the market.” National benchmark indexes fell in all but two of the 18 western European (SXXP) markets. The U.K.’s FTSE 100 slipped 0.5 percent, Germany’s DAX lost 0.8 percent, while France’s CAC 40 retreated 0.7 percent. The euro dropped to $1.2882, the lowest since Oct. 3, as of 4:26 p.m. in London.

Emerging Stocks Fall to Lowest in Two Weeks on IMF, Spain (Bloomberg)
Emerging-market stocks retreated to the lowest level in two weeks on concern Spain’s failure to respond to a bailout package will worsen Europe’s credit crisis, crimping demand for developing-nation exports. The MSCI Emerging Markets Index (MXEF) slid 0.1 percent to 996.59, the lowest level since Sept. 26. Brazil’s Bovespa index (MXBR0FN) declined for the first time in three days as Itau Unibanco Holding SA (ITUB4), Latin America’s biggest bank by market value, dropped to the lowest since July. Equity gauges in South Korea, Hungary and South Africa fell. Industrial & Commercial Bank of China Ltd. rallied after state-run Central Huijin Investment Ltd. raised its ownership in the lender.
The International Monetary Fund cut its global growth forecast this year to 3.3 percent, the slowest since 2009. Spain has yet to respond to the European Central Bank’s offer to buy its debt to lower unsustainable borrowing costs. The decision to apply for ECB intervention is “important and sensitive,” Economy Minister Luis de Guindos told reporters in Luxembourg today. The European Union accounts for a third of the exports from companies on the developing nations’ gauge. “The big medium-term question is global growth,” Phillipe Langham, who helps oversee about $1.4 billion at RBC Global Asset Management, said by telephone from London. “I don’t think that anyone believes that the issues facing Europe are over.”
The iShares MSCI Emerging Markets Index (VXEEM) exchange-traded fund, the ETF (EEM) tracking developing-nation shares, slid 0.7 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, jumped 6.5 percent.

Aussie Dollar Falls, Ends 2-Day Gain Before Unemployment (Bloomberg)
Australia’s dollar fell, reversing a two-day gain, before data tomorrow that may show the unemployment rate climbed to the highest in three months. The so-called Aussie slid versus the yen on speculation the Reserve Bank of Australia will lower interest rates next month to help spur growth in the labor market. Demand for the South Pacific nation’s currency was supported after prices for iron ore, Australia’s biggest export, surged to a two-month high. “The basic outlook is that employment growth remains weak,” said Greg Gibbs, a senior currency strategist at Royal Bank of Scotland Group Plc in Singapore. “There are reasons to be more downbeat on the Aussie in the near term.” The Australian dollar lost 0.2 percent to $1.0187 at 11:21 a.m. in Sydney after rising 0.2 percent in the previous two days. It fell 0.2 percent to 79.69 yen. New Zealand’s currency, nicknamed the kiwi, dropped 0.3 percent to 81.52 U.S. cents. It bought 63.76 yen, 0.4 percent lower than the close in New York.
Australia’s 10-year yield was little changed at 3.06 percent. New Zealand’s swap rate, a fixed payment made to receive floating rates, fell two basis points to 2.61 percent. The jobless rate in Australia probably rose to 5.3 percent in September from 5.1 percent in the previous month, according to the median estimate of economists surveyed by Bloomberg News before the statistics bureau releases the report tomorrow. If confirmed, that would be the highest since June. Interest-rate swaps data compiled by Bloomberg show traders see an 81 percent chance the RBA will lower its overnight cash rate target by 25 basis points to 3 percent at a meeting on Nov. 6, up from 79 percent odds seen on Oct. 3, the day after the central bank’s last policy meeting. Physical iron ore with 62 percent content at the Chinese port of Tianjin jumped 6.2 percent yesterday to $117.20 a ton, the highest close since Aug. 1, according to The Steel Index Ltd. China is Australia’s biggest trading partner.

Euro Declines for Third Day Before French, Italian Data (Bloomberg)
The euro fell for a third day amid signs Europe’s debt crisis is hampering growth in the currency bloc’s major economies. The 17-nation euro slid to its weakest level in one week against the yen before data today that may show French and Italian industrial production decreased in August. Japan’s currency gained against peers as global losses in stocks boosted demand for safer assets. Europe’s shared currency was supported before Spain’s Prime Minister Mariano Rajoy meets French President Francois Hollande today in Paris as investors weigh whether the Iberian nation will ask for a bailout. “From the perspective of fundamentals, the euro is the least desirable currency,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency-margin company. “Europe’s economy remains in a worse state than the U.S. and Japan.”
The euro weakened 0.2 percent to $1.2859 as of 9:11 a.m. in Tokyo from the close yesterday in New York, after earlier touching $1.2850, the lowest since Oct. 1. It declined to 100.47 yen, also the least since Oct. 1, before trading at 100.60, 0.2 percent lower than yesterday’s close. The yen was little changed at 78.23 per dollar. The common currency may fall below $1.20 by March, Ueda forecast. The MSCI Asia Pacific Index of regional shares headed for a third day of declines, losing 0.1 percent. The Standard & Poor’s 500 Index dropped 1 percent yesterday.

IMF Sees ‘Alarmingly High’ Risk of Deeper Global Slump (Bloomberg)
The International Monetary Fund cut its global growth forecasts as the euro area’s debt crisis intensifies and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies. The world economy will grow 3.3 percent this year, the slowest since the 2009 recession, and 3.6 percent next year, the IMF said today, compared with July predictions of 3.5 percent in 2012 and 3.9 percent in 2013. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2 percent. “A key issue is whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current slowdown has a more lasting component,” the IMF said in its World Economic Outlook report. “The answer depends on whether European and U.S. policy makers deal proactively with their major short-term economic challenges.”
The IMF’s 188 member countries convene in Tokyo this week as low growth damped by fiscal consolidation in the richest economies hurts developing counterparts from China to Brazil. As the IMF urged measures to boost confidence, uncertainties out of Europe show no sign of abating, with leaders still divided over a banking union and Spain resisting a bailout.

Fed Search for Policy Thresholds Hindered by Volatility (Bloomberg)
An unexpected drop in the jobless rate last month illustrates the hurdles faced by Federal Reserve officials seeking to link monetary policy to specific economic indicators. Unemployment fell to 7.8 percent in September, the lowest since January 2009, from 8.1 percent in August, according to a Labor Department report released last week in Washington. The rate was lower than the most optimistic forecast in a Bloomberg News survey of economists. At the same time, monthly payrolls growth slowed to 114,000 from 142,000. That report “gives you an indication of how potentially dangerous it could be” to tie policy to an indicator such as the jobless rate, said Michael Hanson, senior U.S. economist at Bank of America Corp. in New York who formerly worked for the Fed board. “You had a big fall in the unemployment rate, but you had pretty modest growth in payrolls. This is a very volatile series.”
Since August 2011, the Federal Open Market Committee has said it was likely to keep interest rates low for a specified period of time, currently mid-2015. At last month’s meeting, “many participants” said it would be better to replace the date with language describing the “economic factors” that would prompt them to raise rates, according to minutes of the gathering released last week. The minutes didn’t specify how many policy makers supported that approach. Officials said such an approach would provide “greater clarity” about their intentions, and would allow market expectations to “adjust automatically” as fresh data on the economy becomes available.

