Thursday, November 8, 2012

20121108 1816 FCPO EOD Daily Chart Study.

FCPO closed : 2328, changed : -69 points, volume : lower.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : falling lower, seller in control.
Support : 2300, 2250, 2230, 2200 level.
Resistance : 2350, 2400, 2450, 2490 level.
Comment :
FCPO closed recorded loss with declined volume changed hand. Soy oil price currently trading marginally higher after overnight closed slightly lower while crude oil price rebounding higher after overnight fall.
Price pressured downward on poor global equity markets performance due to fiscal cliff concern and gloomy global economy outlook.
FCPO daily chart reading revised to calling a downside biased market development with possible pullback correction.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with larger cut loss and profit target.

20121108 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1637 changed : -3.5 point, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : falling lower, seller in control.
Support :  1635, 1627, 1623, 1615 level.
Resistance : 1640, 1645, 1651, 1657 level.
Comment :
FKLI closed weaker with increased volume participation doing 4 points discount compare to cash market that closed little lower. Overnight U.S markets slumped substantially lower and today Asia markets closed in negative territory while European markets currently trading little higher.
Focus on U.S. fiscal cliff a 607 billion of tax increase and spending cut, China leadership congress meeting to choose new leader and slower than forecast Japan machinery orders send global markets traded lower.
FKLI daily chart wise, reading revised to suggesting a pullback correction downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20121108 1631 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to a higher open, with a sharp decline in the previous session prompting some investors to buy cheaper stocks, although gains are likely to be limited. Asian shares extended losses tracking U.S. markets which fell over 2 percent in the wake of the presidential election as investors' focus shifted to the looming "fiscal cliff" debate and Europe's economic troubles. (Reuters)

FOREX:The safe-haven yen touched a one-month high versus the euro and the dollar slipped as worries about a looming U.S. fiscal crisis dampened investors' risk appetite. (Reuters)

FOREX-Yen hits 1-month peak vs euro on risk aversion
SINGAPORE/SYDNEY, Nov 8 (Reuters) - The safe-haven yen touched a one-month high versus the euro on Thursday and the dollar slipped as worries about a looming U.S. fiscal crisis dampened investors' risk appetite.    
"The increase in risk aversion will help support the yen on the crosses as well as the dollar," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.

ECB seen holding rates steady as it waits to unlock bond plan (Reuters)
The European Central Bank is expected to leave interest rates on hold on Thursday, waiting instead to show its mettle with a new bond-purchase programme that is ready for use as soon as Spain asks for help.

Russia says grain sales from state stock efficient (Reuters)
Planned grain sales from Russian state stocks will be enough to keep domestic prices stable, Agriculture Minister Nikolai Fyodorov was quoted as saying on Wednesday.

GRAINS: U.S. wheat slid 0.6 percent as the market took a breather after climbing for three consecutive sessions to a five-week top on concerns over global supplies as dryness hurts U.S. crops and rains threaten the Australian harvest. Soy lost more ground to trade near its lowest since mid-October, with expectations of higher supplies from the United States and favourable crop weather in South America weighing on the market. (Reuters)

U.S. oil stocks rose despite Hurricane Sandy - EIA (Reuters)
U.S. crude and refined product stocks rose last week in spite of inventory drops on the East Coast, where Hurricane Sandy interrupted imports, refining activity and fuel supply chains.

OIL:Brent crude rose above $107 a barrel in Asia as a slump of almost 4 percent in the previous session, its biggest fall in about a year, lured in some buyers, although worries on the U.S. fiscal cliff and Europe's woes kept a lid on gains. (Reuters)

Obama to weigh energy boom, climate change in 2nd term (Reuters)
President Barack Obama will face a two-fold challenge in energy policy in his second term: make good on his promise to act on climate change, while at the same time foster growth in oil and gas production that has spurred jobs and manufacturing.

China base metal buys will hardly dent ample supply -trade (Reuters)
China's plan to buy base metals for state reserves in an effort to cushion domestic smelters from slowing economic growth would support prices but would not significantly reduce bulging stockpiles, traders and analysts said on Wednesday.

BASE METALS: London copper edged up from a two-month low hit the day before, but worries about the fiscal crisis in the United States will likely cap gains. (Reuters)

PRECIOUS METALS: Gold traded little changed below the 2-1/2-week high hit in the previous session after U.S. President Barack Obama was re-elected, as a strong dollar largely put off buyers. (Reuters)

METALS-LME copper inches up from 2-mth low, US fiscal woes weigh
SHANGHAI, Nov 8 (Reuters) - London copper rose from the previous session's two-month low, but prices are likely to stay subdued by slack Chinese demand and worries over U.S. fiscal measures that, if enacted, may tip the world's largest economy into recession.
"London copper is back up again today mostly on short-covering after investors' worries over the U.S. fiscal cliff led to a steep fall late in yesterday's session," said a Shanghai-based trader.

PRECIOUS-Gold flat as US fiscal worries support dollar
SINGAPORE, Nov 8 (Reuters) - Gold traded little changed below the 2-1/2-week high hit in the previous session after U.S. President Barack Obama was re-elected, as a strong dollar largely put off buyers.
"The dollar serves as a barometer of overall global risk," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.

20121108 1546 Palm Oil Related News.

VEGOILS-Palm oil edges down on U.S., Europe worries
Thu Nov 8, 2012 1:01am EST
* Palm oil tracks losses in global markets
    * Prices must stay near 2,200 ringgit for 2 mths to
stimulate demand -Mistry
    * Palm oil to keep rebounding to 2,453 ringgit -technicals

 (Updates prices, adds details)
    By Chew Yee Kiat
    SINGAPORE, Nov 8 (Reuters) - Malaysian palm oil futures
edged down on Thursday, tracking losses in global markets on
renewed worries that economic woes in the United States and
Europe could hurt commodity demand.
    Crude oil and equities slumped as euphoria faded after
President Barack Obama's re-election on Wednesday, with the
world's biggest economy now facing a so-called fiscal cliff of
$600 billion in automatic tax increases and spending cuts.

    Sentiment was also dented by a gloomy outlook for Europe
after the European Commission said the euro zone economy would
barely grow next year.    
    "There is a lot of uncertainty after the U.S. election, you
have all these problems in Europe, and then there's also the
fiscal cliff," said a trader with a foreign commodities
brokerage in Malaysia.
    "Local sentiment for palm is also bearish, because of high
stocks. I don't think palm has any support until you can see
very strong demand followed by a drawdown in stocks, then the
market will stabilise."
    By the midday break, the benchmark January contract
on the Bursa Malaysia Derivatives Exchange had lost 0.4 percent
to 2,387 ringgit ($780) per tonne.
    Total traded volumes stood at 10,994 lots of 25 tonnes each,
lower than the usual 12,500 lots.
    Technicals showed palm oil was expected to keep rebounding
to 2,453 ringgit, said Reuters market analyst Wang Tao, based on
a wave analysis.
    Palm oil prices must stay at around 2,200 ringgit a tonne
for two months in order to stimulate demand for the edible oil
and reduce high stock levels, leading industry analyst Dorab
Mistry said at a conference in China on Thursday.

    Malaysian palm oil futures have lost almost 25 percent so
far this year, weighed by record high stocks and global economy
    Stock levels in Malaysia, the world's No.2 palm oil
producer, may reach a new record at 2.67 million tonnes in
October, a Reuters survey showed on Tuesday.  
    Traders will be watching Malaysian exports data for Nov.
1-10 from cargo surveyor Intertek Testing Services, due to be
released on Saturday, and October stocks data from industry
regulator, the Malaysian Palm Oil Board, on Monday.    
    In related markets, Brent crude rose above $107 a barrel in
Asia on Thursday as a slump of almost 4 percent in the previous
session, its biggest fall in about a year, lured in some buyers,
although worries over the U.S. fiscal cliff and Europe's woes
kept a lid on gains.
    In other vegetable oil markets, U.S. soyoil for December
delivery inched up 0.1 percent in early Asian trade. The
most active May 2013 soybean oil contract on the Dalian
Commodity Exchange edged down 0.1 percent.  

