Thursday, October 18, 2012

20121018 1811 FCPO EOD Daily Chart Study.

FCPO closed : 2496, changed : +25 points, volume : lower. 
Bollinger band reading : correction range bound little downside biased. 
MACD Histogram : rising higher, buyer taking exposure. 
Support : 2490, 2450, 2400, 2350 level.
Resistance : 2520, 2550, 2570, 2600 level.
Comment :
FCPO closed little firmer with lesser volume changed hand. Soy oil currently trading higher after overnight closed recorded more than 1% gain while crude oil price trading marginally lower. 
Concern over possible flood in palm tree plantation area due to heavy raining season, India festival buying and within forecast China GDP data send FCPO price trading higher. 
FCPO daily chart adjusted again to suggesting a correction range bound little downside biased market development with price manage to closed above middle Bollinger band resistance level. 
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.

20121018 1739 FKLI EOD Daily Chart Study.

FKLI closed : 1667.5 changed : +2 points, volume : lower.
Bollinger band reading : upside biased. 
MACD Histogram : recovering, buyer seller battling. 
Support : 1660, 1657, 1651, 1645 level.
Resistance : 1670, 1680, 1690, 1700 level.
Comment :
FKLI closed little higher with reduced volume transacted doing 2 points premium compare to cash market that closed firmer. Overnight U.S. markets closed recorded marginal gain and today Asia markets soared higher while European markets currently having mix development. 
Within estimates China 3rd quarter GDP figure(+7.4%, slower growth) and surge in U.S. home sales data send most world markets trading higher. 
Daily chart reading continue to suggesting an upside biased market development but have yet to break above previous high at 1671.5 level. 
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.

20121018 1604 Global Markets & Commodities Related News.

STOCKS: Asian shares struck a seven-month high as worries  about a sharper slowdown in global growth eased after a slew of Chinese data signalled stabilisation in the world's second largest economy, and the U.S. produced positive economic news.European stocks opened higher. The S&P 500 rose for the third consecutive day on Wednesday after housing starts hit a four-year high, but the Dow was weighed down by IBM after it posted weak revenue. (Reuters)

China economy slows for 7th quarter, pick-up seen in Q4 (Reuters)
China's economy slowed for a seventh straight quarter in July-September, missing the government's target for the first time since the depths of the global financial crisis, but other data released on Thursday pointed to a year-end rebound.

COLUMN-China GDP points to steadier commodity demand
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, Oct 18 (Reuters) - It's probably not going to be too hard to find bearish analysis of China's economic growth data, but much of this will miss the point.
While the 7.4 percent expansion in gross domestic product in the third quarter from a year earlier was lowest since the first quarter of 2009, all this tells us is what we already knew.

China Q3 GDP growth 7.4 pct y/y, below official target
BEIJING, Oct 18 (Reuters) - China's economy slowed for a seventh straight quarter in July-September, missing the government's target for the first time since the depths of the global financial crisis.
The National Bureau of Statistics said GDP grew 7.4 percent in the third quarter from a year earlier - in line with  forecasts from economists polled by Reuters - the first miss of the official target since 6.5 percent growth in the first quarter of 2009.

U.S. housing starts surge in positive sign for economy (Reuters)
Groundbreaking on new U.S. homes surged in September to its fastest pace in more than four years, a sign the housing sector's budding recovery is gaining traction and supporting the wider economic recovery.

U.S. housing starts surge in positive sign for economy
WASHINGTON, Oct 17 (Reuters) - Groundbreaking on new U.S. homes surged in September to its fastest pace in more than four years, a sign the housing sector's budding recovery is gaining traction and supporting the wider economic recovery.
Housing starts increased 15 percent last month to a seasonally adjusted annual rate of 872,000 units, b eating even the most optimistic forecasts on Wall Street, C ommerce Department data showed on Wednesday.

FOREX: The euro held near a one-month high against the dollar as a fall in Spanish bond yields, strong U.S. housing data and hopes for a year-end rebound in China boosted optimism on the global economy. (Reuters)

FOREX-Euro near 1-month high on optimism over Spain, global economy
TOKYO/SYDNEY, Oct 18 (Reuters) - The euro held near a one-month high against the dollar as a fall in Spanish bond yields, strong U.S. housing data and hopes for a year-end rebound in China boosted optimism on the global economy.
"Some of the China numbers were pretty strong so financial markets may welcome these numbers," Ayako Sera, market economist at Sumitomo Trust Bank.

UK wheat imports soar following poor crop (Reuters)
Britain remained on track to become a net wheat importer in the 2012/13 season for the first time in more than a decade on Wednesday following a poor harvest this summer with customs data showing imports far outstripped exports in August.

GRAINS: U.S. wheat rose 0.7 percent, gaining for a second consecutive session as dry weather in top exporters the United States and Australia renewed concerns over tightening global supplies. (Reuters)

China's September crude runs hit record high (Reuters)
China's refinery throughput in September rose 7 percent from a year earlier to a record daily rate of 9.43 million barrels per day (bpd), after new refining capacity came on stream in the world's second-largest oil consumer.

OIL: Brent futures held above $113, buoyed by hopes for a rebound in year-end economic growth in China, the world's second-biggest oil consumer, and with simmering tension in the Middle East providing additional support. (Reuters)

China daily crude steel output rises 2 pct in Sept
SHANGHAI, Oct 18 (Reuters) - China's average daily crude steel output rose to 1.932 million tonnes in September, up 2 percent from 1.894 million tonnes in August, government data showed on Thursday, as a rebound in prices encouraged mills to boost production.
On a full-month basis, total crude steel production stood at 57.95 million tonnes in September, down one percent from August, to mark the lowest output since February, data from the National Bureau of Statistics showed.

BASE METALS: London copper rose for a third session, boosted by data that showed China's economy stabilising and a recovery in the U.S. housing sector gathering pace.. (Reuters)

PRECIOUS METALS: Gold was slightly weak as investors looked for fresh leads from a European Union summit after shrugging off data showing China's economy slowed for a seventh quarter as expected. (Reuters)

METALS-London copper edges up for 3rd day; focus on China data
SHANGHAI, Oct 18 (Reuters) - London copper rose for a third session boosted by data that showed China's economy stabilising and a recovery gathering pace in the U.S. housing sector.  
"Base metals are up on today's economic data, which, coupled with the premier's optimism over the economy, signalled that China's economy has mostly likely bottomed out in the third quarter. The U.S. economy also seems to be improving," said Orient Futures derivatives director Andy Du.

PRECIOUS-Gold steady after China data, euro zone summit eyed
SINGAPORE, Oct 18 (Reuters) - Gold traded flat retaining gains from the previous two days, as investors looked  for fresh leads from a European Union summit after shrugging off data showing China's economy slowed for a seventh quarter as  expected.
"In the short term, the $1,730 support level will continue  to feel a lot of pressure as investors focus on the euro zone  summit," said Chen Min, an analyst at Jinrui Futures in the  southern Chinese city of Shenzhen.

20121018 1344 Palm Oil Related News.

VEGOILS-Palm oil up on flood risk, economic data
Thu Oct 18, 2012 1:31am EDT
* Investors short-cover ahead of Muslim festival next week
    * Rainy season could trigger floods and hurt output -trader

    By Anuradha Raghu
    KUALA LUMPUR, Oct 18 (Reuters) - Malaysian palm oil futures
climbed on Thursday on emerging concerns of floods in key
growing regions curbing output and a slew of economic data from
the U.S. and China that showed global growth trends were intact.

    Palm oil futures, which have lost 21 percent so far this
year, also gained support from some investors shortcovering
ahead of the Islamic holiday of Eid al-Adha next week.
    "The market should continue to go higher. They are expecting
some floods because there's going to be rainy days ahead," said
a trader with a local commodities brokerage.
    "I'm expecting some short covering to take place either now
or next week -- next week it will be Hari Raya Haji," he said,
in reference to the Muslim holiday.
    By the midday break, the benchmark January contract
on the Bursa Malaysia Derivatives Exchange rose 1.1 percent to
2,499 ringgit ($822) per tonne.
    Total traded volumes stood at 14,592 lots of 25 tonnes each,
higher than the usual 12,500 lots as more traders hedged
    Floods could complicate logistics and harvesting in
Malaysia, the second largest producer, at a time when yields
have bounced back strongly after a weak first half in 2012.
    But the impact on output and stocks may be limited given
production hit a record in September, lifting stocks to an
all-time high in the same month.
    Palm oil futures also rose on gains in the U.S. soy complex,
said traders. Soybean futures extended gains in Asian trade on
Thursday, driven by bargain hunting after prices slid this week
to their lowest since late June.
    U.S. soyoil for December delivery climbed 0.6
percent. The most active January 2013 soybean oil contract
 on the Dalian Commodity Exchange rose 1.2 percent.
    Brent futures held above $113, buoyed by hopes for steady
growth in demand after China, the world's second-biggest oil
consumer, posted growth that met expectations, and simmering
tension in the Middle East provided additional support.
  Palm, soy and crude oil prices at 0457 GMT

Indonesian firm in $1.3 bln palm plantation bid
Thu Oct 18, 2012 12:37am EDT
* Deal would cover plantations, mills, other assets
* Would be among largest palm oil M&As for several years

* Deal expected to be completed by Nov -- source

By David Fogarty and Janeman Latul

SINGAPORE/JAKARTA, Oct 18 (Reuters) - An Indonesian businessman is leading a bid to buy one of the country's largest palm oil plantations in a deal worth up to $1.3 billion, documents detailing the transaction show.

If completed, the deal would be among the largest for the sector in Asia for several years.

The deal, codenamed Project Thor, is currently at the closing stage and is expected to be completed by next month, said a source with direct knowledge of the deal.

