Wednesday, November 28, 2012

20121128 1807 FCPO EOD Daily Chart Study.


FCPO closed : 2394, changed : -16 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histogram : weakening, buyer seller battling.
Support : 2400, 2350, 2300, 2250, 2230 level.
Resistance : 2400, 2450, 2490, 2520, 2550 level.
Comment :
FCPO closed recorded loss again with decreasing volume traded. Soy oil price currently trading lower after overnight closed recorded nearly 2% gain while crude oil price currently trading lower.
Continue worry on slower demand, pressure from U.S. fiscal cliff development still pressure price weaker while trader focusing on Indonesia palm oil conference that started today awaits key industry expert outlook.
chart reading continue to recommending a correction range bound downside biased market development with immediate resistance stands on middle Bollinger band level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20121128 1732 FKLI EOD Daily Chart Study.


FKLI closed : 1609 changed : +11 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : turned upward, seller taking profit.
Support :  1600, 1595, 1590, 1580 level.
Resistance : 1610, 1615, 1623, 1627 level.
Comment :
FKLI having technical rebound closed recorded gains with reduced volune transacted doing 2 points premium compare to cash market that also rebounded higher. Overnight U.S markets traded lower and today Asia markets ended mostly recorded loss and European markets currently registering loss.
Continue concern on unsettle U.S. congress budget negotiation (fiscal cliff) overshadows positive Europe Greece debt agreement send world market traded lower. Back home, technical rebound finally take place after moving down for 4 weeks with profit taking and rollover activities kicks in.
Daily chart reading revised to suggesting a pullback correction down side 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.

20121128 1606 Global Markets & Commodities Related News.

STOCKS: Asian shares ended a seven-day winning streak as investors fretted that a lack of progress in talks on U.S. budget woes risked putting the world's largest economy into recession, dragging down global growth with it. European stocks are set to open slightly lower retreating for only the second time in eight sessions, as comments from U.S. Senate Majority Leader Harry Reid on the lack of progress in budget talks prompt investors to book recent gains. U.S. stocks slid on Tuesday. (Reuters)


FOREX-Yen jumps, euro drops on US fiscal fear, Greece debt doubt
TOKYO, Nov 28 (Reuters) - The yen soared and the euro moved away from the previous session's one-month high against the dollar in Asian trading Wednesday as investors' relief about a new debt target for Greece turned to unease over the looming U.S. fiscal crisis.    
"Worries about the U.S. fiscal cliff have increased, while the effects of the 'Abe trade' have faded for now," said Masashi Murata, senior forex strategist at Brown Brothers Harriman.  "The market wants to see what the Bank of Japan actually does," he said.


Obama promotes tax agenda, U.S. Congress in stand-off (Reuters)
President Barack Obama on Tuesday launched a public relations push for his bid to raise taxes on wealthy Americans, but U.S. lawmakers remained deadlocked over dramatic, year-end tax increases and spending cuts known as the "fiscal cliff."

CNOOC, Nexen reapply for U.S. deal approval (Reuters)
China's state-owned CNOOC Ltd and its Canadian takeover target Nexen Inc have withdrawn and resubmitted an application for U.S. approval of their $15.1 billion deal, as Canada gets close to its decision on whether to approve the transaction.

GRAINS: Chicago wheat futures fell, as traders locked in profits after steep gains of nearly 3 percent in the previous session triggered by a sharply reduced assessment of the crop in the U.S. Plains.  (Reuters)

India's 2013 wheat exports seen at 3 mln T (Reuters)
Exports of wheat by India, the world's second-largest producer, could reach 3 million tonnes from government stocks in 2013, an official of a state-run trading firm said on Wednesday, adding that the country had sold 1 million tonnes since April.


Euro Coal-market rises on tighter supply outlook for early 2013
LONDON, Nov 27 (Reuters) - Physical coal prices for delivery early in 2013 rose in value on Tuesday as supplies were expected to tighten at the beginning of next year, analysts said.
South African cargoes for delivery in February traded at $90.75, up a dollar since Monday, and March cargoes were traded at $91.75 a tonne.


Iraqi Kurdish oil exports down 'significantly'-sources (Reuters)
Oil exports from Iraq's Kurdistan region were reduced "significantly" on Tuesday, industry sources said.

OIL: Brent oil rose near $110 per barrel on after hitting a one-week low in the previous session, but gains were capped as investors nervously eyed talks to head off a looming fiscal disaster in the United States, the world's top oil consumer. (Reuters)

Italy races to save ILVA plant as workers storm factory (Reuters)
Workers stormed Europe's biggest steel plant ILVA, which faces closure over allegations of an environmental disaster, as Italy's government raced to save 20,000 threatened jobs.

BASE METALS: London copper slipped, retreating from a three-week high in the previous session as concerns resurfaced over fiscal troubles in the United States, though signs of an economic revival in top consumer China cushioned prices. (Reuters)

PRECIOUS METALS: Gold edged lower, extending its losses to a third day, as the euphoria over a Greek debt deal fizzled and investors shifted their focus to U.S. negotiations.  (Reuters)


China daily steel output falls 0.25 pct in mid-Nov -CISA
BEIJING, Nov 27 (Reuters) - China's steel mills produced 1.952 million tonnes of crude steel a day over the Nov. 11-20 period, down 0.25 percent from the previous 10 days, data from the China Iron and Steel Association (CISA) showed on Tuesday.
Chinese steel output normally peaks in October before slowing over the winter months as construction activity in northern regions comes to a halt, but so far production is holding relatively firm, said Qiu Yuecheng, an analyst with Xiben New Line Co Ltd, a steel trading platform in Shanghai.

China copper cathode consumption growth to slow in 2013 -execs
SHANGHAI, Nov 28 (Reuters) - Consumption of copper cathode is likely to grow more slowly in  China in 2013, cooling further after the pace of growth looks set to drop by at least a third this year, senior metals executives said on Wednesday.
Demand for industrial metals such as copper has weakened this year as China's economic growth slows, largely due to a decline in manufacturing activity in its main export market Europe.

METALS-LME copper slips as US fiscal cliff worries resurface
SINGAPORE, Nov 28 (Reuters) - London copper slipped retreating from a three-week high in the previous session, as concerns resurfaced over fiscal troubles in the United States but signs of an economic revival in top consumer China cushioned prices.
"There's still a lot of concern around the 'fiscal cliff', also Europe isn't out of the woods yet," said Natalie Robertson, an ANZ commodity analyst based in Melbourne.

PRECIOUS-Gold extends losses as investors eye US fiscal talks
SINGAPORE, Nov 28 (Reuters) - Gold edged lower on Wednesday, extending its losses to a third day, as the euphoria over a  Greek debt deal fizzled and investors shifted their focus to  U.S. negotiations to avert a looming fiscal disaster in the  world's largest economy.
"We may see gold consolidate or correct a bit in the short  term as the market lacks incentives after the Greek deal, while  the dollar appears supported," said Li Ning, an analyst at  Shanghai CIFCO Futures.

Panamax activity keeps Baltic Index up
Nov 27 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose on Tuesday helped by slightly higher rates for panamax ships. 
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, rose 0.27 percent to 1,097 points.

20121128 1448 Palm Oil Related News.


Wed Nov 28, 2012 1:11am EST
* Palm oil signals mixed, biased to retrace more -technicals
    * EU Commission backs controversial sustainable palm oil
scheme
    By Chew Yee Kiat
    SINGAPORE, Nov 28 (Reuters) - Malaysian palm oil futures
eased on Wednesday, dropping for a second straight session on
concerns the U.S. fiscal woes could hamper global economic
growth and commodity demand.
    Prices touched their highest in almost one week on Tuesday
as a Greek debt deal provided brief comfort for investors, but
the lack of progress in U.S. budget talks and speculation that
Malaysian palm oil inventory level could hit a record high this
month kept prices in a tight range.
    "The market looks like it's expected to just stay rangebound
this week," said a Singapore-based trader with a global
commodities trading house. "But for the longer term, sentiment
has improved compared to a month ago."
    By the midday break, the benchmark February contract
 on the Bursa Malaysia Derivatives Exchange fell 0.3
percent to 2,404 ringgit ($788) per tonne. Prices traded in a
tight range of 2,396 to 2,417 ringgit.
    Total traded volumes stood at 18,618 lots of 25 tonnes each,
higher than the usual 12,500 lots.
    Technicals showed mixed signals for palm oil, but it is
biased to drop to 2,353 ringgit per tonne, said Reuters market
analyst Wang Tao.  
    Malaysian palm oil stocks hit a record high in October at
2.51 million tonnes on seasonally high production. While some
traders said a slower output this month may ease pressure on
stockbuild, concerns remained that export demand may not be
enough to bring stocks down.
    Cargo surveyors showed a slight drop in shipments in the
first 25 days of November from a month ago.
    The European Commission has made public a decision taken
last week to allow palm oil producers under the Roundtable on
Sustainable Palm Oil scheme to qualify for biofuel subsidies, a
move that could spur more European demand for the tropical oil.