U.S. Downgrade Seen as Upgrade as U.S. Debt Dissolved (Bloomberg)
U.S. debt has shrunk to a six-year low relative to the size of the economy as homeowners, cities and companies cut borrowing, undermining rating companies’ downgrading of the nation’s credit rating. Total indebtedness including that of federal and state governments and consumers has fallen to 3.29 times gross domestic product, the least since 2006, from a peak of 3.59 four years ago, according to data compiled by Bloomberg. Private- sector borrowing is down by $4 trillion to $40.2 trillion. Reduced borrowing means there is less competition for the U.S. Treasury Department as it sells debt to fund spending programs to help the nation recover from the worst financial crisis since the Great Depression. Credit-rating firms are discounting the improvement even as debt, equity and currency markets suggest the U.S. is more creditworthy than before Standard & Poor’s stripped the nation of its AAA grade in 2011.
“Most people don’t pay much attention to ratings when it comes to Treasuries, as they are still considered to be risk- free assets,” Donald Ellenberger, who oversees about $10 billion as co-head of government and mortgage-backed securities at Federated Investors in Pittsburgh, said Oct. 5 in a telephone interview. “Until that perception changes Treasuries will continue to be” in demand, he said.

Best Bond Firms Split on Year-End Storm: Credit Markets (Bloomberg)
Debt strategists at top-ranked Wall Street firms can’t agree on what investors should do as yields on everything from government to corporate and asset-backed bonds plunge to record lows. While JPMorgan Chase & Co. (JPM) forecasts a “year-end storm in the market for U.S. Treasuries,” Barclays Plc (BARC) advises buying government bonds and cutting investment-grade company debt. Bank of America Corp. (BAC) recommends high-grade bonds over both junk- rated and U.S. government notes. The three firms are rated the best at fixed-income research by Institutional Investor magazine. The stakes are mounting, with the four-year-old rally in U.S. corporates leaving little room for further gains, as the Federal Reserve suppresses benchmark borrowing costs to ignite an economy still recovering from the worst financial crisis since the Great Depression. Investors who shifted toward riskier assets in response to the central-bank stimulus are reassessing their holdings as credit quality shows signs of deteriorating.
“Right now we have a delicate situation,” Hans Mikkelsen, a credit strategist at Bank of America in New York, said in a telephone interview on Oct. 4. Longer term, “Treasuries are the riskiest fixed-income asset class,” he said.

Confidence Among Small U.S. Businesses Cooled in September (Bloomberg)
Confidence among U.S. small businesses cooled in September as fewer companies said they planned to hire or invest in new equipment, a survey found. The National Federation of Independent Business’s optimism index fell to 92.8 from an August reading of 92.9. Four of the 10 components that make up the gauge decreased, the Washington- based group said. The fourth decline in the past five months for the measure showed business leaders may be putting off some of their hiring and investment decisions because of a lack of clarity on tax and regulatory policy. At the same time, more companies expected better economic conditions in six months, signaling a pickup in sales and employment may take time to develop. Small-business “owners are in maintenance mode; spending only where necessary and not hiring,” William Dunkelberg, the group’s chief economist, said in a statement. “Owners are unwilling to put their own capital on the line until the future path of the economy and economic policy becomes clear.”
A measure of whether business owners plan to add more workers fell by six percentage points to a net 4 percent. The number of respondents who said they planned to invest in equipment dropped three points to a net 21 percent in September. The world’s largest economy added 114,000 workers last month, the fewest since June, according to a Labor Department report on Oct. 5. The jobless rate dropped to 7.8 percent after exceeding 8 percent for 43 straight months.

Bahk Eschews Stimulus as South Korea’s Slowdown Abates (Bloomberg)
South Korea’s finance minister said his nation’s economic growth will improve this quarter and policy makers should limit the scale of stimulus measures. “Mobilizing all available fiscal, monetary and financial policy means in a bold move with a large size may have harmful effects” including a wider budget deficit, Bahk Jae Wan said in an interview at the Bloomberg News office in Seoul yesterday. Bahk, 57, instead advocated “less costly and more salient policies,” such as cutting business regulation -- a stance that contrasts with calls from presidential candidates for tighter oversight of chaebols, the conglomerates that drive exports. The finance chief said “bold or harsh” moves against chaebols are unlikely to be enacted and “no more than a ploy to woo voters.”
Reluctance to endorse “all-out measures” to stoke growth reflects Bahk’s concern that “this will be a long economic crisis.” Speaking before he flies to Tokyo for this week’s International Monetary Fund and World Bank annual meetings, he urged European nations to set a timetable for implementing steps to resolve their debt woes. The Group of 20 should also maintain its “standstill” on protectionist trade measures, he said. The central bank of Asia’s fourth-largest economy meets tomorrow to consider a second interest-rate cut for the year, with 13 of 16 analysts surveyed by Bloomberg News predicting a quarter-point move. While Bahk said that growth “could be weak” in the final three months of the year, “the third quarter will be a bottom.”

Singapore May Ease Currency Gain as Growth Slows: Southeast Asia (Bloomberg)
The Monetary Authority of Singapore will probably slow the pace of appreciation in the local dollar as moderating price pressures provide scope for measures to support economic growth, according to a survey of analysts. Officials will curb gains in Singapore’s currency when they meet Oct. 12 by decreasing the slope of its trading band, according to 17 of 23 financial companies surveyed by Bloomberg News. Two said there’s a chance the MAS will widen the band in addition to reducing its slope. Five predict no change, while one projected a shift to a zero slope, the poll showed. Recent data have shown bigger-than-forecast declines in manufacturing and exports, leading economists and investors to flag the risk of a technical recession. Singapore cut its 2012 growth forecast in August, and a report last month indicated the slowest pace of inflation in almost two years. That means the MAS has room to spur the economy by stemming gains in the exchange rate, its main policy tool, according to analysts.
“The Singaporean economy has largely underperformed the MAS’s expectations,” Frances Cheung, a Hong-Kong based strategist at Credit Agricole CIB, wrote in an e-mail Oct. 3. “The balance of risk has clearly shifted from inflation to growth.” Cheung predicted the MAS will announce a reduction to the Singapore dollar’s trading band slope. Singapore’s central bank uses the exchange rate rather than borrowing costs to conduct monetary policy, adjusting the pace of appreciation or depreciation against an undisclosed trade- weighted band of currencies by changing the slope, width and center of the band. A flatter slope allows slower appreciation or depreciation over time.