20121108 1106 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares fall on worry over U.S. fiscal cliff  
TOKYO, Nov 8 (Reuters) - Asian shares fell as investors worried about the fiscal crisis in the United States and the European economy's further deterioration, underpinning safe-haven currencies such as the yen and dollar.
"The general trend of  weaker equities, higher bond prices and a weaker dollar will likely continue," said Kazuto Uchida, an executive officer and general manager of the global markets division at the Bank of Tokyo-Mitsubishi UFJ.

Obama to weigh energy boom, climate change in 2nd term
WASHINGTON, Nov 7 (Reuters) - President Barack Obama will face a two-fold challenge in energy policy in his second term: make good on his promise to act on climate change, while at the same time foster growth in oil and gas production that has spurred jobs and manufacturing.
That could mean a revival of regulations for producing and burning natural gas, coal and oil that had been on hold during the election, and possibly some new rules for hydraulic fracturing, or "fracking," the water and chemical-intensive technique used to extract gas and oil from deep within shale beds.

OIL- Oil down about 4 pct, fiscal cliff looms after US vote
NEW YORK, Nov 7 (Reuters) - Brent crude fell nearly 4 percent on Wednesday as problems facing the economies of the United States and Europe darkened investor sentiment a day after the re-election of U.S. President Barack Obama.
"The market is definitely sliding with the equities, it feels like a risk-off trade," said Richard Ilczyszyn, Chief market strategist and founder of LLC in Chicago.  

NATURAL GAS - Milder weather forecast drives US natgas futures lower
NEW YORK, Nov 7 (Reuters) - U.S. natural gas futures ended lower on Wednesday as milder weather forecasts for later this week and early next week weighed on prices despite chilly near-term temperatures that have stirred more heating demand.
"It looks like the weather forecasts are trending bearish, so prices were down a little, but cash has been holding up pretty well, and people are expecting a light inventory build," said Steve Mosley at SMC Advisory Services.

EURO COAL-Dips on South African mining wage deal
LONDON, Nov 7 (Reuters) - South African physical coal prices eased on Wednesday as coal companies there signed a wage deal with unions in an effort to avoid a wave of illegal strikes that have rocked the gold and platinum sectors.
Traders said that the drop in prices was a result of South Africa's coal mining wage deal, which saw the Chamber of Mines agreeing to raise certain entry-level wages by up to 5 percent and offered one-off payments to higher categories of workers.

20121108 1105 Malaysia Corporate Related News.

Nadzmi ups stake in Tiger Synergy to 8.91pc
Former Proton Holdings chairman Datuk Seri Mohd Nadzmi Mohd Salleh has raised his stake in Tiger Synergy to 8.9% via Hayat Maya SB. This confirms Business Times report yesterday which stated that Hayat Maya, in which Nadzmi has substantial interest, is expected to build up its stake in Tiger Synergy to 10% before seeking a board representation in the company. In a filing with Bursa Malaysia yesterday, it showed that Nadzmi had raised his stake by acquiring 11.2m shares in Tiger Synergy in the open market at 39.9 sen apiece. The stock closed unchanged yesterday at 40 sen a share. (BT)

UEM in JV to bid for Turkish jobs
UEM Group is bidding for the privatisation of two bridges across the Bosphorus Strait in Istanbul and various highway projects in Turkey. For this purpose, the company has agreed to form a joint venture with Turkish partners, Gozde Girisim and KOC Holding. Under the arrangement, Gozde would have a 20% stake in the joint venture, while KOC and UEM Group would each hold a 40% stake. According to a statement, the toll road asset portfolio, which includes eight motorways and two bridges over the Bosphorus, with service areas and other facilities are to be privatised in a single package via transfer-of-operating-rights for 25 years. (BT)

KWAP ups Gamuda stake
Kumpulan Wang Persaraan (KWAP) has raised its shareholding in infrastructure-based Gamuda to 7.9% or 164.1m shares. A filing on Wednesday showed the KWAP acquired 3.6m shares on 1 Nov from the open market. Another filing showed that Gamuda executive director Datuk Ng Kee Leen disposed of three million shares at RM3.70 apiece on the same day. Ng's direct shareholding was reduced to 1.11% or 23.0m shares after the recent disposal. Gamuda's shares had attracted strong interest after its managing director Datuk Lin Yun Ling increased his stake in the company. (StarBiz)

PJBumi gets govt nod to sell 15.7% Alam Flora stake
PJBumi has received the government's approval for its proposed disposal of 12m shares in Alam Flora SB for RM20.4m cash consideration. It said on Wednesday it had obtained the approval through the Public Private Partnership Unit of the Prime Minister's Department to sell the stake to Hicom Holdings. To recap, on 29 May, PJBumi had entered into a conditional share sale agreement with Hicom to sell the 12m shares or 15.8% stake in a move to divest its non-core operations to generate fresh cashflows. PJBumi said it had taken into consideration the one-off loss of about RM15.8m to be incurred upon completion of the proposed disposal. (StarBiz)

Gas Malaysia 3Q profit up to RM42m
Natural gas distributor Gas Malaysia (GMB) registered a 37.8% increase in net profit to RM42m for the third-quarter (3Q) ended 30 Sept 2012, compared to RM30.5m recorded the same period a year ago. Revenue for the quarter under review registered a smaller gain of 5%, or RM25.3m, from RM517.1m to RM542.4m. According to GMB, the gains were contributed mainly by the increase in volume of gas sold and the upward revision in natural gas tariff effective 1 June 2011. For the cumulative period, the group saw a 29.2% decline in net profit due to margin compression resulting from the revision in gas tariff. (Malaysian Reserve)

SP Setia aborting new ESOS
Property developer SP Setia will seek shareholders' approval at a meeting on 23 Nov to place out up to 15% of its share base, but is no longer pursuing its proposed employees share option scheme (ESOS). "The company will not be tabling the resolutions on the proposed ESOS, as the company is evaluating alternative incentive schemes before deciding on the eventual scheme to be implemented", said SP Setia. SP Setia's proposed share placement exercise is to raise cash following its participation in the multi-billion Battersea power station development. (Financial Daily)

Sime in JV to build education hub in Johor
Sime Darby has entered into a joint venture (JV) with Tunas Selatan Pagoh SB (TSP) to undertake the Pagoh Education Hub Project worth RM992,3m under the Private Finance Initiative. Sime said its indirect wholly owned unit Sime Darby Johor Development SB (SJD) has formed a 60:40 JV with TSP to undertake the project that will be based on a "build-lease-maintain-transfer" concept. The construction of the hub is expected to take place over the next three years for a total cost of RM992.6m, including the procurement of teaching equipment. Upon completion, it will be leased out to the Ministry of Education and several universities for 20 years. (Financial Daily)

20121108 1105 Global Economy Related News.

China: Economic growth at stake as communists gather in Beijing
China’s Communist Party gathers today in Beijing to choose its fifth generation of leaders since taking power in 1949, a decision that will shape the nation’s economic and financial policies for the next decade. Vice President Xi Jinping is forecast to replace Hu Jintao as general secretary of the 82m-member party. Vice Premier Li Keqiang is seen taking Premier Wen Jiabao’s spot on the top Politburo Standing Committee, setting him up to assume Wen’s job next March. (Bloomberg)

NZ: Jobless rate surges to 13-year high 7.3%, currency plunges
New Zealand’s unemployment rate unexpectedly rose last quarter to a 13-year high, adding to evidence of a faltering recovery and sending the best-performing Group of 10 currency this year plunging. The jobless rate jumped to 7.3% from 6.8% in the second quarter, Statistics New Zealand said in a report today in Wellington. That’s the highest since the first quarter of 1999 and was more than the 6.7% median estimate in a Bloomberg survey of economists. Employment fell by 0.4%, or 8,000 jobs, from the second quarter, when it dropped 0.1%. Economists expected job growth of 0.3%. (Bloomberg)

EU: Poland delivers first rate cut since 2009 as economy weaken
Poland’s central bank cut borrowing costs for the first time since 2009 as the European Union’s biggest eastern economy slows amid the euro-area debt crisis. The only central bank in the 27-nation EU to raise rates this year lowered the benchmark 25 basis points to 4.5%, in line with forecasts of 34 economists surveyed by Bloomberg. One predicted a 50 basis-point cut. While central banks around the world have eased monetary policy to avert a recession, Poland raised rates by a quarter-point in May after inflation exceeded its 2.5% target for two years. (Bloomberg)