    In other markets, Brent crude edged above $110 per barrel
after dropping to a one-week low in the previous session,
although gains were capped as investors nervously eyed talks to
head off a looming fiscal disaster in the United States, the
world's top oil consumer.
    The U.S. budget woes also weighed on other vegetable oil
markets. U.S. soyoil for December delivery fell 0.7
percent in early trade. The most-active May 2013 soybean oil
contract on the Dalian Commodity Exchange edged 0.3
percent lower.
    The market also took note of Olam International's
detailed defence on Wednesday against short-seller Muddy Waters'
attacks on its accounting practices and acquisitions,
emphasising it was not at risk of insolvency.  
    Shares of the Singapore commodities firm tumbled as much as
6 percent to a three-and-a-half year low, but later recouped
some losses.

20121128 1128 Global Markets & Energy Related News.


GLOBAL MARKETS-Asian shares fall as focus shifts to US budget talks
TOKYO, Nov 28 (Reuters) - Asian shares ended a seven-day winning streak  as investor concern rose over whether U.S. lawmakers were putting the world's largest economy at risk of a recession by failing to make headway in their budget talks.
"The uncertainty brought by this approach makes European assets, including the EUR, vulnerable to global growth risks. For that reason, we think the European muddle through amplifies the market's response to the fiscal cliff discussion in the US."

Obama promotes tax agenda, U.S. Congress in stand-off
WASHINGTON, Nov 27 - President Barack Obama on Tuesday launched a public relations push for his bid to raise taxes on wealthy Americans, but U.S. lawmakers remained deadlocked over dramatic, year-end tax increases and spending cuts known as the "fiscal cliff."
At the White House, small business leaders emerged from a one-hour meeting with Obama to voice support for his goal of extending low tax rates for the middle class beyond the end of the year, while letting rates rise for wealthier taxpayers.

FOREX-Euro moves lower on US fiscal fears, Greece debt doubts
TOKYO, Nov 28 (Reuters) - The euro moved away from the previous session's one-month high against the dollar in early Asian trading as investors' relief about a new debt target for Greece turned to unease about the looming U.S. fiscal crisis.
"The muddle through approach in Europe may amplify the outcome of the U.S. fiscal cliff discussions," strategists at Barclays wrote in a note to clients on Wednesday.

OIL - Oil dips on U.S. budget worries, gasoline rises
NEW YORK, Nov 27 (Reuters) - Oil prices fell on Tuesday, weighed down for a second straight day by concerns about key U.S. budget talks, while gasoline futures got a boost from low inventory levels.
"The euro zone still has growth issues even if we accept the Greek deal as enough to sustain financial stability and keep Greece in the European Union," said Tim Evans, an energy analyst for Citi Futures Perspective.

CNOOC, Nexen pull and resubmit US deal application
CALGARY, Alberta, Nov 27 -China's state-owned CNOOC Ltd and its Canadian takeover target Nexen Inc said on Tuesday they withdrew and resubmitted their application for U.S. approval of their $15.1 billion deal, as Canada gets close to a crucial decision on whether to approve the transaction.
The energy companies said discussions with the Committee on Foreign Investment in the United States are still going on, "with a view to completing the CFIUS review process as expeditiously as possible." They did not provide a reason for the move.

Libya oil ministry proposes shake-up of key industry
Nov 27 - Libya's oil ministry is proposing to separate the OPEC member’s exploration and production activities from refining, shaking up the running of its key industry by creating two separate bodies that would be headquartered in Tripoli and Benghazi.
In a move that could be seen as appeasing calls for more authority in the oil-rich east, new Oil Minister Abdelbari al-Arusi said the ministry was proposing to set up a body dealing with Libya's oil refining and petrochemicals in Benghazi.

Iran agrees to transit of Turkmen gas -Shana
DUBAI, Nov 27 - Iran has agreed to allow Turkmenistan to pump its gas across northern Iran to Turkey and Armenia, the director of Iran's state gas company, Javad Oji, was quoted by Iran's oil ministry news website as saying.
Iran's Fars news agency reported Iranian Oil Minister Rostam Qasemi when he arrived in Turkmenistan for talks on Tuesday as saying that he also planned to discuss increasing the volume of gas Iran imports from Turkmenistan.

BP sells Turkish LPG assets to Russia's Oteko
ISTANBUL, Nov 27 - British oil major BP's Turkish unit said it had sold its liquefied petroleum gas assets and Petgaz business in Turkey to Russia's Oteko Group, which transports crude oil and oil products within Russia.
The sale was part of BP's plan to exit its liquefied petroleum gas bottle- and tank-filling businesses worldwide after reviewing the operations last year.

Enbridge rations capacity on U.S. oil pipelines for December
Nov 26 - Enbridge Inc said on Monday it will ration capacity on several of its U.S. Midwest oil pipelines in December after nominations from its shippers exceeded capacity.
Enbridge, whose pipelines carry most Canadian crude exports to the United States, said its Line 5 is apportioned by 12 percent; Line 14 by 4 percent; Line 6B by 14 percent; Lines 6A and 62 in aggregate by 10 percent; Lines 4 and 67 in aggregate ex-Kerrobert and Hardisty by 13 percent, respectively; and Line 4 ex-Edmonton by 10 percent.

20121128 1051 Global Economy Related News.


South Korea: Current-account surplus narrows to USD5.8bn
South Korea’s current-account surplus narrowed to a two-month low after imports of machinery and equipment increased. The surplus was USD5.8bn last month, compared with a revised excess of USD5.9bn in September, the Bank of Korea said. The current account is the broadest measure of trade, tracking goods, services and investment income. (Bloomberg)

UK: Consumer spending drives 1% third-quarter GDP growth
Consumers helped propel the UK economy to its fastest growth since 2007 in 3Q as the London Olympics and a post-Jubilee rebound saw household spending increase the most for more than two years. GDP rose 1% from 2Q, the same as reported on 25 Oct, the Office for National Statistics said. No revisions were forecasted, according to the median of 33 estimates in a Bloomberg News survey. It means Britain exited a double-dip recession in the last quarter. (Bloomberg)

EU: French jobless claims jump to 14-year high on stalled economy
French jobless claims jumped to a 14-year high as a stalled economy prompted companies to trim payrolls and investment. The number of people actively looking for work rose by 45,400, or 1.5%, to 3.103m, the Labour Ministry said. Economists predicted an increase of 28,600, according to the median of six forecasts gathered by Bloomberg News. (Bloomberg)

Greece: Gets rescue boost as EU trumpets latest crisis remedy
European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health. In the latest bid to keep the 17-nation euro intact, the ministers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a EUR34.4bn (USD44.7bn) loan installment in December. Greek bonds rose. (Bloomberg)

US: Consumer confidence gains as US home prices climb
Consumer confidence climbed to a four-year high, home prices increased by the most since 2010 and demand for business equipment rose, signaling resilience in the US economy as the new year approaches. The Conference Board’s confidence index increased to 73.7 in November from 73.1 the prior month, the New York-based group said. The S&P/Case-Shiller index of property values in 20 cities advanced 3% in September from a year earlier. (Bloomberg)

20121128 1051 Malaysia Corporate Related News.

Shell Malaysia signs new exploration contract with Petronas
Shell Malaysia has signed a new production sharing contract (PSC) with Petronas to explore for oil and gas offshore Sarawak. Shell said under the SK319 PSC, it would undertake an initial three-year exploration programme covering 2,727 sq km within block SK319 in Central Luconia in offshore Sarawak. Sarawak Shell is the operator while the partner is Petronas Carigali with a 50:50 participating equity split, it said. The new PSC forms part of Shell's low-cost exploration and the development focus would enable it to carry out a multi-well exploration campaign to further explore and de-risk the mature carbonate pinnacle play in Central Luconia. (StarBiz)

Brahim's wins tender for premium food court and fast food outlet at KLIA2
Brahim's Holding's subsidiary has won a bid to operate a premium food court and a fast food outlet at the Kuala Lumpur International Airport 2 (KLIA2) from Malaysia Airports Holding (MAHB), raising its total airport food and beverage floor space by 141.6%. The in-flight catering firm said on Tuesday its 51%-owned subsidiary Dewina Host SB was offered the tenancy at KLIA2. The contract was offered by MAHB's unit Malaysia Airports (Sepang) SB after a tender exercise. No figures were provided on the value of the contract, but the company said it was expected to contribute positively to earnings from FY2013. (StarBiz)

MAS flies back into the black
Malaysia Airline System (MAS), the country's national carrier, says it plans to undertake a RM3.1bn cash call, plus a RM8bn capital reduction exercise to help clean the company's balance sheet and wipe off its accumulated losses. The corporate exercise was announced on the same day MAS said it managed to return to the black after suffering six consecutive quarters of losses. The national carrier will reduce both the par value of each existing ordinary share and share premium accounts. It involves a reduction of 90 sen for each existing ordinary MAS share of RM1 each. (BT)

TNB to build RM2.47bn power plant in Prai
Tenaga Nasional (TNB) has accepted the Letter of Award issued by the Energy Commission on the Development of 1,000MW-1,400MW Combined Cycle Gas Turbine Power Plant at Prai, Pulau Pinang. The estimated cost of the project is RM2.47bn and the construction period is 32 months. TNB told Bursa Malaysia that it will fund the total project cost using a combination of senior Islamic project bonds and equity which will potentially increase its gearing ratio by 1.7% to 40.5%. (BT)

