Thursday, October 25, 2012

20121025 1115 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares steady, earnings still in focus
TOKYO, Oct 25 (Reuters) - Asian shares steadied, but sentiment remained vulnerable with weak corporate earnings continuing to undermine investor confidence.
"Global sentiment is not conducive to risk-taking. In fact we are seeing more defensive plays," said Lee Kyung-soo, an analyst at Shinyoung Securities, adding that the Korean stock market will likely hold steady ahead of third quarter results from Hyundai Motor Co.

Oil falls on US crude stocks rise, Europe's weak data
NEW YORK, Oct 24 (Reuters) - Brent crude prices fell for a seventh consecutive session on Wednesday as rising U.S. crude inventories and weak euro zone economic data offset supportive signs that Chinese petroleum demand could stage a recovery.
"The report is mostly bearish, with the large increase in crude oil inventories being the highlight of the report," said John Kilduff, partner at Again Capital LLC in New York.

NATURAL GAS - US natgas futures end down on mild extended forecasts
NEW YORK, Oct 24 (Reuters) - U.S. natural gas futures ended lower on Wednesday for the second time this week, undermined by prospects for a sizable inventory build on Thursday and by milder early-November weather despite the cold shot expected next week that should stir more demand.
"We're still seeing plenty of supply, and demand has peeled back a bit with the milder weather. Unless we get some cold weather, we could see prices move even lower," said Jason Schenker, president of Prestige Economics in Texas.

Euro Coal-S.Africa coal prices hit fresh lows, $77/T trades
LONDON, Oct 24 (Reuters) - South African prompt physical coal prices fell by $2.60 a tonne to the lowest since late December 2009 on Wednesday, extending a month-long decline, with a trade at $77.00 for a November cargo, traders said.
"There is still a lot of Q4 South African in traders' hands and it just doesn't price in competitively in most markets," one trader said.

20121025 1114 Local & Global Economy Related News.

The leading index (LI), which monitors the economic performance in advance, rose 2% yoy in Aug (2.3% yoy in Jul). The  coincident index (CI), which  measures the current economic activity, up 1.6% yoy from 0.2% yoy in Jul while  the lagging index increased 3.5% yoy in Aug (2.3% yoy in Jul). Conversely, the level of Diffusion Index for both LI and CI showed below 50% for the first time in 2012. (Department of Statistics)

Vietnam: Inflation accelerates in October for a second month
Vietnam’s inflation accelerated for a second month, reducing the scope to ease monetary policy and spur an economy set to grow at the slowest pace in 13 years. Consumer prices rose 7% in October from a year earlier after climbing 6.48% in September, the General Statistics Office said in Hanoi yesterday. The median of four estimates in a Bloomberg News survey was 6.75%. Prices gained 0.85% from the previous month. The nation will maintain a tight, flexible monetary and fiscal policy in 2013 and lower interest rates in line with inflation, Prime Minister Nguyen Tan Dung told legislators at the National Assembly in Hanoi this week.

China: Industry gauge rises as easing prospects abate
A Chinese manufacturing index rose and economists have pared forecasts for cuts in interest rates and bank reserve requirements as confidence grows that the world’s second-biggest economy is stabilising. The preliminary, or flash, reading was 49.1 for a purchasing managers’ index released yesterday by HSBC Holdings Plc and Markit Economics, after a final level of 47.9 for September. China will probably keep the benchmark one-year lending rate at 6% through the end of 2012, based on median estimates in a survey conducted 18-22 Oct, instead of prior forecasts for a quarter percentage-point reduction.

Euro: Recession deepens as manufacturing shrinks
Euro-area services and manufacturing output contracted more than economists forecast in October and German business confidence dropped to the lowest in more than 2 1/2 years as Europe’s recession deepened. A composite index based on a survey of euro-area purchasing managers in services and manufacturing fell to 45.8, the lowest in more than three years, from 46.1 in September, London-based Markit Economics said yesterday. Economists had forecast a reading of 46.5, according to a Bloomberg News survey. A separate factory index in China rose. In Germany, the Ifo institute’s business climate index unexpectedly dropped to 100.0 from 101.4 in September.

UK: BOE ready to add to QE if recovery fades
Bank of England Governor Mervyn King said the Monetary Policy Committee is ready to add to stimulus again as it assesses the strength of the domestic recovery amid signs that global economic weakness is spreading. “At this stage, it is difficult to know whether some of the recent more positive signs will persist,” King said in a speech late yesterday in Cardiff, Wales. “Should those signs fade; the MPC does stand ready to inject more money into the economy.” King said gross domestic product data tomorrow may confirm a “zig-zag” pattern of recovery in the UK that is likely to continue. His comments come two weeks before officials must decide whether to increase bond purchases and at a time when the economies that have driven global growth through the crisis have shown signs of faltering.

US: Home sales rising to two-year high spur US growth
Americans bought new homes in September at the fastest pace in two years, another sign the industry whose decline was at the heart of the recession is bouncing back. Sales climbed 5.7% to a 389,000 annual pace, the most since April 2010, following a revised 368,000 rate in August, figures from the Commerce Department showed yesterday in Washington. The median estimate of 75 economists surveyed by Bloomberg called for an increase to 385,000. Population growth and mortgage rates pushed to record lows by Federal Reserve purchases of housing debt are generating sales for builders like Toll Brothers Inc. and spurring the three-year economic recovery. Housing starts in September jumped 15% to the fastest pace since July 2008, a report last week showed.

20121025 1114 Malaysia Corporate Related News.

TH Plantations is set to buy 6,500ha of oil palm estate and a quarry in Sarawak for more than RM200m. "It's a brownfield block in Bintulu, away from native customary land. The oil palms are young, between two and five years old," a source said. "It's  going for RM20,500 per hectare. It is at a slight premium because this Bintulu estate includes a quarry mine, separately priced at around RM70m. It has income-generating rock reserves of up to 30 years," the source added. (BT)

Petroliam Nasional (Petronas) and Progress Energy Resources Corp have agreed to meet Canadian officials in Ottawa this week on its RM16bn proposed acquisition of Progress. Petronas said its subsidiary Petronas Carigali Canada Ltd, together with Progress, will be meeting officials from Canada's Ministry of Industry to better understand the Canadian government's requirements with respect to the proposed acquisition. Based on the announcement by the Canadian Ministry of Industry last Friday, Petronas said it has up to 30 days, or longer as mutually agreed to, to make any additional representations and submit any further undertakings. In this regard, Petronas said it will work together with Progress to ensure that the Canadian Industry Minister Christian Paradis has the necessary information to determine that the proposed acquisition of Progress would be of net benefit to Canada. (BT)

Sunway REIT aims to achieve RM7bn in total assets under management in three to five years through a combination of acquisitions from its sponsor, Sunway Bhd, and external acquisitions. According to CEO Datuk Jeffrey Ng, Sunway REIT does not intend to expand overseas. (Bernama)

The government will not cut the  excise duty for cars, dashing hopes of driving cheaper cars. International Trade and Industries Minister Datuk Seri Mustapa Mohamed said that the excise duty on imported and locally manufactured cars cannot be reduced because it would have an adverse impact on the industry as a whole. A reduction will have a significant impact on government's revenue from excise duty now estimated at RM7bn a year. (Bernama)