Banks Chasing Asian Millionaires Create Singapore’s Canary Wharf (Bloomberg)
Singapore’s Marina Bay area is emerging as the city’s new financial hub, with banks including Standard Chartered Plc (STAN) and Barclays (BARC) Plc taking bigger offices as they pursue Asia’s expanding ranks of millionaires. As new construction pushes rents in the area lower, financial-services companies are consolidating operations from the central business district about a 10-minute walk away that was first built almost two centuries ago. Standard Chartered last year relocated from 11 buildings across the city to one tower in the new office area, while Barclays moved from six to two in the district. “Our growth in Singapore has been incredibly quick over the past few years,” Tony Padgett, head of corporate real estate services at Barclays in Singapore, said in an interview. “Banks tend to go for the prime locations in cities, they gravitate towards the same area like they’ve done in Canary Wharf in London or Wall Street in New York.”
Singapore’s emergence as Asia’s center of wealth management prompted the government in 2005 to start expanding the business district around Raffles Place, building on reclaimed land from the Singapore Strait to accommodate demand from the likes of Citigroup Inc. and UBS AG. (UBSN) The island-country had $512 billion of private-banking assets in 2010, the largest such pool of money in Asia, according to the latest available figures from the Boston Consulting Group. Singapore’s millionaire households expanded by 14 percent last year, according to a Boston Consulting study published May 31. The proportion of millionaire homes in the city of 5.3 million people was 17 percent, the highest in the world, followed by Qatar and Kuwait.

Inflation Bonds May Ease Singapore Price Pinch (Bloomberg)
Singapore may consider issuing bonds that protect against inflation after price gains sent the cost of a public-housing apartment to a record S$1 million ($813,000) last month and made cars as expensive as U.S. homes. Singapore’s consumer price index rose 3.9 percent in August from the year before, more than double the 1.7 percent rate in the U.S., the world’s biggest economy. Inflation in the island state averaged 5 percent for the past year. With the nation home to world’s highest proportion of millionaire households, the central bank said in July it was studying the feasibility of securities to help savers protect their funds from rising costs. Assets in inflation-protected bond funds worldwide climbed to a record $183.8 billion as of Aug. 31, according to EPFR Global in Cambridge, Massachusetts. In the U.S., the largest market for the debt at $729.8 billion, bond payments are based on a principal amount that increases or decreases in line with the consumer price index.
Japan, South Korea, Australia and Hong Kong are Asia-Pacific economies that already sell inflation- linked debt, according to data compiled by Bloomberg. “For whoever is looking at managing inflation risks, it would be a handy tool which has been developed in many other markets already, particularly those that consider themselves financial centers,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd., part of Japan’s third- biggest lender by market value. “I think we see a need to go ahead and say, ‘let’s get this done.’” Inflation will be within the government’s forecast of 4 percent to 4.5 percent this year, Varathan said.

IMF Says European Banks May Sell $4.5 Trillion in Assets (Bloomberg)
The International Monetary Fund said European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate. Failure to implement fiscal tightening or set up a single supervisory system in the timing agreed could force 58 European Union banks from UniCredit SpA (UCG) to Deutsche Bank AG (DBK) to shrink assets, the IMF said. That would hurt credit and crimp growth by 4 percentage points next year in Greece, Cyprus, Ireland, Italy, Portugal and Spain, Europe’s periphery. “Intensification of the crisis has manifested itself in capital outflows from the periphery to the core at a pace typically associated with currency crises or sudden stops,” the IMF wrote in its Global Financial Stability Report released today. “Restoring confidence among private investors is paramount for the stabilization of the euro area.”
The Washington-based IMF cut its global growth forecasts yesterday and warned of even slower expansion if European officials don’t address threats to their economies. While the European Central Bank’s plan to purchase bonds of debt-burdened countries bought governments time to act, divisions over a banking union and Spain’s reluctance to ask for a bailout threaten to boost borrowing costs. The European rescue mechanism and the ECB bond program “must be regarded by markets as real, not ‘virtual’ and should be coupled with credible conditionality,” Jose Vinals, the director of the IMF’s monetary and capital markets department, said in prepared remarks for a press conference in Tokyo today.

Samaras Bolstered as Greece Aims to Wrap Up Troika Talks (Bloomberg)
Antonis Samaras won a round in his fight to stay in the euro. The Greek prime minister got endorsements from German Chancellor Angela Merkel and European finance chiefs as well as signals that the country’s next aid payment was in the offing. International inspectors known as the troika are due back in Athens this week after a pause that provided Samaras’s three- party with backing to continue efforts to carve out 13.5 billion euros ($17.4 billion) of new budget cuts. Merkel’s visit to Greece yesterday “proves that we are breaking an international isolation,” Samaras said at their joint press conference. “And this was due to our mistakes as well. The political power and image of a country corresponds to its credibility.” Merkel, Europe’s most powerful politician, made her first trip to the country since 2007 almost a year after she initially raised the prospect of Greece exiting the euro and four months after Samaras defeated an electoral challenge by parties that advocated breaking the bailout deal.
“The key message to Greece was, ‘do your part and we’ll support you,’” said Riccardo Barbieri, chief European economist at Mizuho International in London. “This would have been unthinkable only two months ago. I think that the implication is that if Greece moves closer to the demands of the troika, Germany will support the new financing package.”

Spain Foreclosures Spread to Once Wealthy: Mortgages (Bloomberg)
Home foreclosures in Spain, which disproportionately affected lower-income immigrants after the real estate bubble burst, are spreading to formerly well-to-do families and businessmen as they run out of ways to pay mortgages in a deepening recession. Spanish business people, upper middle class families and their loan guarantors, typically parents of first-time buyers, now account for 60 percent of foreclosures in Madrid, according to AFES, an association that advises homeowners facing repossession. Three years ago, 80 percent of foreclosures were on the homes of immigrants, usually the first to lose jobs and fall behind on loan payments in a souring economy. They now comprise 40 percent of the total, according to AFES.
“Repossessions are encroaching further into the city centers, like an overflowing river,” said Emilio Miravet, head of real estate finance at the Spanish property unit of advisory and investment firm Catella AB. “At the beginning of the crisis, it was homes in the periphery areas belonging to the less affluent that were being foreclosed upon.” Loan guarantors, often parents who used their houses as collateral to help their children become homeowners when real estate was booming, now represent a fifth of foreclosures, AFES data show. Bloated prices had forced thousands of first-time homebuyers to seek parental help to get a foot on the property ladder, according to Jose Luis Ruiz Bartolome, author of “Adios Ladrillo Adios,” which means “Goodbye, Real Estate, Goodbye,” a 2010 book on the rise and fall of Spain’s property market.

Rajoy’s Deepening Budget Black Hole Outpaces Spain’s Cuts (Bloomberg)
The black hole in Spain’s budget has expanded faster than Prime Minister Mariano Rajoy’s attempt to shrink it, portending the same unrest roiling Greece. The harshest austerity since the return to democracy in 1978 has failed to contain the deficit as the economy sinks deeper into recession. The shortfall increased in the first half of the year, as it did in the previous 12 months. Even after a sales-tax increase and health-care cuts kick in this quarter, it may still approach last year’s 9.4 percent of gross domestic product, said Ignacio Conde-Ruiz, an economist at the independent Applied Economic Research Foundation in Madrid. The fiscal and political consequences of demanding austerity in a shrinking economy highlight the dilemma facing Rajoy. To trigger a European financial lifeline, he may have to impose yet more cuts, repeating the pattern seen in Greece, Portugal and Ireland.
“There is no chance that Spain will hit its targets,” Megan Greene, director of European economics at Roubini Global Economics LLC, said in a telephone interview. “The deficit targets are economic suicide.’ Spanish bonds fell today, with the yield on the 5.85 percent January 2022 security rising 6 basis points to 5.77 percent at 2:40 p.m. in Madrid.