The company is also discussing a debt financing scheme with several Indonesian and Singaporean banks, another source familiar with the negotiations told Reuters.

Businessman Alexander Thaslim, president director of unlisted investment vehicle PT Borneo Pacific, has been negotiating since 2011 to buy the 83,879 hectares (209,700 acres) spread across 36 plantations in Riau province opposite Singapore on Sumatra island.

The purchase would be funded mostly through loans, two sources said, with about $300 million already raised in equity. No further details were available on the equity portion.

Reuters obtained several investor presentations, one of which describes the plantation cluster as the largest contiguous plantation concession in Indonesia. In total, the area is larger than the island of Singapore.

A third source with knowledge of the deal confirmed that PT Borneo Pacific is in the process of acquiring the plantations and arranging financing.

Thaslim, through his lawyer, said he was not immediately available to discuss the deal.


Malaysia's TH Plantations owns 95 percent of the Riau plantations and in April this year signed a conditional share purchase agreement with PT Borneo, the presentations show.

TH Plantations could not be reached for comment.

A total of 73,650 ha of the estate area has been planted. Other assets include six mills, a kernel crushing plant and biomass power plant.

Credit Suisse is financial advisor for the deal.

The bank said PT Borneo would buy TH Plantation's 95 percent stake for $910 million and is expecting to buy the remaining 5 percent owned by PT Primasakti Rizki Pertiwi.

"Including other transaction related expenses, the total purchase consideration is expected to be up to US$1.3 billion," a Credit Suisse investor presentation says.

The bank says Thaslim is the majority owner of PT Borneo Pacific and is involved in the holding of palm oil firms.

PT Borneo Pacific is a coal trader and miner.

Analysts said the deal would be among the largest palm oil asset acquisitions in recent years.

The deal was costlier than recent transactions by some listed firms, based on an enterprise value of nearly $16,000 per hectare and assuming no debt, said Ivy Ng, palm oil sector analyst for CIMB in Kuala Lumpur.

That was a positive sign for the market, said Ng, because it underscored demand for palm oil concessions, despite weaker crude palm oil prices, which have fallen 30 percent since April.

In 2007, palm oil giant Wilmar completed a proposed S$4.1 billion deal to acquire Malaysia's PPB Oil Palms Berhad, Kuok Oils and Grains Pte Ltd and PGEO Group Sdn Bhd.

The same year, the plantation assets of Sime Darby, Kumpulan Guthrie and Golden Hope Plantations merged to create the world's largest listed palm-oil group worth $8.6 billion at the time.

20121018 1342 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares rise after US data, China GDP in focus
TOKYO, Oct 18 (Reuters) - Asian shares rose to their highest in seven months, buoyed by a surge in U.S. housing starts that has followed other positive economic data, helping to further ease worries about a slowdown in global growth.
"According to many estimates, the GDP is expected to miss the 7.4 percent consensus which would create an initial drag on the AUD/USD," Neal Gilbert, currency strategist at GFT Forex in New Jersey, wrote in a note.

OIL-Brent crude, U.S. gasoline fall on inventory gains
NEW YORK, Oct 17 (Reuters) - Brent crude prices fell on Wednesday as rising U.S. crude oil and gasoline stockpiles kept tepid global demand for petroleum in focus, while a weaker dollar and worries about supply disruptions limited losses.
"The Brent curve is ... coming under pressure on lack of significant North Sea buying interest that appeared to be (associated) with the expected resumption of normal Buzzard Field production activities next week," Jim Ritterbusch, president at Ritterbusch & Associates said in a research note.

U.S. crude stocks up, oil products mixed - EIA
NEW YORK, Oct 17 (Reuters) - U.S. crude stocks rose last week as imports increased and oil product inventories were mixed after refiners boosted processing rates, government data showed on Wednesday.
Domestic stocks of crude oil rose by 2.86 million barrels in the week to Oct. 12, the Energy Information Administration reported. Analysts polled in advance by Reuters had forecast an increase of 1.7 million barrels.

Indonesia's 2012 oil output set to drop 3.6 pct
JAKARTA, Oct 17 (Reuters) - Indonesia's declining oil and condensate production will fall a further 3.6 percent in 2012 to 870,000 barrels per day, as damaged infrastructure, aging fields and a lack of exploration investment hurt output, state oil and gas regulator BPMigas said on Wednesday.
The former OPEC member was once self-sufficient in oil and gas but for years has been struggling to attract investment to halt declining oil output.

NATURAL GAS-US natgas futures end up, mild forecasts limit gains
NEW YORK, Oct 17 (Reuters) - U.S. natural gas futures ended higher on Wednesday, backed by prospects for a light inventory build on Thursday and some technical buying after two straight losing sessions, but milder weather this week slowed demand and helped limit the upside.
"I think we've got some short covering ahead of Thursday's (EIA storage) number - people are expecting a small build - but the weather forecasts look mild, and that should mean some decent (bigger) injections going forward," said Eric Bickel, analyst at Summit Energy in Kentucky.

EURO COAL-Dec ARA trades higher but activity remains thin
LONDON, Oct 17 (Reuters) - Prompt physical coal prices were little changed to slightly higher on Wednesday but few trades were seen as many coal market players returned from the biggest annual industry conference in Istanbul this week.
"November South African was bid again today at $79.25 a tonne but $81.00 is where most people are pegging prices," one European trader said.

20121018 1009 Malaysia Corporate Related News.

Malaysia Airports' retail arm, Eraman Malaysia, along with German airport  giant Fraport plans to pull out of  Delhi International Airport (DIAL), a  media report said. GMR Group is willing to pick up the equity stake of its joint  venture partners.  A senior executive of GMR Group confirmed that both  companies were keen to withdraw from the venture and GMR is willing to buy  them out.  DIAL is a joint venture consortium in which GMR Group has about a 54%  stake, with the state-owned Airports Authority of India (AAI) having 26%,  while Fraport and Eraman Malaysia have 10% each. (Bernama)

Part of  TH Plantations Bhd's proposals to expand its operations involving  sustainable forest management and also teak and rubber plantation  development in Sabah were rejected by the Sabah Forestry Department. It said  on Wednesday the department had  not accepted its proposals which involved  the assignment of the sustainable forest management licence agreement dated  Sep-88 between TH Plantations and the Chief Minister of Sabah to  TH-Bonggaya.The department also did not accept the execution of the teak and  rubber plantation development agreement with TH-Bonggaya.TH Plantations  said it would appeal against the decision.(Starbiz)

New EU rules to limit how much food can be made into  biofuels are "not  perfect" and make it harder to achieve overall goals on switching to low carbon  energy, European Commissioners said on Wednesday. But they insisted the  proposals sent out the right signal to the biofuel industry, which would have to  move on to new-generation fuels that do not compete with demand for food.  The Commission announced a major policy shift in September, saying it  planned to limit crop-based biofuels to 5% of consumption, as part of a  goal to draw 10% of transport fuel from renewable sources, mainly  biodiesel and bioethanol. On Wednesday, it formally  published the  proposal, which biofuel producers have said could devastate their business  and green campaigners say fails to address the problem. (Starbiz)

SapuraKencana has secured a 3-month extension worth US$9.2m starting  from 21 Apr 2013 for the supply of rig T6 to Petronas Carigali. The rig is  currently servicing a 28-month contract effective 21 Dec 2010. (BMSB)

Etiqa Takaful sees vast opportunities to expand its business as only 47% of the  population are insured. Etiqa Insurance and Takaful chief commercial officer,  Shahril Azuar Jimin, said many Malaysians still did not have any kind of  insurance coverage. "The insurance penetration rate here is still low, especially  among the Bumiputera community, where only 11% are covered," he said. He  said the products were launched in partnership with Pos Malaysia. (Bernama)

Ken Holdings, a specialist engineering construction services provider and  green property developer, is looking for strategic partners to venture into the  hospitality sector. Executive Director Sam C.S. Tan said "We've got many  ongoing projects in Kuala Lumpur, Shah Alam, Penang, Melaka, Perak and also  now in Johor Baharu City Centre.  "In JB we are developing the first green township in the southern corridor  after our first green township development in Ken Rimba Shah Alam in  Selangor. We are moving into the hospitality sector and hope to have good  partners who can make our vision of creating better and greener homes for  the public," he said. (Bernama)

Pos Malaysia Bhd hopes to finalise soon the acquisition of a courier company  in the Middle East. Group CEO Datuk Khalid Abdol Rahman said talks on the  acquisition were still ongoing and "we hope to finalise it within this year." "We  are currently in the negotiation process and want to finalise it very soon," he  told reporters at the launch of the Takaful Flexi PA and Takaful Driver and  Passenger PA here on Wednesday.  In another development, Khalid said Pos Malaysia is currently working  with DRB-Hicom Bhd's property development group, to redevelop its  land.Pos Malaysia has land in Brickfields, Kelana Jaya and Batu Pahat.  (Starbiz)

Westports Malaysia Sdn Bhd, operator of the country's busiest port, is  looking to raise as much as US$500m (RM1.5bn) in an initial public offering  (IPO) in 2Q13, two sources with direct knowledge of the plan said. The funds  raised from the IPO will help Westports expand Port Klang, which has reported  double-digit growth in container handling over the last five years. Westports,  which counts Hutchison Port Holdings and Khazanah Nasional Bhd as  shareholders, is launching an IPO at a time when privatisation schemes and  economic growth have cemented the country's position as Asia's top destination  for initial share sales. (BT)

Sarawak Corridor of Renewable Energy (Score) has attracted total  approved investments of RM29.1bn. 12 of the approved projects worth RM27bn  were in energy-intensive or heavy industries in Samalaju Industrial Park,  Bintulu. (Star Biz)