Prominent corporate lawyer Datuk E Sreesanthan, who is facing charges of insider trading, has offered himself to be re-elected as a director of Sime Darby Bhd in its coming AGM. Sreesanthan had taken a leave of absence from Sime Darby on July 25, five days after he was charged by Securities Commission with seven counts of insider trading. Sime Darby previously said Sreesanthan had indicated his intention to retire by rotation when his term comes up for renewal in the company AGM. However, executive close to Sreesanthan said he has prepared for all the challenges for his case during his leave of absence. As a result, he now has time to go back to resuming his duties as a board member and is offering himself to be re-elected to the Sime Board. (Financial Daily)

Naim Holdings Bhd says its subsidiary Naim Engineering Sdn Bhd has confirmed the acceptance of a letter of award from  Gadang Engineering (M) Sdn Bhd to be a subcontractor for the Mass Rapid Transit (MRT) project in the Klang Valley. The Package S2 contract involves the execution and completion of elevated stations and other works at Taman Industri Sungai Buloh, PJU 5 and Dataran Sunway for RM204.6m. (BT)

Taiwan's Phison Electronics Corp is looking to list its operations on Bursa Malaysia by 2016. Its Malaysian-born CEO and co-founder Datuk Pua Khein-Seng said that the plan to float Phisontech Electronics’ was not for capital gains, but more to showcase the ability of home-grown information technology companies to thrive globally. Phison Electronic, listed on the Taiwan Stock Exchange and established in 2000, manufactures and markets universal serial bus (USB) flash pen drives, card readers. adapters, flash memory controllers and integrated circuits. (BT)

The Federal Land Development Authority (FELDA) buys palm oil from its settlers at market prices and not at a discount, said its chairman Tan Sri Mohd Isa Abdul Samad. His comment aimed to dismiss allegations made by an opposition leader that Felda Palm Industries Sdn Bhd was buying fresh fruit bunch at a discount of RM200 per tonne from the traded monthly crude palm oil prices. (Financial Daily)

Four telcos shortlisted for DTTB infrastructure
Four out of eight companies which submitted their bids for the digital terrestrial television broadcasting (DTTB) infrastructure buildup is believed to have been shortlisted. The four, said to be Celcom Axiata, Puncak Semangat SB, REDtone International and Sapura Holdings, will now enter the second stage of bidding. DTTB is for the free-to-air channels to migrate from an analogue to digital format. Telekom Malaysia and YTL Communications did not submit a bid. (StarBiz)

No excise duty cut on cars
The government will not cut the excise duty for cars. International Trade and Industries Minister Datuk Seri Mustapa Mohamed said that the excise duty on imported and locally manufactured cars cannot be reduced because it would have an adverse impact on the industry as a whole. Government’s revenue from excise duty is estimated at RM7bn a year. Mustapa said that “the government is aware that the domestic automotive industry has to be developed further to become more competitive and offer more benefits to the people, particularly in selling cars at a reasonable price.” (Financial Daily)

Daya wins tender to construct mall in Putrajaya
Daya Materials is the winner for the construction portion of IOI Properties’ upcoming IOI City Mall in Putrajaya, valued at RM500m. The mall sits on 36 acres and will be complemented by two office blocks and a hotel. While the mall is scheduled to be completed in 2014, the office blocks will be completed a year later. The mall has a GDV of RM1bn and will target the 1.1m residents living within 10-minutes drive from the Putrajaya area. (StarBiz)

Bumi Armada wins contracts worth RM147m
Bumi Armada has secured five contracts totaling RM147m, with an optional extension value of RM102m. The contracts are for works in Gabon, Congo and Saudi Arabia. The RM12m contract in Gabon is for the charter of an accommodation boat while the RM92m contracts in Congo are for the charter of a towing vessel and an accommodation barge. The Saudi Arabia’s RM43m contract is for the charter of towing vessels. (Malaysian Reserve)

RM1.04bn for forest plantation scheme
The government has allocated RM1.04bn for a forest plantation scheme to ensure sustainable wood supplies in the country. Malaysian Timber Industry Board (MTIB) director-general Dr Jalaluddin Harun said the allocation would be used to turn 375,000 ha nationwide into forest plantations from 2006 until 2021. A total of 106,000 ha had been approved for the planting purposes, of which 56,000 ha had been planted. 40 companies have taken part in the scheme, with RM650m soft loan of the RM1.04bn allocation disbursed to them. (StarBiz)

Request for RA extension for rubber-based producers likely to be rejected
MITI believes the request to extend reinvestment allowance (RA) by rubber-based producers whose exports rose 14.8% to RM13.4bn for the first eight months of this year will most probably be rejected again by the government. MITI says the government views the current 15-year period granted for companies to enjoy tax break for reinvestments to be sufficient. (Malaysian Reserve)

Pacificmas Bhd has announced that it will be delisted from the Main Board with effect from Oct 30.On  Sept 11, the financial services provider announced that its board of directors had resolved to table the proposed members' voluntary winding-up of the company at an EGM. (BT)

20121025 1047 Global Market Related News.

Asia FX By Cornelius Luca - Wed 24 Oct 2012 15:31:16 CT (Source:CME/
The appetite for risk improved cautiously and selectively on Wednesday after imploding for two the past three days amid lackluster corporate earnings. The foreign currencies ended divergently after falling since Thursday, as the boost from a better Chinese PMI was countered by weak Eurozone data. The US stock markets ended lower after the S&P500 seems to have confirmed a triple top formation on Tuesday. The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is still 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: Markit manufacturing PMI edged up to 51.3 in October from 51.1 in September
US: New home sales rose to 389,000 in September from 368,000 in August.
US: The Fed left interest rates unchanged and re-affirmed its commitment to support the US economy is needed.

Today's economic calendar
Japan: Corporate service price  for September
China: Leading Economic Index for September

Asian Stocks Rise After U.S. Home Sales Data; KDDI Jumps (Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its first advance in five days, as sales of new homes in the U.S. climbed to a two-year high, helping to support what the Federal Reserve described as modest growth in the world’s biggest economy. SK Hynix Inc. (000660), the world’s second-largest maker of computer memory chips, climbed 1.9 percent in Seoul. KDDI Corp. jumped 4.8 percent after Japan’s No. 2 mobile-phone company and Sumitomo Corp. offered as much as 216 billion yen ($2.7 billion) for the remaining shares of their cable television joint venture. Sharp Corp. sank 4.8 percent in Tokyo after the Nikkei newspaper reported the maker of Aquos televisions may post a 400 billion yen first-half loss.
The MSCI Asia Pacific Index (MXAP) gained 0.3 percent to 122.43 as of 10:22 a.m. in Tokyo, erasing losses of 0.1 percent. About two shares rose for each that fell. The gauge rose 12 percent from this year’s low on June 4 through yesterday as stimulus measures in the U.S., Japan and China boosted sentiment amid a global economic slowdown and Europe’s debt crisis. “The economy is recovering in the U.S., allowing investors to have a certain amount of confidence,” said Mitsushige Akino, who helps oversees about $626 million in assets at Ichiyoshi Investment Management Co. in Tokyo. “To a certain extent, weaker corporate earnings have already been priced in, so earnings shouldn’t drive down the overall market any further, but individual shares will react.”
The Nikkei 225 Stock Average added 0.5 percent, while Australia’s S&P/ASX 200 Index rose 0.1 percent. Taiwan’s Taiex Index gained 0.3 percent and South Korea’s Kospi Index advanced 0.1 percent. Markets in China and Hong Kong have yet to open.