US: Upbeat consumers to sustain US as firms hesitate
Consumers in the US are stepping in where companies fear to tread. Americans are more upbeat while business sentiment stagnates, a sign their spending will provide a bridge for the economic expansion until the so-called fiscal cliff is resolved and entices companies to resume investment. “In the tug-of-war between more confident consumers and more cautious businesses, it looks like the consumer is winning,” said Harm Bandholz, chief US economist at UniCredit Group in New York. (Bloomberg)

US: Obama get re-elected with economy looking nothing like 2008
Unemployment is falling. The housing market is rebounding. Consumers are paying off their debts. And the big banks are healthy. The US economy that earned President Barack Obama a second term looks nothing like the mess that he inherited four years ago. Instead of shrinking and shedding jobs, the country is growing at an annual rate of 2% and businesses are handing out new paychecks at a monthly average of 157,000 so far this year. That doesn’t mean the world’s largest economy is thriving. (Bloomberg)

Dow tumbles most in one year after presidential elections
US stocks slumped, giving the Dow Jones Industrial Average its biggest decline in a year, as investors’ focus turned to the budget debate and Europe’s debt crisis following President Barack Obama’s re-election. The S&P 500 fell 2.4% to 1,394.53. The Dow lost 312.95 pts, or 2.4%, to 12,932.73. Volume for exchange-listed stocks in the U.S. was 7.9bn shares, or 32% above the three-month average. Now that the election has been decided, investors will turn their focus to the USD607bn of tax increases and federal spending cuts set to kick in automatically in January, the so-called fiscal cliff. (Bloomberg)

20121108 1101 Global Markets Related News.

Asian Stocks Decline as China Leadership Congress Begins (Bloomberg)
Asian stocks fell as investors turned their attention to the U.S. budget debate and as China’s Communist Party began its meeting to decide its fifth generation of leaders since taking power in 1949. BHP Billiton Ltd. (BHP), the world’s biggest mining company, dropped 0.7 percent in Sydney as commodity prices retreated. Fanuc Corp. (6954), the largest maker of controls that run machine tools, fell 1.5 percent as Japanese machine orders fell more than expected. Canon Inc. (7751), a camera manufacturer that depends on Europe for almost a third of its sales, sank 2.1 percent after the European Commission cut its growth forecast for the euro zone. The MSCI Asia Pacific (MXAP) Index lost 0.5 percent to 122.73 as of 9:56 a.m. in Tokyo, before markets opened in China and Hong Kong. All 10 industry groups retreated. The gauge gained 13 percent through yesterday from this year’s low on June 4 as central banks added stimulus amid a slowdown in global economic growth and the European debt crisis.
“The euphoria from President Barack Obama’s re-election has swiftly waned,” said Stan Shamu, a market strategist at IG Markets, Melbourne-based provider of trading services in stocks, commodities and currencies. Investors “decided to focus on some of the key issues the president will be facing, the fiscal cliff and the debt ceiling.”

Japan Stocks Fall on U.S. Budget Battle, China Congress (Bloomberg)
Japanese stocks declined, with the Nikkei 225 (NKY) Stock Average heading for a four-day drop, as investors turned their attention to the U.S. budget showdown after President Barack Obama’s re-election, and as China’s Communist Party convened a congress to pick new leadership. Honda Motor Co. (7267), a carmaker that counts North America as its biggest market, sank 2 percent. Machinery-maker Komatsu Ltd. fell 1.7 percent after Japan’s machinery orders fell more than expected. Canon Inc., a camera maker that gets almost a third of its sales in, sank 2.8 percent after the European Commission cut its growth forecast for the monetary union. “The result of the U.S. election was within expectations, but now the fiscal cliff is the problem the country faces,” said Mitsushige Akino, Tokyo-based chief fund officer at Ichiyoshi Asset Management Co., which oversees about 30 billion yen ($375 million). “Such uncertainty weighs on the markets.”
The Nikkei 225 fell 1.1 percent to 8,876.93 as of 9:22 a.m. in Tokyo, with volume 5.2 percent above the 30-day average. The broader Topix (TPX) Index lost 1 percent to 738.59, with all but one of its 33 industry groups falling. The Topix rose 3.7 percent through yesterday from Sept. 6 after the European Central Bank started a global wave of stimulus to boost growth, with the U.S. Federal Reserve and the Bank of Japan following suit. Shares on the equity gauge traded at 0.9 times book value, compared with 2.1 for the S&P 500 and 1.5 for the Europe Stoxx 600 Index.

Dow Tumbles Most in One Year After Presidential Elections (Bloomberg)
U.S. stocks slumped, giving the Dow Jones Industrial Average its biggest decline in a year, as investors’ focus turned to the budget debate and Europe’s debt crisis following President Barack Obama’s re-election. All 10 groups in the Standard & Poor’s 500 Index fell as financial shares had the biggest losses. Bank of America Corp. and JPMorgan Chase & Co. slumped at least 5.6 percent. Peabody Energy Corp. and Alpha Natural Resources Inc. slid more than 9.6 percent on bets Obama’s re-election will mean more regulation for the coal industry. Apple Inc. retreated 3.8 percent, extending a plunge from its September high to 21 percent. The S&P 500 fell 2.4 percent to 1,394.53 at 4 p.m. in New York. The Dow lost 312.95 points, or 2.4 percent, to 12,932.73. Volume for exchange-listed stocks in the U.S. was 7.9 billion shares, or 32 percent above the three-month average.
“It’s going to be very messy,” said James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management. He spoke in a telephone interview. “The wrestling around the fiscal cliff is going to leave a lot of bruises along the way. While I think we’ll get there, the path is not clear.” Obama defeated RepublicanMitt Romney, boosting speculation policy makers will add to stimulus in the world’s largest economy. While Obama received at least 303 electoral votes to Romney’s 206, Republicans kept a majority in the House of Representatives. Democrats retained control of the Senate.

Best Rally in Decade May Slow as Obama Faces Congress (Bloomberg)
Stock and bond investors enjoying the biggest advance in more than a decade under Barack Obama may see the momentum fade as the rallies age and the president confronts Congress over spending cuts and taxes. Obama will continue to support the Federal Reserve’s interest-rate policy, according to Brian Jacobsen at Wells Fargo Advantage Funds and Bruce Bittles of RW Baird & Co., which oversee a combined $294 billion. At the same time, his re- election endangers tax breaks enacted a decade ago on dividends and capital gains. The advance in the Dow Jones Industrial Average (INDU) that began just after Obama took office is five months away from matching the mean length of bull markets since World War II, data compiled by Bloomberg show. While Obama’s victory in 2008 spurred the biggest plunge ever for the Dow on the day after an election, gains for American assets over the past four years are among the best in the developed world.
Fed Chairman Ben S. Bernanke’s actions to revive the economy after the worst recession in seven decades helped send the Dow up 67 percent and U.S. bonds to a total return of 27 percent, data compiled by Bloomberg show. “There are different sections of any bull market and we’re probably entering the continuation phase versus the initial expansion,” Larry Gilbert, who helps oversee $25 billion as managing director at Chicago-based HighTower Advisors, said in a phone interview. “The market returns depend in part on how the next president deals with the structural economic issues in this country. We’re very cautious.”

Recap Stock Index Market Report (CME)
The December S&P 500 traded sharply lower during the US morning hours, pressured by uncertainty surrounding the fiscal cliff, prospects for dividend and capital gain tax increases and fresh evidence of slowing economic growth in Germany. The December S&P 500 traded down nearly 3% into the mid session and to its lowest level since August 8th. Some traders also noted concern in the broader market over a Greek austerity vote due later in the session. All of the major S&P sectors were in negative territory, led by declines in financial and energy-related shares. Some traders indicated that the financial sector was under added strain from potential impact of upcoming Dodd-Frank regulations.