Sarawak Energy Bhd (SEB) plans to build another five coal-fired power plants with a combined generation capacity of 2,400MW to support  energy-intensive industries in Score. The give include the 600MW Balingian I  project, for which the tender for its construction has been called. The other  plants were Balingian II, Mukah West I, Merit Pila and Mukah West II. (Star  Biz)

Semperit AG Holdings said that securing regulatory approvals in Europe for  its acquisition of Latexx Partners Bhd is merely a formality. The company  must file with the competition regulators in Germany and Austria which will  take four to five weeks from the offer date to complete.  Semperit has obtained a controlling interest in the Latexx of 57% and has  no intentions to revise its price. If Semperit is able to acquire more than  75% of Latexx's shares, it will  seek to delist Latexx. However, Semperit is  also comfortable maintaining Latexx's listed status because it would  already control the management team.  The company added that it intends to invest U$60-80m to expand Latexx's  annual production capacity to 15-16bn pieces. The company said its focus is to grow Malaysia and Latexx's chairman and CEO Low Bok Tek is expected  to remain at the helm of Latexx. (StarBiz)

Perodua continued to stamp its dominance on the local automotive industry  with a 30% market share for the first nine months of this year. It sold 139,400  vehicles during the period, an increase of 10% over last year. However,  Perodua's sales on a qoq basis saw marginal decline of 3%, which the company  attributed to the tightened lending guidelines imposed on the industry.  (Financial Daily)

Maxis intends to grow its data centre management. Being the first Tier III  certified data centre facility in Malaysia, maxis is stepping up efforts to attract  international enterprises, leveraging its certified facility and the country's  natural disaster free environment, said senior VP and head of Maxis business  services M Fitri Abdullah. (Financial Daily)

Green Packet, whose share price had risen in very active trade over the  speculation on the sale of its broadband business, declined to comment  yesterday. It had earlier in the day, through a public relations company, sent an  email advisory to the press to expect an announcement later in the day.  Describing the articles as "speculative in nature", it said the company's public  communication policy is not to comment on press articles which are speculative  in nature. "The company holds itself to the highest standards of corporate  governance and will ensure that all announceable agreements or transactions  will be disclosed to Bursa Malaysia Securities Bhd and the investors  accordingly," the company said in its filing to Bursa Malaysia.  Various publications reported yesterday that the company is rumoured to  be looking into selling its 61% stake in Packet One Networks (M) Sdn Bhd.  The reports said five parties submitted bids for P1, of which three are  foreign parties. P1's other major shareholder is South Korea's SK Telecom  with a 28.2% stake. (BT)

Siemens it has won a major contract to supply driverless metro trains to the  Malaysian capital of Kuala Lumpur. Siemens said that in a partnership with an  unnamed local company, it had won an order for 58 four-car trains, as well as  the complete equipment for two new depots. The total value of the agreement  was some EUR450m (RM1.8bn), with Siemens' share worth some  EUR260m(RM1.0bn), the statement said. (StarBiz)

SAAG seeks white knight
After seeing its share price collapse earlier in the week, SAAG Consolidated has now slipped into PN17 status due to its inability to regularize its financial position. This in turn is likely to get its creditors, which comprise of some big banking names, more anxious about their exposure. SAAG has outstanding debts of about RM700m, owed to AMMB, Exim Bank Malaysia and the State Bank of India among others. (StarBiz)

20121018 1009 Local & Global Economy Related News.

The government is considering defraying infrastructure costs so that private  developers can build more houses at below market price, said PM Datuk  Seri Najib Tun Razak. He said that he had asked the 1Malaysia Housing  Progamme Corporation (PR1MA) to have discussions with private developers to  come up with a second model to build more affordable houses. (Financial Daily)

The total  sukuk issuance in Malaysia amounted to RM219.4bn during the  first eight months of 2012 against RM120.7bn in the corresponding period in  2011. Securities Commission (SC) executive director, Zainal Izlan Zainal Abidin  said 2012 witnessed encouraging performance of the Islamic capital market and  the sukuk segment is set to register another record year in terms of total  issuance value. (Bernama)

US housing starts  rose to a seasonally adjusted annualised rate of 872,000  units in Sep from a revised 758,000 units in Aug, beating expectations of a level  of 765,000 units.  Permits  rose to a seasonally adjusted annualised rate of  894,000 (a revised 801,000 in Aug), again beating consensus of 810,000.  (Bloomberg)

The US MBA purchase applications index gained 1.0% wow in the 12 Oct  week (2.0% in the earlier week), whilst the  refinance index  lost 5.0% wow  (-2.0% in the prior week). (Bloomberg)

Eurozone construction output  grew 0.7% mom in Aug (a revised 0.1% in  Jul), the second straight month of increase. On a yoy basis, output was down  5.5% in Aug, following a 6.2% drop in Jul. (Dow Jones)

China's Premier Wen Jiabao said the economy began stabilising in the  past three months and should meet 2012 targets. (AFP)

 Japan’s machine tool orders fell 2.8% yoy in Sep following a 3.0% decline  in the previous month. (RTTNews)

 Japan's prime minister Yoshihiko Noda instructed his ministers to plan  for an economic stimulus reportedly worth up to ¥1.0tr. (AFP)

Singapore’s exports  fell 3.4% yoy, after a revised decline of 10.7% in Aug,  missing market expectations for a 2.3% rise.  Electronic exports declined  16.4% yoy in Sep  after falling 11.0% in Aug, while  non-electronics  shipments grew 4.2%, reversing a 10.5% fall the previous month. (WSJ)

The Bank of Thailand cut its one-day bond repurchase rate by a quarter  of a percentage point to 2.75%. The monetary policy committee voted 5-2 in  favor of a cut. The decision was predicted by three of 23 economists in a  Bloomberg News survey. (Bloomberg)

Vietnam’s trade surplus in Sep reached more than US$170m, a three-time  increase against Aug. (Vietnam News)

20121018 1003 Global Markets Relate News.

Asia FX By Cornelius Luca - Wed 17 Oct 2012 15:37:48 CT (CME/
The appetite for risk surged early on Wednesday after Moody's kept Spanish rating at Baa3, but then petered out. The appetite for risk had been improving recently due to good US data and earnings, and hopes the European Union's leaders will be able to alleviate with Spain and Greece's debilitating debt problems later this week. All the European and commodity currencies advanced, and but the yen resumed losses. The US stock markets closed marginally higher. Gold and oil and silver finished little changed. The short-term outlook for most of the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is short on yen, sterling and Canadian dollar, and long euro, franc and Australian dollar. Good luck!

US: Housing starts jumped 15% to an annual rate of 872,000 in September from a revised August estimate of 758,000. Building permits surged 11.6% to 894,000 from 801,000.

Today's economic calendar
China: Gross Domestic Product for the third quarter
China: Industrial production for September
China: Retail sales for September
Japan:  Foreign investment in Japanese stocks for October
Australia: National Australia Bank's business confidence for the third quarter

Asian Stocks Rise on U.S. Housing, Wen China GDP Comments (Bloomberg)
Asian stocks rose, with the regional benchmark index headed for its highest close in a month, as U.S. housing starts jumped and Premier Wen Jiabao said China’s economy was “relatively good” ahead of today’s report on gross domestic product. Machinery maker Hitachi Construction Machinery Co (6305), which gets about 17 percent of its sales in China, added 2.3 percent in Tokyo. James Hardie Industries SE (JHX), a building-materials supplier that gets 67 percent of sales from the U.S. rose 4 percent in Sydney. Woodside Petroleum Ltd. (WPL), Australia’s second- biggest oil producer, advanced 3.9 percent in Sydney after boosting its output forecast. The MSCI Asia Pacific Index gained 0.5 percent to 123.51 as of 10:04 a.m. in Tokyo, rising for a third day, before markets in Hong Kong and China opened. Almost four stocks advanced for each that fell on the measure.
“I don’t see much of a downside risk for stocks because we don’t see the U.S. situation deteriorating,” said Masahiko Ejiri, a Tokyo-based senior fund manager at Mizuho Asset Management Co., which oversees about 3.6 trillion yen ($45 billion) in assets. “The market consensus is that China’s GDP will continue to be weaker, and the government has been deploying new measures. They will do a bit more to shore up growth once the leadership transition is over.” China’s Communist Party will nominate new leaders at a congress starting Nov. 8 in a once-a-decade leadership change.

Japanese Stocks Rise on U.S. Housing Starts, Weaker Yen (Bloomberg)
Japanese shares rose, with the Nikkei 225 (NKY) Stock Average headed for its longest winning streak in two months, after U.S. housing starts jumped to a four-year high and the yen weakened. Honda Motor Co. (7267), a carmaker that gets 44 percent of its sales in North America, jumped 2.7 percent. Komatsu Ltd. (6301), a construction-machinery company that relies on China for 14 percent of its revenue, gained 3.7 percent after Chinese Premier Wen Jiabao said the economy was “relatively good” ahead of today’s gross domestic product report. Bridgestone Co. gained 1.5 percent on a report the tiremaker will raise capacity in emerging markets.
The Nikkei 225 gained 1.1 percent to 8,907.08 as of 10:01 a.m. in Tokyo, heading for a four-day advance. Trading volume was almost 30 percent higher than the 30-day average. The broader Topix Index climbed 1.1 percent to 747.65, with almost four times as many shares advancing as declining. The economy minister yesterday called for stronger stimulus from the Bank of Japan, which is holding a policy meeting at the end of the month. “U.S. homes and car sales are rebounding from the plunge after the Lehman shock, and recovery momentum will be maintained,” said Mitsushige Akino, an executive officer at Ichiyoshi Investment Management Co., which oversees about 40 billion yen ($505 million). “There are rising expectations the government will put strong pressure on the Bank of Japan for further easing to overcome deflation.”