Dutch Lady declares handsome interim dividend
Dutch Lady Milk Industries has declared a total interim dividend of RM1.30 for its financial year ended 31 Dec 2012. Its shares fell 2.33% or RM1.02 to end at RM42.68 yesterday. Dutch Lady announced a single-tier standard dividend of 50 sen per share while a single-tier special dividend of 80 sen per share for its 2012 financial year. Meanwhile, Dutch Lady announced that it entered into a distribution agreement with FrieslandCampina AMEA Pte Ltd for the sale, marketing and distribution of Frisco, a premium brand of infant and toddler milk product. (Malaysian Reserve)

Green Ocean to supply refined cooking oil to Sime Darby
Green Ocean has entered into an agreement to supply refined bleached and deodorized palm oil to Sime Darby. Green Ocean said the contract period to supply the premium cooking oil under NoveLin brand is two years plus one year, effective yesterday. Meanwhile, Green Ocean also sees the emergence of a new substantial shareholder, Ng Chiew Eng, who bought into the company early this month. Ng start accumulating Green Ocean shares on the open market. He currently holds 17.3%, making him the single largest shareholder after Heshbon Co Ltd which owns 14.1%. . (Malaysian Reserve)

KLCCP proposes stapled REIT
To unlock the value of its property assets without losing control over the ownership and franchise, KLCC Property Holdings (KLCCP) has proposed a stapled real estate investment trust (REIT). Three prime properties - Petronas Twin Tower, Menara ExxonMobil and Menara 3 Petronas - would be injected into a REIT for RM8.8bn and in return, shareholders will get stapled securities. The REIT together with KLCCP would then be listed as a single entity called KLPPC Stapled Group. KLCCP would first acquire the remaining 49.5% stake in Midciti Resources SB which will see Petroliam Nasional (Petronas)' interest in KLCCP increase to 75.5% from 52.6% (Financial Daily)

Malaysian Bulk Carriers Bhd : Profit soars in Q3
Malaysian Bulk Carriers Bhd net profit for the third quarter ended Sept 30 jumped to RM17.1mil from RM371,000 previously. Revenue was lower at RM64.4mil compared to RM85.18mil in the previous corresponding quarter. Despite recording a higher quarterly profit, its net profit for nine-month period ended Sept 30 was weaker at RM48.9mil compared to RM74.9mil previously. - StarBiz

AirAsia Bhd : AirAsia X records 40.7% passenger growth in Q3
AirAsia X has recorded strong growth in the third quarter of 2012, carrying 0.64 million passengers, representing a growth of 40.7% over the same quarter in 2011. In terms of passenger traffic, the long haul subsidiary of AirAsia – with 12 destinations globally – achieved 3.9 billion available-seat-kms (ASKs) and 3.2 billion revenuepassenger-kms (RPKs) for the third quarter, resulting in a load factor of 83%. Meanwhile, for the first nine months of 2012, AirAsia X carried 1.91 million passengers, reflecting an increase of 1.7% from the same period of 2011. Although RPKs and ASKs had contracted by 2.8% and 5.3% respectively in comparison with 2011, it recorded a higher load factor of 84%, an increase of 4.5 ppt over the same period of 2011. AirAsia X CEO Azran Osman-Rani said in the statement that AirAsia X would continue to focus on increasing capacity in its core markets including Australia, China, Taiwan, South Korea and Japan. - StarBiz


Dialog: Shareholder's agreement with Integrated Petroleum Services Sdn Bhd. Dialog Group Bhd's wholly owned subsidiary, Dialog (Labuan) Ltd (DLL) has entered into a shareholders' agreement with Integrated Petroleum Services Sdn Bhd (IPS) to establish a company known as Dialog IPS Marine (Labuan) Ltd (DIPSM). DLL will hold 60% equity stake in DIPSM and the balance 40% equity stake will be held by IPS. DIPSM will own the marine vessels for the distribution of base oil. (Source: Bursa Malaysia)

BToto: Business trust valued at MYR5.7-6.3b. The valuation of Berjaya Sports Toto Bhd (BToto) business trust, which will be listed on the main board of the Singapore Exchange, has been set at between MYR5.7-6.3b, according to independent valuer Deloitte Corporate Advisory Services Sdn Bhd. (Source: The Sun)

20121128 1040 Global Commodities Related News.


DTN Closing Grain Comments 11/27 14:29 Grains Stage Strong Rally Late Tuesday (CME)
Similar to Monday, early commercial buying gave way to noncommercial trade late in the day, extending Tuesday's rally in most grain markets.

Wheat Market Recap Report (CME)
December Wheat finished up 24 at 873, 1/2 off the high and 23 3/4 up from the low. March Wheat closed up 24 3/4 at 888 1/2. This was 24 3/4 up from the low and 1/2 off the high. December Chicago wheat finished the day sharply higher but KC wheat traded over 30 cents higher into the close and Minneapolis followed. Drought conditions in the western plains and hopes that the US will begin to see an increase in export demand pushed Chicago March wheat to a new high for the move. The weekly Winter Wheat Conditions report showed 33% of the crop was rated good/excellent compared to 34% last week and 52% last year. This was in line with market estimates was the lowest rating on record for this time of year, beating out the old record of 42% good/excellent in 1999. No significant precipitation is expected in the next two weeks and temperatures are expected to be above normal which will keep some wheat from entering dormancy in the south. Nearly half of the Hard Red Winter wheat crop will enter dormancy with poor establishment. Export tenders this week include, Jordan for 100,000 tonnes, Iraq for 50,000 tonnes, Syria for 100,000 tonnes of soft wheat, and Algeria issued a tender for 50,000 tonnes yesterday. Japan is seeking 49,000 tonnes of wheat for February shipment.
December Oats closed up 4 1/4 at 373. This was 4 up from the low and equal to the high.

Corn Market Recap for 11/27/2012 (CME)
December Corn finished up 12 3/4 at 760, 1/4 off the high and 13 1/2 up from the low. March Corn closed up 12 3/4 at 764. This was 13 3/4 up from the low and 1/4 off the high. March corn finished the day sharply higher seeing support from a sharply higher wheat market and on concern in regards to Argentina's corn production. Outside markets are slightly negative with crude oil and stocks trading lower while the US Dollar is stronger. The grain markets shrugged off the negative macro influences and instead chose to focus on the supportive weather factors in the market. Winter Wheat crop condition ratings fell to 33% good/excellent which is the lowest rating on record for this time of year. No relief is expected in the western plains over the next 10 days and current forecasts call for above normal temperatures for much of the Corn Belt in the coming week. Renewed fears that winter weather will fail to produce adequate precipitation to ease soil moisture deficits has added positive sentiment to the marketplace. Export demand continues to disappoint but long term supply fears are the highlight of the market at the moment. January Rice finished up 0.165 at 15.085, 0.005 off the high and equal to the low.

Drought-Parched Mississippi River Is Halting Barges (Bloomberg)
Mississippi River barge traffic is slowing as the worst drought in five decades combines with a seasonal dry period to push water levels to a near-record low, prompting shippers to seek alternatives. River vessels are cutting loads on the nation’s busiest waterway while railroads sign up new business and the U.S. Army Corps of Engineers draws criticism from lawmakers over its management of the river, which could be shut to cargo from companies including Archer-Daniels-Midland Co. (ADM) next month. “Our shippers are looking at alternate modes of transportation,” said Marty Hettel, senior manager of bulk sales for AEP River Operations, the barge unit of American Electric Power Co. (AEP), a utility owner based in Columbus, Ohio. “If you’re shipping raw materials to a steel mill in Chicago, you’re trying to figure out if you can go to Cincinnati or Louisville, Kentucky, unload it out of the barge and rail it up to the steel mill.”
The worst U.S. drought since 1956, which dried farmland from Ohio to Nebraska, will last at least through February in most areas, according to the U.S. Climate Prediction Center in College Park, Maryland. Barges on the Mississippi handle about 60 percent of the nation’s grain exports entering the Gulf of Mexico through New Orleans, as well as 22 percent of its petroleum and 20 percent of its coal.

Recap Energy Market Report (CME)
January crude oil prices experienced a choppy trading session and registered a lower low in the process. Crude oil took on a higher track during the initial morning hours, supported by a boost in risk-sentiment after EU and IMF leaders came to an agreement over Greece's debt target. However, a rebound in the US dollar and ongoing concerns over the US fiscal cliff seemed to rattle sentiment and pushed the crude oil market lower. Some traders indicated that better than expected US economic data on Durable Goods Orders and Consumer Confidence seemed to limit the downside. Expectations for this week's EIA crude stocks report are for a build in the range of 500,000 to 1.0 million barrels.