Japan Stocks Swing From Gains, Losses on Fed Comments (Bloomberg)
Japanese stocks swung between gains and losses after the U.S. Federal Reserve said the economy is growing modestly, and the nation’s new home sales climbed to a two-year high. Funai Electric Co., a maker of audio-visual equipment that relies on North America for half its revenue, gained 2.2 percent. Mitsubishi Motors Corp. rose 2.9 percent after the carmaker raised its profit forecast. Nippon Electric Glass Co. led declines on the Nikkei 225 Stock Average (NKY) after first-half net income tumbled and industry bellwether Corning Inc. said it may cut jobs to improve earnings. The Nikkei 225 Stock Average rose 0.3 percent to 8,976.39 as of 9:47 a.m. in Tokyo after falling as much as 0.1 percent. The broader Topix (TPX) Index added 0.3 percent to 745.38.
“The economy is recovering in the U.S., allowing investors to have a certain amount of confidence,” said Mitsushige Akino, who helps oversee about $626 million in assets at Ichiyoshi Investment Management Co. in Tokyo. “Weaker corporate earnings have already been priced in, so earnings shouldn’t drive the overall market down any further but individual shares will react.” The Topix has risen 3.4 percent through yesterday from Sept. 6 after the European Central Bank started a global wave of easing to boost growth, with the Fed and the Bank of Japan following suit. Shares on the stock gauge traded at 0.9 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Europe Stoxx 600 Index.

U.S. Stocks Fall to Seven-Week Low as Fed Offsets Economy (Bloomberg)
U.S. stocks declined, sending the Standard & Poor’s 500 Index to a seven-week low, as the Federal Reserve’s call for moderate growth offset signs of improvement in Chinese factory output and America’s housing market. Netflix Inc. (NFLX) plunged 12 percent after the world’s largest online video service cut its forecast for domestic growth. Altera Corp. (ALTR) slumped 8.4 percent as the maker of programmable chips used in phone systems predicted sales that fell short of estimates. D.R. Horton Inc. (DHI) and Toll Brothers Inc. (TOL) added at least 1.5 percent to pace gains in homebuilders. Facebook Inc. (FB), the world’s biggest social networking site, surged 19 percent after reporting sales that topped analysts’ projections.
The S&P 500 declined 0.3 percent to 1,408.75 at 4 p.m. New York time, dropping 1.8 percent in two days. The Dow Jones Industrial Average lost 25.19 points, or 0.2 percent, to 13,077.34. Volume for exchange-listed stocks in the U.S. was 6.1 billion shares, or about in line with the three-month average. “It’s been a pretty lackluster market,” Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, said in a telephone interview. “There’s nothing new or encouraging in terms of the Fed’s outlook regarding the economy. In addition to that, top line growth of companies has been disappointing.”
Equities erased gains as the Fed said the economy is still growing modestly and unemployment remains elevated as it maintains $40 billion in monthly purchases of mortgage-backed securities aimed at spurring the three-year expansion. An earlier advance was driven by a survey signaling a smaller contraction in China’s manufacturing. Purchases of new homes in the U.S. rose to the highest level in more than two years.

Recap Stock Index Market Report (CME)
The December S&P 500 trended higher during the early morning hours, supported by favorable economic data and better than expected earnings from Boeing. The morning bounce began with positive data flow out of China, with a read on manufacturing showing a larger than anticipated jump. This morning's round of US corporate earnings seemed to offer added support, with standout leadership coming from Boeing, Facebook and Dow Chemical. Meanwhile, US equity markets failed to gain much upside after a stronger than expected New Home Sales report and a muted reaction following the FOMC meeting decision. The major US indices registered their low of the session ahead of the closing bell.

European Stocks Climb on SAP Revenue Forecast (Bloomberg)
European stocks advanced, after yesterday tumbling the most in four weeks, as technology companies rallied, outweighing worsening economic data from the euro area. SAP AG (SAP) gained 4.2 percent after the world’s biggest maker of business-management software raised its full-year revenue target as license sales beat estimates. STMicroelectronics NV (STM) climbed 4.2 percent on plans to cut costs. Volvo AB and Nordea Bank AB (NDA) retreated more than 1.5 percent after the companies reported third-quarter earnings that missed projections. The Stoxx Europe 600 Index (SXXP) rose 0.4 percent to 269.52 at the close in London, after earlier falling as much as 0.4 percent. The equity benchmark dropped 1.7 percent yesterday as company earnings disappointed investors. The gauge has rallied 15 percent from this year’s low on June 4 as the European Central Bank approved an unlimited bond-buying plan for the most-indebted members of the currency zone.
“People were expecting a pretty undynamic earnings season given the macro drop, so there are few surprises on that front,” Philip Saunders, a portfolio manager at Investec Asset Management, said on Bloomberg Television in London. “Clearly some leading stocks have disappointed, but beneath the surface, there is is some good news as well.” Stocks slid earlier as separate reports showed euro-area services and manufacturing output have contracted more than economists had forecast, while German business confidence unexpectedly declined.

Treasuries Stay Lower Before Durable Goods Orders (Bloomberg)
Treasuries stayed lower following a loss yesterday before a report economists said will show durable goods orders rose and a $29 billion seven-year auction. U.S. government securities due in 10 years and longer have handed investors a 5 percent loss in the past three months, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Only South African and Greek bonds have done worse, based on changes in debt levels and currency rates, the indexes show. Benchmark 10-year notes yielded 1.79 percent as of 9:32 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent note due in August 2022 was 98 17/32. The record low was 1.38 percent on July 25. “I just don’t think there’s any value in Treasuries,” said Roger Bridges, who oversees the equivalent of $15.5 billion of debt as head of fixed income at Tyndall Investment Management Ltd. in Sydney. “Growth isn’t as bad as people were expecting.”
Orders for U.S. durable goods probably rose 7.5 percent in September following a 13.2 percent slump in August that was the biggest since January 2009, according to the forecast of 77 economists surveyed by Bloomberg. The Commerce Department report is scheduled for 8:30 a.m. New York time. Ten-year yields will be 1.77 percent at year-end and 2.06 percent by June 30, according to a Bloomberg survey of economists, with the most recent projections given the heaviest weightings. Treasuries fell yesterday as the Federal Reserve said it would maintain stimulus measures with the economy growing at a “moderate” pace. The central bank, in its last meeting before the Nov. 6 presidential election, retained its program of $40 billion in monthly purchases of mortgage-backed debt aimed at spurring the three-year expansion and said “inflation recently picked up somewhat.”
Today’s auction is the last of three note sales this week. The U.S. sold $35 billion of five-year debt yesterday and the same amount of two-year securities on Oct. 23.