Europe Stocks Drop on Economy Concern, U.S. Fiscal Cliff (Bloomberg)
European stocks fell the most in two weeks as the European Commission cut its growth forecast for the region and concern over an impending fiscal crisis in the U.S. increased after the re-election of President Barack Obama. Randgold Resources Ltd. (RRS) slumped the most in six months after predicting that its annual output will be at the bottom of its target. Holcim Ltd. (HOLN), the world’s largest cement maker, slid 2.4 percent as earnings missed analysts’ estimates. BNP Paribas SA jumped 1.1 percent after third-quarter net income more than doubled. Hochtief AG (HOT) advanced 3.1 percent after reiterating full-year profit targets. The Stoxx Europe 600 Index (SXXP) declined 1.4 percent to 271.04 at the close of trading, erasing an earlier gain of as much as 0.7 percent. The benchmark gauge has still rallied 16 percent from this year’s low on June 4 as central banks around the world reduced borrowing costs and expanded stimulus programs.
“Worries about the state of the European economy are weighing on sentiment,” said Markus Wallner, an equity strategist at Commerzbank AG in Frankfurt. “With regards to the U.S. election, investors may be relieved it’s over, but the fiscal cliff at the end of the year still is the main unsolved problem.” Brussels-based European Commission today projected the 17- nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent. It cut the estimate for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent.

Emerging ETF Sinks to 2-Week Low as Brazil Equities Fall (Bloomberg)
The exchange-traded fund tracking developing-nation shares sank the most in two weeks as equity indexes from Hungary to Brazil fell along with U.S. stocks and oil. BYD Co. (1211), the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., surged 11 percent. The iShares MSCI Emerging Markets Index ETF tumbled 1.6 percent as investors assessed U.S. President Barack Obama’s challenge to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts after winning re- election and the Greek debt crisis on emerging markets. BYD led gains in industrial and technology companies in the MSCI Emerging Markets Index (INDEXCF), which was little changed.
“We’re seeing the very tough reality check after the party,” Chris Weafer, chief strategist at Sberbank Investment Research, the investment banking arm of Russia’s largest lender, said in an interview at Bloomberg’s headquarters in New York. “With the election over people are looking to the tough schedule ahead for the U.S. coupled with uncertainty surrounding Greece and the euro zone.” The MSCI Emerging Markets Index added 0.1 percent to 1,007.45 at the close in New York, paring an earlier advance of as much as 0.8 percent. Benchmark indexes in Hungary, Russia, Brazil Colombia and Mexico fell more than 1 percent. Brazilian oil producer OGX Petroleo e Gas Participacoes SA, slid the most since Oct. 26 as crude sank the most this year.

Treasuries Rise as Obama Wins Presidential Election (Bloomberg)
Treasuries held gains from yesterday on concern the so-called fiscal cliff of spending cuts and tax increases will curb growth in the world’s biggest economy. U.S. government securities returned 0.6 percent in the month ended yesterday, according to Bank of America Merrill Lynch indexes, reflecting demand for the relative safety of sovereign debt. The MSCI All-Country World Index (MXWD) of stocks handed investors a 2.9 percent loss. The Treasury is scheduled to sell $16 billion of 30-year bonds today. U.S. 10-year notes yielded 1.68 percent as of 9:55 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 1.625 percent security due in November 2022 changed hands at 99 15/32. Yields declined 10 basis points, or 0.10 percentage point, yesterday as President Barack Obama won a second term.
“We’re back in the lines of political games,” said Roger Bridges, who oversees the equivalent of $15.6 billion of debt as head of fixed income at Tyndall Investment Management Ltd. in Sydney. “There’s enough momentum in the economy to get rates up to 2 percent. The question is, if we’re going to continue with this policy uncertainty, then they will send the economy downward and bonds will rally.” Obama’s re-election bolstered expectations that Federal Reserve Chairman Ben S. Bernanke will keep supporting the economy via bond purchases. Ten-year notes have “a bid based upon the Bernanke expectation for easy money as far as the eye can see,” Pacific Investment Management Co.’s Bill Gross, who runs the world’s biggest bond fund, said yesterday on Bloomberg Television’s “Street Smart” with Trish Regan.’’ As for the fiscal cliff, “finding that middle ground will be very difficult,” he said.
The fiscal cliff comprises $600 billion of tax increases and spending cuts scheduled to take effect automatically next year unless Congress acts.

Aussie Touches 7-Week High Versus Kiwi on Job Gains (Bloomberg)
Australia’s dollar touched a seven- week high against its New Zealand peer as gains in the nation’s employment exceeded estimates, while the jobless rate in the smaller South Pacific country surged to a 13-year high. The so-called Aussie strengthened versus all of its 16 major counterparts as investors reduced expectations the Reserve Bank of Australia will cut borrowing costs next month. The New Zealand dollar, known as the kiwi, failed to rally against the greenback after its biggest one-day loss in three months. Demand for both currencies was also limited as U.S. President Barack Obama, a Democrat, faces budget negotiations with congressional Republicans. Today’s data from Australia “was stronger than expected,” said Sue Trinh, a Hong Kong-based senior currency strategist at Royal Bank of Canada. “It’s no surprise to see the Aussie outperforming across the board. Expectations of a December rate cut from the RBA have been pared back further.”
The Australian dollar added 0.2 percent to NZ$1.2739 as of 12:12 p.m. in Sydney after it earlier touched NZ$1.2742, the strongest since Sept. 17. It gained 0.2 percent to $1.0427. New Zealand’s currency was unchanged from 81.84 U.S. cents yesterday, when it slid 1 percent, the biggest drop since July 23. The number of people employed in Australia increased by 10,700 last month after rising a revised 15,500 in September, the statistics bureau said today. That compares with economist forecasts in a Bloomberg News survey of a gain of 500. The unemployment rate was unchanged at 5.4 percent. Statistics New Zealand said today the nation’s jobless rate increased to 7.3 percent in the three months ended September from 6.8 percent in the second quarter. That’s the most since 1999.
In the U.S., President Obama’s re-election is set to be followed by budget discussions with Congress to avert the so- called fiscal cliff, which refers to more than $600 billion in tax increases and spending cuts set to be implemented in 2013 that may push the U.S. back into recession.

Dollar, Yen Gain Amid U.S. Fiscal Cliff, Europe Concern (Bloomberg)
The dollar and yen remained stronger against most major peers as investors sought safety amid concern re-elected President Barack Obama and the U.S. Congress will struggle to avert the so-called fiscal cliff. The greenback remained weaker against the Japanese currency after Obama’s victory over Republican challenger Mitt Romney boosted expectations the Federal Reserve will maintain monetary stimulus. The euro traded near a two month-low ahead of a European Central Bank meeting today after President Mario Draghi said Europe’s debt crisis is affecting Germany. A report today is forecast to show exports in Europe’s largest economy declined in September. “The biggest focus of the market as we head into year-end will be the fiscal cliff in the U.S.,” said Noriaki Murao, New York-based managing director of the marketing group at the Bank of Tokyo-Mitsubishi UFJ Ltd., referring to the $607 billion in tax increases and spending cuts set to be implemented in 2013 unless Congress acts.
“Investors are buying safe currencies such as the dollar and yen.” The dollar fetched $1.2754 per euro as of 9:19 a.m. in Tokyo from $1.2771 yesterday, when it touched $1.2737, the strongest since Sept. 7. The U.S. currency slid 0.1 percent to 79.90 yen after declining 0.4 percent yesterday. The euro lost 0.3 percent to 101.90 yen.

U.S. Consumer Credit Rose More Than Forecast in September (Bloomberg)
Consumer credit in the U.S. increased in September for a second month, led by a pickup in borrowing for education and automobiles. The $11.4 billion gain followed a revised $18.4 billion jump in August, Federal Reserve figures showed today in Washington. The median forecast of 34 economists surveyed by Bloomberg called for a $10.2 billion increase in September. Improving labor and housing markets may be giving households enough confidence to take on more debt as they finance purchases that account for about 70 percent of the economy. Auto sales in September that were the strongest in more than four years showed some Americans took advantage of cheaper borrowing costs.
“It’s pretty clear that consumer confidence has risen,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “I think what’s really driving that improvement in consumer confidence is that average Americans are seeing the value of their homes now recover somewhat or rebound somewhat after four or five years of steady declines.” Estimates in the Bloomberg survey for consumer credit ranged from gains of $7 billion to $19.5 billion after a previously reported August gain of $18.1 billion. The consumer credit report doesn’t track debt secured by real estate, such as home equity lines of credit and home mortgages.