20121010 0958 Global Commodities Related News.


One in eight of world population going hungry-UN (Reuters)
One out of every eight people in the world is chronically undernourished, the United Nations' food agencies said on Tuesday, warning that progress to reduce hunger has slowed since 2007/08 when high food prices sparked riots in several poor countries.

DTN Closing Grain Comments 10/09 14:21 (CME)
Grains Mixed Following Quiet Session
Grains spent much of the latter part of Tuesday's session drifting back toward unchanged, though wheat and soybeans were able to close with modest gains. Corn never showed much interest in rallying over the course of the session. Buying enthusiasm was cooled by the solid rally in the U.S. dollar index.

Pro Farmer: After The Bell Wheat Recap (CME)
Nearby wheat futures favored a firmer tone though the day and ended mid-range. Chicago and Minneapolis futures ended mostly 2 to 4 cents higher, with Kansas City up 4 to 6 cents. Global crop concerns supported nearby wheat futures, as the inability of El Nino to develop has increased concerns about crops in areas like Australia.

Wheat Market Recap Report (CME)
December Wheat finished up 3 1/4 at 864 1/4, 9 1/2 off the high and 4 1/2 up from the low. March Wheat closed up 4 1/2 at 875 3/4. This was 5 3/4 up from the low and 8 off the high. December Chicago wheat ended the day in positive territory and traded higher throughout the session. KC and Minneapolis wheat followed higher. Support in wheat came from private forecasts that pegged Australian wheat production near 20-22.5 million tonnes vs. the current USDA estimate of 26 million tonnes. Additional upside momentum was added after the Russia Agriculture Minister revised his estimate of their wheat crop to 40 million tonnes vs. previous forecasts of 40-42 million tonnes. The exportable surplus of wheat for Russia is estimated at 10 million tonnes vs. previous government estimates of 10-12 million tonnes. Syria issued a tender to buy 100,000 tonnes and Morocco is expected to come to the market soon as well. Export inspections for the week ending October 4th were reported at 13.2 million bushels vs. 24.5 last week and were below trade estimates. Inspections need to average 24.2 million bushels each week to reach the current USDA export forecast. Outside markets added pressure throughout the day with US stocks trading lower and the US Dollar sharply higher. December Oats closed up 7 1/2 at 378. This was 7 1/2 up from the low and 2 1/2 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
The corn market enjoyed gains much of the session, but bears gained some traction heading into the close. Futures ended steady to 3 cents higher for the day, which was low-range for the day. The corn market enjoyed corrective short-covering most of the day as traders continued to ready positions for what is expected to be friendly USDA reports Thursday.

Corn Market Recap for 10/9/2012 (CME)
December Corn finished unchanged at 742, 6 1/2 off the high and 1 3/4 up from the low. March Corn closed up 1/4 at 742 1/4. This was 2 up from the low and 6 1/4 off the high. December corn ended the day nearly unchanged. After trading higher for most of the afternoon, sell pressure at the close pushed December corn near its lowest level of the session and closed just off the lows. Some in the trade believe current price levels in corn are rationing demand which could limit the long term price outlook. US corn export inspections for the week ending October 4th were reported at 17.4 million bushels vs. 20.2 the week prior. Inspections of 25.30 million bushels are needed each week to reach the current USDA forecast. Export demand remains sluggish for US corn as South American supply trades at a steep discount. The Brazilian government pegged their corn crop for 2012/13 at 73.2 million tonnes vs. 72.6 in 2011/12. Early support in corn was seen after a private analyst in Ukraine cut Ukraine's estimated corn production to 21 million tonnes vs. 25-27 million tonnes previously. Some commodity markets turned sour this morning after the IMF announced a downward revision in their global growth forecasts. The US Dollar moved sharply higher on the news which kept gains limited for the remainder of the day. November Rice finished down 0.135 at 15.23, 0.17 off the high and equal to the low.

Wheat Climbs as U.S. May Cut Supply Estimates; Soy, Corn Gain (Bloomberg)
Wheat futures rose for the second straight day on speculation that the U.S. will lower its forecasts for global supplies as dry weather damages crops from Russia to Australia. Soybeans declined. Global wheat supplies before next year’s Northern Hemisphere harvest may be 172.77 million metric tons, down 2.2 percent from the U.S. Department of Agriculture’s estimate in September, according to analysts in a Bloomberg survey. Today, Russia cut its forecast for grain exports, and Australia last month reduced its harvest projection. “Fundamentals are still bullish,” said Kieran Walsh, an agricultural-derivatives broker at Aurel BGC in Paris. “It would not be entirely unexpected for the USDA report to cut global production outlook, and Russian exports were at the lower end of estimates.” Wheat futures for December delivery rose 0.4 percent to settle at $8.6425 a bushel at 2 p.m. on the Chicago Board of Trade. The price gained 0.4 percent yesterday.
The USDA will update its forecasts on supply and demand on Oct. 11. Last year, the U.S. was the world’s top exporter, followed by Australia and Russia. The price has jumped 32 percent this year. Soybean futures for November delivery fell 0.1 percent to $15.50 a bushel. Earlier, the price reached $15.74, the highest for a most-active contract since Oct. 1. Corn futures for December delivery were unchanged at $7.42 a bushel. Earlier, the price gained as much as 0.9 percent. In the U.S., corn is the biggest crop, followed by soybeans, hay and wheat.

Africa can easily grow wheat to ease hunger, price shocks-study (Reuters)
Wheat production in sub-Saharan Africa is at only 10 to 25 percent of its potential and nations can easily grow more to limit hunger, price shocks and political instability, a study showed on Tuesday.

Thai govt sees $2.6 bln losses in 2011/12 from rice scheme (Reuters)
Thailand's government expects losses of about 80 billion baht from its rice intervention scheme as of September 2012, the commerce minister said on Tuesday, a cost that may increase pressure on the state to scale back the programme.

GRAINS: U.S. corn rose for the first time in three sessions as the market readied for a U.S. Department of Agriculture report this week that is expected to show further cuts in yield projections, reducing harvest pressure that had squeezed prices. Soybeans rose on bargain hunting, while wheat firmed for the second straight session on concerns over tight global supply. (Reuters)

SOFTS: Raw sugar futures edged higher with selling of the remainder of top producer Brazil's crop limiting potential price upside, while arabica coffee and cocoa were steady. (Reuters)

Kenya cuts coffee sales frequency due to low supply (Reuters)
Kenya has reduced the frequency of its coffee auctions from weekly to every two weeks due to dwindling stocks levels, an industry official said on Tuesday.