Euro Stays Lower Before German, French Confidence Data (Bloomberg)
The euro remained lower against its major counterparts amid signs the region’s debt crisis is hampering growth in its biggest economies. The 17-nation euro traded below $1.30 for a third day before data forecast to show German consumer confidence will fail to improve in November and French household sentiment fell for a fourth month. New Zealand’s dollar held onto a gain following the Reserve Bank’s decision to keep interest rates unchanged. Demand for the dollar was limited after the Federal Reserve said it plans to continue bond buying in a third round of quantitative easing, which tends to debase the U.S. currency. “The recession that you’ve got in the peripheries is certainly now spilling over into the core,” Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s biggest lender, said of Europe’s economies. “France is in a recession, Germany, if not in a recession, then is very close to it, so that’s certainly not a good sign, and the euro dipped a bit.”
The euro dropped 0.1 percent to $1.2968 at 9:21 a.m. in Tokyo after declining 0.7 percent over the previous two days. It touched $1.2921 yesterday, the weakest level since Oct. 15. The shared currency was little changed at 103.53 yen. The dollar bought 79.84 yen from 79.81. GfK SE (GFK), a market-research company in Nuremberg, Germany, will probably say tomorrow that its consumer-sentiment index will remain at 5.9 for a fourth-straight month in November, according to the median estimate of economists in a Bloomberg News survey. A report from the Ifo institute yesterday showed German business confidence unexpectedly fell to the lowest in more than 2 1/2 years.

N.Z. Dollar Touches One-Month Versus Yen After RBNZ (Bloomberg)
New Zealand’s dollar rose to a near six-month high versus the yen after the central bank left interest rates unchanged and said market sentiment has improved. The so-called kiwi climbed for a second day against the U.S. dollar after newly installed Reserve Bank of New Zealand Governor Graeme Wheeler said inflation is expected to accelerate. Australia’s dollar rose for a second day versus the yen as swaps traders cut bets that the South Pacific nation’s central bank will reduce borrowing costs next month. “Wheeler disappointed those in the market who had been expecting an easing signal,” said Imre Speizer, a market strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s No. 2 lender. “The market was fully priced for a January rate cut, and that pricing will be at least partially unwound.”
The New Zealand dollar climbed 0.4 percent to 65.74 yen as of 12:10 p.m. in Sydney, the most since April 30. It added 0.2 percent to 82.24 U.S. cents. Australia’s dollar rose to 82.81 yen, the highest since Sept. 19, up 0.2 percent from yesterday’s close. The Aussie climbed 0.1 percent to $1.0362. The MSCI Asia Pacific Index (MXAP) of shares advanced 0.3 percent, snapping a four-day decline and boosting the allure of higher- yielding currencies. The RBNZ expects annual inflation to head back to the middle of its 1 percent to 3 percent target range from 0.8 percent in the third quarter, Wheeler said in a statement. Improved market sentiment suggests that risks to the global outlook are “more balanced,” he said. Australia’s statistics bureau said yesterday the so-called core inflation rate rose 2.4 percent in the three months ended Sept. 30, surpassing the 2.2 percent increase estimated by economists.
Overnight-index swaps data compiled by Bloomberg show traders see a 63 percent chance Australia’s central bank will lower its key rate to 3 percent at its Nov. 6 meeting, compared with a 97 percent likelihood signaled on Oct. 22.

Fed Says Growth ‘Moderate’ While Maintaining Bond Buying (Bloomberg)
The Federal Reserve said the economy is still growing modestly and unemployment remains elevated as it maintains $40 billion in monthly purchases of mortgage-backed securities aimed at spurring the three-year expansion. “Growth in employment has been slow,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. “Household spending has advanced a bit more quickly.” Fed Chairman Ben S. Bernanke is leading a third round of unprecedented bond-buying as he seeks to speed job creation for 12.1 million unemployed Americans. The FOMC, in its last scheduled meeting before the presidential election, repeated today that it would press on with the asset purchases until the labor market improves “substantially.” “Strains in global financial markets continue to pose significant downside risks,” the statement said. “Inflation recently picked up somewhat, reflecting higher energy prices.” It said longer-term inflation expectations have remained stable.
Treasuries were little changed after the statement, with the 10-year note yield rising one basis point, or 0.01 percentage point, to 1.77 percent as of 2:53 p.m. The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,412.85 in New York after rising as much as 0.5 percent.

Bernanke Seen Attacking Jobless Rate With QE Through 2013 (Bloomberg)
Federal Reserve Chairman Ben S. Bernanke says he’ll stoke the economy until the job market recovers “substantially.” That promise may force him to keep buying bonds until the final months of his term ending in January 2014, according economists in a Bloomberg survey. Sixty-eight percent of 60 economists said the Fed chairman’s third round of quantitative easing will last until late next year or beyond. Just 51 percent of them said the strategy will help boost employment, with a median estimate of 116,000 jobs over the course of next year. “The recovery in the labor market is probably going to be more sluggish than the Fed recognizes” said Michael Hanson, senior U.S. economist at Bank of America Corp. in New York and a former Fed economist. He said policy makers have “painted themselves in a bit of a corner, waiting to see a significant improvement in the labor market.”
Bernanke said in August that new bond buying, while spurring growth and generating jobs, may erode confidence the Fed will exit smoothly from record accommodation, including the first two rounds of bond purchases totaling $2.3 trillion. Most surveyed economists believe Bernanke has gone too far with quantitative easing, with 55 percent saying policy is too easy, compared with 48 percent who said so in a Sept. 7-10 survey. Bernanke and his colleagues on the Federal Open Market Committee resumed a two-day meeting in Washington today and plan to release a statement at about 2:15 p.m. on policy, including their current plan to buy $40 billion in mortgage-backed securities each month for an indefinite period.

Home Sales Rising to Two-Year High Spur U.S. Growth: Economy (Bloomberg)
Americans bought new homes in September at the fastest pace in two years, another sign the industry whose decline was at the heart of the recession is bouncing back. Sales climbed 5.7 percent to a 389,000 annual pace, the most since April 2010, following a revised 368,000 rate in August, figures from the Commerce Department showed today in Washington. The median estimate of 75 economists surveyed by Bloomberg called for an increase to 385,000. Population growth and mortgage rates pushed to record lows by Federal Reserve purchases of housing debt are generating sales for builders like Toll Brothers Inc. (TOL) and spurring the three-year economic recovery. Housing starts in September jumped 15 percent to the fastest pace since July 2008, a report last week showed.
“All the things that were really holding back housing are finally starting to lift,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who projected sales would climb to 390,000. “It really is tough to find any bad signs here. Inventories are very, very lean. Assuming the economy remains on track, housing should continue to improve for the rest of the year and into 2013.” Stocks fell, erasing earlier gains, after the Fed said employment growth is slow and strains in financial markets continue to pose risks to the economy. The Standard & Poor’s 500 Index dropped 0.3 percent to 1,408.75 at the close in New York. Treasury securities declined, sending the yield on the benchmark 10-year note up to 1.79 percent from 1.76 percent late yesterday.