Oil Trades Near One-Week Low as U.S. Crude Stockpiles Increase (Bloomberg)
Oil traded near the lowest price in a week in New York after an industry-funded report showed rising stockpiles in the U.S., the world’s biggest crude consumer. Futures were little changed after slipping 0.6 percent yesterday. U.S. inventories gained 1.96 million barrels last week, data from the American Petroleum Institute indicated. An Energy Department report today may show supplies increased 350,000 barrels to 374.8 million, according to the median estimate of 11 analysts in a Bloomberg News survey. “Stockpiles are above two-to-three year averages, so there’s ample supply,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “The market is still ignoring the builds. I would look at it as a seasonal adjustment, as we’re expecting winter to be cooler than last year.”
Crude for January delivery was at $87.12 a barrel, down 6 cents, in electronic trading on the New York Mercantile Exchange at 12:42 p.m. Sydney time. The contract decreased 56 cents yesterday to $87.18, the lowest since Nov. 20. Prices are down 12 percent this year. Brent for January settlement rose 3 cents to $109.90 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.79 to West Texas Intermediate, compared with $22.69 yesterday.

Silver Market Recap Report (CME)
After making a fresh new high for the move early on, December silver sagged into and through mid session. The failure to sustain a rally attempt in US equities, adverse currency market action and US data that failed to inspire probably emboldened the bear camp in silver, especially since fears that the US will fall over the fiscal cliff are sitting just below the surface of most markets. Clearly silver was unable to benefit from residual strength in platinum and grain prices and that would seem to suggest that something financial was behind the weakness in silver today.

Gold Market Recap Report (CME)
The gold market started out a touch soft and spent most of the morning in weaker ground. However, into mid session and early afternoon, gold came under some fresh pressure perhaps because of sagging confidence in seeing a US fiscal deal but it is also possible that adverse currency market action served to undermine gold prices. Others traders suggested that options were responsible for the weakness in gold but with fresh hopes of a Greece deal in the headlines, it seemed as if gold wasn't going out of its way to find the positives today.

Gold Declines on Waning India Demand, Dollar’s Rebound (Bloomberg)
Gold fell the most in a week as physical demand from India, last year’s biggest buyer, remained slack and a rebounding dollar eroded the appeal of the metal as an alternative investment. Buying in India has “retreated,” UBS AG wrote today in a report. The U.S. Dollar Index extended gains after a report showed U.S. demand for goods such as machinery and electronics climbed in October by the most in five months. While gold rose 5.1 percent in September after the Federal Reserve announced stimulus measures to boost growth, such accommodative policies can’t be left in place forever, Fed Bank of Dallas President Richard W. Fisher said today in Berlin. “The dollar strength is working against gold,” Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna, said in a telephone interview. “Also, the physical market looks quiet.”
Gold futures for December delivery fell 0.4 percent to settle at $1,742.30 an ounce at 1:44 p.m. on the Comex in New York, the biggest decline since Nov. 20. Prices dropped 0.1 percent yesterday, after reaching $1,755 on Nov. 23, the highest since Oct. 17. Holdings in gold-backed exchange-traded products rose 0.7 metric ton to a record 2,607 tons yesterday, data compiled by Bloomberg show. Silver futures for March delivery slid 0.5 percent to $34.074 an ounce in New York, after reaching $34.37, the highest since Oct. 11. On the New York Mercantile Exchange, platinum futures for January delivery rose 0.5 percent to settle at $1,618.50 an ounce. Palladium futures for December delivery climbed 1.1 percent to $668.20 an ounce.

Shanghai Ship Index Challenges 268-Year-Old London Bourse (Bloomberg)
Shanghai Shipping Exchange will introduce dry-bulk and oil-tanker indexes today in a challenge to a 268-year-old London bourse that sets freight rates covering about 75 percent of global commodity cargoes. The indexes will track China-import shipping rates using data collected from shipowners, brokers and charterers, the Shanghai exchange said in an e-mailed reply to Bloomberg News questions. The gauges will initially run on a trial basis. Derivatives, used to speculate on future rates, will be added at a later date, it said. The Shanghai bourse is introducing the gauges as China’s biggest port tries to compete with London and Singapore as a shipping-finance center. The bourse will need to overcome concerns about the use of data from operators and slumping derivatives trading to lure investors using indexes compiled by Baltic Exchange Ltd.
“They have to convince the shipping market that their data is independent and objective,” said Ralph Leszczynski, the Beijing-based head of research at shipbroker Banchero Costa & Co. “They shouldn’t create indexes that are only handy for Chinese state-owned companies.” The Shanghai exchange will take data from 23 companies for dry-bulk indexes tracking three vessel types. The oil tanker gauge, which only follows very large crude carriers, will use information from 18 companies. The exchange didn’t say which routes it will track. State-controlled companies contributing data for the indexes will include ship operators China Cosco Holdings Co. (1919) and CSC Nanjing Tanker Corp. (600087) and oil company China Petroleum & Chemical Corp. Overseas companies such as brokers Fearnleys A/S and ICAP Plc will also provide information.

20121128 1041 Global Markets Related News.


Asia Stocks Fall First Time in Six Days on Growth Concern (Bloomberg)
Asian stocks fell, with a regional benchmark index headed for its first loss in six days, as the Organization for Economic Cooperation and Development said failure to prevent the so-called fiscal cliff in the U.S. would increase the risk of a global recession. BHP Billiton Ltd. (BHP), the world’s largest mining company, sank 0.9 percent in Sydney, leading losses among companies with earnings closely tied to economic growth. Komatsu Ltd. (6301), which gets about a quarter of its sales in the U.S., fell 0.7 percent. Hulic Co. (3003) tumbled 11 percent after the Japanese real-estate operator said it plans a share sale. The MSCI Asia Pacific Index slid 0.2 percent to 123.48 as of 9:43 a.m in Tokyo, with almost three stocks falling for each that rose. Markets in China and Hong Kong are yet to open. The gauge rose 13 percent from this year’s low on June 4 through yesterday as central banks added stimulus to spur economic growth and data showed a slowdown in China may be ending.
“Most investors are still cautious to bearish in terms of their outlook, and certainly in terms of their positioning,” said Markus Rosgen, chief Asian strategist at Citigroup Inc. in Hong Kong. “As far as the markets are concerned here in Asia, increasingly people feel less about Greece and more about the fiscal cliff.” Japan’s Nikkei 225 Stock Average (NKY) lost 0.3 percent, South Korea’s Kospi Index sank 0.5 percent and Australia’s S&P/ASX 200 Index (AS51) slid 0.4 percent.

Japan Stocks Set to Halt Rally on Fiscal Cliff Concern (Bloomberg)
Nov. 28 (Bloomberg) -- Japanese shares fell, with the Nikkei 225 (NKY) Stock Average poised to halt a four-day rally, on concern U.S. lawmakers are making little progress on budget talks to avert the so-called fiscal cliff and after a technical indicator signaled the market may be overheating. Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, dropped 0.8 percent. Sumitomo Mitsui Financial Group Inc. (8316), the country’s second-biggest lender by market value, fell 0.5 percent, heading for its first decline in two weeks. Kawasaki Kisen Kaisha Ltd. (9107) led shipping lines lower after delaying expansion of its commodity-transport fleet. The Nikkei 225 slid 0.5 percent to 9,375.22 as of 10:10 a.m. in Tokyo after yesterday closing at the highest level since April. The broader Topix Index dropped 0.5 percent to 777.43, with about three stocks declining for each that rose.
“There’s definitely signs of short-term overheating as stocks have risen fast over the past two weeks,” said Fumio Matsumoto, a fund manager who helps oversee about 65 billion yen ($791 million) in Japanese equities at T&D Asset Management Co. “I’m concerned about the fiscal cliff in the short-term.” The Topix advanced 8.2 percent through yesterday from Nov. 14, when Prime Minister Yoshihiko Noda called for a Dec. 16 election, causing the yen to drop on speculation the opposition may win and call for more monetary easing.

U.S. Stocks Fall as Budget Negotiations Overshadow Greece (Bloomberg)
U.S. stocks fell for a second day as concern about progress in Washington budget negotiations overshadowed a European agreement on Greece aid and a better- than-forecast report on durable goods. Nine of 10 groups in the Standard & Poor’s 500 Index fell. Hewlett-Packard Co. (HPQ) lost 3 percent after Autonomy Corp.’s former chief executive officer challenged the computer maker’s board to explain allegations that the software company falsified financial statements. Seagate Technology Plc (STX) slid 5.1 percent as CLSA Asia-Pacific Markets said the magnitude of the personal- computer slowdown in emerging markets was worse than thought. The S&P 500 fell 0.5 percent to 1,398.94 in New York. The Dow Jones Industrial Average (INDU) lost 89.24 points, or 0.7 percent, to 12,878.13. More than 5.9 billion shares traded hands on U.S. exchanges, or 2.6 percent below the three-month average at this time of day, according to data compiled by Bloomberg.
“The market remains fixated on what’s going on in Washington,” Frederic Dickson, who helps oversee about $32 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a telephone interview. “The lack of progress in resolving major fiscal cliff issues is topic A and trumping any kind of positive news whether it’s coming out of Europe or positive economic reports.” U.S. equities extended declines after Senator Majority Leader Harry Reid said “little progress” has been made in talks to avert the so-called fiscal cliff. “We only have a couple weeks to get something done so we have to get away from the happy talk” and do “specific things,” he told reporters.