Milk-Cow Drought Culling Accelerates as Prices Jump: Commodities (Bloomberg)
U.S. milk production is headed for the biggest contraction in 12 years as a drought-fueled surge in feed costs drives more cows to slaughter. Output will drop 0.5 percent to 198.9 billion pounds (90.2 million metric tons) in 2013 as the herd shrinks to an eight- year low, the U.S. Department of Agriculture estimates. Milk futures rose 45 percent since mid-April and may advance at least an additional 19 percent to a record $25 per 100 pounds by June, said Shawn Hackett, the president of Boynton Beach, Florida- based Hackett Financial Advisers Inc. He correctly predicted the rally in March.
Dairies in California, the top milk-producing state, are filing for bankruptcy, and U.S. cows are being slaughtered at the fastest rate in more than a quarter century. Corn surged to a record in August as the USDA forecast the smallest crop in six years because of drought across the U.S. Global dairy prices tracked by the United Nations rose 6.9 percent last month, the most among the five food groups monitored, and that will probably mean record costs next year, Rabobank estimates. “Farmers can’t afford to buy as much grain and protein, and that affects milk production,” said Bob Cropp, an economist at the University of Wisconsin in Madison who has been following the industry since 1966. “In California, there’ve been some foreclosures and some sell-off of cows quite heavily. You’re going to see that in other parts of the country.”

Natural Gas Drops as Mild Weather to Reduce Heating-Fuel Demand (Bloomberg)
Natural gas futures advanced to a five-day high in New York before a government report that may show a below-average inventory increase for last week. Gas rose 1.9 percent. The Energy Department may report a supply increase of 80 billion cubic feet, based on the median of five analyst estimates compiled by Bloomberg. The five-year average gain for the week is 84 billion. Price gains accelerated after National Weather Service forecasts for the Midwest turned cooler for mid-October. “People are anticipating a smaller number and the surplus to the five-year average could possibly fall even further,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “They are going to take advantage of any pullback in anticipation of a rally.” Natural gas for November delivery increased 6.4 cents to $3.467 per million British thermal units on the New York Mercantile Exchange, the highest settlement price since Oct. 2. The futures have risen 16 percent this year.
January $3 puts were the most active options in electronic trading. They fell 0.2 cent to 1.7 cents per million Btu on volume of 2,595 contracts at 2:38 p.m. January $4 calls were the second-most active gas options today, jumping 3.1 cents to 21.3 cents on volume of 1,648 contracts. The discount for November contracts versus December futures widened 0.7 cent from yesterday to 30.1 cents, the most since June 13.

OIL-Oil rises towards $113 on Syria-Turkey tensions
LONDON, Oct 9 (Reuters) - Oil rose towards $113 a barrel after two days of losses, with tensions in the Middle East and the risk of supply disruptions outweighing concerns about sluggish global demand.
"Right now the market is concerned about the continuing conflict between Syria and Turkey, and the worry is that, if it escalates, it may disrupt supplies," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.

Oil Declines From One-Week High as Crude Stockpiles Seen Rising (Bloomberg)
Oil declined from the highest level in a week in New York before a government report that may show stockpiles climbed in the U.S., the world’s biggest crude user. Futures slipped as much as 0.5 percent. Crude inventories probably increased by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate supply data today. London-traded Brent is “still high” and Saudi Arabia “will work towards moderating the price,” Oil Minister Ali al-Naimi said yesterday. Crude for November delivery decreased as much as 47 cents to $91.92 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.97 at 10:10 a.m. Sydney time. The contract gained 3.4 percent yesterday to $92.39, the highest close since Oct. 1. Prices are down 6.9 percent this year.
Brent oil for November settlement rose $2.68, or 2.4 percent, to $114.50 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $22.11. The spread reached $22.49 on Oct. 8, the widest since October 2011. Saudi Arabia, the world’s biggest oil exporter, wants to see Brent fall closer to $100 a barrel, al-Naimi told reporters in Riyadh today ahead of a conference of oil ministers from the Gulf Cooperation Council. “We will meet the market demands fully,” he said.

Recap Energy Market Report (CME)
November crude oil experienced a wide range up day on the session that established a new five day high. The source of upside action seemed to come in response to concerns that unrest in Syria might spread to surrounding areas. There were reports that NATO drafted plans to protect Turkey's border, and that might have provided an added boost in the geopolitical risk premium. In the meantime, the outside market tone was weaker, with stocks lower and the US dollar higher. The was also disappointing global growth forecasts from the IMF overnight, that seemed to do little to impede today's advance.

Alcoa Cuts Global Aluminum Forecast on China Slowdown (Bloomberg)
Alcoa Inc. (AA), the largest U.S. aluminum producer, cut its forecast for global consumption of the metal by 1 percentage point as the Chinese economy slowed. Demand will climb by 6 percent this year, the New York- based company said yesterday in its third-quarter earnings statement. It said in July that usage would rise 7 percent, after increases of 10 percent in 2011 and 13 percent in 2010. “We do see a slight slowdown in some regions in end markets, and the main driver for this is China,” Chairman and Chief Executive Officer Klaus Kleinfeld said in a conference call with analysts. Chinese demand may pick up at the end of the fourth quarter because of stimulus spending, he said.
The International Monetary Fund yesterday cut its global growth forecast and lowered its projected expansion for China, the world’s biggest aluminum user, by 0.2 percentage point annually, to 7.8 percent this year and 8.2 percent in 2013. Aluminum prices on the London Metal Exchange have declined in the past year, touching a 34-month low in August, as global supply exceeds demand. “The global economy is clearly slowing,” Lloyd O’Carroll, a Richmond, Virginia-based analyst for Davenport & Co., said yesterday in an interview. “That’s what the IMF said today and so I think what Alcoa is doing is consistent with that.” Demand from heavy-truck and trailer manufacturing will fall in 2012, Alcoa said. It now sees Chinese truck and trailer output declining as much as 21 percent, compared with a drop of as much as 8 percent projected three months ago. Chinese can and packaging growth may be 8 percent, down from a July forecast of as much as 20 percent Alcoa estimated in July.

Copper Consumption in China to Drop for First Time Since ‘08 (Bloomberg)
Copper consumption in China will contract this year for the first time since 2008 as demand falters and inventories climb in the largest user, before rebounding in 2013, according to Simon Hunt Strategic Services. Consumption will drop about 8.5 percent to 5.6 million metric tons in 2012, said Simon Hunt, chief executive officer of the Weybridge, Surrey-based consultancy, which compiles analysis for users and fabricators. Next year, usage may grow 5.6 percent to 5.9 million tons, Hunt said in an interview in Singapore after visiting China for two weeks last month. Hunt’s assessment adds to signs that China’s slowdown is hurting demand for commodities. Copper, used in wires and cables, helps set the pace for other base metals and the drop in China’s consumption may hurt prices and cut profits at mining companies including Freeport-McMoRan Copper & Gold Inc. (FCX) Copper rose 6.8 percent last quarter as central banks in the U.S., China, Japan and Europe expanded stimulus to try to revive economic growth.
“The safety valve of exports has gone, the domestic economy is slowing down, they have a problem of surplus capacity and cash is extraordinarily tight,” said Hunt, who estimated total copper reserves in China at 3.5 million tons, including reported and unreported stockpiles. “There are no signals of a recovery in heavy industry and manufacturing.”