India Rate-Cut Odds Climb as Policy Revamp Stems Rupee Plunge (Bloomberg)
India’s central bank will consider reducing interest rates for the first time since April after government efforts to pare the budget deficit stemmed a slide in the rupee, boosting scope to stimulate the economy. Governor Duvvuri Subbarao will cut the repurchase rate to 7.75 percent from 8 percent, 10 of 26 analysts said in a Bloomberg News survey ahead of an Oct. 30 decision. Two predicted a reduction to 7.5 percent and the rest no change. A majority of respondents in another poll forecast Subbarao will lower banks’ reserve ratios to spur lending. Finance Minister Palaniappan Chidambaram said Oct. 12 that India needs cheaper credit, following a revamp of economic policy that included fuel-subsidy curbs and helped make the rupee one of Asia’s best-performing currencies in the past three months. While Subbarao has signaled that a narrower budget gap may provide more room to join nations from Brazil to Thailand in extending rate cuts, he also faces inflation of almost 8 percent.
“There is blatant pressure from the government to ease and it’ll be hard for the central bank to ignore it,” said Rajeev Malik, a Singapore-based senior economist at CLSA Asia-Pacific Markets. “Our case for cutting rates rests on the RBI making a reciprocal gesture to the government following its initiatives in the last one month. But more needs to be done on the fiscal deficit.” The Reserve Bank of India unexpectedly reduced the amount of deposits lenders must set aside as reserves last month to boost growth, even as it kept interest rates unchanged as expected by the majority of economists in a Bloomberg survey.

Brazil Seen Leading Latin American Economic Resurgence (CME)
Central Bank May be Forced to Reverse Course
Economic growth in Brazil and other Latin American countries, on pace for the weakest performance in three years, is expected to improve in 2013 thanks to stronger domestic consumption and China's ongoing demand for commodities, according to the Economist Intelligence Unit. Real Gross Domestic Product will increase an estimated 3.8% in Latin America next year from 3.1% this year, the group's analysts said in a recent report. The expected improvement will be driven in large part by Brazil, where GDP growth may jump to 4.2% from 1.5% in 2012. "South American economies will continue to be supported by China's demand for soft and hard commodities exports, even if the period of sustained increases in both prices and volumes has come to an end," the group wrote. Also, historically low interest rates in the U.S. and other major economies "will continue to benefit those Latin American economies that are well integrated into global financial markets."
The Ibovespa index, Brazil's stock-market benchmark, is up nearly 10% since the middle of 2012 as the country's central bank rate cuts bolstered economic prospects. CME Group's U.S. dollar-denominated Ibovespa futures, launched October 22, offer investors access to the expanding Brazil market through a single trade and provide risk mitigation through CME Clearing. The new Ibovespa contract complements CME Group's existing slate of equity index products, including U.S.-based S&P 500, Dow Jones and NASDAQ-100 contracts. For more information, join CME Group at an Ibovespa breakfast briefing November 1 at the annual Futures Industry Association Expo in Chicago.

N.Z. Holds Benchmark Rate at 2.5% as Wheeler Term Begins (Bloomberg)
New Zealand’s new central bank chief extended a period of record-low borrowing costs as a stronger housing market offset a fragile global economy, boosting the currency as traders pared bets on interest-rate cuts. “For now it remains appropriate for the official cash rate to be held at 2.5 percent,” Reserve Bank Governor Graeme Wheeler said in a statement today after a meeting in Wellington. The decision was the first for the former World Bank official who took over from Alan Bollard in late September. Slowing global growth is hurting demand for New Zealand’s exports, which make up about 30 percent of country’s gross domestic product. Sluggish domestic demand and the strongest Group of 10 currency this year have pushed inflation below the central bank’s 1 percent to 3 percent target range.
“The high New Zealand dollar is undermining export earnings and encouraging substitution toward imported goods and services,” Wheeler said. “GDP continues to expand at a modest pace. Housing market activity is increasing as expected and repairs and reconstruction in Canterbury are boosting the construction sector.” Today’s decision was forecast by all 17 economists in a Bloomberg News survey. New Zealand’s dollar rose as traders reduced wagers on a rate cut. It bought 81.97 U.S. cents at 10:33 a.m. in Wellington compared with 81.51 cents immediately before the statement.

ECB Said to Push Spain’s Bankia to Swap Junior Debt for Shares (Bloomberg)
European authorities are pushing Bankia (BKIA) group to impose losses on junior debtholders as part of Spain’s bank bailout by swapping their securities for stock in the nationalized lender, two people with knowledge of the matter said. The European Central Bank and European Commission want investors including preference shareholders to accept newly issued shares in exchange for their existing securities to help reduce the cost to the taxpayer of Spain’s 100 billion-euro ($130 billion) bank rescue, said the people, who declined to be named because the matter isn’t public. Bankia opposes the proposal, they said. Forcing losses on the investors is politically sensitive because many are retail clients, and Economy Minister Luis de Guindos has said in Parliament in Madrid that banks should never have sold preferred shares to individual investors.
Under EU rules, junior bondholders must share the burden of rescuing lenders to reduce the cost to taxpayers and the exercise typically involves exchanging the notes for cash or new securities at a discounted value. De Guindos, who has changed legislation to limit future sales of preference shares to retail clients, has said the government is seeking a solution for the investors. European Union Competition Commissioner Joaquin Almunia said in June that Spain could use budget revenue to compensate them. Spokesmen for the ECB and the Spanish Economy Ministry declined to comment yesterday. Antoine Colombani, an EU spokesman, said the terms of Bankia’s restructuring are being discussed with Spanish authorities. A spokesman for Bankia also declined to comment.

Draghi Defends Bond Purchases With Warning of Deflation (Bloomberg)
European Central Bank President Mario Draghi defended his plan to buy government bonds in the German parliament today with a warning about deflation risks. The ECB’s so-called Outright Monetary Transactions “will not lead to inflation,” Draghi told lawmakers in Berlin in a closed-door session, according to a text provided by the ECB. “In our assessment, the greater risk to price stability is currently falling prices in some euro-area countries,” he said. “In this sense, OMTs are not in contradiction to our mandate: in fact, they are essential for ensuring we can continue to achieve it.” Draghi is seeking to win support in Europe’s largest economy for his plan to purchase government bonds to stem the debt crisis and safeguard the euro. Some German policy makers including Bundesbank President Jens Weidmann have said the proposal is tantamount to printing money to finance governments, which is prohibited by the ECB’s statutes.
“OMTs will not lead to disguised financing of governments,” Draghi said. “All this is fully consistent with the Treaty’s prohibition on monetary financing. Moreover, they will focus on shorter maturities and leave room for market discipline.”

Euro-Area Recession Deepens as Manufacturing Shrinks: Economy (Bloomberg)
Euro-area services and manufacturing output contracted more than economists forecast in October and German business confidence dropped to the lowest in more than 2 1/2 years as Europe’s recession deepened. A composite index based on a survey of euro-area purchasing managers in services and manufacturing fell to 45.8, the lowest in more than three years, from 46.1 in September, London-based Markit Economics said today. Economists had forecast a reading of 46.5, according to a Bloomberg News survey. A separate factory index in China rose. In Germany, the Ifo institute’s business climate index unexpectedly dropped to 100.0 from 101.4 in September. The European Central Bank and the International Monetary Fund have both lowered their forecasts for the euro-area economy as governments cut spending to plug budget gaps, eroding consumer and export demand. Even so, the region’s debt burden rose to a record in the second quarter, reaching 90 percent of gross domestic product, another report showed today.
“The euro-zone recession is still getting worse,” said Holger Schmieding, chief economist at Berenberg Bank in London. “In a disappointing set of data, the fact that the Ifo expectations index did not decline further offers the only ray of hope. In this sense, the survey results today do not dispel the hope that the euro economy could turn the corner early next year.”