Recap Stock Index Market Report (CME)
The December S&P 500 experienced a choppy session that was initially higher on an agreement between EU and IMF leaders on a new debt target for Greece. However, those early morning gains evaporated as the market focus turned back to the US fiscal cliff. This morning's data on October Durable Goods Orders was better than expected and a reading on Consumer Confidence climbed to its highest level since February 2008. Despite the positive economic data readings, concerns over the US fiscal cliff weighed on sentiment. The S&P 500 registered its low of the session late in the day in response to comments out of Washington noting a lack of progress on resolving the fiscal cliff.

Europe Stocks Gain as Finance Ministers Agree Greek Deal (Bloomberg)
European (SXXP) stocks advanced after euro- region finance ministers eased the terms of aid for Greece and cleared the way for a loan instalment in December. Remy Cointreau SA, France’s second-largest distiller, surged 6.4 percent after posting first-half operating profit that beat estimates. SBM Offshore (SBMO) NV added 2.9 percent after Barclays Plc raised its recommendation on the stock. Galp Energia SGPS SA slid 5.9 percent after Eni SpA said it is selling shares in Portugal’s biggest oil company. The Stoxx Europe 600 Index climbed 0.3 percent to 272.86 at the close of trading, paring earlier gains of as much as 0.7 percent. The gauge rallied 4 percent last week as optimism grew that the U.S. Congress will agree on a budget that avoids automatic tax increases and spending cuts, and data showed China’s manufacturing expanded.
“This was the last chance after the finance ministers kept delaying a decision,” Guillaume Chaloin, a fund manager at Meeschaert Asset Management in Paris, which oversees $3.2 billion, said, referring to the decision on Greek aid. “We’ve evacuated one of the big worries and this has reassured the market.” European finance ministers eased the terms on emergency aid for the Mediterranean nation. In the latest bid to keep the 17- nation euro-area intact, the ministers cut the rates on bailout loans, suspended interest payments for a decade on money from the temporary rescue fund, gave the country more time to repay, and engineered a Greek bond buyback. Greece was also cleared to get a 34.4 billion-euro ($44.7 billion) loan instalment in December.

Emerging Stocks at 3-Week High as Greek Aid Buoys Risk (Bloomberg)
Emerging-market stocks rose, sending the benchmark index to a three-week high, as an agreement on emergency aid for Greece and better-than-forecast U.S. economic data boosted appetite for riskier assets. Hyundai Motor Co. (005380), which got 20 percent of its 2011 sales from Europe, gained the most in three weeks in Seoul. Power utility Centrais Eletricas Brasileiras SA (ELET6) rallied as Brazil considered raising the amount of compensation offered to companies that accept lower electricity rates. Unitech Ltd. (UT), a New Delhi-based real estate developer, led the gains on the developing-nations equities gauge, rallying 11 percent. The MSCI Emerging Markets Index (MXEF) added 0.1 percent to 996.44, the highest since Nov. 7. European finance ministers agreed to cut rates on Greece’s bailout loans, suspend interest payments for a decade and gave the nation more time for repayments.
The gauge pared gains after Senate Majority Leader Harry Reid said Democrats and Republicans have made little headway in negotiations over how to avoid $607 billion in tax increases and spending cuts set to take effect in 2013. “Better news on the economic front in the U.S. is certainly helping and you also have the Greece deal,” Aryam Vazquez, an economist at Wells Fargo & Co., said by phone from New York. “But anytime you get negative comments from political leaders that speak to the possibility that we may be pushed over the fiscal cliff, this carries adverse repercussions for international financial markets.” Brazil’s Bovespa Index retreated 0.9 percent as billionaire Eike Batista’s OGX Petroleo e Gas Participacoes SA slumped 3.7 percent to a four-year low on concern its $270 million purchase of an oil field stake will cut into cash holdings.

Treasuries Volatility Falls to Five-Year Low (Bloomberg)
Treasury market volatility dropped to the lowest level in five years as the pending U.S. fiscal cliff and Europe’s debt crisis kept alive demand for the relative safety of government debt. Bank of America Merrill Lynch’s MOVE index, which measures price swings for Treasuries based on options, fell to 51.7 yesterday in the U.S., the least since May 2007. The Treasury Department is scheduled to sell $35 billion of five-year notes today and $29 billion of seven-year securities tomorrow, after a two-year auction yesterday drew record demand. “A low-yield environment is in place,” said Tomohisa Fujiki, an interest-rate strategist in Tokyo at BNP Paribas SA, whose New York unit is one of the 21 primary dealers obliged to bid at U.S. debt sales. “We have some concerns about the fiscal cliff, and that that is supportive for Treasuries.”
Ten-year yields were little changed at 1.63 percent today as of 10:16 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in November 2022 was 99 29/32. The rate fell five basis points, or 0.05 percentage point, over the past two days. It is less than the average of 3.68 percent over the past decade. Senate Majority Leader Harry Reid said yesterday Democrats and Republicans have made little headway in negotiations over how to avoid a year-end fiscal cliff of spending cuts and tax increases that are threatening the economy. A $35 billion two-year auction yesterday drew record demand. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 4.07, matching the record high in November 2011.
Investors are hiding in the securities until officials get through the fiscal negotiations in Washington, Scott Graham, head of government bond trading in Chicago at Bank of Montreal (BMO)’s BMO Capital Markets unit, said yesterday. BMO is another primary dealer. In Europe, finance ministers eased the terms on emergency aid for Greece yesterday, striving to keep 17-nation euro bloc intact.

Dollar Gains, Yen Advances Amid Fiscal Cliff Deadlock (Bloomberg)
The dollar gained against most of its major peers as a struggle among U.S. lawmakers to reach a budget consensus boosted demand for safe-haven assets. The yen rose against all its most-traded counterparts and the greenback stayed stronger versus the euro after Senate Majority Leader Harry Reid said he is “disappointed” in the lack of progress in discussions to avoid the so-called fiscal cliff. The euro declined against the yen for a third day before data forecast to show Germany’s jobless rate was near the highest in a year. “Prolonged negotiations over the fiscal cliff create a risk-off environment, so they are a dollar-buying catalyst,” said Daisaku Ueno, a senior foreign-exchange and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “From the perspective of economic fundamentals, the euro is more likely to edge down.”
The dollar bought $1.2928 per euro at 10:46 a.m. in Tokyo, up 0.1 percent from yesterday when it gained 0.2 percent to $1.2943. The 17-nation euro fell 0.4 percent to 105.91 yen from 106.34, having dropped 0.6 percent over the past two days. The Japanese currency rose 0.3 percent to 81.91 yen per dollar. The MSCI Asia Pacific Index (MXAP) of stocks lost 0.5 percent following a 0.5 percent decline in the Standard & Poor’s 500 Index of U.S. shares yesterday.

Aussie Remains Lower Before Business Investment Report (Bloomberg)
The Australian dollar remained lower following a decline yesterday amid speculation a report tomorrow will show a slowdown in capital expenditure growth, damping the outlook for the economy and the currency. The so-called Aussie held a two-day drop versus the yen as investors boosted bets the Reserve Bank of Australia will lower borrowing costs at its next meeting on Dec. 4. The New Zealand dollar, also known as the kiwi, failed to rally following a two- day slide after the country’s central bank Governor Graeme Wheeler said manufacturing has been hurt by the local currency’s gains. “If non-mining capital investment doesn’t show signs of picking up in 2013, that suggests that policy needs to be easier and that would be consistent with a rate cut next month” from the RBA, said Andrew Salter, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ) “It might weigh on the currency in the very short-term.”
The Australian dollar bought $1.0443 as of 11:10 a.m. in Sydney after falling 0.2 percent yesterday to $1.0446. It traded at 85.79 yen from 85.81. New Zealand’s currency fetched 82.05 U.S. cents from 82.03 and was at 67.40 yen, unchanged from yesterday. The yield on 10-year Australian government bonds fell seven basis points, or 0.07 percentage point, to 3.22 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, was little changed at 2.615 percent. Australian business investment probably rose 2 percent in the three months through September after advancing 3.4 percent in the previous quarter, according to the median estimate of economists surveyed by Bloomberg News. The statistics bureau will release the figures tomorrow. Interest-rate swaps data compiled by Bloomberg show traders see a 65 percent chance the RBA will cut the overnight cash rate target by 25 basis points to 3 percent at its next gathering. That’s up from 60 percent yesterday.
ANZ is among 15 of 26 companies polled by Bloomberg News this month that are predicting a quarter-percentage point interest-rate reduction.

U.S. Treasury Declines to Name China Currency Manipulator (Bloomberg)
China isn’t a currency manipulator under U.S. law, though the yuan “remains significantly undervalued” and needs to rise further, the Treasury Department said. China “has substantially reduced the level of official intervention in exchange markets since the third quarter of 2011,” the Treasury said in a statement accompanying its semi- annual currency report to Congress yesterday. The yuan has gained 9.3 percent in nominal terms and 12.6 percent in real terms against the dollar since June 2010, the Treasury said. “It appears that the strategy of the last two administrations to use diplomacy rather than confrontation in dealing with the yuan’s value is having some positive results,” William Reinsch, president of the National Foreign Trade Council, a Washington-based business group, said in an e-mail after the report. “There is clearly room for further appreciation, however.”
In declining to brand China a manipulator, the Treasury cited the reduced intervention and “steps to liberalize controls on capital movements, as part of a broader plan to move to a more flexible exchange-rate regime.” The U.S. hasn’t designated another nation since 1994, when it named China. Critics of China’s exchange-rate policies, including former Republican presidential candidate Mitt Romney, say the nation deliberately suppresses the value of its currency, making its goods cheaper in overseas markets and costing jobs in the U.S.