U.S. Stocks Rise as Housing Data Overshadow Intel, IBM (Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third straight day, as a jump in housing starts overshadowed disappointing results from International Business Machines Corp. (IBM) and Intel Corp PulteGroup Inc. (PHM) and D.R. Horton Inc. jumped more than 4.2 percent as homebuilders rallied. Dean Foods Co. (DF) soared 13 percent after its WhiteWave Foods Co. filed to go public. Intel fell 2.5 percent after forecasting a fourth-quarter gross margin that missed estimates. IBM slid 4.9 percent after reporting third-quarter revenue that trailed analysts’ projections. The S&P 500 (SPX) rose 0.4 percent to 1,460.91 at 4 p.m. in New York. The index has gained 2.3 percent this week. The Dow Jones Industrial Average added 5.22 points, or less than 0.1 percent, to 13,557 today. IBM, which accounts for more than 11 percent of the share-price-weighted Dow, took 80 points off the gauge today. About 6.3 billion shares traded hands on U.S. exchanges, 5.1 percent above the three-month average.
“The housing number was amazing,” Randall Warren, who oversees $75 million as chief investment officer of Warren Financial Service in Exton, Pennsylvania, said in a phone interview. “Corporate earnings have been strong in a slow growth environment, so if housing can help improve the economy then we could see a move up in stocks.” U.S. equities rose as Commerce Department figures showed new-house construction jumped 15 percent to an 872,000 annual rate last month, the most since July 2008 and exceeding all forecasts in a Bloomberg survey of economists. The median estimate of 81 economists surveyed by Bloomberg called for 770,000.

Recap Stock Index Market Report(CME)
The December S&P 500 trended higher for the third session in a row and climbed to its highest level since October 5th. Early support in the equity market came on Spain debt ratings that were left unchanged by Moody's and US housing market data that showed more signs of improvement. However, mixed earnings last night from IBM and Intel, along with results from Bank of America and Abbott Labs this morning tempered early gains. Shares of IBM were down more than 5% during the session after revenues fell short of expectations. However, most of the major S&P sectors were in positive territory, with the exception of technology shares. The market will get the latest corporate earnings from American Express and eBay after the close, with Chinese growth data expected later this evening.

U.K. Stocks Rally to One-Month High; Tesco, RBS Climb (Bloomberg)
The U.K.’s FTSE 100 Index climbed to a one-month high after an unexpected drop in the country’s unemployment and a surge in U.S. new-house construction. Tesco (TSCO) Plc increased 2.7 percent after UBS AG recommended investors buy shares of Britain’s largest retailer. Royal Bank of Scotland Group Plc rose more 2.2 percent after the lender agreed to leave the U.K.’s Asset Protection Scheme. Rio Tinto Group led mining shares higher, advancing 4 percent. The FTSE 100 Index rose 40.37 points, or 0.7 percent, to 5,910.91 at the close in London, the highest since Sept. 14. The gauge has rallied 2 percent so far this week bolstered by better-than-forecast U.S. retail and industrial-output data. The FTSE All-Share Index added 0.7 percent today, while Ireland’s ISEQ Index gained 0.2 percent.
“Economic data has helped to limit the downward pressure in the U.S. and Europe,” said Ishaq Siddiqi, market strategist at ETX Capital in London. The U.K. jobs data “is very encouraging and will undoubtedly raise questions about the need for more quantitative easing, but importantly, suggests the U.K. economy is back on track to growth.” The Office for National Statistics showed jobless claims in the U.K. fell 4,000 in September from the previous month to 1.57 million, boosted by the London Olympics. The median economist estimate in a Bloomberg News Survey called for no change in claims. A wider measure of unemployment, measured by International Labor Organization methods, declined to 7.9 percent between June and August. Employment surged 212,000 to 29.6 million, the highest since records began in 1971.

European Stocks Climb on Spain Debt Rating, U.S. Housing (Bloomberg)
European stocks rose for a third day, the longest winning streak in five weeks, as Moody’s Investors Service kept its investment-grade debt rating on Spain and U.S. new-home construction surged to a four-year high. Bankia led a rally in Spanish banks, jumping 19 percent. Waertsilae Oyj soared 8.1 percent as the world’s largest maker of ship engines and power plants raised its forecasts. PSA Peugeot Citroen advanced 4.1 percent as Le Figaro said the French government and banks may bail out the automaker’s credit unit. Danone SA sank the most in two months as the food company reported revenue growth that missed analysts’ estimates. The Stoxx Europe 600 Index (SXXP) rose 0.5 percent to 275.66 at the close of trading, the highest level in three weeks. The gauge has rallied 18 percent from its 2012 low on June 4 as European Central Bank policy makers agreed on an unlimited bond- buying program and the Federal Reserve unveiled a third round of quantitative easing.
“There appears to be positive news regarding Spain,” said Jakup Petur Baerentsen, a chief equity adviser at Nordea Private Bank in Copenhagen. “The market has consolidated and we think that it will continue upwards.” National benchmark indexes rose in 16 of the 18 western European markets. The U.K.’s FTSE 100 (UKX) gained 0.7 percent, Germany’s DAX increased 0.3 percent and France’s CAC 40 climbed 0.8 percent. Spain’s IBEX 35 surged 2.4 percent.

Emerging Stocks Rise to One-Month High on China Outlook (Bloomberg)
Emerging-market stocks rose, sending the benchmark index to its highest level in a month, on speculation China’s economy is stabilizing and as Moody’s Investors Service retained Spain’s investment-grade rating. Cosco Pacific Ltd. (1199), which gets about 35 percent of its revenue from Europe, climbed to the highest since March in Hong Kong. Chinese banks including Industrial & Commercial Bank of China Ltd. rose after upgrades by Credit Suisse Group AG. Brazil’s Bovespa index advanced for a fourth day as OGX Petroleo & Gas Participacoes SA (OGXP3) rose. OAO Gazprom, Russia’s largest natural-gas producer, gained and Poland’s Telekomunikacja Polska SA (TPS) tumbled 15 percent after cutting its dividend and earnings forecast.
The MSCI Emerging Markets Index rose 0.7 percent to 1,010.85 at the close of trading in New York, the highest level since Sept. 17. Credit Suisse said the Chinese economy is probably bottoming and Premier Wen Jiabao said the country’s economic situation last quarter was “relatively good.” The European Central Bank’s willingness to buy Spain’s debt lowered the risk of losing access to credit markets, Moody’s said yesterday. A U.S. report today showed new-home construction rose to a four-year high in September. “Emerging markets are getting buoyed by a confluence of favorable factors that are neutralizing the outlook of a global slowdown,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “A bottoming China and rising U.S. industrial output will boost global demand while an investment grade raises the chances of a bailout for Spain.”

Euro Near Month High on EU Summit Crisis Progress Outlook (Bloomberg)
The euro was 0.2 percent from its highest level in a month on prospects European Union leaders meeting today will take steps toward resolving the currency bloc’s debt crisis. The 17-nation euro matched its strongest level in a month versus the yen on speculation Spain will seek financial assistance, which would help contain turmoil within the euro area. The yen fell against all major peers as expectations increased the Bank of Japan (8301) will boost stimulus measures at a meeting this month. Australia’s dollar traded near a two-week high as Asian stocks rose and investors awaited data that may show China grew at the slowest pace in more than three years. “The situation in Spain is the main focus as we head into the EU summit,” said Kikuko Takeda, senior currency economist in London at Bank of Tokyo-Mitsubishi UFJ Ltd. “There seems to be a common belief within Europe that Spain would be too big to fail. The euro should test new highs should Spain request aid.”
The euro was at $1.3112 as of 9:25 a.m. in Tokyo from $1.3119 yesterday, when it reached $1.3140, the strongest since Sept. 17. It rose 0.1 percent to 103.69 yen after earlier touching 103.75, matching yesterday’s high that was the most since Sept. 17. Japan’s currency was at 79.14 per dollar earlier, the weakest since Sept. 19, before trading at 79.09, 0.2 percent below the close in New York. The MSCI Asia Pacific Index of shares climbed 0.5 percent.

Aussie Is Near 2-Week High on Stock Gains; Bonds Decline (Bloomberg)
The Australian dollar traded 0.2 percent from its highest level in two weeks and government bonds fell for a third day as gains in stocks worldwide boosted demand for riskier assets. The so-called Aussie held above $1.03 for a second day as investors awaited Chinese data that may show the world’s second- largest economy grew at the slowest pace in more than three years in the third quarter. New Zealand’s currency was near a one-week high before European Union leaders begin a two-day summit in Brussels today to discuss ways to contain the region’s debt crisis. “The Aussie is being bought because there is a risk-on tone across markets,” said Daisaku Ueno, a senior foreign- exchange and fixed-income strategist in Tokyo at Mitsubishi UFJ Morgan Stanley. “China will be the biggest focus of attention today.”
The Australian dollar was little changed at $1.0373 as of 10:20 a.m. in Sydney from the close in New York yesterday, when it touched $1.0389, the strongest since Oct. 1. It added 0.1 percent to 82.04 yen. New Zealand’s currency, nicknamed the kiwi, fetched 82.11 U.S. cents from 82.19, after yesterday reaching 82.27, the highest since Oct. 9. It currency bought 64.94 yen, 0.1 percent higher than yesterday’s close. Stocks rose globally yesterday after data showed U.S. new home construction surged to a four-year high, adding to signs that the world’s largest economy is gaining momentum. The Standard & Poor’s 500 Index (SPX) of U.S. stocks added 0.4 percent after gaining 1.8 percent over the previous two sessions, while the Stoxx Europe 600 Index advanced 0.5 percent.