Rajoy Sees Case for Slowing EU-Driven Austerity (Bloomberg)
Spanish Prime Minister Mariano Rajoy said there is a case for easing budget-deficit targets set by the European Union as the recession undermines tax revenue. “I think what a lot of other people think,” Rajoy told the Spanish senate yesterday. “Things could be done more calmly, taking into account especially that we are in a recession, but in any case I can’t give up on Spain’s commitments.” Rajoy’s comments undercut Budget Minister Cristobal Montoro’s insistence that Spain can stick to the path of budget consolidation demanded by the EU even after the Bank of Spain said the euro area’s fourth-largest economy contracted for a fifth quarter between July and October. “In 2012, we definitively will comply with our target,” Montoro said as he presented the 2013 budget to the Parliament in Madrid. The EU has set Spain a deficit goal of 6.3 percent of gross domestic product this year, after overspending amounted to 9.4 percent last year, the same as Greece’s and the second- highest shortfall behind Ireland.

German business sentiment posts surprise 6th drop in a row (Reuters)
German business sentiment dropped sharply in October to its lowest in more than 2-1/2 years, the sixth consecutive fall dispelling any lingering doubt that Europe's largest economy is now mired in the euro zone debt crisis.

20121025 1046 Global Commodities Related News.

Commodity Supercycle Seen Continuing on Emerging Markets Demand (Bloomberg)
The commodity supercycle has further to go on increasing demand from China and emerging markets, according to Longview Economics Ltd. and economist Dambisa Moyo. Raw materials have been in a supercycle since 2001 and the average length of each phase since the late 1700s has been almost 21 years, Chris Watling, chief executive officer of London-based Longview Economics, said today at a World Commodities Week conference in the U.K. capital. The Standard & Poor’s GSCI spot gauge of 24 commodities erased this year’s gain yesterday after entering a bull market in the third quarter. Emerging market and developing economies will grow 5.3 percent this year, compared with 3.3 percent globally, the International Monetary Fund said Oct. 9. The Washington-based group estimated growth of 7.8 percent for China this year and 8.2 percent next year. Raw materials, as measured by the S&P GSCI, have risen for most of the past decade, making annual advances in 11 of the last 13 years.
“It’s all about what’s happening in emerging markets,” Moyo, a former Goldman Sachs Group Inc. economist, said in a presentation at the conference. Improving wealth levels “have implications for what we’ll eat” and more people will want consumer products, she said. Moyo pointed to more urbanization globally as why there will be higher demand for some commodities. Increasing urbanization in China, the biggest user of industrial metals, means more demand there for consumer-driven commodities, Richard Elman, chairman and executive director of Hong Kong-based commodity supplier Noble Group Ltd. (NOBL), said at a London Metal Exchange conference in London Oct. 15. Arable land, needed for growing foods, covers about 11 percent of the world, Moyo said.

Hurricane Sandy Heads Toward Cuba, May Strike U.S. Next Week (Bloomberg)
Hurricane Sandy, which closed businesses and airports on Jamaica as it moved north in the Caribbean, may strike the U.S. East Coast next week with the potential to cause millions of dollars in damage. Sandy’s top winds reached 85 miles (137 kilometers) an hour as it moved off the north coast of Jamaica and headed toward Cuba, according to a U.S. National Hurricane Center advisory at 8 p.m. New York time. “The table is set for some pretty major weather,” said Henry Margusity, an expert senior meteorologist at AccuWeather Inc. in State College, Pennsylvania. “Is it going to be an epic storm or is going to be just your typical nor’easter? We will have the answers next week.” Sandy is expected to cross Cuba overnight and the Bahamas tomorrow, according to the hurricane center. The storm may then move parallel to the U.S. East Coast and either be pushed into the Atlantic Ocean or pulled into the coastline.
A computer model based in Europe took the storm up Delaware Bay, while another by the National Oceanic and Atmospheric Administration had Sandy curve into Portland, Maine, Margusity said. Both events would take place early next week. The Massachusetts Emergency Management Agency said residents should monitor the storm’s progress.

France Tops U.S. Wheat With Premium Seen at Record: Commodities (Bloomberg)
Surging demand for European Union wheat is reducing stockpiles to a 14-year low and driving prices in France, the biggest exporter, to a record premium over U.S. grain after drought withered supply from the Black Sea region. EU licenses to ship wheat in the six weeks to Oct. 16 were 40 percent higher than a year ago, data from the 27-nation bloc show. French grain for March delivery now trades at a premium of 33 cents a bushel to Chicago futures, from a 78-cent discount in July. That will widen to 50 cents by the time the contracts expire, the highest since they began trading, according to the median of five analyst estimates compiled by Bloomberg.
Global consumption will be the second-highest ever this marketing year, at a time when output in Russia, Ukraine and Kazakhstan, the Black Sea region’s three biggest exporters, is falling to a nine-year low, the U.S. government estimates. Egypt, the largest importer, bought at least 540,000 metric tons from France in the past six weeks and nothing from the U.S. Once shipping is included, U.S. wheat is still too expensive, said Nomani Nomani, vice chairman of Egypt’s state grain buyer. “The entire story in wheat is one of location,” said Chris Gadd, an analyst at Macquarie Group Ltd. in London. “Right now the exportable surplus in Russia and most of the former Soviet Union is running out. The French seaborne supply will get tight into the first quarter, so this will be supportive of prices in Paris versus Chicago.”

DTN Closing Grain Comments 10/24 14:24 Soybeans, Wheat Impress Wednesday (CME)
Soybean and wheat contracts were sharply higher Wednesday on solid support from both commercial and noncommercial traders. Corn, on the other hand, had another disappointing day on a lack of interest from either side of the market.

Pro Farmer: After The Bell Wheat Recap (CME)
Wheat futures enjoyed gains throughout today's session and ended roughly 15 to 16 cents higher in Chicago, mostly 8 to 13 cents higher in Kansas City and mostly 7 to 13 cents higher in Minneapolis. This represented a close in the upper half of today's trading range. Wheat futures benefited from improved outside markets compared with yesterday's broad risk aversion thanks to a reminder of tightening wheat stocks.

