Friday, November 30, 2012

20121130 1804 FCPO EOD Daily Chart Study.

FCPO closed : 2370, changed : -16 points, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histogram : falling lower, buyer seller battling.
Support : 2350, 2300, 2250, 2230 level.
Resistance : 2400, 2450, 2490, 2520 level.
Comment :
FCPO continue to declined for the 4th day with quiet volume transacted. Soy oil price currently trading weaker after overnight closed recorded loss while crude oil price having downward correction after yesterday rise.
Price trading mostly in negative zone despite 2 cargo surveyors reported improved exports figure as industry expert still see potential downward price movement in order to attract buyer and the affect of exports tax structure.
Daily chart still calling a correction range bound downside biased market development.
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.

20121130 1751 FKLI EOD Daily Chart Study.

FKLI closed : 1609.5 changed : -1.5 point, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : rising higher, buyer testing market.
Support :  1600, 1595, 1590, 1580 level.
Resistance : 1610, 1615, 1623, 1627 level.
Comment :
FKLI eased slightly lower with lesser volume traded with December contract doing 3 points discount compare to cash market that closed little higher. Overnight U.S markets closed little higher and today Asia markets ended firmer while European markets currently having positive development.
Continue hopeful on U.S. budget negotiation will reach agreement, News on Japan government approved proposed economy stimulus package and unexpected hike in Japan industrial production lead world markets trading firmer.
Daily chart wise, reading still suggesting a pullback correction down side biased market development with MACD indicator having positive crossed up.
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.

20121130 1700 Global Markets & Commodities Related News.

STOCKS: European stocks opened little changed while Asian shares hit a nine-month peak, as firmer overnight global equities created an upbeat tone, but flows were largely driven by month- and year-end position-squaring, with investors taking profits on the rises and buying on dips. U.S. stocks finished higher on Thursday. (Reuters)

FOREX-Euro rises to fresh 7-month high versus yen
LONDON, Nov 30 (Reuters) - The euro rose to a fresh seven-month high against the yen with traders citing month-end demand to buy euros from Japanese importers.
The euro  rose to 107.55 yen on EBS trading platform, its highest since late April.

China's Nov official PMI seen hitting 7-mth high as demand revives
BEIJING, Nov 30 (Reuters) - China's factory activity in November probably expanded at its fastest pace in seven months, reinforcing views that recovery in the world's second-largest economy is entrenched going into the final quarter of the year.
China's official purchasing managers' index (PMI) in  November may have rebounded to 50.6 from October's 50.2, the  median estimate of 11 economists polled by Reuters showed, the  latest evidence a recovery in the vast manufacturing sector was  gathering momentum on the back of a revival in domestic demand.

Boehner sees no progress in 'fiscal cliff' talks (Reuters)

House of Representatives Speaker John Boehner said on Thursday that "fiscal cliff" talks with the White House had made no substantive progress and criticized President Barack Obama and Democrats for failing to get serious about including spending cuts in a final deal.

GRAINS: Chicago wheat futures fell for the second straight session, dragged down by weak exports from the United States and profit taking after a consistent rally this week.  (Reuters)

Flood-hit Argentine barley seen losing ground to soy (Reuters)
Flooded Argentine barley fields will be planted with soybeans once they dry out, the Buenos Aires Grains Exchange said on Thursday, signaling the exchange may end up increasing its soy area estimate for the 2012/13 season.

POLL-Oversupply to depress oil prices next year (Reuters)
Oil prices are expected to fall slightly over the next year as high production feeds softening demand at a time of slowing global economic growth, a Reuters poll shows.

OIL: Brent crude was stuck below $111 per barrel, as a lack of progress in critical U.S. budget talks to avert a looming fiscal disaster muddied the outlook for oil demand from the world's biggest consumer. (Reuters)

Norilsk sees palladium in deficit next several years (Reuters)
Norilsk Nickel, the world's largest producer of palladium and nickel, expects the palladium market to remain in a deficit in the next several years largely due to a near depletion of Russian state supplies.

BASE METALS: London copper edged up, bracing to finish the month higher on signs that a recovery in China's economic growth took root in November, although worries over Europe and the United States kept gains constrained.  (Reuters)

PRECIOUS METALS: Gold was trading in a tight $4 range above $1,720 an ounce, but prices were on track for their biggest weekly drop since the start of the month with an uncertainty about crucial U.S. talks to avert a fiscal crisis continuing to hit sentiment. (Reuters)

METALS-LME copper inches up, eyes monthly gain on China prospects
SINGAPORE, Nov 30 (Reuters) - London copper edged up bracing to finish the month higher on signs that a recovery in China's economic growth took root in November, although worries over Europe and the United States kept gains constrained.
"Everyone's expectations on the copper market are turning bullish quarter 1. You've got the U.S. housing market starting to pick up, China starting to pick up and reforms next year," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm.

PRECIOUS-Gold ticks up; headed for biggest weekly drop in 4 weeks
SINGAPORE, Nov 30 (Reuters) - Gold edged up but prices were on track for their biggest weekly drop since the start of the month with an uncertainty about crucial U.S. talks to avert a fiscal crisis continuing to hit sentiment.
"Gold is back in its old $1,700-$1,730 range," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen, referring to a range in which gold had traded earlier this month.