Upbeat Consumers to Sustain U.S. as Companies Hesitate (Bloomberg)
Consumers in the U.S. are stepping in where companies fear to tread. Americans are more upbeat while business sentiment stagnates, a sign their spending will provide a bridge for the economic expansion until the so-called fiscal cliff is resolved and entices companies to resume investment. “In the tug-of-war between more confident consumers and more cautious businesses, it looks like the consumer is winning,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York. “It puts a floor under growth. With consumer spending rising at even a moderate pace, the expansion will carry on.”
The re-election of President Barack Obama yesterday helps remove one element of uncertainty about the nation’s direction as the focus shifts to how lawmakers approach the fiscal cliff - - $607 billion in federal tax increases and spending cuts slated for next year. For consumers, rising home prices, an improving job market and healthier finances are trumping those concerns, making it more likely household demand will be sustained. Household optimism is the highest in more than four years, reports from the Conference Board and Thomson Reuters/University of Michigan show, while a Bloomberg gauge of confidence in the economy is the strongest since early 2008. Corporate sentiment has stalled, according to Institute for Supply Management measures that underscore a cautionary tone from company officials on earnings calls.

Fed QE3 May Top $1 Trillion Amid Political Impasse (Bloomberg)
With the balance of political power in Washington maintained by yesterday’s presidential election, the Federal Reserve remains the sole source of policy support for a U.S. economy plagued by 7.9 percent unemployment. “If you’re going to get stimulus, it’s got to come from the Fed,” said Paul Edelstein, the director of financial economics at IHS Global Insight in Lexington, Massachusetts. “They’re the only game in town.” A fiscal boost to the economy is probably off the table as President Barack Obama negotiates tax increases and spending cuts with leaders of a Democratic-controlled Senate and a House of Representatives led by Republicans, Edelstein said. That may leave only the Fed in the position of trying to boost the economy, and its third round of quantitative easing may extend through next year and climb past $1 trillion, said economists at JPMorgan Chase & Co. and Pierpont Securities LLC.
Treasuries rose, pushing 10-year yields down the most in five months, as Obama’s re-election bolstered speculation the central bank will maintain a bond-buying program that San Francisco Fed President John Williams this week said may exceed $600 billion. Republican candidate Mitt Romney had criticized the Fed’s policies and said he’d replace Chairman Ben S. Bernanke, whose second term expires in January 2014. The 10-year yield fell 10 basis points, or 0.1 percentage point, to 1.65 percent at 5:20 p.m. in New York, according to Bloomberg Bond Trader prices.

Obama Faces Pressure to Lead on ‘Fiscal Cliff’ After Win (Bloomberg)
President Barack Obama’s victory positions him to claim a mandate for pushing a proposal through Congress that would let tax cuts expire for top earners and avert $1.2 trillion in automatic spending reductions. Obama now must decide how to contend with opposition from congressional Republicans who demand a tax-cut extension for all income levels. Obama defeated Republican Mitt Romney to win a second term that will begin with the same balance of power in Congress: Democrats controlling the Senate and Republicans holding the majority in the House. Republicans were counting on a Romney victory or a Senate takeover to improve their negotiating posture. Emboldened by the election results, Obama “will offer a brand-new plan of his own,” Steve Bell, senior director of the Economic Policy Project at the Bipartisan Policy Center, said in an interview.
Bell said one option the Obama administration is considering is pushing anew for a “balanced” plan to cut as much as $100 billion in spending as a deficit-reduction down payment while letting the George W. Bush-era tax cuts expire for top earners. “In the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together: reducing our deficit; reforming our tax code; fixing our immigration system; freeing ourselves from foreign oil,” Obama said in his victory speech early today.

Greenspan Says Election Won’t Help Resolve Fiscal Cliff (Bloomberg)
Former Federal Reserve chairman Alan Greenspan said the U.S. election yesterday perpetuated the political status quo and hasn’t increased the probability of resolving the nation’s fiscal challenges. “I’m concerned that the election per se has really not changed the balance very much of what’s going on” in the debate over how to reduce the U.S. deficit, Greenspan said today in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “We’ve got to resolve this issue.” “Unless and until we come to grips with this issue, we are not going to be able to look to the future with a considerable state of equilibrium and hope,” said Greenspan, who led the U.S. central bank from 1987 to 2006. The three-year U.S. expansion faces headwinds from a slowing global economy and the risk Congress won’t avert $607 billion in federal tax increases and spending cuts beginning at the start of next year.
Congress lined up the spending cuts in 2011 as part of an agreement to raise the federal debt ceiling and cut future deficits. Failing to resolve the issue would probably push the world’s largest economy back into recession, the nonpartisan Congressional Budget Office said in August. President Barack Obama, a Democrat, defeated Republican Mitt Romney to win a second term that will begin with the same balance of power in Congress as before the elections, with Democrats controlling the Senate and Republicans holding the majority in the House.

Home Prices Rise in 81% of U.S. Cities as Markets Recover (Bloomberg)
Prices for single-family homes rose in 81 percent of U.S. cities as the property market extends a recovery from the worst crash since the 1930s. The median sales price increased in the third quarter from a year earlier in 120 of 149 metropolitan areas measured, the National Association of Realtors said in a report today. In the second quarter, 110 areas had gains. Values are climbing after a six-year slump as buyers compete for a shrinking supply of properties listed for sale. U.S. home prices jumped 5 percent in September from a year earlier, the biggest 12-month increase since July 2006, CoreLogic Inc., an Irvine, California-based real estate data provider, said yesterday. “The housing recovery still faces a number of potential headwinds,” Paul Diggle, property economist for Capital Economics Ltd. in London, said in a note to clients after CoreLogic’s report was released. “But our central case is that tight supply conditions will mean that house prices will continue to rise steadily next year.”
At the end of the third quarter, 2.32 million existing homes were available for sale, 20 percent fewer than a year earlier, according to the Chicago-based Realtors group.

New York Flights Halt, N.J. Towns Evacuate as Storm Nears (Bloomberg)
Shore towns in New Jersey and on New York’s Long Island ordered new evacuations as thousands of blacked-out residents braced for the cold while snow began to blanket the region still recovering from Hurricane Sandy. Residents in Toms River, Brick, Berkeley Township, Highlands and Middletown, New Jersey, were told to leave threatened areas, according to website postings. On Long Island, Nassau County Executive Edward Mangano ordered evacuations from flood or storm-surge zones. Islip officials ordered people off Fire Island and out of waterfront neighborhoods. Airlines serving the metropolitan region canceled hundreds of flights.
Winds gusted to 60 miles (97 kilometers) an hour, driving rain, sleet and snow to New York City streets by midday. The nor’easter may swirl up the coast toward New England, bringing a storm surge of as much as 4 feet (1.2 meters) to the New Jersey and Long Island shores, said Lauren Nash, a National Weather Service meteorologist in Upton, New York. The storm knocked out power to at least 22,000, the U.S. Energy Department said. “High winds and heavy rain could cause delays in restoring power, or, with falling trees and branches, bring additional outages,” said Sara Banda, a Consolidated Edison Inc. (ED) spokeswoman. The electric utility serves the city and suburban Westchester County to the north.

China’s Economic Growth at Stake as Communist Party Meets (Bloomberg)
China’s Communist Party gathers today in Beijing to choose its fifth generation of leaders since taking power in 1949, a decision that will shape the nation’s economic and financial policies for the next decade. Vice President Xi Jinping is forecast to replace Hu Jintao as general secretary of the 82 million-member party. Vice Premier Li Keqiang is seen taking Premier Wen Jiabao’s spot on the top Politburo Standing Committee, setting him up to assume Wen’s job next March. The backgrounds of Xi, Li and the other successful candidates for the Standing Committee -- likely all men -- will give investors clues to their appetite for policy shifts that the World Bank says China must embrace to become a high-income economy. The reform agenda ranges from breaking up state-owned monopolies to deregulating lending rates and correcting under- pricing of natural resources.
“There’s no luxury to delay these reforms,” said Ding Shuang, senior economist for China at Citigroup Inc. in Hong Kong, who previously worked at China’s central bank. “The past 10 years, the economy has benefited from changes made in previous periods. Now, those dividends are used up,” he said, referring to the country’s 2001 entry to the World Trade Organization and market reforms in the 1980s and 1990s. The 2,268 delegates to the 18th congress, drawn from the central government, military, state-owned companies and China’s provinces, will approve changes to the party’s constitution and pick the next central committee, a group of about 200 people from whose ranks comes the Politburo, now with 24 people, and its standing committee, now with nine men. The standing committee wields supreme power in China.