Treasuries Snap Three-Day Loss Before Jobless Claims (Bloomberg)
Treasuries snapped a three-day loss before government data economists said will show initial claims for jobless insurance rose last week. The U.S. is scheduled to sell $7 billion of 30-year Treasury Inflation Protected Securities today. The difference between yields on 10-year notes and same-maturity TIPS, a gauge of trader expectations for consumer prices over the life of the debt, was 2.51 percentage points. The average over the past decade is 2.17 percentage points. “Yields will stay pretty low,” said Kim Youngsung, the head of fixed income in Seoul at Samsung Asset Management Co., South Korea’s largest private bond investor with the equivalent of $102.2 billion. “Treasuries are still a safe haven. We’re not sure about the economic recovery.” U.S. 10-year rates were little changed at 1.81 percent as of 9:47 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in August 2022 was 98 11/32.
Jobless claims probably rose to 365,000 last week from 339,000 in the previous period, according to the median forecast among 49 economists surveyed by Bloomberg News before the Labor Department report at 8:30 a.m. New York time today. Treasuries fell yesterday as a surge in new-home construction to the highest level in four years reduced demand for the safety of U.S. government debt. Housing starts jumped 15 percent to an 872,000 annual rate last month, the most since July 2008 and exceeding all forecasts in a Bloomberg survey of economists, Commerce Department figures showed.

U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says (Bloomberg)
The U.S.’s sovereign credit rating will be cut as “fiscal theater” plays out in the world’s biggest economy, according to Pacific Investment Management Co., which runs the world’s biggest bond fund. “The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said at a briefing in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that.” The Congressional Budget Office has warned the U.S. economy will fall into recession if $600 billion of government spending cuts and tax increases occur at the start of 2013. Financial markets are complacent about whether the White House and Congress will reach agreement on deferring the so-called fiscal drag on the economy until later next year, Mather said. In a “base case” of Barack Obama being re-elected and Congress becoming more Republican, there is a high likelihood an agreement “doesn’t happen in a nice way, and we have disruption in the marketplace,” he said.
Policy makers probably will agree on cutbacks that would lower economic growth by about 1.5 percentage points next year, Mather said. They may roil markets by discussing scenarios that would lead to a 4.5 percentage-point fiscal drag, he said. Standard & Poor’s cut the U.S. credit rating to AA+ from AAA on Aug. 5, 2011. Since that time, benchmark Treasury yields have dropped to records.

Housing Starts Jump 15% to Four-Year U.S. High: Economy (Bloomberg)
Housing starts in the U.S. surged 15 percent in September to the highest level in four years, adding to signs of a revival in the industry at the heart of the financial crisis. Beginning home construction jumped last month to an 872,000 annual rate, the fastest since July 2008 and exceeding all forecasts in a Bloomberg survey of economists, Commerce Department figures showed today in Washington. An increase in building permits may mean the gains will be sustained. “It’s no longer a question of whether the industry is rebounding,” Larry Sorsby, chief financial officer of Red Bank, New Jersey-based Hovnanian Enterprises Inc. (HOV), the best-performing homebuilding stock this year, said in a telephone interview today. “There is clear evidence that we have bounced off the bottom and are in the midst of a recovery.”
A pickup in sales stoked by record-low mortgage rates and population growth combined with dwindling supply indicates construction can continue strengthening, contributing more to economic growth. Improving demand may also help revive a part of the job market that’s seen construction employment fall by almost 2 million since the end of 2007. “This is good news for the labor market,” said Anika Khan, a Charlotte, North Carolina-based senior economist at Wells Fargo & Co., the biggest mortgage lender in the U.S. If single-family starts “continue to show this positive momentum, and we expect they will, we’ll likely start to see some construction jobs come back.”

FOMC Straying on Price Target, Former Fed Officials Say (Bloomberg)
The Federal Reserve appears to be backing away from its commitment to keep inflation at 2 percent with its plan to buy mortgage-backed securities until employment improves, two former Fed officials said.
“The message that I took” from the central bank’s Sept. 13 announcement of a third round of bond buying is “we want the inflation rate to go higher,” said Dino Kos, managing director at Hamiltonian Associates Ltd. in New York and a former New York Fed executive vice president. “It’s a historical shift from where they had been to where they seem be to going.” The Fed committed in January to a 2 percent inflation goal.
The policy-setting Federal Open Market Committee said it will buy $40 billion of mortgage bonds per month and possibly purchase even more assets until the labor market improves “substantially.” The central bank in a statement didn’t specify its commitment to act “in a context of price stability,” even though in January it unveiled for the first time an inflation target, according to Marvin Goodfriend, a former research director at the Richmond Fed.
“You have to look hard to find any mention of inflation” in the FOMC’s Sept. 13 statement, Goodfriend, a professor at Carnegie Mellon University in Pittsburgh, said. Both Goodfriend and Kos were interviewed on Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays and Vonnie Quinn. “There ought to be a follow-through on the explicit 2 percent inflation objective” in the Fed’s next statement after its Oct. 23-24 meeting.

Intel Slumps With IBM on Weak Businesses-Consumer Demand (Bloomberg)
The global economic slowdown is prompting companies to curtail technology spending and pushing consumers to favor mobile devices like Apple Inc.’s iPhone over personal computers, eroding profitability at Intel Corp. (INL) and trimming sales for International Business Machines Corp (IBM). Intel, the largest chipmaker, forecast fourth-quarter gross margins that missed analysts’ estimates, while IBM, the biggest computer-services provider, reported third-quarter revenue that fell short of projections. Shares of both companies declined in late trading yesterday and German trading today.
IBM customers, hurt by anemic demand in home markets, put off software purchases and computer-maintenance contracts. Budget-strapped consumers are shunning PCs to buy cheaper handheld devices such as the iPhone, while businesses are shying away from servers that run networks, sapping demand for Intel chips. The reports bode ill for Microsoft Corp. (MSFT), the No. 1 software maker, which releases results tomorrow.
“It’s not looking good out there,” said Alex Gauna, an analyst at JMP Securities.
IBM fell 4.9 percent to $200.63 at the close in New York, the biggest decline since October 2009. Intel dropped 2.5 percent to $21.79.

Wen Says China’s Economy ‘Relatively Good’ Ahead of GDP (Bloomberg)
Chinese Premier Wen Jiabao said the country’s economic situation last quarter was “relatively good,” a signal today’s report on gross domestic product may show the country’s slowdown ebbing. “China’s economic growth has started to stabilize,” the official Xinhua News Agency said yesterday, citing Wen’s comments in meetings he held with industry leaders, company executives and some local government officials on Oct. 12-15. The government is confident of achieving annual targets and the economy will continue to show “positive changes,” Wen said, according to Xinhua. Exports exceeded forecasts in September and money supply grew at the fastest pace in 15 months. Even so, economists forecast today’s data will show growth in the world’s second- biggest economy decelerated for a seventh quarter, putting pressure on the ruling Communist Party to add stimulus ahead of a once-a-decade leadership transition.
“Wen’s comments suggest that there may be signs of stabilization in the quarter-on-quarter numbers, which give a better sign of current momentum in the economy,” said Mark Williams, Asia economist at Capital Economics Ltd. in London. “GDP growth in the third quarter almost certainly slowed in year-on-year terms. Policy makers at this point want to focus on more forward-looking indicators, which indicate the economy may now be turning the corner.” The MSCI Asia Pacific Index of stocks rose for a third day, gaining 0.5 percent at 9:44 a.m. in Tokyo.

Japan Stimulus Limited as Diet Standoff Blocks Extra Budget (Bloomberg)
Japan’s government plans to tap discretionary budget funds to counter an economic slowdown as a legislative stalemate threatens to leave the Noda administration without cash as soon as next month. Prime Minister Yoshihiko Noda yesterday ordered his Cabinet to draw up economic stimulus measures by November, Chief Cabinet Secretary Osamu Fujimura said. With Finance Minister Koriki Jojima telling reporters that the idea of a supplementary budget would be considered later, the government can use around 1.3 trillion yen ($17 billion) in reserves from this year’s budget. Noda’s room for fiscal maneuver is limited by the political opposition’s refusal to give the government authority to borrow to pay for this year’s deficit. Politicians instead may focus on applying pressure on the Bank of Japan, and banks including JPMorgan and UBS AG are among those predicting the BOJ will boost asset purchases this month.
“The next economic stimulus should come from the BOJ,” said Hiromichi Shirakawa, chief Japan economist at Credit Suisse AG and a former BOJ official. The government “does not want to do a big package because monetary stimulus is in sight.”

Russian Investment Unexpectedly Fell First Time in 18 Months (Bloomberg)
Russian investment unexpectedly slid last month for the first time since March 2011 as uncertainty over the economy prompted businesses to reduce spending. Fixed-capital investment fell 1.3 percent in September compared with a year earlier, the Federal Statistics Service in Moscow said in an e-mailed statement today. Economists predicted an increase of 2.1 percent, according to the median of 15 forecasts in a Bloomberg survey. A slowdown in China, Russia’s largest trading parter, and Europe’s sovereign debt crisis are discouraging capital spending, with companies including OAO Novolipetsk Steel (NLMK) and OAO GMK Norilsk Nickel (MNOD) announcing plans in the past month to scale back investment. President Vladimir Putin ordered the government in May to boost investment to 25 percent of gross domestic product by 2015 from 21 percent last year.
“We’re seeing a slowdown in investment from natural- resources companies, which is not so much because of the investment climate as concerns about demand domestically and from abroad,” Vladimir Tikhomirov, chief economist at Otkritie Capital in Moscow, said by telephone. Weaker construction spending and state investment also played a role, he said. The Micex Index (INDEXCF) of 30 stocks maintained gains after the announcement and was 1.4 percent higher at 1,475.83 as of 4:48 p.m. in Moscow. A close at that level would be the highest since Oct. 5.