Baltic Index down as capesize, panamax rates fall
Nov 29 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Thursday as capesize and panamax rates declined.
The overall index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 0.63 percent to 1,097 points.

20121130 1705 Palm Oil Related News.

INTERVIEW-Indonesia's SMART sees 2013 palm oil output rising by up to 10 pct GAGR.SI SMAR.JK - RTRS
30-Nov-2012 16:48
SMART output seen up 5-10 percent in 2013 due to tree maturity Indonesia ports struggle to cope with weather, demand fluctuations Indonesia's palm stock levels at more than 4 million tonnes
By Michael Taylor
NUSA DUA, Indonesia, Nov 30 (Reuters) - Indonesia's biggest palm oil producer SMART SMAR.JK expects its 2013 output to rise by as much as 10 percent on the year to around 2.4 million tonnes as more plantations mature, a company executive said on Friday.
SMART, or PT Sinar Mas Agro Resources & Technology, is likely to produce about 2.2 million tonnes of palm oil this year, Susanto, chief executive of the company's West Kalimantan operations, told Reuters.
"For next year, hopefully there will be an increase of 5-10 percent," Susanto said on the sidelines of the 8th Annual Indonesian Palm Oil Conference.
"We have new areas and more mature areas, especially in Central Kalimantan," he added.
SMART runs the Indonesia palm oil operations of its Singapore-listed parent Golden Agri-Resources GAGR.SI.
The company had earlier estimated output to rise by about 8 percent a year over the next five years. (Full Story)
Susanto manages 30,000 hectares of palm plantations in West Kalimantan, producing 40,000-45,000 tonnes this year. He said that volume is likely to rise 10-15 percent in 2013.
Malaysia and Indonesia account for about 90 percent of the world's annual palm oil production of about 45 million tonnes.
This year, Europe's financial woes coupled with an economic slowdown in top buyers India and China, have cut demand for the edible oil and pushed inventories in second-largest producer Malaysia to record highs. (Full Story)
The rising stocks have shaved a quarter off the value of palm oil futures FCPOc3 this year, and many analysts at the conference see little let-up in early 2013.

Palm oil stocks in Indonesia, the world's top producer, are more than 4 million tonnes at present and capacity is between 5-6 million tonnes, said Joelianto, trading director at SMART.
To offset falling demand, government officials in Indonesia have called on the palm industry to build bigger storage capacity, and increase domestic use of biofuels.
Joelianto, however, said the biggest challenge to the industry in Indonesia was the lack of bigger waterways and new ports to quickly ship out palm oil and ease high stock levels.
"The government has not done anything concrete yet," said Joelianto, adding that many palm firms were now building their own jetties. "We need more infrastructure, especially deeper ports that can handle bigger volumes."
Earlier this month, the Indonesian Vegetable Oil Association said modernising Indonesia's state-owned ports was crucial to handle the rapidly expanding refined palm oil output. (Full Story)
Crude palm oil shipments were also affected by dry weather conditions and falling water levels on a river in West Kalimantan in June. (Full Story)
"If Indonesia's palm oil (output) is growing by 2-2.5 million tonnes per year, we must have ports that can handle that kind of volume," Joelianto said.

Palm oil prices set for a volatile 2013 in oversupplied market
Fri Nov 30, 2012 1:17am EST
* Record palm oil stocks to weigh on 2013 prices
* Renewable energy demand may mop up excess stocks
* China's tighter food quality rules, India protectionism worrying
* Tighter soybeans may be a bright spot for palm oil -Mielke
By Niluksi Koswanage and Michael Taylor
NUSA DUA, Indonesia Nov 30 (Reuters) - Palm oil prices are set to start 2013 on a sour note as record high stocks and rising output in Southeast Asia overwhelm already weak demand, while regulatory uncertainty in top buyers India and China adds to the gloomy outlook.
Analysts and traders at an industry meeting in Bali expect the world's biggest palm oil producers, Indonesia and Malaysia, to boost supplies next year, barring any weather disruptions.
An increase in the amount of edible oil on the global market is likely to further weigh on benchmark Malaysian futures <0>, which are set to post their worst annual performance this year since the 2008 financial crisis. The profits of big palm oil firms, such as Singapore's Wilmar and Malaysia's Sime Darby, are also likely to be eroded.
While lower prices will attract food demand, appetite could be curbed by possible regulations by China and India. India, the world's biggest buyer, may set higher taxes on edible oil imports to protect oilseed farmers, and China launches strict quality curbs for imports on Jan. 1.
"I am steadily coming to the conclusion that the days of supernormal profits in palm oil cultivation are coming to a close," influential palm oil market analyst Dorab Mistry said.
"Overall I expect vegetable oil prices to remain rangebound in the first half of the year and to begin a major bear market in the second half," he told the conference.
Mistry, who handles the edible oil trading portfolio for India's Godrej Industries, forecast palm oil to "break down" if India hiked import taxes.
Otherwise, palm oil futures will trade between 2,300 and 2,600 ringgit between now and February 2013, as high stocks more than make up for strong Asian demand growth, he said.
Other analysts and traders surveyed by Reuters at the meet also saw palm oil prices averaging 2,500 ringgit next year, or 17 percent off this year's average of 3,016 ringgit.