Japan Machinery Orders Fall More Than Forecast on Exports (Bloomberg)
Japan’s machinery orders fell more than expected in September as slowing global demand hurts exports, while the nation’s current account surplus narrowed to its lowest level for the month since at least 1985. Orders, an indicator of capital spending in three to six months, declined 4.3 percent from the previous month, the Cabinet Office said today in Tokyo. The median of 29 estimates in a Bloomberg News survey was for a 2.1 percent drop. The excess in the broadest measure of Japan’s trade was 503.6 billion yen ($6.3 billion), compared with a median estimate of 761.8 billion yen, a Finance Ministry report showed. Data due next week will probably show the world’s third- largest economy shrank the most since last year’s earthquake. A political impasse over deficit enabling legislation is impeding the government’s scope to aid growth, placing the onus on the central bank to add stimulus.
“We are in the middle of a technical recession” of two consecutive quarters of contraction, Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo and a former Bank of Japan official, said before the report. “It’s hard for the government to do anything to get us out of recession, so the BOJ may need to do more.” Gross domestic product probably shrank an annualized 3.4 percent in the three months through September, the first decline in five quarters, according to the median estimate of economists surveyed by Bloomberg News. The Cabinet Office will release the report Nov. 12.

Robots-to-Cosmetics Profit Slump Adds to Japan Economy Woes (Bloomberg)
Slumping profits at Japanese manufacturers from robots to cosmetics threaten to weigh on investment and wages, adding to the likelihood of recession after the economy probably contracted last quarter. Gross domestic product shrank an annualized 3.4 percent in the three months through September, according to the median estimate of 17 economists surveyed by Bloomberg News. That would be the steepest decline since the earthquake-affected first quarter of 2011. The data is due Nov. 12. Machine orders fell a more-than-estimated 4.3 percent in September, a separate report showed today.
The economy’s decline mirrors an aggregate 34 percent drop in net income at the 171 companies listed on the Nikkei (NKY) 225 Stock Average to report July-September earnings so far, according to data compiled by Bloomberg. Sharp Corp. (6753) and Panasonic Corp. (6752) expect to lose a combined 1.2 trillion yen ($15 billion) this fiscal year, while industrial robot maker Fanuc Corp. (6954) missed its forecast and cosmetics company Shiseido Co. (4911) plans to cut costs. “Worsening profits will make it harder for companies to be aggressive about investment and hurt consumption through smaller bonuses this winter and next summer,” said Masamichi Adachi, a senior economist at JPMorgan Securities Japan Co. in Tokyo and a former central bank official. “In terms of the economic cycle, Japan is in a really bad position.”

Australian Employers Added More Workers Than Forecast in October (Bloomberg)
Australian employers boosted payrolls more than economists forecast in October and the unemployment rate unexpectedly held as the nation weathered a global slowdown. The local currency advanced. The number of people employed rose by 10,700 after a 15,500 gain in September, the statistics bureau said in Sydney today. That compares with the median estimate for an increase of 500 jobs last month in a Bloomberg News survey of 26 economists. The jobless rate was unchanged at 5.4 percent. The data highlight the resilience of the world’s 12th- largest economy, which expanded at an annual pace of about 4 percent in the first half of the year, driven by resource investment. Reserve Bank of Australia Governor Glenn Stevens cut interest rates by a quarter percentage point last month, bringing to 1.5 points the reduction since Nov. 1 last year, before holding this week as the global economy stabilizes and inflation picks up.
“The broad picture remains one where job gains are largely balancing job losses,” Diana Mousina, an economist in Sydney at Commonwealth Bank of Australia (CBA), said in a research report before the release. The number of full-time jobs advanced by 18,700 in October, and part-time employment fell by 8,000, today’s report showed. Australia’s participation rate, a measure of the labor force in proportion to the population, dropped to 65.1 percent in October from 65.2 percent a month earlier, it showed.

N.Z. Jobless Rate Surges to 13-Year High, Currency Plunges (Bloomberg)
New Zealand’s unemployment rate unexpectedly rose last quarter to a 13-year high, adding to evidence of a faltering recovery and sending the best-performing Group of 10 currency this year plunging. The jobless rate jumped to 7.3 percent from 6.8 percent in the second quarter, Statistics New Zealand said in a report today in Wellington. That’s the highest since the first quarter of 1999 and was more than the 6.7 percent median estimate in a Bloomberg survey of economists. Employment fell by 0.4 percent, or 8,000 jobs, from the second quarter, when it dropped 0.1 percent. Economists expected job growth of 0.3 percent. The nation’s dollar tumbled to near a two-week low as investors increased bets the Reserve Bank of New Zealand will lower interest rates next month to revive demand. With the world’s major economies struggling to accelerate, the New Zealand currency’s 5.4 percent gain against its U.S. peer this year is forcing companies including Rakon Ltd. (RAK) to fire workers.
“The RBNZ has room to move and today’s report may provide the motivation,” Paul Bloxham, chief economist for HSBC Holdings Plc in Sydney, said in a research note. “The industries that were weakest were those that are most exposed to the New Zealand dollar, including manufacturing.” The local currency bought 81.88 U.S. cents at 12:33 p.m. in Wellington from 82.62 cents immediately before the release. The so-called kiwi earlier touched 81.76 cents, the weakest level since Oct. 26.

Samaras Wins Greek Austerity Bill in Race to Secure Aid (Bloomberg)
Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of austerity measures needed to unlock bailout funds, after more than 50,000 protesters ringed Parliament. The bill on pension, wage and benefit cuts was approved with 153 votes in favor in the 300-seat Parliament early today, according to acting Parliament speaker Athanasios Nakos. A total of 128 voted against the bill, with 18 voting “present.” One lawmaker was absent. The voting was televised on state-run Vouli TV. The vote took its toll on Samaras’s government, with Samaras expelling one lawmaker from his New Democracy party for failing to support the bill. Samaras’s main coalition partner, Pasok, which provides Samaras with the majority he needs to rule, expelled six lawmakers after the vote for their failure to support the legislation.
“Greece today took a great, decisive and positive step,” Samaras said in a statement after the tally. “This vote was a condition that will create jobs for our children, for all of Greece to see better days. The next step is the budget, which will also go well.”

Spain Said to Consider Palace Sales to Raise Cash (Bloomberg)
The Spanish government is considering a sale of a small, century-old palace in the heart of Madrid’s business district as part of a plan to raise cash from 100 prime properties, a person with knowledge of the matter said. Castellana 19, built in 1903 and later used to house Spain’s stock-market regulator, would be sold outright rather than leased, said the person, who asked not to be identified because the plan’s details aren’t public. The property was valued at 28.7 million euros ($37 million) in 2010, the year before the agency moved out. The government said last month it had selected 100 buildings that could be privatized by the end of 2016.
The properties, mostly in Madrid, will be sold outright or leased for as long as 30 years, the person said. They won’t be part of sale-and-leaseback deals because that would be too costly for the state in the long term, the person said. Spain is seeking to generate more money from its real estate as it tries to avoid following Greece, Ireland and Portugal by requesting a full bailout. Another small palace, owned by the Economy and Finance Ministry, may be leased, the person said. The historically protected property on Calle Duque de Medinaceli was designed by Gabriel Abreu and Fernando Garcia Mercadal and built in the 1920s. It was purchased by the state in 1928 and became the Spanish National Research Council’s library in 1952. Castellana 19 was designed by architects including Miguel de Olabarria, who helped conceive the Almudena Cathedral in Madrid.

20121108 1100 Global Commodities Related News.