Obama Had Unannounced Fiscal Cliff Talk With Finance CEOs (Bloomberg)
President Barack Obama’s efforts to engage business leaders in negotiations to avoid the year-end fiscal cliff have included unannounced private talks with top financial executives at the White House. On Nov. 16, the same day Obama met with congressional leaders, he sat down with about a dozen financial services executives in the Roosevelt Room, where they were meeting with senior administration officials including Treasury Secretary Timothy F. Geithner. The session was part of a series of consultations Obama has had with outside groups aimed at pressuring Congress to strike a deal to avert more than $600 billion of automatic spending cuts and tax increases set to take effect in January.
The group included Blackstone Group LP (BX) President Tony James; Evercore Partners Inc. (EVR) chairman Roger Altman; Robert Wolf, chief executive officer of 32 Advisors LLC; Centerbridge Capital Partners LLC managing principal Mark Gallogly; Glenn Hutchins, co-founder of Silver Lake Management LLC; Marc Lasry, founder of Avenue Capital Group LLC; Blair Effron, co-founder of Centerview Partners LLC; and Orin Kramer, general partner at Boston Provident Partners LP, according to administration officials and a participant in the session. The meeting, held across from the Oval Office, wasn’t on the president’s public schedule. He dropped in on the 90-minute session as it was about halfway through.

Home Prices in 20 U.S. Cities Rose 3% in Year to September (Bloomberg)
Home prices rose in the year ended in September by the most since July 2010, showing the recovery in the U.S. real estate market is a source of strength for the economy. The S&P/Case-Shiller index of property values in 20 cities climbed 3 percent from September 2011, after advancing 2 percent in the year to August, the group said today in New York. The median forecast of 29 economists in a Bloomberg survey projected a 3 percent gain. Home prices from July through September climbed the most since the second quarter of 2010. An improving labor market and record-low mortgage rates are shoring up demand for properties, helping explain an increase in optimism among builders. At the same time, Federal Reserve policy makers are pressing forward with monetary accommodation that underpins the residential real-estate recovery and the economic expansion.
“I think it’s a stabilization on the sales side that’s probably helping with the prices here,” said Sean Incremona, senior economist at 4Cast Inc. in New York. “We’ve had several years now for the housing recovery to sort of catch its feet, and it looks like we are starting to crawl out of the giant hole that we dug into from the financial crisis.” Estimates in the Bloomberg survey ranged from gains of 2.2 percent to 3.6 percent. The Case-Shiller index is based on a three-month average, which means the September data were influenced by transactions in July and August.

Demand for U.S. Capital Goods Climbs in Spending Rebound (Bloomberg)
Consumer confidence climbed to a four-year high, home prices increased by the most since 2010 and demand for business equipment rose, signaling resilience in the U.S. economy as the new year approaches. The Conference Board’s confidence index increased to 73.7 in November from 73.1 the prior month, the New York-based group said today. The S&P/Case-Shiller index of property values in 20 cities advanced 3 percent in September from a year earlier. Bookings for non-defense capital goods excluding aircraft rose 1.7 percent last month, the most since May, the Commerce Department reported. “It’s good news starting out the fourth quarter,” said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. “Concern that the fiscal cliff is a major roadblock to the recovery doesn’t seem to be holding up.”
Household finances and sentiment are getting a boost from a revival in the real-estate market, making it more likely that Americans will keep up the spending that accounts for 70 percent of the economy. At the same time, a rebound in business demand for machinery indicates that some companies were undeterred by the threat of automatic spending cuts and tax increases scheduled to take effect in January. Stocks fell as the budget debate in Washington overshadowed the improving economic data. The Standard & Poor’s 500 Index dropped 0.5 percent to 1,398.95 at the close in New York.

Consumer Confidence in U.S. Increases to Four-Year High (Bloomberg)
Consumer confidence rose in November to the highest level in more than four years, a sign U.S. household spending will keep growing. The Conference Board’s confidence index climbed to 73.7, the highest since February 2008, from a revised 73.1 reading the prior month, figures from the New York-based private research group showed today. The median forecast of 75 economists surveyed by Bloomberg projected a reading of 73. The report showed the share of Americans planning to buy a house rose to a record high, indicating improving property values and a job market recovery are making households more willing to make long-term commitments. Sustained gains in consumer spending, the biggest part of the economy, may help overcome concern over the fiscal cliff of tax increases and government spending cuts slated for early 2013.
“Confidence is holding up well,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, who projected the confidence measure would climb to 74. “Spending is going to continue to increase. This bodes well for the fourth quarter.” Other reports today signaled business investment may rebound and home prices are climbing. Demand for goods such as machinery and electronics climbed in October by the most in five months, the Commerce Department reported. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.7 percent last month, the most since May.

U.S. Said to Weigh Tightening Rules for Foreign Lenders (Bloomberg)
U.S. units of foreign lenders including Deutsche Bank AG (DBK) may be required by regulators to comply with tougher capital rules that some banks sought to skirt, three people with knowledge of the discussions said. The Federal Reserve, drafting standards for the nation’s largest banks, may force non-U.S. firms to house all of their businesses within a U.S. holding company, said the people, who requested anonymity because the rules haven’t been completed. That means local units would have to meet minimum capital standards regardless of their parents’ resources. Deutsche Bank and London-based Barclays Plc (BARC) have changed their U.S. legal status in the past two years to discard the holding-company structure. The treatment could force foreign banks to inject capital into their U.S. units and limit their ability to move funds across borders, said Luigi De Ghenghi, a partner at law firm Davis Polk & Wardwell LLP in New York.
“Fragmenting capital along regional lines will impose real costs on doing cross-border banking,” said De Ghenghi, a member of the firm’s financial-institutions group. “Global banks will risk ending up with overcapitalized units all around the world because regulators are reluctant to allow the repatriation of capital once it’s moved to their jurisdiction.” Foreign lenders can choose whether to create U.S. bank holding companies. Those units were exempt from capital standards as long as their parent firms were well-capitalized.

Reid Says Parties Making Little Progress in Budget Talks (Bloomberg)
Senate Majority Leader Harry Reid said Democrats and Republicans have made little headway in negotiations over how to avoid a year-end fiscal cliff. “There’s been little progress with the Republicans, which is a disappointment to me,” Reid, a Nevada Democrat, told reporters today in Washington. Reid said that following a Nov. 16 White House meeting, Republicans backed away from earlier openness to considering new tax revenue as part of a year-end deal to avert the so-called cliff, $607 billion in tax increases and spending reductions set to begin in January. “They talked some happy talk about doing revenues, but we only have a couple weeks to get something done,” Reid said. “So we have to get away from the happy talk and start talking about specific things.” Still, Reid also said he was “extremely hopeful, and I do not believe that the Republicans are going to allow us to go over the cliff.”
U.S. stocks extended losses as Reid spoke. The Standard & Poor’s 500 Index slipped 0.3 percent to 1,402.03 as of 3:17 p.m. in New York. The Dow Jones Industrial Average fell 0.5 percent to 12,908.08. Senate Minority Leader Mitch McConnell, a Kentucky Republican, said Democrats are politicizing the talks.

Carney Favors Rate Plan Copied by Bernanke Over BOE Doubt (Bloomberg)
Mark Carney may be more willing to look further into the future than Mervyn King. As Carney prepares to take control of the Bank of England, former central bank economists say his five years atop the Bank of Canada suggest he will be more inventive and open than the current governor in outlining plans to spur the U.K. recovery. Although King pursues quantitative easing, the Bank of England rejects a Canadian crisis-fighting strategy -- later adopted by Federal Reserve Chairman Ben S. Bernanke -- of specifying how long interest rates will remain low. That stance may be revisited if Carney arrives in London in seven months to find the U.K. still stuck in a recessionary rut. “Mervyn was very proactive in beginning gilt purchases, but he is still less pragmatic than Carney, who may be open to a wider range of options,” said Simon Wells, chief U.K. economist at HSBC Holdings Plc (HSBA) in London and a Bank of England official until last year.
Carney, 47, embraced greater transparency as an emergency tool in 2009 when he promised to keep Canada’s benchmark rate, then at 0.25 percent, low for 15 months as long as the inflation outlook didn’t change. Bernanke followed in August 2011 when the Fed said it would hold its key rate near zero at least through mid-2013, a range it subsequently extended by two years. Such vows are aimed at adding stimulus to an economy where short-term rates are already around rock-bottom by persuading investors to contain longer-term borrowing costs because they know official rates won’t rise.