Palm oil is now trading at above 2,350 ringgit, sharply lower than year-ago levels of above 3,000 ringgit.
Prices next year will be affected by the performance of benchmark Brent crude oil and the Chinese quality requirements, said James Fry, chairman of consultancy LMC International.
"There are three possible outcomes," he said, referring to the Chinese curbs. "More crude palm oil or crude olein imports for refining, more polishing of RBD olein imports and maybe more fractionation of RBD palm oil imports."
Higher crude prices could boost the appeal of Asian palm oil, and shrink Malaysian inventories to 1.8 million tonnes by June 2013 from a record 2.5 million in October, Fry said.
Palm futures are unlikely to change too much from current levels if Brent futures fall to around $90 a barrel, he added. If Brent stays at around $110, palm oil could hit 2,950 ringgit.
Palm oil demand has fallen this year, crimped by financial woes in Europe and economic slowdown in China.
Next year, producers will also have to contend with even higher supplies from both Malaysia and Indonesia, which makes for a challenging market unless the global economy picks up.
Mistry, in his first estimate of Indonesian output, forecast production to rise to 29.5 million to 30 million tonnes in 2013 from a projected 27.5 million this year, exceeding estimates by the official industry association GAPKI.
He also forecast Malaysian output growing at a slower pace, to 19 million tonnes next year, from an estimated 18.4 million this year.
Not all analysts, however, rue the increase in supply.
Thomas Mielke, editor of Hamburg-based research house Oil World, believes the increase in palm oil supply will help fill the gap left by a decline in soybean production in the Americas.
He forecast crude palm oil prices, now trading at a record $350 discount to soybean oil, would start rising as more customers make the switch.
"Global soybean supplies are tight," he said. "I expect that palm oil futures will appreciate to 3,100 to 3,200 Malaysian ringgit sometime in March, April, May 2013."
Indonesia's rapidly expanding edible oil processing industry is also likely to help soak up the extra output.
Indonesia's Palm Oil Board forecast total palm oil consumption to rise to about 7.5 million tonnes next year, from an expected 7 million this year.
Jakarta is also considering increasing tax incentives to encourage palm oil companies to set up refineries, a government adviser said, as it develops its downstream sector to compete with Malaysia and draw in more export earnings. (Editing by Miral Fahmy)

VEGOILS-Palm oil slips on investor caution, set for third monthly loss
Fri Nov 30, 2012 1:06am EST
* Prices need to trade at 2,200 ringgit level for next 4-6
weeks -Mistry
    * Palm oil still eyes 2,353 ringgit - technicals
    * Malaysia's November palm exports up 3.9 pct -ITS
    By Chew Yee Kiat
    SINGAPORE, Nov 30 (Reuters) - Malaysian palm oil futures
edged lower on Friday and were heading for their third straight
monthly loss, with investors staying cautious after top analysts
warned that record high stocks will weigh on prices in the new
    But losses were limited by a surprise increase in Malaysian
exports in November to 1.66 million tonnes from 1.6 million
tonnes seen in October, easing concerns that record high stocks
would climb further for the month.
    "The export surprise is likely to limit the downside because
 end-stocks are going to be flat to slightly lower for November.
The market is also taking some time to digest the analysts'
comments," said a dealer with a foreign commodities brokerage in
    By the midday break, the benchmark February contract
 on the Bursa Malaysia Derivatives Exchange fell 0.6
percent to 2,372 ringgit ($780) per tonne. For the month, prices
were on track for a 5 percent loss.
    Total traded volumes were thin at 8,342 lots of 25 tonnes
each compared to the usual 12,500 lots, highlighting investor
    Technicals showed palm oil's target at 2,353 ringgit per
tonne remained unchanged, and a break below will lead to a
further drop to 2,288 ringgit, said Reuters market analyst Wang
    Palm oil prices need to trade at the 2,200 ringgit level for
the next 4-6 weeks to attract demand that could reduce and clear
stocks, said top industry analyst Dorab Mistry at the Indonesian
Palm Oil Association conference on Friday.
    Leading analyst James Fry of LMC International raised issues
such as uncertainty ahead of Chinese and possibly Indian import
rules, although Thomas Mielke of Oil World provided a more
upbeat forecast for palm oil prices.  
    Analysts and traders surveyed by Reuters at the conference
saw 2013 average palm oil prices at 2,500 ringgit, down 17.1
percent from 3,016 ringgit calculated so far for this year.
    In related markets, Brent crude slipped towards $110 a
barrel on Friday as critical U.S. budget talks to avert a
looming fiscal disaster appeared to have stalled, denting the
outlook for oil demand from the world's biggest consumer.
    In other vegetable oil markets, U.S. soyoil for December
delivery lost 0.1 percent in early Asian trade. The
most-active May 2013 soybean oil contract on the Dalian
Commodity Exchange edged up 0.2 percent.

20121130 1215 Palm Oil Related News.

ITS CPO export up 3.9% to 1,663,092 tonnes for the period of 1~230 Nov 2012.

POLL-Malaysian average palm oil prices seen falling 17 pct in 2013 0#FCPO: BWPT.JK SMAR.JK - RTRS
30-Nov-2012 11:30
NUSA DUA, Nov 30 (Reuters) - A Reuters survey on analysts and traders polled at a conference in Indonesia's island of Bali showed average palm oil prices in 2013 are seen to fall to 2,500 ringgit ($820) per tonne, down 17.1 percent from 3,016 ringgit calculated so far for 2012.