DTN Closing Grain Comments 11/07 14:39 Wheat Impresses Wednesday (CME)
Grains started the pit session weaker, but very quickly exploded to the plus side led by Chicago wheat. Corn was able to finish modestly higher while soybeans were unable to sustain bullish momentum almost wiping out Monday's gains.

Wheat Market Recap Report (CME)
December Wheat finished up 17 at 894, 3 off the high and 23 1/4 up from the low. March Wheat closed up 17 1/4 at 907 3/4. This was 23 1/2 up from the low and 3 off the high. December Chicago wheat surged to its highest level since October 1st and finished the day with double digit gains. KC and Minneapolis wheat traded higher as well. Poor growing conditions in the western plains, short covering ahead of Friday's USDA report, and new contract highs in the Paris Wheat futures market overnight prompted a massive round of buying shortly after the open outcry open. Outside markets negatively following the reelection of the President but fears of a Greek default on debt as well as concern over the US fiscal cliff added to the negative tone and pushed the US Dollar higher on the day. The strong dollar and weak soybean market offered resistance to gains but many in the market also feel the USDA report this Friday could be supportive to the market.
Some feel global wheat ending stocks will fall near 170 million tonnes vs. current estimates of 173 million tonnes. Traders will also watch for cuts to Argentina and Australian wheat production. December Oats closed up 5 1/4 at 365 1/4. This was 9 3/4 up from the low and 1/2 off the high.

Corn Market Recap for 11/7/2012 (CME)
December Corn finished up 3 1/4 at 744 1/4, 7 1/2 off the high and 10 1/4 up from the low. March Corn closed up 3 at 746. This was 10 1/2 up from the low and 6 1/4 off the high. December corn trade higher on the day and briefly traded above 750 shortly after open outcry began trading. Buying support was linked to a sharply higher wheat market as well as thoughts that Argentina corn production will be slashed due to heavy rainfall in October. Exports remain sluggish for corn but this only makes up 10% of the demand matrix. Demand for corn remains strong in feeder markets as wheat extends its premium to corn futures. Basis bids at ethanol facilities are strong as well and ethanol production for the week ending November 2nd averaged 827,000 barrels per day which is up 0.25% vs. last week and down 9.2% vs. last year. On top of the better production, ethanol stocks were drawn down which could imply a significant improvement in overall ethanol demand. Total ethanol production for the week was 5.79 million barrels which was up from 5.77 the week prior. Corn used in last week's production is estimated at 86.8 million bushels which was up from last week. This crop year's cumulative corn used for ethanol production for this crop year is 765.9 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. November Rice finished down 0.1 at 14.935, equal to the high and equal to the low.

Wheat Gains as Declining Crop Conditions Threaten Supply (Bloomberg)
Wheat futures rose to a five-week high on speculation that global supplies will tighten as crop conditions deteriorate in the U.S. because of dry weather and rain delays planting in parts of Europe. About 39 percent of the U.S. winter crop was in good or excellent condition as of Nov. 4, the lowest for the week since data started 27 years ago, the Department of Agriculture said on Nov. 5. The French soft-wheat crop was 64 percent planted as of Oct. 29, compared with 88 percent last year, FranceAgriMer said on Nov. 2. “In the U.S. Plains, they’re going into dormancy in very dry conditions,” Mike O’Dea, a risk-management consultant at INTL FCStone in Kansas City, Missouri, said in a telephone interview. As the French price rises, “it will give the impression that U.S. grain is undervalued compared to the world market,” he said.
Wheat futures for December delivery gained 1.9 percent to settle at $8.94 a bushel at 2 p.m. on the Chicago Board of Trade, after reaching $8.97, the highest for a most-active contract since Oct. 1. The grain is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show. In Paris, milling-wheat futures for January delivery gained 1.5 percent to 275.50 euros ($351.70) a metric ton on NYSE Liffe. Earlier, the contract reached a record 277.50 euros.

Longest Sugar Glut in Decade Extends on Indian Crop: Commodities (Bloomberg)
Indian farmers may reap at least 6 percent more sugar than forecast by the government and industry, extending the longest global glut in more than a decade and a bear market that began in September. Output in the world’s second-biggest producer will reach 25.53 million metric tons in the season that began Oct. 1, according to a survey of 820 farmers across an area responsible for 93 percent of national output by Geneva-based SGS SA (SGSN) for Bloomberg. While that’s 2.6 percent less than a year earlier, the government expects output of 23.5 million tons and the Indian Sugar Mills Association predicts 24 million tons.
The extra sweetener would expand global supply already forecast by the International Sugar Organization to reach a record this season. Producers from Russia to Thailand raised output after prices averaged the most in three decades in 2011. Futures fell 26 percent since March on prospects for a third straight annual surplus, helping to contain the surge in global food costs caused by droughts in the U.S., Europe and Australia. “If the actual crop is going to be more than expected it’s detrimental for the world market,” said Sergey Gudoshnikov, a senior economist at the ISO in London who has studied the commodity for about three decades. “For the time being the world sugar market is still in surplus.”
Raw-sugar futures fell 16 percent to 19.50 cents a pound this year on ICE Futures U.S. in New York. Prices, which reached 36.08 cents in February 2011, the highest since 1980, may drop to 18 cents by the year-end, based on the median of 15 trader and analyst estimates compiled by Bloomberg last month. It’s this year’s third-biggest decliner in the Standard & Poor’s GSCI Spot Index of 24 commodities, behind coffee and cotton.

Recap Energy Market Report (CME)
December crude oil prices trended sharply lower during the US trading session, under pressure from a sell off in risk-taking sentiment, gains in the US dollar and renewed concerns over the US fiscal cliff. The decline in crude oil turned lower following renewed concerns over the European debt situation and ahead of a Greek austerity vote. December crude oil prices plunged below yesterday's low in the wake of EIA inventory data that showed a build that was slightly more than expected of 1.766 million barrels last week. Some of the build came from a hefty decline in refinery capacity, which was down 2.3% last week to 85.40%. Crude oil prices seemed to stabilize in early afternoon trade as prices attracted a measure of support on the downdraft to $84.50 and modest rebound in US equity markets.

Oil Trades Near Four-Month Low After Biggest Decline This Year (Bloomberg)
Oil traded near the lowest level in almost four months in New York on concern the so-called fiscal cliff threatens to slow economic growth in the U.S, the world’s biggest oil-consuming nation. Futures were little changed after dropping 4.8 percent yesterday as President Barack Obama was re-elected and a government report showed that U.S. crude and fuel supplies rose last week. Democrat Obama faces a showdown with the Republican- controlled House over more than $600 billion in tax increases and spending cuts next year. West Texas Intermediate oil for December was at $84.68 a barrel, up 24 cents, in electronic trading on the New York Mercantile Exchange at 9 a.m. in Tokyo. Crude slumped $4.27 yesterday to $84.44, its lowest close since July 10. Prices have fallen 14 percent this year. Brent oil for December settlement slid $4.25, or 3.8 percent, to $106.82 a barrel on the ICE Futures Europe exchange yesterday. The European benchmark crude closed at a premium of $22.38 to New York-traded WTI.

U.S. Oil Production Increases to Highest Since December 1994 (Bloomberg)
U.S. oil production rose to the highest in almost 18 years as a shale drilling boom cut reliance on foreign fuel and nudged the country closer to energy independence. Output swelled by 8,000 barrels to 6.68 million barrels a day in the week ended Nov. 2, the Energy Department reported today. It was the most since Dec. 23, 1994. Improvements in horizontal drilling and hydraulic fracturing, or fracking, have unlocked fuel trapped in deep underground rock formations in states such as North Dakota, Texas and Oklahoma. The U.S. met 83% of its energy needs in first six months of 2012, on track to be the highest annual level since 1991, according to department data compiled by Bloomberg. Production advanced 31 percent this year in North Dakota, 19 percent in Texas and 11 percent in Oklahoma, department records show. Crude imports have declined 11 percent this year.
“Every added barrel we make here is another barrel we don’t need from somewhere else,” said Kyle Cooper, director of commodities research at IAF Advisors, a Houston consulting firm. “U.S. production could reach 9 million to 10 million barrels per day in another five to 10 years.” Oil fell $3.59 a barrel, or 4.1 percent, to $85.12 on the New York Mercantile Exchange at 12:19 p.m. Futures have declined 14 percent this year.