China’s U.S. Debt Purchases Seen Limited, Former Adviser Says (Bloomberg)
China may limit its purchases of U.S. Treasuries because the central bank has reduced its buying of dollars at home, according to a Chinese academic who has served as a government adviser. The People’s Bank of China has “noticeably” reduced its purchases of dollars from local banks to allow commercial banks to trade among themselves, Ding Zhijie, dean of finance at Beijing’s University of International Business and Economics, said in a Nov. 23 interview. That may cap the nation’s foreign- exchange reserves and consequently its demand for U.S. government debt, he said. The scaled-back intervention is part of a shift toward managing the currency through the daily price fixing, Ding said. A reduction in China’s U.S. debt holdings may help defuse criticism by some American politicians that their country is becoming too dependent on the world’s second-largest economy.
“We are now witnessing a big change -- China’s official foreign-exchange reserves will be stable or even fall slightly in the coming years,” said Ding, who advised the government on creating the nation’s sovereign wealth fund. “That means China’s new purchases of Treasuries will be limited and as you can already see, purchases have already started ebbing in the last couple of months.” The PBOC has barely intervened in the foreign-exchange market for four quarters, Yi Gang, a deputy governor and head of the State Administration of Foreign Exchange, said at an International Monetary Fund meeting in Tokyo last month.

Korea’s Current-Account Surplus Narrows to $5.8 Billion (Bloomberg)
South Korea’s current-account surplus narrowed to a two-month low after imports of machinery and equipment increased. The surplus was $5.8 billion last month, compared with a revised excess of $5.9 billion in September, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income. South Korean officials announced measures yesterday to tighten limits on banks’ currency forward positions as gains in the won threaten to curtail a rebound in exports. The nation’s current-account surplus will help support further appreciation of the currency, said Wai Ho Leong, a Singapore-based economist at Barclays Plc. “The latest regulation is seen as more of a speed bump, not a road block,” Leong said before the data was released. Barclays forecasts the currency will reach 1,050 won per dollar within 12 months, he said.
The won, Asia’s best performing currency in the second half of the year, strengthened 0.1 percent to 1,084.08 per dollar at the close yesterday in Seoul, according to data compiled by Bloomberg. It reached 1,080.05 on Nov. 22, the highest level since Sept. 9, 2011. The Kospi (KOSPI) index of stocks climbed 0.9 percent yesterday.

Selling U.S. Treasuries Leads Standard Life to Australian Bonds (Bloomberg)
Edinburgh’s largest fund company sold Treasuries because it’s confident that politicians will find a budget compromise and avert another recession while the Federal Reserve stokes U.S. economic growth. Standard Life Investments instead is favoring Australia’s AAA-rated bonds due to the country’s tightening fiscal policy, prospects for lower interest rates and “decent credit worthiness,” said Sebastian Mackay, an investment director for fixed income. The firm also bought German bonds as Europe faces a “prolonged” period of low growth and interest rates.
U.S. Treasuries have beaten both German bunds and Australian bonds since President Barack Obama won re-election on Nov. 6 as investors opted for a safer home for their money on concern about the so-called fiscal cliff, or $607 billion of automatic tax increases and spending cuts starting in January. Obama, a Democrat, proposed cutting the deficit by reducing spending and allowing predecessor George W. Bush’s tax cuts for high-income earners to lapse. Republicans oppose tax increases. “We’re at the more relaxed end of the spectrum on the fiscal negotiations, given the Democrats overriding motive to avoid the cliff and the Republicans’ motive to maintain the Bush tax cuts,” Mackay said in an interview. “We are not positive on Treasuries at this juncture.”
The U.S. economy will advance by 2 percent in 2013, compared with an average 1.26 percent for the Group of 10 nations, according to Bloomberg surveys of economies. Over the course of 2014, the U.S. will exceed the G-10 average by 0.82 percent points, the surveys show.

Greece Wins Easier Debt Terms as EU Hails Rescue Formula (Bloomberg)
European finance ministers eased the terms on emergency aid for Greece, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health. In the latest bid to keep the 17-nation euro intact, the ministers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion-euro ($44.7 billion) loan installment in December. Greek bonds rose. “This has been a very difficult deal,” Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels after chairing a 13-hour meeting that ended early today. “All initiatives decided upon today will bring Greece’s public debt clearly back on a sustainable path.”
After 240 billion euros in loan pledges and the biggest writedown of privately held debt failed to turn Greece around, the creditor governments led by Germany proclaimed the latest fix just as they grappled with swelling financing needs in Cyprus and a potential aid request by Spain, the fourth-largest euro economy.

Credit Rating Firms in EU to Face Sovereign-Debt Limits (Bloomberg)
Credit rating companies face curbs on when they can assess government debt and restrictions on their ownership under draft plans agreed on by European Union officials and legislators. Lawmakers from the European Parliament and Cyprus, which holds the rotating presidency of the EU, also agreed yesterday to let investors sue ratings companies if they lose money because of malpractice or gross negligence. “We have reached a good result,” Michel Barnier, the EU’s financial services chief, said in an e-mailed statement. “With this agreement, we are taking another important step towards financial stability.” Barnier proposed the tougher ratings rules after warnings from nations including France and Germany that downgrades of sovereign debt had deepened the bloc’s fiscal crisis. Barnier said last year that ratings companies were guilty of “serious mistakes” and shouldn’t be allowed to “increase market volatility” through ill-timed or unjustified downgrades.
The European Commission, the 27-nation EU’s executive arm, has said that tougher regulation is needed to boost competition for the so-called big three ratings companies, Fitch Ratings Ltd., Moody’s Investors Service Inc. and Standard & Poor’s. Negotiators at yesterday’s meeting brokered a draft deal on the rules, which must be formally approved by governments and by the full parliament before they can be implemented.

20121128 1040 Global Commodities Related News.


DTN Closing Grain Comments 11/27 14:29 Grains Stage Strong Rally Late Tuesday (CME)
Similar to Monday, early commercial buying gave way to noncommercial trade late in the day, extending Tuesday's rally in most grain markets.

Wheat Market Recap Report (CME)
December Wheat finished up 24 at 873, 1/2 off the high and 23 3/4 up from the low. March Wheat closed up 24 3/4 at 888 1/2. This was 24 3/4 up from the low and 1/2 off the high. December Chicago wheat finished the day sharply higher but KC wheat traded over 30 cents higher into the close and Minneapolis followed. Drought conditions in the western plains and hopes that the US will begin to see an increase in export demand pushed Chicago March wheat to a new high for the move. The weekly Winter Wheat Conditions report showed 33% of the crop was rated good/excellent compared to 34% last week and 52% last year. This was in line with market estimates was the lowest rating on record for this time of year, beating out the old record of 42% good/excellent in 1999. No significant precipitation is expected in the next two weeks and temperatures are expected to be above normal which will keep some wheat from entering dormancy in the south. Nearly half of the Hard Red Winter wheat crop will enter dormancy with poor establishment. Export tenders this week include, Jordan for 100,000 tonnes, Iraq for 50,000 tonnes, Syria for 100,000 tonnes of soft wheat, and Algeria issued a tender for 50,000 tonnes yesterday. Japan is seeking 49,000 tonnes of wheat for February shipment.
December Oats closed up 4 1/4 at 373. This was 4 up from the low and equal to the high.

Corn Market Recap for 11/27/2012 (CME)
December Corn finished up 12 3/4 at 760, 1/4 off the high and 13 1/2 up from the low. March Corn closed up 12 3/4 at 764. This was 13 3/4 up from the low and 1/4 off the high. March corn finished the day sharply higher seeing support from a sharply higher wheat market and on concern in regards to Argentina's corn production. Outside markets are slightly negative with crude oil and stocks trading lower while the US Dollar is stronger. The grain markets shrugged off the negative macro influences and instead chose to focus on the supportive weather factors in the market. Winter Wheat crop condition ratings fell to 33% good/excellent which is the lowest rating on record for this time of year. No relief is expected in the western plains over the next 10 days and current forecasts call for above normal temperatures for much of the Corn Belt in the coming week. Renewed fears that winter weather will fail to produce adequate precipitation to ease soil moisture deficits has added positive sentiment to the marketplace. Export demand continues to disappoint but long term supply fears are the highlight of the market at the moment. January Rice finished up 0.165 at 15.085, 0.005 off the high and equal to the low.

Drought-Parched Mississippi River Is Halting Barges (Bloomberg)
Mississippi River barge traffic is slowing as the worst drought in five decades combines with a seasonal dry period to push water levels to a near-record low, prompting shippers to seek alternatives. River vessels are cutting loads on the nation’s busiest waterway while railroads sign up new business and the U.S. Army Corps of Engineers draws criticism from lawmakers over its management of the river, which could be shut to cargo from companies including Archer-Daniels-Midland Co. (ADM) next month. “Our shippers are looking at alternate modes of transportation,” said Marty Hettel, senior manager of bulk sales for AEP River Operations, the barge unit of American Electric Power Co. (AEP), a utility owner based in Columbus, Ohio. “If you’re shipping raw materials to a steel mill in Chicago, you’re trying to figure out if you can go to Cincinnati or Louisville, Kentucky, unload it out of the barge and rail it up to the steel mill.”
The worst U.S. drought since 1956, which dried farmland from Ohio to Nebraska, will last at least through February in most areas, according to the U.S. Climate Prediction Center in College Park, Maryland. Barges on the Mississippi handle about 60 percent of the nation’s grain exports entering the Gulf of Mexico through New Orleans, as well as 22 percent of its petroleum and 20 percent of its coal.