HIGHLIGHTS-Analysts call the palm oil market for 2013 0#FCPO: - RTRS
30-Nov-2012 11:10
(Adds more quotes for Oil World)
NUSA DUA, Indonesia Nov 30 (Reuters) - Following are comments by key analysts at a palm oil industry conference in the Indonesian island of Bali:

"I repeat, the Bursa Malaysia Derivatives futures on the 3rd position need to trade over a period of 4 to 6 weeks at a level of 2,200 ringgit in order to attract massive energy demand so as to reduce and clear stocks. I don’t really expect Malaysian bulls to heed my advice."
"So I am predicting crude palm oil (CPO) futures on the Bursa Malaysia Derivatives (BMD) exchange to trade in a range between 2300 and 2600 from now until February 2013. This will ensure high stock levels in both countries but particularly in Malaysia."
"If India imposes a 10 percent import duty on CPO and a 20 percent import duty on Refined Palm products as I anticipate it will, then Palm futures will break down. We shall have to watch that situation very closely. Otherwise I expect the 2300-2600 range to hold for a fairly long period of time."
"Overall I expect vegetable oil prices to remain range-bound in the first half of the year and to begin a major bear market in the second half."

"It will be seen that incremental demand will exceed incremental supply. However it must be borne in mind that we start the new oil year with the heaviest stocks in history.
"The massive over-hang from the previous year will cushion the impact of the lower production of vegetable oils in the first half of the new oil year."
"In the second half of the year, from March onwards the recovery in soft oil production and the anticipation of big crops to be harvested will prevent any thoughts of a price rally."

"India’s Kharif oilseed harvest was somewhat affected by drought. The omens for the winter sown crop are good. If all goes well, India should harvest a Rape-Mustard crop of about 6.5 million tonnes."
"Overall India’s production of vegetable oils should expand for the next oil year mainly on account of a higher mustard crop. The most important point to note is that India started the new Oil Year on 1 November 2012 with record opening stocks (port stocks plus internal pipeline) of 1.65 million tonnes."
"Indian consumption is also expected to grow at a healthy pace but overall India’s imports will be about the same as the current year. Imports for the months of November to April may be somewhat higher than 2012 but in the later half, they will be slightly lower."

"Let me say at the outset that current Indonesian CPO production is running ahead of expectation. Indonesian production is peaking this month in November and looks like exceeding my estimate of 27.5 million tonnes for 2012. Malaysia will produce 18.4 million tonnes in 2012."
"The possibility of an El Nino has now faded away. Based on data available at present and current rainfall, my model suggests we shall start a new soft Low Cycle from about January which should last until about August 2013. "
"The biological cycle in recent two years has tended to be shorter than in earlier years. Since there has been no major weather disturbance in the last one year, I expect the new Low Cycle to be shorter and softer than earlier ones."
"After the trees have rested and if rainfall remains normal, we shall move into a good High Cycle once again. What is fortunate is that this new High Cycle will coincide with the seasonal High Cycle also."
"Therefore, CPO production in the Second Half of 2013 and particularly in the months of September to December 2013 is likely to be at a new all-time high, possibly creating new monthly production records in both countries."
"My estimate is that Malaysia will produce at least 19 million tonnes in 2013 and Indonesian production will be between 29.5 and 30 million tonnes. Between Malaysia and Indonesia CPO production will expand 2.5 to 3 million tonnes."

"As Malaysian Palm Oil Board stocks drop below 1.8 million tonnes by June next year, the European Union premium of crude palm oil over Brent crude should move up towards $200."
"Adding the CPO premium to the Brent crude oil price, we get these EU CPO price forecasts of $1,000 with Brent at $110 a barrel and $865 with Brent at $90 a barrel by next June."
(This translates to Malaysian palm oil futures trading at around 2,530 ringgit per tonne if the mineral oil drops to $90 a barrel, Fry said. And if Brent remains at $110, palm oil futures could hit 2,950 ringgit.)

"There are three possible outcomes: more crude palm oil or crude olein imports for refining; more polishing of RBD olein imports; and maybe more fractionation of RBD palm oil imports."
"Palm imports will be high for the next two weeks, and then be slow in January as the application of the new policies is studied. They should settle at a level down slightly from 2012."

"The immediate effect of China’s announcement about higher quality specifications for RDB olein in January has been to boost imports as buyers try to avoid uncertainties about how it will be applied."
"Will Chinese Customs authorities allow bulk RBD olein imports, as now, but with a requirement that it be polished to meet the tighter specifications?
"Will application of the regulations differ in different regions, i.e., will they apply before/after polishing?
What about the standards applied to RBD palm oil imported for fractionation? Will they be tightened?
In the background, how will the rules on blending of oils for food use and on “gutter oil” affect palm oil?"

Palm’s role in meeting oil demand in the next few months is affected by new policies round the world."
"Among exporters, Malaysia will match Indonesia’s refinery export tax incentives in January. This will boost its share of RBD exports and help to reduce MPOB stocks. This is mildly bullish for CPO prices."
"Among importers: India reacted to Indonesia’s tax reforms by lifting RBD olein import tariffs. However, it is China that needs the closest watching, as the changes to its CIQ quality requirements for RBD olein add to the impact of its measures to tighten the rules regarding the labelling of blended oils tighter."