Gold Seen Declining as a Stronger Dollar Curbs Demand (Bloomberg)
Gold declined to the lowest in more than a week as a stronger dollar eroded demand for the precious metal as an alternative investment. The dollar gained the most in more than two months against a basket of currencies after the International Monetary Fund said the world economy will grow 3.3 percent this year, the slowest pace since the 2009 recession. The region using the European currency will contract 0.4 percent this year, 0.1 percentage point worse than forecast in July, the IMF said. Gold rallied last week as central banks from the U.S. to Asia pledged to spur growth. “The IMF forecast has taken some blush off the rose,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “We are seeing some move towards the dollar.”
Gold futures for December delivery fell 0.6 percent to settle at $1,765 an ounce as of 1:33 p.m. on the Comex in New York, after earlier slipping to $1,762, the lowest since Sept. 27. Bullion retreated 1.2 percent in the previous two sessions. The metal reached $1,798.10 on Oct. 5, the highest since Nov. 9. The IMF’s 188 member countries convene in Tokyo this week as low growth damped by fiscal consolidation in the richest economies hurts developing counterparts from China to Brazil. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2 percent. Silver futures for December delivery dropped 0.1 percent to $33.985 an ounce on the Comex.
Platinum futures for January delivery fell 0.2 percent to $1,695.30 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery gained 0.2 percent to $658.20 an ounce.

Silver Market Recap Report (CME)
A big range down move saw December silver prices dip to a fresh new low for the move but the market was able to return to the vicinity of even numbers at $34.00. Like gold, silver was under pressure as a result of adverse currency market action and the reversal in equities. While copper was weak for a large portion of the trading session today, it seemed to perform better than the rest of the metals complex and that might have helped silver discount some of the action in gold today.

Gold Market Recap Report (CME)
The gold market forged a downside breakout which at times put December gold prices as much as $36 an ounce below last week's highs. Clearly gold was somewhat undermined by the reversal in equities and the Euro today. At times gold was clearly leading the entire metals complex lower. Some gold longs might have decided to bank long profits and step temporarily to the sidelines ahead of the kick off to the US earnings cycle. Some traders even suggested that a slight up tick in an Investor Business Daily Economic Optimism Index served to undermine gold as that data might have tamped down the prospect of fresh easing talk.

Iran Oil Sanctions Boosting Returns for Nordic American: Freight (Bloomberg)
European sanctions on buying oil from Iran are turning into a windfall for owners of Suezmax tankers, shipping the most cargoes in at least nine years as Saudi Arabia and Iraq increase supply. Rates for the vessels, which can sail fully loaded with 1 million barrels through the Suez Canal to destinations in the Mediterranean, will rise 61 percent to an average of $19,000 a day this quarter, the median of six analyst estimates compiled by Bloomberg shows. Shares of Nordic American Tankers Ltd. (NAT), which operates a fleet of 20 carriers, will gain 33 percent in 12 months, based on the average of seven forecasts.
Saudi Arabian output is now within 1 percent of a record and Iraq is pumping the most since 2000, compensating for Iran, once OPEC’s second-biggest producer, which is exporting about 50 percent less oil than last year. The 27-nation European Union imposed an embargo in July over Iran’s nuclear program. The extra cargoes are helping to diminish a glut of Suezmaxes that caused earnings for the ships to drop 59 percent this year. “The canal trade is becoming a new mainstay,” said Jeff McGee, the head of marine research and consulting at Poten & Partners Inc., a shipbroker in New York. “There was a heavy appetite in the Mediterranean for Iranian oil, and now they have to get it from somewhere else.”
Suezmax earnings dropped to $11,810 this year, according to London-based Clarkson Plc, the world’s largest shipbroker. Forward freight agreements, handled by brokers and used to bet on future shipping costs, anticipate a fourth-quarter average of $13,034, based on data from Marex Spectron Group, which handles the contracts.

20121010 0958 Global Commodities Related News.


One in eight of world population going hungry-UN (Reuters)
One out of every eight people in the world is chronically undernourished, the United Nations' food agencies said on Tuesday, warning that progress to reduce hunger has slowed since 2007/08 when high food prices sparked riots in several poor countries.

DTN Closing Grain Comments 10/09 14:21 (CME)
Grains Mixed Following Quiet Session
Grains spent much of the latter part of Tuesday's session drifting back toward unchanged, though wheat and soybeans were able to close with modest gains. Corn never showed much interest in rallying over the course of the session. Buying enthusiasm was cooled by the solid rally in the U.S. dollar index.

Pro Farmer: After The Bell Wheat Recap (CME)
Nearby wheat futures favored a firmer tone though the day and ended mid-range. Chicago and Minneapolis futures ended mostly 2 to 4 cents higher, with Kansas City up 4 to 6 cents. Global crop concerns supported nearby wheat futures, as the inability of El Nino to develop has increased concerns about crops in areas like Australia.

Wheat Market Recap Report (CME)
December Wheat finished up 3 1/4 at 864 1/4, 9 1/2 off the high and 4 1/2 up from the low. March Wheat closed up 4 1/2 at 875 3/4. This was 5 3/4 up from the low and 8 off the high. December Chicago wheat ended the day in positive territory and traded higher throughout the session. KC and Minneapolis wheat followed higher. Support in wheat came from private forecasts that pegged Australian wheat production near 20-22.5 million tonnes vs. the current USDA estimate of 26 million tonnes. Additional upside momentum was added after the Russia Agriculture Minister revised his estimate of their wheat crop to 40 million tonnes vs. previous forecasts of 40-42 million tonnes. The exportable surplus of wheat for Russia is estimated at 10 million tonnes vs. previous government estimates of 10-12 million tonnes. Syria issued a tender to buy 100,000 tonnes and Morocco is expected to come to the market soon as well. Export inspections for the week ending October 4th were reported at 13.2 million bushels vs. 24.5 last week and were below trade estimates. Inspections need to average 24.2 million bushels each week to reach the current USDA export forecast. Outside markets added pressure throughout the day with US stocks trading lower and the US Dollar sharply higher. December Oats closed up 7 1/2 at 378. This was 7 1/2 up from the low and 2 1/2 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
The corn market enjoyed gains much of the session, but bears gained some traction heading into the close. Futures ended steady to 3 cents higher for the day, which was low-range for the day. The corn market enjoyed corrective short-covering most of the day as traders continued to ready positions for what is expected to be friendly USDA reports Thursday.

Corn Market Recap for 10/9/2012 (CME)
December Corn finished unchanged at 742, 6 1/2 off the high and 1 3/4 up from the low. March Corn closed up 1/4 at 742 1/4. This was 2 up from the low and 6 1/4 off the high. December corn ended the day nearly unchanged. After trading higher for most of the afternoon, sell pressure at the close pushed December corn near its lowest level of the session and closed just off the lows. Some in the trade believe current price levels in corn are rationing demand which could limit the long term price outlook. US corn export inspections for the week ending October 4th were reported at 17.4 million bushels vs. 20.2 the week prior. Inspections of 25.30 million bushels are needed each week to reach the current USDA forecast. Export demand remains sluggish for US corn as South American supply trades at a steep discount. The Brazilian government pegged their corn crop for 2012/13 at 73.2 million tonnes vs. 72.6 in 2011/12. Early support in corn was seen after a private analyst in Ukraine cut Ukraine's estimated corn production to 21 million tonnes vs. 25-27 million tonnes previously. Some commodity markets turned sour this morning after the IMF announced a downward revision in their global growth forecasts. The US Dollar moved sharply higher on the news which kept gains limited for the remainder of the day. November Rice finished down 0.135 at 15.23, 0.17 off the high and equal to the low.