Surprise Thai Rate Cut Shows Worsening Outlook: Southeast Asia (Bloomberg)
Thailand’s central bank voted to cut interest rates four days after Governor Prasarn Trairatvorakul said no easing was needed, adding to evidence Asia’s outlook has worsened and supporting a government push to shore up growth. The Bank of Thailand lowered its one-day bond repurchase rate by a quarter of a percentage point to 2.75 percent, it said in Bangkok yesterday. The decision was predicted by three of 23 economists in a Bloomberg News survey, while the rest expected no change. The monetary policy committee voted 5-2 in favor of a cut, it said in a statement, without disclosing names.
Thailand’s exports have slumped as a growth slowdown in China and austerity measures in Europe hurt demand for Asian goods, prompting South Korea to lower borrowing costs while the Philippines said it won’t rule out further easing. The Thai central bank said there was no political interference in yesterday’s decision, seeking to distance its action from Finance Minister Kittiratt Na-Ranong’s call for lower rates and a weaker baht to help exporters. ”While the overall economy is still a picture of health, the rate cut came amid deeper concerns of a negative spillover from the worsening external environment to domestic demand,” said Julia Goh, an economist at CIMB Investment Bank Bhd. in Kuala Lumpur, who correctly predicted the decision. “The objective of maintaining growth stability and shoring up the post-flood growth momentum was the trigger for the rate cut.”
The monetary authority yesterday maintained its forecast for growth in 2012 at 5.7 percent, and said it would announce a lower estimate for 2013 next week.

U.K. Unemployment Declines as Payrolls Surge to Record (Bloomberg)
U.K. jobless claims unexpectedly fell and payrolls rose to a record high as the London Olympics helped boost hiring. Jobless-benefit claims fell 4,000 to 1.57 million in September, the Office for National Statistics said today in London. The number of people in work surged 212,000 to 29.6 million in the quarter through August, the highest since records began in 1971. Separately, minutes of the Bank of England’s policy meeting this month showed that officials are divided on the need for more stimulus for the economy. The labor-market strength provides a boost for Prime Minister David Cameron and deepens what the Bank of England describes as a “productivity puzzle” as the economy continues to create jobs despite Britain’s return to recession at the end of last year. That may deepen divisions among Bank of England policy makers assessing the outlook for inflation and growth.
“Yet another strong set of labor-market figures, which on one hand is encouraging, but on the other makes the so-called productivity puzzle even more baffling,” said Nida Ali, an economist at the Ernst & Young ITEM Club in London. “It’s likely that there will be some form of payback in the months ahead.” Economists had forecast no change to September jobless claims, according to the median of 27 estimates in a Bloomberg News survey. The decline in claims was the third consecutive drop and it left the claimant-count rate at 4.8 percent. The June-August jobless rate measured by International Labor Organization methods declined to 7.9 percent, the lowest in more than a year, from 8.1 percent.

Samaras Faces Coalition Revolt Over Lenders’ Demands (Bloomberg)
Greek Prime Minister Antonis Samaras faces a growing revolt from his coalition partners as representatives of the country’s lenders press for more changes to the country’s labor market as a condition for releasing further bailout funds. Evangelos Venizelos of Pasok and the Democratic Left’s Fotis Kouvelis, whose parliamentary seats give Samaras the majority in Parliament he needs to govern, both said they wouldn’t accept further changes to labor rules after a three- hour meeting with the prime minister in Athens yesterday. “Further interventions on labor issues don’t help productivity, competitiveness or employment,” Venizelos told state-run NET TV. “We must look elsewhere now and the insistence on this is wrong,” he said, adding some European Union members were “playing with fire.”
The hitch comes as Samaras prepares to argue for a two-year extension to meet the country’s bailout targets at his first EU summit on Oct. 18. A deal with the EU, the International Monetary Fund and the European Central Bank, the so-called troika, is needed to unlock a 31 billion-euro ($40.7 billion) aid installment. The government needs the funds to recapitalize its banks and pay debts. Samaras didn’t comment after yesterday’s meeting.

20121018 1003 Global Commodities Related News.

Pro Framer: After the Bell Wheat Recap (CME)
Wheat futures enjoyed gains most of the day and rallied into the close to finish 3 to 8 1/2 cents higher in Chicago, roughly 8 to 11 cents higher in Kansas City and mostly 8 to 15 cents higher in Minneapolis. A late surge in the soybean market helped wheat to rally into the close. The market had enjoyed gains most of the day, thanks to sharp weakness in the U.S. dollar index and ideas demand for U.S. wheat will soon improve as global wheat stocks shrink.

Wheat Market Recap Report (CME)
December Wheat finished up 8 1/2 at 856 1/4, 1 3/4 off the high and 10 3/4 up from the low. March Wheat closed up 8 1/2 at 868 3/4. This was 10 3/4 up from the low and 1 3/4 off the high.
December Chicago wheat traded sharply higher on the day along with Kansas City wheat. Minneapolis wheat led all three markets higher after surging nearly 13 cents higher after yesterday's report that stated China bought 295,000 tonnes of Canadian Spring wheat. Some traders suggest the total volume could total 500-600,000 tonnes. Additional support came from continued dry weather in Australia and on outside markets as the US Dollar tumbled lower throughout the day. The US missed out on more Middle Eastern wheat business after it was announced that Algeria purchased 400,000 tonnes of option-origin wheat that is likely to come from Argentina or France. The missed business was another sign that US wheat remains overpriced relative to other origins around the world. The negative news was offset after ABARES estimated that Australian wheat stocks at the end of September fell to 7.1 million tonnes, which was down 2 million tonnes from August. The United Kingdom reported that they had exported only 26,800 tonnes of wheat in August and total United Kingdom exports for the 2012/13 crop year fell just shy of 70,000 tonnes vs. 281,704 for the same period last year. The prospects of a tightening global wheat supply and hope that US export demand will pick up later this year could suggest a positive long term outlook to prices.
December Oats closed up 3 1/4 at 395 3/4. This was 3 3/4 up from the low and 8 1/4 off the high.

Pro Farner: After the Bell Corn Recap (CME)
Corn futures closed mostly around 3 to 7 cents higher and near session highs. Much of the support for corn futures today came from pressure on the U.S. dollar. With the greenback nearing the September lows, there's a little more interest in the long side of the corn market. For corn to actively build on today's gains, however, some bullish demand news is likely needed.

Corn Market Recap for 10/17/2012 (CME)
December Corn finished up 7 1/4 at 745 1/2, 3/4 off the high and 9 1/4 up from the low. March Corn closed up 6 1/2 at 744 3/4. This was 8 1/4 up from the low and 3/4 off the high.
December corn traded higher into the close and near the highs of the day. The sharply lower dollar and higher trade in soybeans and wheat offered a positive tilt to the market. Basis in the interior of the US was steady throughout the day but bids on the river and in the Gulf of Mexico were lower due to a sluggish export pace. Corn futures saw a bit of sell pressure after ethanol production for the week ending October 12th averaged 797,000 barrels per day vs. 800,000 the week prior. Most in the trade expected a slight increase in production from the week prior so the numbers may come off as a disappointment. Total ethanol production for the week was 5.6 million barrels. Corn used in last week's production was estimated at 83.7 million bushels vs. 84 million last week. This crop year's cumulative corn used for ethanol production for this crop year is 508.3 million bushels. Corn use needs to average 86.5 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels. December corn was able to trade above yesterday's high briefly at the close which could be considered a short term positive for the market.
November Rice finished up 0.265 at 15.135, 0.055 off the high and 0.045 up from the low.

Grains Climb as Dry Australian Weather Adds to Concerns (Bloomberg)
Wheat rose in Chicago as dry weather in Australia added to global supply concerns after the worst U.S. drought in half a century parched crops. Corn gained. Wheat reserves in Australia, the second-largest exporter, fell 14 percent from a year earlier at the marketing season’s end on Sept. 30, the government said today. It expects production of the grain to drop to 22.5 million metric tons this year from the prior period’s record. Western Australia will remain dry in the next seven days, increasing risks of winter- crop damage, Telvent DTN Inc. said today. “The dry weather in Australia is still a concern,” Victor Thianpiriya, an agricultural commodity analyst at Australia & New Zealand Banking Group Ltd. (ANZ), said by phone from Singapore. Wheat for December delivery advanced 0.5 percent to $8.5225 a bushel by 6:56 a.m. on the Chicago Board of Trade. Prices slid 4.3 percent in the previous three days. In Paris, milling wheat for November delivery rose 0.2 percent to 258 euros ($339) a ton on NYSE Liffe.
Algeria issued a tender to buy 50,000 tons of wheat, which “held European wheat prices steady” before the results, French farm adviser Offre & Demande Agricole wrote in an e-mailed comment. “French wheat is in a good position and Algeria usually buys much more than it initially sets out to buy.” Corn for delivery in December rose 0.6 percent to $7.4275 a bushel in Chicago. The grain has dropped 13 percent since concerns about the U.S. drought lifted prices to a record $8.49 a bushel on Aug. 10.

Corn States Lead Record Crop-Loss Payout: BGOV Barometer (Bloomberg)
The worst U.S. drought since the 1950s may trigger record crop insurance payouts, concentrated in corn-producing states led by Illinois, Indiana and Missouri. Industry payouts from companies including Ace Ltd. (ACE), American Financial Group Inc. (AFG) and Wells Fargo & Co. (WFC) may reach a record $25 billion this year, according to Kansas State University. The BGOV Barometer shows where insured losses may be the biggest based on declines in corn production. Corn yields, measured in bushels per acre, dropped by more than a third from the average of the previous five years in Missouri, Illinois and Indiana, and the U.S. Department of Agriculture this month projected yields nationwide may decline to a 17-year low of 122 bushels an acre.
The drought pushed the price of corn, the nation’s most valuable crop, to a record $8.49 a bushel in August, further driving up insurance payouts. Many crop insurance payments cover revenues based both on the magnitude of lost yields and the price of the crop at harvest. Corn futures for December delivery traded in Chicago closed up 1 percent at $7.455 a bushel today. Farmers can choose to protect up to 85 percent of revenue with insurance, and “the coverage in most of the central Midwest states runs a little higher than the U.S. averages,” Keith Collins, a former Agriculture Department chief economist who now works with National Crop Insurance Services, said in an e-mail. Of 96.9 million acres planted to corn, 67.2 million were covered by revenue protection, Collins said.