"Last year was a remarkably good year for CPO output all over the world, from S.E. Asia to Latin America. This year's output is now benefiting from the good rains in most regions in 2011 and so far this year."
"There is also growing confirmation that, regardless of pressures to slow palm plantings, high prices have been promoting the expansion in palm areas. We can expect growth of 2-3 million tonnes a year in Indonesian CPO output for the next few years."
"Over the next six months, the output of oils from all three major oilseeds will be restricted by poor crops and so CPO is crucial in balancing supply-demand."

"The price outlook for 2013, very difficult markets and very dangerous markets at the same time. We have big stocks, very big stocks in Malaysia and Indonesia"
"Palm oil lost market share over the last 12 months. Sunflower all took away market share because of attractive prices…contributing to the very high stocks at the moment."
"World demand for palm oil will rise by 3.6-3.7 in the current season."
"Vegetable oil prices are undervalued for the 2013 positions.
“We need 78 million tones of palm oil by 2020 and that will be a big challenge.””
"The biodiesel market has lost its dynamics at the moment."
"Palm oil price in Rotterdam set to rise to around $1,100 until April/May 2013. I expect that palm oil futures appreciate to 3,100-3,200 Malaysian ringgit sometime in March, April, May 2013."

"Palm oil prices are undervalued, I consider the huge discount of $350 to soyoil as not sustainable. It is a matter of time with current surplus in palm oil getting disposed."

"South American crops are going to be key for prices. September to February 2012/13, global crushing of ten oilseed varieties forecast to suffer an unprecedented drop of 5 million tonnes."
"In contrast, crushing jumped8.4 million tonnes a year ago and 5.8 million tonnes per annum on the average of the past 14 years. The world needs more palm oil to offset these reductions."
"Soybean crushing could be compensated by higher palm oil supplies."
"September/February 2012/13 world soybean supplies down by 24 million tonnes. Little rationing in world soybean consumption so far."

20121130 1109 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares higher, capped by U.S. fiscal worries
TOKYO, Nov 30 (Reuters) - Asian shares edged up on expectations a deal will eventually be reached to avoid a U.S. fiscal crisis, but investors wary about taking big positions before the year-end were likely to take profits on the rises and buy on dips.
"Concerns about the fiscal cliff linger, but investors still expect a budget deal to be reached by the end of this year. Today's shares will fare well," Lee Jeong-do, an analyst at Shinhan Investment Corp said of Seoul shares.

FOREX-Euro holds below 1-month high on U.S. fiscal blues
TOKYO, Nov 30 (Reuters) - The euro held below a one-month high against the dollar as the market worried about the prospects for a budget deal seen as essential to preventing the U.S. economy from slipping back into recession next year.
"If there is no progress in the U.S. debt talk, the dollar is likely to fall below 82 yen next week," said Masafumi Yamamoto, chief FX strategist at Barclays in Tokyo, noting recent U.S. economic data had not been as solid as before.

Boehner sees no progress in 'fiscal cliff' talks
WASHINGTON, Nov 29 (Reuters) - House of Representatives Speaker John Boehner said on Thursday that "fiscal cliff" talks with the White House had made no substantive progress and criticized President Barack Obama and Democrats for failing to get serious about including spending cuts in a final deal.
Boehner said he was "disappointed" after a phone call with Obama on Wednesday night and a meeting with Treasury Secretary Timothy Geithner on Thursday moved the two sides no closer to an agreement to avert the tax hikes and spending cuts that will be triggered at the start of 2013 unless Congress intervenes.

OIL - Oil up on U.S. budget optimism, Middle East tensions
NEW YORK, Nov 29 (Reuters) - Oil prices rose on Thursday for the first time this week as investors grew more optimistic that U.S. lawmakers will resolve a budget fight and increasing Middle East tensions stoked fear about potential disruptions to oil supplies.
"The developments in the Middle East keep pumping up the security premium and that is helping push crude higher along with the hopes that a fiscal deal can be reached in Washington," said John Kilduff, partner at hedge fund Again Capital LLC in New York.

US oil imports in Sept down from year ago-EIA
WASHINGTON, Nov 29 (Reuters) - U.S. crude oil imports fell 539,000 barrels per day from a year earlier in September, the Energy Information Administration said on Thursday.
Crude imports averaged 8.375 million bpd in September. Imports of crude oil have dropped year-over-year in eight of the first nine months of the year.

UK oil production rises in October
LONDON, Nov 29 (Reuters) - Britain's crude oil production and exports rose in October versus September with the end of yearly field maintenance, while refinery output fell amid seasonal turnarounds, energy department figures showed on Thursday.
Crude oil production was up 20.4 percent in October at 2.851 million tonnes as producing fields returned from maintenance, from 2.368 million tonnes in September.

20121130 1032 Local & Global Economy Related News.