Wheat Market Recap Report (CME)
December Wheat finished up 15 1/4 at 884, 11 off the high and 19 up from the low. March Wheat closed up 15 1/4 at 897 1/4. This was 18 1/2 up from the low and 10 3/4 off the high. Chicago wheat surged higher after open outcry trading began as traders holding short positions ran for cover but the market stabilized midday and closed well off the 895 session high. Kansas City and Minneapolis wheat followed Chicago higher in anticipation of better export demand for high protein milling wheat over the next 3-6 months. The wheat market started the day with a bullish tilt after China released data pegging imports of wheat at 524,156 tonnes which was up 196% on the year and January through September imports were reported at a new 7-year high. The Ukraine Ag Minister confirmed this morning that they plan on banning wheat exports as of November 15th, which came as no surprise to many in the trade. As a result, this could push more demand to the US later this crop year. Argentina and Australia continue to deal with unfavorable weather conditions with Argentina too wet and Australia too dry. Each of which could see further production cuts in the next USDA report as a result. December Oats closed up 3/4 at 386 3/4. This was 2 1/2 up from the low and 1 3/4 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
December corn futures ended 1 1/2 cents lower and the March contract was steady while deferred futures settled fractionally to 5 1/4 cents higher. Corn futures lacked buying interest today due to a lack of bullish news, but spillover support from soybeans and wheat kept the market from sliding. While corn supplies are tight, traders are concerned about the demand side of the market.

Corn Market Recap for 10/24/2012 (CME)
December Corn finished down 1 1/2 at 754 1/2, 9 off the high and 3 up from the low. March Corn closed unchanged at 756. This was 3 1/4 up from the low and 7 3/4 off the high. December corn saw good buying interest at the opening bell this morning but fell back into negative territory midday and settled well off today's session highs. Strong trade in the soybean and wheat markets helped to support but bearish supply and demand data in the crude oil market limited gains. The basis in the Gulf of Mexico was firm midday on better export interest as the discount between South America and the US narrows. South American corn prices have risen this week on tight supplies and increased demand from Europe. Corn also saw a boost this morning on a supportive ethanol production report. Ethanol production for the week ending October 19th averaged 801,000 barrels per day. This is up 0.50% vs. last week and down almost 12% vs. last year. Corn used in last week's production is estimated at 84.1 million bushels which was a 420,000 bushel increase from the week prior and a new 4-week high. This crop year's cumulative corn used for ethanol production for this crop year is 592.4 million bushels and corn use needs to average 86.6 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels. November Rice finished up 0.075 at 15.055, 0.065 off the high and 0.015 up from the low.

Gasoline Losing Streak Hits Longest in 26 Years on Supply (Bloomberg)
Gasoline fell for a 10th consecutive day, extending a losing streak to the longest since the start of New York futures trading in 1986, as fuel supplies surged to the highest level in almost two months. Futures slipped after the Energy Department reported stockpiles rose 1.44 million barrels to 198.6 million, the highest level since Aug. 31. The median forecast by 11 analysts surveyed by Bloomberg called for an increase of 500,000 barrels. The fuel is down 22 percent this month as refineries, including Delta Air Lines Inc. (DAL)’s Trainer plant, started units. “We’ve seen the restart of the Trainer refinery and restart of a number of other units that could supply the East Coast, so the supply situation has improved,” Andy Lipow, president of Lipow Oil Associates LLC, an energy consulting firm in Houston, Texas, said by phone. “In conjunction with the supply improvement, this is the time of year we expect this type of pressure on gasoline.”
Gasoline for November delivery dropped 0.2 cent to settle at $2.603 a gallon on the New York Mercantile Exchange, a four- month low. This is the longest down streak since futures began trading in May 1986. Demand for the motor fuel sank 2.7 percent to 8.49 million barrels a day, the lowest level since March 16, department data show. Over the past four weeks, consumption was down 1.8 percent from a year ago.

Oil Falls for Fifth Day as Inventories Increase (Bloomberg)
Oil traded near the lowest close since July in New York as U.S. inventories rose more than expected and fuel demand dropped. Prices were little changed after capping the longest losing streak in five months yesterday. The Energy Department said stockpiles jumped 5.9 million barrels last week, more than three times the 1.8 million increase that analysts surveyed by Bloomberg expected. Gasoline demand fell to a seven-month low, according to the department. Prices also dropped after the Federal Reserve said the U.S. economy is growing modestly and unemployment remains elevated. “Inventory data overnight was a lot more bearish than expected,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. The Fed’s comments “added to a general risk-off tone to the markets overnight,” he said.
Crude for December delivery was at $85.74 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 6:54 a.m. in Singapore. It settled yesterday at $85.73, the lowest since July 10. The five-day loss was the longest since May 18. Prices are down 13 percent this year. Brent crude for December settlement traded in London fell 40 cents, or 0.4 percent, to $107.85 a barrel yesterday. Brent’s premium to WTI widened to $22.12. Oil stockpiles increased to 375.1 million barrels last week, the most since July 20 and the highest level for this time of year since the government started reporting inventories in 1982. Oil production climbed for a seventh week to 6.61 million barrels a day, a 17-year high. Imports rose for a fourth week, up 5.7 percent to 8.82 million barrels. The refinery utilization rate dropped to 87.2 percent from 87.4 percent.

Recap Energy Market Report  (CME)
December crude oil prices closed lower for the fifth consecutive session and fell to the lowest level since July 2nd in the process. The market traded higher during the initial morning hours, supported by a rebound in outside market sentiment and a stronger than anticipated Chinese manufacturing data. However, a batch of soft European economic reports tamped down that optimism. December crude oil turned to sharply lower on the session in the wake of EIA inventory data that showed a larger than expected build in supply last week of 5.896 million barrels. The surprise build came from a jump in import activity to a rate of 8.823 million barrels per day and the slight decline in refinery operating rate to 87.2%. December crude oil managed to pare some of its losses by the close but still finished down more than 1%.

Silver Market Recap Report (CME)
The silver market also forged a moderately wide trading range today with a lot of time spent in negative territory. As in gold, the silver markets didn't seem to benefit from favorable scheduled data flows and silver also didn't seem to garner much in the way of lift from periodic strength in US equities. Some metals bulls might have been partially discouraged in the wake of positive US data as some traders think that reduces the prospect of additional Fed easing down the road. Like gold, the silver market saw a fleeting lift off the FOMC meeting statement.

Copper Heads for Longest Slump in Seven Weeks on Europe (Bloomberg)
Copper futures fell, capping the longest slump since August, as a bigger-than-expected contraction in Euro-area services and manufacturing added to concern that metals demand will slow. An index based on a survey of purchasing managers in the currency union that uses the euro dropped to the lowest in more than three years, London-based Markit Economics said today. In Germany, the Ifo institute’s business climate index fell in September. A Bloomberg survey of economists had forecast a rise. “There are a lot of worries out there about how economies continue to be very sluggish,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The overall sentiment in copper is not good, and people are finding a reason to pull the sell trigger.”
Copper futures for December delivery declined less than 1 percent to settle at $3.568 a pound at 1:21 p.m. on the Comex in New York, dropping for a fifth straight session, the longest slump since Aug. 30. Earlier, the price touched $3.5475, the lowest for a most-active contract since Sept. 7. Reports showing stronger Chinese manufacturing and higher sales of new houses in the U.S. failed to lift copper. Signs that China’s economy may grow fast enough to allow the government to refrain from additional stimulus measures may be dragging copper lower, Zeman said. On the London Metal Exchange, copper for delivery in three months dropped 0.2 percent to $7,817 a metric ton ($3.55 a pound). Nickel, zinc and tin advanced, while aluminum and lead declined.