Recap Energy Market Report (CME)
January crude oil prices experienced a choppy trading session and registered a lower low in the process. Crude oil took on a higher track during the initial morning hours, supported by a boost in risk-sentiment after EU and IMF leaders came to an agreement over Greece's debt target. However, a rebound in the US dollar and ongoing concerns over the US fiscal cliff seemed to rattle sentiment and pushed the crude oil market lower. Some traders indicated that better than expected US economic data on Durable Goods Orders and Consumer Confidence seemed to limit the downside. Expectations for this week's EIA crude stocks report are for a build in the range of 500,000 to 1.0 million barrels.

Oil Trades Near One-Week Low as U.S. Crude Stockpiles Increase (Bloomberg)
Oil traded near the lowest price in a week in New York after an industry-funded report showed rising stockpiles in the U.S., the world’s biggest crude consumer. Futures were little changed after slipping 0.6 percent yesterday. U.S. inventories gained 1.96 million barrels last week, data from the American Petroleum Institute indicated. An Energy Department report today may show supplies increased 350,000 barrels to 374.8 million, according to the median estimate of 11 analysts in a Bloomberg News survey. “Stockpiles are above two-to-three year averages, so there’s ample supply,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “The market is still ignoring the builds. I would look at it as a seasonal adjustment, as we’re expecting winter to be cooler than last year.”
Crude for January delivery was at $87.12 a barrel, down 6 cents, in electronic trading on the New York Mercantile Exchange at 12:42 p.m. Sydney time. The contract decreased 56 cents yesterday to $87.18, the lowest since Nov. 20. Prices are down 12 percent this year. Brent for January settlement rose 3 cents to $109.90 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.79 to West Texas Intermediate, compared with $22.69 yesterday.

Silver Market Recap Report (CME)
After making a fresh new high for the move early on, December silver sagged into and through mid session. The failure to sustain a rally attempt in US equities, adverse currency market action and US data that failed to inspire probably emboldened the bear camp in silver, especially since fears that the US will fall over the fiscal cliff are sitting just below the surface of most markets. Clearly silver was unable to benefit from residual strength in platinum and grain prices and that would seem to suggest that something financial was behind the weakness in silver today.

Gold Market Recap Report (CME)
The gold market started out a touch soft and spent most of the morning in weaker ground. However, into mid session and early afternoon, gold came under some fresh pressure perhaps because of sagging confidence in seeing a US fiscal deal but it is also possible that adverse currency market action served to undermine gold prices. Others traders suggested that options were responsible for the weakness in gold but with fresh hopes of a Greece deal in the headlines, it seemed as if gold wasn't going out of its way to find the positives today.

Gold Declines on Waning India Demand, Dollar’s Rebound (Bloomberg)
Gold fell the most in a week as physical demand from India, last year’s biggest buyer, remained slack and a rebounding dollar eroded the appeal of the metal as an alternative investment. Buying in India has “retreated,” UBS AG wrote today in a report. The U.S. Dollar Index extended gains after a report showed U.S. demand for goods such as machinery and electronics climbed in October by the most in five months. While gold rose 5.1 percent in September after the Federal Reserve announced stimulus measures to boost growth, such accommodative policies can’t be left in place forever, Fed Bank of Dallas President Richard W. Fisher said today in Berlin. “The dollar strength is working against gold,” Ronald Stoeferle, a commodity analyst at Erste Group Bank AG in Vienna, said in a telephone interview. “Also, the physical market looks quiet.”
Gold futures for December delivery fell 0.4 percent to settle at $1,742.30 an ounce at 1:44 p.m. on the Comex in New York, the biggest decline since Nov. 20. Prices dropped 0.1 percent yesterday, after reaching $1,755 on Nov. 23, the highest since Oct. 17. Holdings in gold-backed exchange-traded products rose 0.7 metric ton to a record 2,607 tons yesterday, data compiled by Bloomberg show. Silver futures for March delivery slid 0.5 percent to $34.074 an ounce in New York, after reaching $34.37, the highest since Oct. 11. On the New York Mercantile Exchange, platinum futures for January delivery rose 0.5 percent to settle at $1,618.50 an ounce. Palladium futures for December delivery climbed 1.1 percent to $668.20 an ounce.

Shanghai Ship Index Challenges 268-Year-Old London Bourse (Bloomberg)
Shanghai Shipping Exchange will introduce dry-bulk and oil-tanker indexes today in a challenge to a 268-year-old London bourse that sets freight rates covering about 75 percent of global commodity cargoes. The indexes will track China-import shipping rates using data collected from shipowners, brokers and charterers, the Shanghai exchange said in an e-mailed reply to Bloomberg News questions. The gauges will initially run on a trial basis. Derivatives, used to speculate on future rates, will be added at a later date, it said. The Shanghai bourse is introducing the gauges as China’s biggest port tries to compete with London and Singapore as a shipping-finance center. The bourse will need to overcome concerns about the use of data from operators and slumping derivatives trading to lure investors using indexes compiled by Baltic Exchange Ltd.
“They have to convince the shipping market that their data is independent and objective,” said Ralph Leszczynski, the Beijing-based head of research at shipbroker Banchero Costa & Co. “They shouldn’t create indexes that are only handy for Chinese state-owned companies.” The Shanghai exchange will take data from 23 companies for dry-bulk indexes tracking three vessel types. The oil tanker gauge, which only follows very large crude carriers, will use information from 18 companies. The exchange didn’t say which routes it will track. State-controlled companies contributing data for the indexes will include ship operators China Cosco Holdings Co. (1919) and CSC Nanjing Tanker Corp. (600087) and oil company China Petroleum & Chemical Corp. Overseas companies such as brokers Fearnleys A/S and ICAP Plc will also provide information.

20121128 1040 Soy Oil & Palm Oil Related News.


Soybean Complex Market Recap (CME)
January Soybeans finished up 24 1/2 at 1449 1/4, 1 3/4 off the high and 26 1/4 up from the low. March Soybeans closed up 25 1/4 at 1437 1/2. This was 25 3/4 up from the low and 1 1/2 off the high. December Soymeal closed up 7.3 at 439.0. This was 7.7 up from the low and 0.9 off the high. December Soybean Oil finished up 0.85 at 50.12, 0.04 off the high and 0.99 up from the low.
January soybeans saw double digit gains on the day and support was linked to concern over the South American weather forecast and on solid demand for soybeans, meal, and oil. Soybean oil has been the leader for the complex recently and yesterday's sale of 20,000 tonnes brought the sales total for the last two weeks over 200,000 tonnes. Some analysts even suggest that total commitments now exceed the November USDA export estimate of 1.2 billion pounds. Traders noted strength in soybean calendar spreads and a firm tone to the basis in the Gulf of Mexico which added support to the trade. The overall weather outlook for South America remains mostly favorable. Central and northern Brazil continues to see steady precipitation which has improved conditions while Southern Brazil is trending drier. Heavier and more consistent rainfall patterns will be needed to alleviate soil moisture deficits. Argentina will see another shot of precipitation at the end of this week followed by a drier weather pattern. Most analysts are neutral on the Brazilian soybean crop with most estimates falling near the current USDA estimate of 81 million tonnes.

EDIBLE OIL: Malaysian palm oil futures edged down as traders booked profits from a near one-week high after Greece's international lenders agreed on a financial aid deal that boosted market optimism. (Reuters)

BRUSSELS | Tue Nov 27, 2012 3:10pm EST
(Reuters) - The European Commission has approved a scheme that would certify as sustainable transport fuel made from palm oil, condemned by environmental groups as one of the most damaging sources of biodiesel.
The Commission made public on Tuesday a decision taken last week to endorse the Roundtable on Sustainable Palm Oil scheme, which means the palm oil producers it licenses can qualify for subsidies.
"Palm oil is driving deforestation, wildlife loss, community conflicts, and accelerating climate change. Instead of greenwashing palm oil, the EU should outright ban its use as a biofuel," said Robbie Blake, biofuels campaigner at Friends of the Earth Europe.
Concern that some biofuels create more problems than they solve led to a major policy shift in September when the EU executive announced a proposal to limit how much biodiesel and bioethanol could be made from food crops.
Last month, it announced new rules to encourage a shift away from first-generation biofuels, blamed for stoking food price inflation, forcing forest clearance and draining of peat land. The aim is to move towards a second generation of fuels made from waste or algae, for instance.
The Commission's own research has shown palm oil has the highest emissions of any biofuel when so-called ILUC factors - the indirect land use change caused by using it for fuel - are considered.
"Emissions from peat conversion have a larger impact on the overall emissions attributed to oil crops, particularly for palm oil, than for bioethanol crops," a Commission document released in October said.
The roundtable is an association of hundreds of palm oil growers, processors, traders and distributors, as well as some non-governmental organizations working in palm-oil producing nations, such as Indonesia and Malaysia.
Commission spokeswoman Marlene Holzner said the Roundtable on Sustainable Palm Oil scheme had been judged "suitable."
She added that the EU's Renewable Energy Directive already prohibits the destruction of forests to grow palm oil or other biofuel crops.