Wheat Climbs as U.S. May Cut Supply Estimates; Soy, Corn Gain (Bloomberg)
Wheat futures rose for the second straight day on speculation that the U.S. will lower its forecasts for global supplies as dry weather damages crops from Russia to Australia. Soybeans declined. Global wheat supplies before next year’s Northern Hemisphere harvest may be 172.77 million metric tons, down 2.2 percent from the U.S. Department of Agriculture’s estimate in September, according to analysts in a Bloomberg survey. Today, Russia cut its forecast for grain exports, and Australia last month reduced its harvest projection. “Fundamentals are still bullish,” said Kieran Walsh, an agricultural-derivatives broker at Aurel BGC in Paris. “It would not be entirely unexpected for the USDA report to cut global production outlook, and Russian exports were at the lower end of estimates.” Wheat futures for December delivery rose 0.4 percent to settle at $8.6425 a bushel at 2 p.m. on the Chicago Board of Trade. The price gained 0.4 percent yesterday.
The USDA will update its forecasts on supply and demand on Oct. 11. Last year, the U.S. was the world’s top exporter, followed by Australia and Russia. The price has jumped 32 percent this year. Soybean futures for November delivery fell 0.1 percent to $15.50 a bushel. Earlier, the price reached $15.74, the highest for a most-active contract since Oct. 1. Corn futures for December delivery were unchanged at $7.42 a bushel. Earlier, the price gained as much as 0.9 percent. In the U.S., corn is the biggest crop, followed by soybeans, hay and wheat.

Africa can easily grow wheat to ease hunger, price shocks-study (Reuters)
Wheat production in sub-Saharan Africa is at only 10 to 25 percent of its potential and nations can easily grow more to limit hunger, price shocks and political instability, a study showed on Tuesday.

Thai govt sees $2.6 bln losses in 2011/12 from rice scheme (Reuters)
Thailand's government expects losses of about 80 billion baht from its rice intervention scheme as of September 2012, the commerce minister said on Tuesday, a cost that may increase pressure on the state to scale back the programme.

GRAINS: U.S. corn rose for the first time in three sessions as the market readied for a U.S. Department of Agriculture report this week that is expected to show further cuts in yield projections, reducing harvest pressure that had squeezed prices. Soybeans rose on bargain hunting, while wheat firmed for the second straight session on concerns over tight global supply. (Reuters)

SOFTS: Raw sugar futures edged higher with selling of the remainder of top producer Brazil's crop limiting potential price upside, while arabica coffee and cocoa were steady. (Reuters)

Kenya cuts coffee sales frequency due to low supply (Reuters)
Kenya has reduced the frequency of its coffee auctions from weekly to every two weeks due to dwindling stocks levels, an industry official said on Tuesday.

Milk-Cow Drought Culling Accelerates as Prices Jump: Commodities (Bloomberg)
U.S. milk production is headed for the biggest contraction in 12 years as a drought-fueled surge in feed costs drives more cows to slaughter. Output will drop 0.5 percent to 198.9 billion pounds (90.2 million metric tons) in 2013 as the herd shrinks to an eight- year low, the U.S. Department of Agriculture estimates. Milk futures rose 45 percent since mid-April and may advance at least an additional 19 percent to a record $25 per 100 pounds by June, said Shawn Hackett, the president of Boynton Beach, Florida- based Hackett Financial Advisers Inc. He correctly predicted the rally in March.
Dairies in California, the top milk-producing state, are filing for bankruptcy, and U.S. cows are being slaughtered at the fastest rate in more than a quarter century. Corn surged to a record in August as the USDA forecast the smallest crop in six years because of drought across the U.S. Global dairy prices tracked by the United Nations rose 6.9 percent last month, the most among the five food groups monitored, and that will probably mean record costs next year, Rabobank estimates. “Farmers can’t afford to buy as much grain and protein, and that affects milk production,” said Bob Cropp, an economist at the University of Wisconsin in Madison who has been following the industry since 1966. “In California, there’ve been some foreclosures and some sell-off of cows quite heavily. You’re going to see that in other parts of the country.”

Natural Gas Drops as Mild Weather to Reduce Heating-Fuel Demand (Bloomberg)
Natural gas futures advanced to a five-day high in New York before a government report that may show a below-average inventory increase for last week. Gas rose 1.9 percent. The Energy Department may report a supply increase of 80 billion cubic feet, based on the median of five analyst estimates compiled by Bloomberg. The five-year average gain for the week is 84 billion. Price gains accelerated after National Weather Service forecasts for the Midwest turned cooler for mid-October. “People are anticipating a smaller number and the surplus to the five-year average could possibly fall even further,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “They are going to take advantage of any pullback in anticipation of a rally.” Natural gas for November delivery increased 6.4 cents to $3.467 per million British thermal units on the New York Mercantile Exchange, the highest settlement price since Oct. 2. The futures have risen 16 percent this year.
January $3 puts were the most active options in electronic trading. They fell 0.2 cent to 1.7 cents per million Btu on volume of 2,595 contracts at 2:38 p.m. January $4 calls were the second-most active gas options today, jumping 3.1 cents to 21.3 cents on volume of 1,648 contracts. The discount for November contracts versus December futures widened 0.7 cent from yesterday to 30.1 cents, the most since June 13.

OIL-Oil rises towards $113 on Syria-Turkey tensions
LONDON, Oct 9 (Reuters) - Oil rose towards $113 a barrel after two days of losses, with tensions in the Middle East and the risk of supply disruptions outweighing concerns about sluggish global demand.
"Right now the market is concerned about the continuing conflict between Syria and Turkey, and the worry is that, if it escalates, it may disrupt supplies," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.

Oil Declines From One-Week High as Crude Stockpiles Seen Rising (Bloomberg)
Oil declined from the highest level in a week in New York before a government report that may show stockpiles climbed in the U.S., the world’s biggest crude user. Futures slipped as much as 0.5 percent. Crude inventories probably increased by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate supply data today. London-traded Brent is “still high” and Saudi Arabia “will work towards moderating the price,” Oil Minister Ali al-Naimi said yesterday. Crude for November delivery decreased as much as 47 cents to $91.92 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.97 at 10:10 a.m. Sydney time. The contract gained 3.4 percent yesterday to $92.39, the highest close since Oct. 1. Prices are down 6.9 percent this year.
Brent oil for November settlement rose $2.68, or 2.4 percent, to $114.50 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark grade’s premium to West Texas Intermediate closed at $22.11. The spread reached $22.49 on Oct. 8, the widest since October 2011. Saudi Arabia, the world’s biggest oil exporter, wants to see Brent fall closer to $100 a barrel, al-Naimi told reporters in Riyadh today ahead of a conference of oil ministers from the Gulf Cooperation Council. “We will meet the market demands fully,” he said.