Oil Trades Near One-Week High on Demand Outlook Amid Supply Gain (Bloomberg)
Oil traded near the highest level in a week in New York amid signs of an economic recovery in the U.S., the world’s biggest crude consumer. Futures were little changed after rising 3 cents yesterday. Housing starts in the U.S. surged 15 percent last month to the highest in four years, exceeding all forecasts in a Bloomberg survey of economists, Commerce Department data showed. Petroleum demand climbed the most in two months last week, the Energy Department said in a report. Oil pared gains after the report also showed crude stockpiles advanced to the highest level for this time of year since government records began in 1982. “We are seeing the green shoots of recovery starting to come through in the U.S.,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “I’m quite optimistic and I think you should see demand start to pick-up.”
Crude for November delivery was at $91.96 a barrel, down 16 cents, in electronic trading on the New York Mercantile Exchange at 12:09 p.m. Sydney time. The contract yesterday closed at $92.12, the highest settlement since Oct. 9. Prices changed less than 25 cents for a fourth consecutive day, the longest streak of moves that small since 2003. Oil is down 7 percent this year. Brent oil for December settlement slid 10 cents to $113.12 a barrel on the London-based ICE Futures Europe. The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate contract was at $20.71 a barrel. It settled at $23.95 on Oct. 15, the widest gap since reaching a record on Oct. 14, 2011.

Recap Energy Market Report (CME)
November crude oil price broke out to a new four day high during the morning hours but finished the session fractionally higher. Early support in the crude oil market came from a sell off in the US dollar, improvement in risk-taking sentiment and favorable US economic data. However, the upside action in the crude oil complex seemed limited on ideas of slowing global growth, as well as apprehension ahead of Chinese Q3 GDP data this evening. November crude oil prices reversed course after this morning's EIA inventory report that showed a much larger than expected build of 2.860 million barrels. The refinery operating rate was up 0.7% to 87.4%. Meanwhile, further upside action in US equity markets lent the crude oil market a measure of support.

EIA inventory report mixed By Dominick Chirichella - Wed 17 Oct 2012 12:29:30 CT (CME)
The improvement in the latest housing data out of the US today coupled with Spain maintaining its investment grade bond rating was enough to offset the build in US crude oil inventories and minimize the decline in oil prices today. In fact it was a relatively flat day for most risk asset markets including the US equity market. In fact I believe we are starting to enter what I like to call the "election zone" when many participants will likely start to neutralize their trading books a tad as the uncertainly over who will win the US Presidential election as well as how the markets will react to a win by either side is quickly increasing. There is now just three weeks to go before election day and at the moment the Gallup national poll has Mitt Romney ahead of Barrack Obama by 6 points. That said in terms of elections three weeks is a long time to go and lots can happen between now and November 6th. As such I believe many market participants will take a cautious approach to most risk asset markets and likely keep their trading time horizon relatively short term until after the election.
Tonight key data will be coming out of China... GDP, Industrial Production, Retail Sales, House prices and Fixed Asset Investment. Each data point is very important in assessing the state of the Chinese economy and will likely impact the direction of oil and the broader risk asst markets for the next several days. The market is expecting GDP to come in at 7.4%, Industrial production at 9%, Sales at 13.2% and Asset Investments at 20.2%. If the actual data is in sync with the projections it would signal that the Chinese economy may be starting to stabilize and possibly be setting up for a turn back to the upside. China's Premier Wen Jiabao said today that the country's economic situation last quarter was relatively good. Possibly eh is signaling that the GDP data may come in even better than expected. Either way this batch of data will be a market mover for tomorrow's trading.
For the second day in a row global equity markets rose across the board as shown in the EMI Global Equity Index table below. The Index is now up by 2.1% for the week resulting in the year to date gain widening to 8.8% orthe highest level since mid September. Five of the bourses are showing double digit gains for 2012 with China still the only bourse in the Index that is still in negative territory for the year. Global equities have been a positive price driver for the oil complex as well as the broader commodity markets.
Wednesday's EIA inventory report was mixed but slightly bullish overall as total commercial stocks declined on the week. Overall I would categorize the report as mildly biased to the bullish side as total commercial stocks decreased modestly even as crude oil inventories increased as crude oil imports rose on the week. Refinery utilization rates increased on the week up to 87.4% of capacity. The data is summarized in the following table along with a comparison to last year and the five year average for the same week.
Total commercial stocks of crude oil and refined products decreased by 2.7 million barrels after decreasing by about 4.3 million barrels the week before. The year over year surplus came in at 32.1 million barrels while the surplus versus the five year average for the same week narrowed to 34.3 million barrels.
Crude oil inventories increased (by 2.9 million barrels) and above the market expectations. Crude oil inventories have been increasing steadily for most of this year and are still well above the levels they were at during the height of the recession as well as being at the highest level since 1990. With the increase in stocks this week the crude oil inventory status versus last year is still showing a surplus of around 36.3 million barrels while the surplus versus the five year average for the same week came in around 37 million barrels. Crude oil imports increased modestly on the week.
PADD 2 crude oil inventories increased by about 1.2 million barrels while Cushing, Ok crude oil inventories increased by about 0.1 million barrels on the week. Crude oil inventories in the mid-west region of the US are off of their record high levels as the Seaway pipeline is now pumping oil out of the region as well as refineries running at over 90% of capacity (temporarily lower from Isaac). The increase in crude oil inventories in both PADD 2 and only small decline in Cushing is bullish for the Brent/WTI spread. The Nov spread is trading around the $20.60/bbl level.
Distillate stocks surprisingly decreased (versus and expectation for a smaller decline) even as refinery run rates increased by 0.7%. Heating oil/diesel stocks decreased by 2.2 million barrels after declining by 3.2 million barrels in the previous week. The year over year deficit came in around 31.1 million barrels while the five year average remained in a deficit of about 31.6 million barrels.
Gasoline inventories increased versus an expectations for a small build. Total gasoline stocks increased by about 1.7 million barrels on the week versus an expectation for a smaller build. The deficit versus last year came in at 9.1 million barrels while the deficit versus the five year average for the same week was about 7.5 million barrels.
The following table details the week to week changes for each of the major oil commodities at every level of the supply chain. As shown I have presented a mixed categorization on the week as crude oil and gasoline were bearish while distillate and jet were bullish. Overall this week's report was biased to the bullish side as total stocks are once again back to declining.
The oil complex has breached all of its current support levels and as such I am keeping my view at neutral for today as crude oil continues to trade within a wide trading range (see above for more comments). The battle continues between the negativity from the slowing of the global economy compared to what global stimulus programs might do to the economy going forward while geopolitics has continued to remain an issue for market participants.
I am keeping my Nat Gas price view at neutral with bias to the bullish side as the fundamentals and technicals are quickly catching up the current price levels. As I mentioned above the market appears to be moving into a buy the dip mode
This week the EIA will release the weekly Nat Gas inventory report on its normal schedule... Thursday October 18 at 10:30 AM. This week I am projecting a 55 BCF net injection into inventory. My projection for this week is shown in the following table and is based on a week that experienced minimal Nat Gas cooling related demand but a fair amount of heating related demand from the cold front that has passed across the upper mid west and along parts of the east coast My projection compares to last year's net injection of 106 BCF and the normal five year net injection for the same week of 71 BCF. Bottom line the inventory surplus will narrow modestly this week versus last year and versus the five year average if the actual numbers are in sync with my projections. This week's injection will be at 52% of last year and 77% of the five year average for the same week if the actual outcome is in sync with my forecast. For interest the average for the injection season to date has been around 71.5% of last year.
If the actual EIA data is in line with my projections the year over year surplus will narrow to around 219 BCF. The surplus versus the five year average for the same week will widen to around 252 BCF. This will be another bullish weekly fundamental snapshot if the actual data is in line with my projection. The early industry projections are coming in a wide range of the 30 BCF to the 70 BCF with the consensus starting to form around 50 BCF.

Vale 3Q Iron-Ore Output Falls Less Than Forecast to 83.9m (Bloomberg)
Vale SA (VALE3)’s third-quarter iron-ore production fell 4.6 percent, beating analysts’ estimates, as the world’s biggest producer of the steel-making ingredient faces weaker demand in China and Europe, its two main markets. Output declined to 83.9 million metric tons from a record 87.9 million tons a year ago, the Rio de Janeiro-based company said in a regulatory filing today. That exceeded the 82.8- million ton average of seven analysts’ estimates compiled by Bloomberg News. BHP Billiton Ltd. (BHP)’s quarterly iron-ore output was little changed, while Rio Tinto Group’s gained 6 percent. Vale this year suspended projects, announced asset sales for about $1.2 billion and cut output of premium pellet products as demand slows in China, the biggest buyer of iron ore, and growth slows in Europe, its second-biggest market. Brazilian iron-ore exports slumped 8.2 percent in the three months through Sept. 30, its biggest quarterly decline compared to the prior year in more than three years.
Vale, the world’s third-largest mining company by market value after Melbourne-based BHP and Rio Tinto (RIO), gained 1.4 percent to 36.33 reais at the close in Sao Paulo today. The stock has dropped 3.9 percent this year, underperforming the Brazilian benchmark Bovespa index, which rose 5.9 percent in the period. Rio Tinto overtook Vale to become the world’s second- most valuable mining company for the first time since 2008, according to today’s closing prices of New York-listed shares.