Malaysia is expected to register real GDP growth of 5.1% in 2012 and 5% in 2013, according to World Bank’s Malaysia Economic Monitor launched Thursday. As propelled by domestic demand, the economy is likely to weather a weak global environment and grow robustly in the next year. The report also noted that strengthening structural reforms is the key to ensuring the positive growth momentum carries into the medium-term. (Bernama)

The  private sector is more likely to contribute towards the government's target of increasing women's participation rate in the labour force to 55% by 2015, Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said Thursday. As of last year, women's participation rate increased to 47.9% from 46% in 2010, he said. (Bernama)

US consumer spending climbed at a 1.4% rate in 3Q12, the smallest gain in more than a year and down from a previously reported 2% advance. (Bloomberg)

The US pending home sales index rose 5.2% mom in Oct (a revised 0.4% in Sep), beating consensus of 1.0%. (Bloomberg)

US after-tax corporate profits gained 18.6% yoy in 3Q12 (14.5% in 2Q12). (Bloomberg)

US 3Q12 GDP rose a revised 2.7% qoq in the second estimate (2.0% in the advance estimate; 1.3% in 2Q12). This was close to the consensus estimate of 2.8%. (Bloomberg)

US jobless claims fell 23,000 in the 24 Nov week to 393,000 (a revised 416,000 in the earlier week), still higher than consensus of 390,000. (Bloomberg)

New home sales across 54 major cities in China jumped by 30% yoy in Nov. (Caixin)

China’s leading index improved marginally to 100.42 pts in Oct from 100.36 in Sep. (Bloomberg)

Japan’s retail sales fell 1.2% yoy in Oct, the most in 11 months, after a 0.4% advance in Sep. Economists expected a 0.8% decline. (Bloomberg)

The average salary increase in Thailand in 2013 is projected at 6%, slightly higher than the 5.7% pay rise in 2012, putting the country in the middle spectrum in the Asia-Pacific region, where predictions range from 2.3% to 12% - a slight increase from 2012. (Bangkok Post)

The Philippines’ budget deficit  narrowed to PP9.7bn in Oct from US$34.9bn in Sep. (Bloomberg)

Eurozone economic confidence rose to 85.7 from 84.3 in Oct, well above consensus of 84.5, whilst industrial confidence rose to -15.1 from -18.3 in Oct.  Services confidence improved to  -11.9 from  -12.1. The  business climate index rose by 0.42 pt to  -1.19, whilst the  consumer sentiment index fell to -26.9 from -25.7 in Oct. (RTTNews)

20121130 1032 Malaysia Corporate Related News.

SP Setia says it has entered into a RM845m privatisation agreement with the federal government to develop an integrated health and research institute in Setia Alam, Selangor. In the agreement with the Ministry of Finance's Syarikat Tanah dan Harta Sdn Bhd, SP Setia's 50%-subsidiary Sentosa Jitra Sdn Bhd (SJSB) will develop 16.6ha of land in Setia Alam for the institute, in return for a 20.9ha piece of land located along Jalan Bangsar, Kuala Lumpur. SJSB will design, build and test the integrated centre through to its commissioning for the Ministry of Health within 48 months of the start of construction. The RM845m project consists of a fully-integrated health and reserach institute in Setia Alam and 24 apartments with a polyclinic and dental clinic in Bangsar. In addition, SJSB is to pay the government RM217.11m, being the minimum guaranteed profit for the mixed development that SJSB proposed to undertake on the piece of land in Bangsar. (Malaysian Reserve)

IJM Corp Bhd may sell down its 9% stake in Scomi Group if the latter isn't able to vote through the issuance of convertible debt papers to the former, according to sources. Recall that as part of the deal involving IJM acquiring 9% in Scomi Group in September, the two parties agreed that Scomi Group will issue an additional RM110m worth of redeemable convertible secured bonds to IJM, which can be converted into another 15% equity in Scomi. However, the issuance of debt paper is being opposed by other major shareholders of Scomi Group who collectively own about 13%. (StarBiz)

CIMB Group  is not bidding for General Electric's (GE) stake in Bank of Ayudhya (BAY), sources said, putting an end to market speculation that it was zeroing in on the Thai bank. "We did not put in a bid," a source from CIMB, who declined to be named. Last month, top lender Maybank too said it would not be making a bid for BAY. (BT)

Mitsubishi UFJ Financial Group, is among the first round bidders for General Electric's $1.5bn (RM4.5bn) stake in Thailand's fifth-largest lender, Bank of Ayudhya, sources told. Suitors of GE's Thai bank stake are seeking a foothold in one of Asia's fastest growing economies. They are expected to seek full control of the bank, which is also Thailand's No. 1 retail bank with a $5.9bn (RM17.7bn) market value. One source familiar with the process but not directly involved said CIMB Group had also lodged a bid. MUFG and CIMB declined to comment. (Reuters)

Proton aims to sell 250 of its newly launched Satria Neo R3 model, an extension of Satria Neo CPS model, a month, Executive Chairman Datuk Seri Mohd Khamil Jamil said. With a lower price compared to the previous Satria Neo version, the new model is expected to receive overwhelming response from customers, he said. "There is a great following for the R3 (model). I think the positioning of the car at RM64,000 is absolutely fabulous. "This model is something that we want to bring to the Malaysian public, what has been used in the rally for the use of our customers," he told reporters after launching the Satria Neo R3. (Bernama)

Malaysia Airlines is targeting a 10% rise in RASK or a two sen increase from now until 2014 that would translate in a profit margin of RM1bn, said its group CEO Ahmad Jauhari Yahya. It also plans to reduce its CASK by three sen to bring it to 20 sen. Jauhari also felt the potential of cargo, engineering and MAS Holidays units had not been fully exploited. Those in the know claim that these units could potentially earn MAS about RM1bn in revenue over the next few years. (Star Biz)