Gold Set for Longest Winning Run in 2 Months on Obama Win (Bloomberg)
Gold declined for the first time in three days as a stronger dollar crimped demand for the precious metal as an alternative investment. The dollar gained as much as 0.4 percent against a basket of six currencies on concern that President Barack Obama will struggle to convince Congress to avert the so-called fiscal cliff after his re-election. European Central Bank President Mario Draghi said the region’s crisis is affecting Germany. The Standard & Poor’s GSCI Spot Index of 24 commodities slumped as much as 2.6 percent. “We are seeing a risk-off day today,” Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages about $3 billion of assets, said in a telephone interview. “There is a sell-off across the board.” Gold futures for December delivery slid 0.1 percent to settle at $1,714 an ounce at 1:53 p.m. on the Comex in New York. Earlier, prices touched $1,733, the highest for a most-active contract since Oct. 19.
Silver futures for December delivery declined 1.2 percent to $31.661 an ounce in New York. On the New York Mercantile Exchange, platinum futures for January delivery fell 1.2 percent to close at $1,539.50 an ounce. Palladium futures for December delivery slipped 1.6 percent to $610.35 an ounce.

Gold, Copper Lead Gains in Commodities as Obama Wins Second Term (Bloomberg)
Gold and copper advanced after Barack Obama won a second term as U.S. president, entrenching prospects for continued stimulus in the world’s biggest economy and weakening the dollar. The Standard & Poor’s GSCI Index of raw materials climbed as much as 0.5 percent to 647.66. Gold advanced to $1,731.82 an ounce in London, the highest in more than two weeks, while copper rose as much as 1.4 percent to $7,806.25 a metric ton. Obama defeated Republican Mitt Romney, securing at least 303 electoral votes, with 270 needed for victory. The S&P GSCI Index is little changed this year as investors weigh stimulus from the world’s central banks including the Federal Reserve against a global slowdown and impact of Europe’s debt crisis.
“The outcome of the U.S. election increases the probability that the ultra-expansionary monetary and fiscal policy will continue, which puts pressure on the U.S. dollar and gives buoyancy to commodity prices,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said today in a report. The Dollar Index (DXY), a gauge of the U.S. currency against six counterparts, declined 0.2 percent to 80.453. Commodities priced in dollars tend to move counter to the currency. Obama’s victory erases a question mark that has shadowed the U.S. economy and the Fed all year as the U.S. central bank presses on with a program of quantitative easing to spur growth and cut joblessness. Romney had vowed to replace Fed Chairman Ben S. Bernanke when his term ends in 2014 because “the amount of currency that he’s created” with his purchases of Treasuries and other debt securities has failed to create jobs. The U.S. jobless rate rose to 7.9 percent in October, according to a Labor Department report on Nov. 2.

Silver Market Recap Report (CME)
The silver market forged a large trading range today but at times the December silver contract surrendered more than half its initial gains. In addition to concerns of slowing fostered by renewed attention to the looming US fiscal cliff, it is also possible that silver was undermined by talk of rising investment taxes. For good measure the silver bulls might have been emboldened by the looming uncertainty of the Chinese Congress kick off on Thursday and perhaps some silver bulls decided to stand aside rather than risk a sell off in the events the situation in Greece deteriorates.

Gold Market Recap Report (CME)
The gold market forged a rather wide two sided trading range today. The December gold contract has now seen 3 out of the last 4 trading session's exhibiting some very extensive volatility and that could be something that begins to favor the bear camp ahead. Gold was probably undermined as a result of talk that rising investor taxes in the US were likely to be seen as a headwind for the US economy and that in turn could rekindle old fears toward the Euro zone situation. While the currency markets posted some adverse action for gold today, the main pressure on gold seemed to be the result of big picture macro economic slowing concerns. While gold did see volume and open interest pick up to start this week, the failure on the charts today might put the prior two day's noted gains in jeopardy.

20121108 1100 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
November Soybeans finished down 8 at 1508 3/4, 14 off the high and 8 1/2 up from the low. January Soybeans closed down 8 1/2 at 1507. This was 9 3/4 up from the low and 14 3/4 off the high. December Soymeal closed down 3.2 at 469.5. This was 4.3 up from the low and 5.9 off the high. December Soybean Oil finished down 0.06 at 48.62, 0.44 off the high and 0.21 up from the low. January soybeans finished the day lower but off session lows and above $15.00. Technical selling as well as a stronger US Dollar offered resistance to prices. Outside markets were sharply lower with the Dow Jones down over 200 points. Concerns that no agreement will be made on the fiscal cliff and uncertainly over the path of the global economy pushed investors to the sidelines and towards safe havens like the US Dollar. Underlying support is coming from strong export demand from China and a tight global supply outlook if South America fails to produce a bumper crop this year. Weather has turned more favorable in South America this week. Argentina is expected to dry down before seeing another chance for rainfall this weekend. Central and northern Brazil is expected to see rainfall this week which should relieve soil moisture deficits. Additional pressure was linked to thoughts that the USDA will raise the US average soybean yield and production estimate in this Friday's USDA report.

EDIBLE OIL: Malaysian palm oil futures gained snapping three days of losses, with investors buying after prices dropped to a one-month low earlier in the session and on concerns year-end floods in the country could hurt production. (Reuters)

By Michael Taylor
JAKARTA | Wed Nov 7, 2012 8:19pm EST
Nov 8 (Reuters) - Benchmark Malaysian palm oil prices must stay at around 2,200 ringgit ($720) a tonne for two months in order to stimulate demand for the edible oil and reduce high stock levels, a leading industry analyst said on Thursday.
Malaysian palm oil prices have already lost about a quarter this year to trade at around 2,400 ringgit ($780) a tonne, as stocks rise in top producers Indonesia and Malaysia and demand slumps, hit by a global economic downturn.
But palm prices must fall further within the next 4 to 6 weeks to lure buyers and cut back inventories, said Dorab Mistry, head of edible oil trading at Indian conglomerate Godrej Industries.
He made a similar call at an industry conference in Malaysia in October.
"One thing is crystal clear. Futures are very overpriced at present," Mistry said in a speech to be delivered at an industry meeting in the Chinese city of Guangzhou.
"A period of short-term pain will be rewarded with ample long-term gain."
Last month, second-largest producer Malaysia said it would cut export taxes next year, which has helped support crude palm oil prices. The government also said it would scrap duty-free export quotas.
Mistry said that by January, the government would have to announce loopholes and exemptions to this new export tax regime to allow substantial duty-free exports of crude palm oil, otherwise monthly exports will fall.
"In their euphoria, plantation groups and their cheerleaders have overlooked one simple but significant fact," Mistry said. "In the last fortnight, palm oil has completely priced itself out of any meaningful energy demand," he added.
Palm oil is used as a cooking oil, biofuel and in cosmetics.

Seasonally strong production may have driven Malaysian palm oil stocks to another record high in October, a Reuters survey of five plantation firms showed this week.
Inventory levels may have grown 7.5 percent in October to 2.67 million tonnes from a previous peak of 2.48 million in September, the poll showed.
Malaysian palm oil stocks are likely to increase further in November and December, Mistry said, adding that they will total 3 million tonnes by Jan. 1 next year.
Crude palm oil production will be 18.4 million tonnes by Malaysia this year and 27.5 million by Indonesia, he estimated.
Output prospects next year had brightened as a result of the fadeout of the El Nino weather event and better rain, he added.
Turning to rival edible oil soyoil, Mistry said prices of soybeans, now trading at about $15.18-1/4 a bushel, would depend on the weather, acreage and pace of planting in South America, and crucially, releases from Chinese state reserves.
"If the state reserve releases another 2 million tonnes of soybeans between now and March, Chinese imports will be reduced to that extent, and prices need not rise to $18," he said.
"Prices around $16 will be sufficient to see us through until new crop Brazilian supplies come to market." ($1=3.0615 Malaysian ringgit) (Reporting by Michael Taylor; Editing by Clarence Fernandez)