Recap Energy Market Report (CME)
November crude oil experienced a wide range up day on the session that established a new five day high. The source of upside action seemed to come in response to concerns that unrest in Syria might spread to surrounding areas. There were reports that NATO drafted plans to protect Turkey's border, and that might have provided an added boost in the geopolitical risk premium. In the meantime, the outside market tone was weaker, with stocks lower and the US dollar higher. The was also disappointing global growth forecasts from the IMF overnight, that seemed to do little to impede today's advance.

Alcoa Cuts Global Aluminum Forecast on China Slowdown (Bloomberg)
Alcoa Inc. (AA), the largest U.S. aluminum producer, cut its forecast for global consumption of the metal by 1 percentage point as the Chinese economy slowed. Demand will climb by 6 percent this year, the New York- based company said yesterday in its third-quarter earnings statement. It said in July that usage would rise 7 percent, after increases of 10 percent in 2011 and 13 percent in 2010. “We do see a slight slowdown in some regions in end markets, and the main driver for this is China,” Chairman and Chief Executive Officer Klaus Kleinfeld said in a conference call with analysts. Chinese demand may pick up at the end of the fourth quarter because of stimulus spending, he said.
The International Monetary Fund yesterday cut its global growth forecast and lowered its projected expansion for China, the world’s biggest aluminum user, by 0.2 percentage point annually, to 7.8 percent this year and 8.2 percent in 2013. Aluminum prices on the London Metal Exchange have declined in the past year, touching a 34-month low in August, as global supply exceeds demand. “The global economy is clearly slowing,” Lloyd O’Carroll, a Richmond, Virginia-based analyst for Davenport & Co., said yesterday in an interview. “That’s what the IMF said today and so I think what Alcoa is doing is consistent with that.” Demand from heavy-truck and trailer manufacturing will fall in 2012, Alcoa said. It now sees Chinese truck and trailer output declining as much as 21 percent, compared with a drop of as much as 8 percent projected three months ago. Chinese can and packaging growth may be 8 percent, down from a July forecast of as much as 20 percent Alcoa estimated in July.

Copper Consumption in China to Drop for First Time Since ‘08 (Bloomberg)
Copper consumption in China will contract this year for the first time since 2008 as demand falters and inventories climb in the largest user, before rebounding in 2013, according to Simon Hunt Strategic Services. Consumption will drop about 8.5 percent to 5.6 million metric tons in 2012, said Simon Hunt, chief executive officer of the Weybridge, Surrey-based consultancy, which compiles analysis for users and fabricators. Next year, usage may grow 5.6 percent to 5.9 million tons, Hunt said in an interview in Singapore after visiting China for two weeks last month. Hunt’s assessment adds to signs that China’s slowdown is hurting demand for commodities. Copper, used in wires and cables, helps set the pace for other base metals and the drop in China’s consumption may hurt prices and cut profits at mining companies including Freeport-McMoRan Copper & Gold Inc. (FCX) Copper rose 6.8 percent last quarter as central banks in the U.S., China, Japan and Europe expanded stimulus to try to revive economic growth.
“The safety valve of exports has gone, the domestic economy is slowing down, they have a problem of surplus capacity and cash is extraordinarily tight,” said Hunt, who estimated total copper reserves in China at 3.5 million tons, including reported and unreported stockpiles. “There are no signals of a recovery in heavy industry and manufacturing.”

Gold Seen Declining as a Stronger Dollar Curbs Demand (Bloomberg)
Gold declined to the lowest in more than a week as a stronger dollar eroded demand for the precious metal as an alternative investment. The dollar gained the most in more than two months against a basket of currencies after the International Monetary Fund said the world economy will grow 3.3 percent this year, the slowest pace since the 2009 recession. The region using the European currency will contract 0.4 percent this year, 0.1 percentage point worse than forecast in July, the IMF said. Gold rallied last week as central banks from the U.S. to Asia pledged to spur growth. “The IMF forecast has taken some blush off the rose,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “We are seeing some move towards the dollar.”
Gold futures for December delivery fell 0.6 percent to settle at $1,765 an ounce as of 1:33 p.m. on the Comex in New York, after earlier slipping to $1,762, the lowest since Sept. 27. Bullion retreated 1.2 percent in the previous two sessions. The metal reached $1,798.10 on Oct. 5, the highest since Nov. 9. The IMF’s 188 member countries convene in Tokyo this week as low growth damped by fiscal consolidation in the richest economies hurts developing counterparts from China to Brazil. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2 percent. Silver futures for December delivery dropped 0.1 percent to $33.985 an ounce on the Comex.
Platinum futures for January delivery fell 0.2 percent to $1,695.30 an ounce on the New York Mercantile Exchange. Palladium futures for December delivery gained 0.2 percent to $658.20 an ounce.

Silver Market Recap Report (CME)
A big range down move saw December silver prices dip to a fresh new low for the move but the market was able to return to the vicinity of even numbers at $34.00. Like gold, silver was under pressure as a result of adverse currency market action and the reversal in equities. While copper was weak for a large portion of the trading session today, it seemed to perform better than the rest of the metals complex and that might have helped silver discount some of the action in gold today.

Gold Market Recap Report (CME)
The gold market forged a downside breakout which at times put December gold prices as much as $36 an ounce below last week's highs. Clearly gold was somewhat undermined by the reversal in equities and the Euro today. At times gold was clearly leading the entire metals complex lower. Some gold longs might have decided to bank long profits and step temporarily to the sidelines ahead of the kick off to the US earnings cycle. Some traders even suggested that a slight up tick in an Investor Business Daily Economic Optimism Index served to undermine gold as that data might have tamped down the prospect of fresh easing talk.

Iran Oil Sanctions Boosting Returns for Nordic American: Freight (Bloomberg)
European sanctions on buying oil from Iran are turning into a windfall for owners of Suezmax tankers, shipping the most cargoes in at least nine years as Saudi Arabia and Iraq increase supply. Rates for the vessels, which can sail fully loaded with 1 million barrels through the Suez Canal to destinations in the Mediterranean, will rise 61 percent to an average of $19,000 a day this quarter, the median of six analyst estimates compiled by Bloomberg shows. Shares of Nordic American Tankers Ltd. (NAT), which operates a fleet of 20 carriers, will gain 33 percent in 12 months, based on the average of seven forecasts.
Saudi Arabian output is now within 1 percent of a record and Iraq is pumping the most since 2000, compensating for Iran, once OPEC’s second-biggest producer, which is exporting about 50 percent less oil than last year. The 27-nation European Union imposed an embargo in July over Iran’s nuclear program. The extra cargoes are helping to diminish a glut of Suezmaxes that caused earnings for the ships to drop 59 percent this year. “The canal trade is becoming a new mainstay,” said Jeff McGee, the head of marine research and consulting at Poten & Partners Inc., a shipbroker in New York. “There was a heavy appetite in the Mediterranean for Iranian oil, and now they have to get it from somewhere else.”
Suezmax earnings dropped to $11,810 this year, according to London-based Clarkson Plc, the world’s largest shipbroker. Forward freight agreements, handled by brokers and used to bet on future shipping costs, anticipate a fourth-quarter average of $13,034, based on data from Marex Spectron Group, which handles the contracts.