Malaysia Airports (MAHB) may bid to run facilities in China and Indonesia because of rising travel demand in the Asian nations, said MD Bashir Ahmad. The airport operator is also in talks to build a theme park and golf course on land near airfields in Malaysia. The company is on track to meet its goal of increasing EBITDA to RM1bn in 2014. Separately, the company said it is studying its legal position after a venture with GMR Group was stripped of the right to run an airport in the Maldives. The island nation's new government faulted how the contract was awarded in 2010 by then Prime Minister  Mohamed Nasheed, who was ousted in February. (Bloomberg)

DRB-Hicom expects to unveil details of Proton's turnaround plan very soon. "It's going to be announced very soon. I know it is much awaited by the public. We are currently looking into it and will be coming up with our plans. "Our financial year ends on March 31 and so, you can definitely expect us to reveal the turnaround plan before our financial year ends," said group MD Datuk Seri Mohd Khamil Jamil. Meanwhile, in a statement to the stock market, Mohd Khamil said the group is implementing several initiatives to streamline and align its businesses, operations and investments, which include business and operational rationalisation in the retail and after-sale-services of Proton vehicles in Edaran Otomobil Nasional Bhd and Proton Edar Sdn Bhd. (BT)

Tan Sri Leo Moggie’s  tenure as the non-executive chairman of  Tenaga Nasional has been extended for two years. His new contract starts effective from March 12 2013 until March 11 2015, Tenaga Nasional said in a statement to the stock exchange yesterday. (BT)

Tan Sri Tony Fernandes and  Datuk Kamarudin Meranun have each bought 1.69m shares in AirAsia on Nov 29. After the  purchase, their indirect stakes in AirAsia rose to 25.38% each. This follows their earlier purchases on Nov 27, where Fernandes and Kamarudin had each bought 2.36m shares. (Malaysian Reserve)

Masterskill Education Group recorded a revenue of RM118.5m and a net loss of RM15.42m for the nine months ended September 30 2012.In the same period last year, Masterskill had posted RM200.66m in revenue, alongside a net profit of RM45.52m. The lower revenue was attributed to lower student enrolment in the reporting  period due to competition in the market.  The reduction in PTPTN loan amount as well as the higher entry requirement for nursing programme has resulted in lower student enrolment, Masterskill said. (BT)

20121130 1022 Global Markets Related News.

Asia FX By Cornelius Luca (Source:CME/
The appetite for risk improved overall for a second day on Tuesday on hopes that the US politicians will manage to avoid the "fiscal cliff" by Christmas. Politicians have taken to their battle to the public in order to put themselves in a better light if somehow success is achieved. The market will continue to overreact to both good and bad rumors. The European currencies extended gains after ending up from their lows on Wednesday. The Aussie was clobbered by fears for a rate cut. The US stock indexes closed slightly higher. Gold, oil and silver ended up as well. The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all European currencies. Good luck!

US: The NAR's pending home sales index jumped 5.2% to 104.8 in October after edging up by 0.4% to an upwardly revised 99.6 in September.
US:  Jobless claims decreased 23,000 to 393,000 from the previous week's revised figure of 416,000 (from the 410,000 originally reported).
US:  The GDP for the third quarter was revised upward to an annual rate of 2.7% from the 2.0% growth previously reported.
Canada: Current account deficit widened to $18.91 billion during the third quarter from $16.02 billion in the second quarter.
Canada: The Industrial Product Price index has contracted 0.1% in October after rising 0.5% in September.

Today's economic calendar
Japan: Nomura/ JMMA Manufacturing Purchasing Manager Index for October
Japan: National Consumer Price Index for October
Japan: Tokyo Consumer Price Index for November
Japan: Overall Household Spending  for October
Japan: Unemployment Rate for October
Japan: Industrial Production  for October
Japan: Annualized housing starts for October
Japan: Construction orders for October
Japan: Housing starts for October
UK: Gfk Consumer confidence for November
Australia: Private sector credit for October

Asian Stocks Rise on U.S. Budget Talks, Japan Production (Bloomberg)
Asian stocks rose, with the benchmark regional gauge heading for its second weekly advance, amid investor optimism that U.S. lawmakers will reach a resolution in federal budget negotiations and as Japanese industrial production unexpectedly increased. Rio Tinto Group (RIO) advanced 3.2 percent in Sydney as JPMorgan Chase & Co. analysts said plans by the world’s second-largest mining company to cut costs by $5 billion through the end of 2014 may boost shareholder returns. Mitsubishi Heavy Industries Ltd. rose 1.9 percent after agreeing to merge its energy- equipment businesses with Hitachi Ltd. Gold producer Northern Star Resources Ltd. (NST) slumped 10 percent in Sydney after directors cut stakes in the company. The MSCI Asia Pacific (MXAP) Index gained 0.2 percent to 124.44 as of 10:06 a.m. in Tokyo, before markets opened in China and Hong Kong. About two shares advanced for each that fell. The gauge has increased 1.3 percent this week.
“The market can go higher even if U.S. lawmakers drag out budget discussions all the way to the last minute,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost $100 billion. “They will not let the U.S. economy shrink. There’s a lot of room for negotiation and compromise.” Japan’s Nikkei 225 Stock Average rose 0.2 percent. Australia’s S&P/ASX 200 Index (AS51) advanced 0.6 percent and South Korea’s Kospi Index was little changed.