Silver Market Recap Report(CME)
Silver prices were able to shake off early pressure but continued to lag behind other metal markets by only posting moderate gains during today's trading, as prices remain in close proximity to Monday's 5-week lows. Some traders felt that the sense of improving global risk sentiment clearly helped December silver extend this week's recovery. Other traders noted that relatively low US inflation levels may be to blame for silver's losses of more than $1.25 during the month of October.

Gold Market Recap Report(CME)
The gold market was able to recover from early pressure and ended up posting moderate gains by the close of Wednesday's trading. Many in the market feel that macro-economic sentiment continues to improve, which has led to rising investment demand for gold during the early part of this week. A rebound in global risk sentiment was strengthened by better than expected US Housing data earlier in the day, as well as from rising optimism that Spain is close to making a formal request for aid. A sharp selloff in the Dollar down to a new 1-month low was also seen by many traders as a key positive factor for gold prices during today's session.

Gold Set to Decline for First Day in Three Before Chinese Data (Bloomberg)
Gold was poised to drop for the first time in three days before a report forecast to show growth in China slowed for a seventh quarter, curbing demand for commodities. Silver fell. Spot gold was little changed at $1,748.55 an ounce at 9:13 a.m. in Singapore, after advancing 0.7 percent in the past two days. The metal for December delivery slid 0.2 percent to $1,749.70 an ounce on the Comex in New York. China’s gross domestic product probably expanded 7.4 percent in the July-September period from a year earlier, economists in a Bloomberg News survey estimated. The country’s economic growth has started to stabilize, the official Xinhua News Agency reported yesterday, citing Premier Wen Jiabao. “Slowing demand concerns will continue to be of focus, with attention particularly on China’s GDP,” Australia & New Zealand Banking Group Ltd. analysts led by Mark Pervan wrote in a report today. “Prices expected to experience more volatility and possibly decline towards $1,735 if data disappoints.”
Holdings in exchange-traded products rose for the first day in four yesterday to 2,579.062 metric tons after expanding to a record 2,582.98 tons on Oct. 11, data compiled by Bloomberg show. Spot gold of 99.99 percent purity was little changed at 352.51 yuan a gram ($1,752.83) on the Shanghai Gold Exchange. Volumes slipped to 3,759 kilograms yesterday from 4,686 kilograms on Oct. 16. Cash silver fell for the first day in three, dropping as much as 0.4 percent to $33.0875 an ounce, before trading at $33.10. Spot platinum gained 0.2 percent to $1,668 an ounce, climbing for a third day, and palladium was little changed at $652.50 an ounce.

Gold Futures Rise on Investment Demand as Dollar Drops (Bloomberg)
Gold futures rose for the second straight day as the dollar’s decline spurred demand for the metal as an alternative investment. The greenback fell to a four-week low against a basket of major currencies after Spain kept its investment grade credit rating from Moody’s Investors Service, easing European fiscal concerns. Yesterday, gold climbed 0.5 percent as the dollar fell 0.4 percent. “The weaker dollar is lending support to gold,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. Gold futures for December delivery climbed 0.4 percent to settle at $1,753 an ounce at 1:52 p.m. on the Comex in New York. The price has increased 12 percent this year. Silver futures for December delivery rose 0.8 percent to $33.232 an ounce, extending this year’s gain to 19 percent.
On the New York Mercantile Exchange, platinum futures for January delivery advanced 1.5 percent to $1,670.50 an ounce. Palladium futures for December delivery surged 2.3 percent to $653.40 an ounce, the biggest jump for a most-active contract since Oct. 4.

20121018 1002 Soy Oil & Palm Oil Related News.

Palm Oil Increases on Speculation India Buying Before Festivals (Bloomberg)
Palm oil gained on speculation that India, the largest consumer, is buying before the festival season this month and November. The contract for January delivery, which has the largest open interest and volume, rose 0.2 percent to close at 2,471 ringgit ($815) a metric ton on the Malaysia Derivatives Exchange. The most-active contract has lost 22 percent this year, touching a three-year low this month, as demand slowed and reserves rose. The world’s second-most populous country celebrates several religious festivals in October and Diwali in November. Dorab Mistry, a director of Godrej International Ltd., told a conference in Kuala Lumpur yesterday that futures may drop to 2,200 ringgit, the lowest level since November 2009, in the next six weeks as crude oil drops amid a global slowdown.
“There should be some restocking from India ahead of the festival season,” said James Ratnam, an analyst at TA Securities Holdings Bhd. “However, taking into account yesterday’s bearish views at the conference, I don’t think there will be any sustained interest on the upside for today.” Reserves increased to a record 2.48 million tons last month, data from the Malaysian Palm Oil Board show. Mistry forecast a further increase to 3 million tons or more on Jan. 1. India’s crude palm oil imports climbed 32 percent to 722,754 tons in September, while refined purchases fell 22 percent to 111,163 tons, the Solvent Extractors’ Association of India said Oct. 15. Soybean oil for December delivery advanced 0.4 percent to 50.69 cents a pound on the Chicago Board of Trade. Soybeans for November delivery were little changed at $14.955 a bushel.
Palm oil for January delivery lost 0.6 percent to close at 6,884 yuan ($1,101) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in May dropped 0.3 percent to end at 9,188 yuan a ton.

Pro Farmer: After the Bell Soybean Recap (CME)
Soybean futures strengthened into the close to finish 15 1/2 cents higher in the November through March contracts. Deferred months posted slightly lighter gains. Meal and soyoil saw spillover strength. Price action in the bean pit was rather lackluster much of the day, but late-session buying -- tied to weakness in the U.S. dollar index and recognition of the tight supply situation -- kicked in to produce a strong close.

Soybean Complex Market Recap (CME)
November Soybeans finished up 15 1/2 at 1509 1/4, 2 off the high and 22 up from the low. January Soybeans closed up 15 1/2 at 1508 1/4. This was 22 up from the low and 1 3/4 off the high.
December Soymeal closed up 1.9 at 454.7. This was 4.5 up from the low and 1.2 off the high.
December Soybean Oil finished up 0.56 at 51.03, 0.06 off the high and 0.74 up from the low.
The soybean market traded modestly higher through midday but bids began to pick up in the last hour and November soybeans ended the day with double digit gains. Outside markets were steady to slightly positive for the commodity complex with stocks mixed on the day but the US Dollar was sharply lower. Soybean cash bids were mostly flat across the Midwest with harvest wrapping up in the west but substantial activity remains in the east. Some traders suggest that new farmer sales are slowing as some wait and hope for a $17.00 cash price. Additional support in futures came from consistent demand from China and in anticipation of a positive export sales report tomorrow. A fair amount of pressure was seen early on as traders took profits and on news that South American weather looks favorable this week and next with scattered showers expected to cover areas of Brazil in the next 5 days. Argentina will dry down this week before rainfall returns next week which should also be beneficial to row crop conditions.

EDIBLE OIL: Malaysian palm oil futures slipped after analysts expected the market to fall further on high stocks although traders were betting on the edible oil's big discount to competing soyoil to spur demand. (Reuters)

Wed Oct 17, 2012 6:31am EDT
* Palm oil stuck in rangebound trade
    * Widening discount to soyoil could shift demand to palm
    * Palm oil neutral in 2,361-2,528 ringgit range -technicals

 (Recasts, updates prices)
    By Anuradha Raghu
    KUALA LUMPUR, Oct 17 (Reuters) - Malaysian palm oil futures
ended higher in rangebound trade on Wednesday, as rising exports
offset analyst expectations that the market will fall further on
high stocks.
    Palm oil futures have lost 22 percent so far this year,
prompting top analyst Dorab Mistry to forecast at a conference
on Tuesday that prices could fall to 2,200 ringgit in the next
four to six weeks on a record build-up in Malaysian stocks.

    But exports in the first half of October have climbed as
much as 16.3 percent from a month ago, signalling strong buying
interest from the likes of the European Union and Pakistan, data
from a cargo surveyor showed.
    "The market is digesting all the news and views spoken
yesterday, it will remain rangebound until more is known about
demand," said a trader with a local commodities brokerage in
    The benchmark January contract on the Bursa
Malaysia Derivatives Exchange edged up 0.2 percent to close at
2,471 ringgit ($814) per tonne, after trading in a tight range
of 2,456-2,489 ringgit.
    Total traded volumes stood at 44,600 lots of 25 tonnes each,
higher than the usual 25,000 lots.
    Technical analysis showed that palm oil remained neutral,
trapped in a range of 2,361-2,528 ringgit per tonne, said
Reuters analyst Wang Tao.
    Another trader with a foreign commodities brokerage in
Malaysia said the upcoming U.S. presidential elections have made
global investors more cautious.
    On Tuesday, U.S. President Barack Obama and Republican rival
Mitt Romney clashed repeatedly on jobs and energy.
    While market reaction in Asia has been muted, U.S. investors
are likely to focus on the outcome as it gives an idea on the
kind of economic and financial policies that may come into play
after the polls.
    "The U.S markets are quiet because of the presidential
election next month, so people are watching carefully. That's
why the (palm oil) market can't move," the Malaysian trader
    Palm oil mostly takes its cues from U.S. soyoil and Brent
crude, as it competes with the edible oil for food demand and
the crude oil grade for use in the energy sector.
    Brent crude oil fell on Wednesday as lingering worry about
the global economy overshadowed relief that Spain avoided a
ratings downgrade and optimism prompted by firm U.S. corporate
    U.S. soyoil for December delivery inched up 0.4
percent in late Asian trade after earlier losses on expectations
of higher soybean supplies in the Americas.
   The most active January 2013 soybean oil contract on
the Dalian Commodity Exchange closed 0.1 percent higher.