Gold Moving Average Signals Slump to $1,600, Analyst Says (Bloomberg)
Gold futures may slump to $1,600 an ounce by the end of the year, according to technical analysis by Paul Kavanaugh at FuturePath Trading LLC. The contract for December delivery settled below its 50-day moving average for the second straight day, signaling the metal may slide 6 percent from yesterday’s closing price of $1,701.60 on the Comex in New York, Kavanaugh, the Chicago-based director of business development, said in a telephone interview. “The downside risks are growing, and prices have peaked for this year,” said Kavanaugh, who correctly predicted in early April that the Standard & Poor’s GSCI Spot Index of 24 raw materials would slump by the end of the second quarter. “Gold will correct further.” Yesterday, the metal touched $1,698.70, breaching $1,700 for the first time since Sept. 7. The 50-day moving average is $1,726.55. In October, gold has declined 4.1 percent, heading for the first drop since May.
The price has advanced 8.6 percent this year, heading for the 12 straight annual gain, as economic stimulus by the U.S., Europe and Japan spurred demand for the metal as an inflation hedge. This month, gold has averaged $1,755.28, the highest since September 2011, when the commodity surged to an intraday record of $1,923.70. This year’s high was $1,798.10 on Oct. 5. In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

Gold Market Recap Report (CME)
The bull camp in gold has to be disappointed as higher equities, favorable US housing readings and a stronger Chinese PMI result failed to entrench a risk on vibe in the Wednesday US trade. Some gold players suggested that better US and Chinese numbers dented expectations of additional Fed action, while others suggested that gold saw so much chart damage on the charts that an improvement in macro economic sentiment was discounted in the trade. Gold might also have been undermined as a result of adverse currency market action and weakness in energies, industrial metals and grain prices. The gold market only saw a fleeting lift from the FOMC statement and the market wasn't able to hold all of those initial gains.

Maersk Rate Rise Adds to Mothballing Ships for Profit: Freight (Bloomberg)
Europe’s largest container lines are making an attempt to increase Asia-Europe rates to more than break-even levels and restore profit before year-end. Capacity cuts may boost their chance of success. A.P. Moeller-Maersk A/S (MAERSKB)’s container line, the world’s largest, and Hapag-Lloyd AG, Europe’s No. 4 line, have announced a $500 per-standard-container rate increase from Asia to Europe starting Nov. 1. France’s CMA CGM SA, Europe’s No. 3 container company, will also increase Asia to Europe rates by $500 on that date, while Hong Kong’s Orient Overseas International Ltd. (316) has announced a rise of $525 per box.
Container lines are losing money on routes from Asia to Europe because of an overcapacity of ships and slumping demand due to the European debt crisis. That’s made it difficult for carriers to raise prices on the televisions, T-shirts and shoes they ship from China to such ports as Hamburg and Rotterdam. While efforts to increase prices in March restored profits, rates have since slumped to below break-even levels. “This will be a major trigger for Maersk and other container share prices,” Frode Moerkedal, an analyst at RS Platou Markets AS in Oslo, said in a phone interview. “Utilization should improve and support higher rates.”
Container carriers such as Maersk Line, Hapag-Lloyd and Hanjin Shipping Co. have announced the removal of capacity of more than 30,000 standard containers between Asia and Europe in recent weeks. Coupled with the planned Nov. 1 rate hike, that may allow Maersk Line to achieve the full-year profit it forecasts for the year and help offset rising fuel prices in an industry in which all major container lines lost money in 2011.

20121025 1046 Soy Oil & Palm Oil Related News.

ITS CPO export up 11.1% to 1,300,495 tonnes for the period of 1~25 Oct 2012.
SGS CPO export up 9.4% to 1,280,652 tonnes for the period of 1~25 Oct 2012.

Soybeans Rise on Global Demand for U.S. Supplies; Corn Drops (Bloomberg)
Soybeans rose to a three-week high on signs of improving demand for supplies from the U.S., the world’s largest grower last year. Corn declined. U.S. exporters sold 105,000 metric tons of soybeans for delivery before Aug. 31 to unknown destinations, the U.S. Department of Agriculture said today. China, the world’s biggest buyer, boosted imports by 20 percent in September from a year earlier with U.S. shipments almost four times higher than a year earlier, the Customs Administration reported today. “Export business continues to be very good for soybeans,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. “There appears to be no slowdown in Chinese demand.” Soybean futures for January delivery gained 1.1 percent to close at $15.7225 a bushel at 2 p.m. on the Chicago Board of Trade, after reaching $15.77, the highest since Oct. 1. The price touched $14.8575 on Oct. 15, the lowest since July 3.
Soybean-meal futures for December delivery rose 1.2 percent to $481.90 for 2,000 pounds on the CBOT, capping the first six- day gain since July 20. U.S. export sales for delivery in the marketing year that began Sept. 1 are 35 percent higher than at the same time a year earlier, the USDA said Oct. 18. U.S. supply on Aug. 31 is forecast to drop to 4.4 percent of domestic use and exports, the smallest reserves since 1966. U.S. production was estimated by the government at the lowest since 2008 after the worst drought since 1956 reduced Midwest yields. Corn futures for December delivery declined 0.2 percent to $7.545 a bushel on the CBOT, the third straight drop. The price has tumbled 11 percent from a record $8.49 on Aug. 10, as demand slowed and overseas buyers shifted to cheaper grain from other suppliers. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

Pro Farmer: After The Bell Soybean Recap (CME)
Soybean futures ended widely mixed. November through March futures closed 16 1/4 to 17 1/4 cents higher. May and July futures were 4 1/2 to 8 3/4 cents higher, and far-deferred contracts were down 3/4 to 3 1/2 cents. Meal also ended mixed, with soyoil stronger. Early support in the bean pit was tied to fresh demand news, as USDA announced 105,000 MT of beans were sold to unknown destinations for 2012-13.

Soybean Complex Market Recap (CME)
November Soybeans finished up 17 1/4 at 1570 1/2, 4 1/4 off the high and 21 1/4 up from the low. January Soybeans closed up 16 1/2 at 1572 1/4. This was 20 1/2 up from the low and 4 3/4 off the high. December Soymeal closed up 5.7 at 481.9. This was 7.8 up from the low and 2.7 off the high. December Soybean Oil finished up 0.52 at 51.84, 0.09 off the high and 0.49 up from the low. January soybeans made a new high for the move and peaked at levels not seen since October 1st. A rebound in outside markets, sparked by better economic data out of China and the US helped to support futures. Soybean basis was slightly weaker on the river midday but firmed around processor markets. The USDA reported that US exporters sold 105,000 tonnes of soybeans to an unknown destination for 2012/13 delivery. Most in the trade believe the buyer was China as they have been inquiring for bean cargos on setbacks in the market. Support was also coming from a high pressure ridge in central and central west Brazil which could result in higher than normal temperatures this week. The ridge is expected to break down by the end of next week. Northern Brazil remains dry but Southern Brazil and Argentina remain too wet which is delaying the planting pace. The longer term weather outlook looks more favorable which is limiting gains but demand for US soybeans from China and firm cash markets were positive to the trade.

EDIBLE OIL: Malaysian palm oil futures inched up as investors bet on increased festival demand for the tropical oil, although prices were locked in a tight range due to lingering concerns over record-high stocks. (Reuters)