Japan Stocks Swing From Gains, Losses on Economic Data (Bloomberg)
Japanese stocks swung between gains and losses as the nation’s cabinet approved 880 billion yen ($10.7 billion) of stimulus ahead of next month’s elections and the nation’s industrial production unexpectedly rose, while consumer prices declined. Komatsu Ltd. (6301), Japan’s largest construction machinery maker, rose 0.6 percent. Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. gained after agreeing to merge energy-equipment businesses. Tokai Holdings Corp. slumped 11 percent on plans to raise 5 billion yen in a share sale. The Nikkei 225 Stock Average (NKY) added 0.3 percent to 9,425.21 at 10:09 a.m. in Tokyo after falling as much as 0.6 percent. The gauge has risen 0.2 percent this week and 5.6 percent this month, the biggest monthly gain since February, on speculation next month’s election will lead to more monetary easing. The broader Topix Index slid 0.2 percent to 781.01.
“We’ve seen weakness in data related to spending and other areas as demand has been uneven,” said Akihiro Tsunoda, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co., which manages about 5 trillion yen ($61 billion) in assets. “I don’t think politicians will say anything negative prior to the race, which will give the market support.”

U.S. Stocks Climb Amid Optimism Over Budget Negotiations (Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second day, amid investor optimism that lawmakers will reach a resolution in federal budget negotiations. All 10 groups in the S&P 500 rose as commodity producers rallied. Apple Inc. (AAPL) and Advanced Micro Devices Inc. (AMD) led an advance in technology stocks. Kroger Co. (KR) jumped 4.8 percent after boosting its profit projection for the year. Walt Disney Co., the world’s largest entertainment company, added 1.1 percent after raising its dividend. Tiffany & Co. (TIF) tumbled 6.2 percent after cutting its profit forecast. Kohl’s Corp. (KSS) plunged 12 percent after reporting disappointing sales for November. The S&P 500 increased 0.4 percent to 1,415.95, the highest level since Nov. 6, at 4 p.m. in New York. The Dow Jones Industrial Average rose 36.71 points, or 0.3 percent, to 13,021.82. About 6.2 billion shares traded hands on U.S. exchanges today, in line with the three-month average, according to data compiled by Bloomberg.
“There’s going to be increasingly divisive negotiations that might shake the market’s confidence a bit,” Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which oversees $350 billion, said in a telephone interview. “We might see a lot of volatility.” Equities briefly erased gains after Speaker of the House John Boehner said to reporters in Washington today that “no substantive progress” has been made in budget talks. Senate Majority Leader Harry Reid said Democrats were all on the same page on budget talks and Senator Chuck Schumer said there has been progress, helping the market recover after Boehner’s comments.

Recap Stock Index Market Report (CME)
The December S&P 500 trended higher throughout the session and broke out above its 50 day moving average in the process. Early support for market came from optimism over US budget negotiations, positive European economic data earlier this morning and better than expected October Pending Home Sales figures lent support. Technology shares were the upside leaders early in the session, helped by gains in Apple, Advanced Micro Devices and Research in Motion. However, stocks took a negative turn toward unchanged levels in response to comments from US House Speaker John Boehner indicating that no substantive progress had been made on budget negotiations. Some traders noted fresh buying interest on the mid-day dip, and that helped the index finish near the upper end of the day's range.

European Stocks Climb Amid Optimism on U.S. Budget Talks (Bloomberg)
European stocks rallied to their highest in 17 months as optimism grew that U.S. President Barack Obama will reach an agreement with Congress on a new budget. Rio Tinto Group gained 5.1 percent after the world’s second-largest mining company said it will reduce costs by $5 billion during 2013. Invensys Plc surged 8.9 percent as RBC Capital wrote that the company may be acquired after selling its rail unit to Siemens AG. Electricite de France SA slid 1 percent as the country’s highest court ruled that the utility has overcharged households. The Stoxx Europe 600 Index advanced 1.2 percent to 276.31 at the close in London, its highest level since June 1, 2011. The equity benchmark erased a decline of as much as 0.6 percent yesterday as Republican House Speaker John Boehner expressed optimism that Congress will reach a deal to prevent the so- called fiscal cliff coming into force.
“The President is on strong ground, having defeated his Republican challenger, and the House Speaker is sounding conciliatory too,” said Manish Singh, who helps manage $2 billion as head of investment at Crossbridge Capital LLP in London. “A deal is a certainty. News on the fiscal cliff has been incrementally positive, so investors are increasingly optimistic too.”

Emerging Stocks Rise Most in 11 Weeks on Commodity Rally (Bloomberg)
Emerging-market stocks advanced the most in 11 weeks as commodities rallied after U.S. politicians expressed confidence they will reach a budget deal and Goldman Sachs Group Inc. upgraded Indian shares. OAO MegaFon (MFON), Russia’s second-largest mobile-phone provider, climbed above its initial offer price on the second day of London trading. Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA rallied. Gold Fields Ltd. (GFI), the world’s fourth- biggest gold producer, gained the most in a year on plans to spin off some South African operations. Franshion Properties China Ltd. (817) rose the most on the benchmark gauge for emerging- market stocks as ICBC International said the developer met its sales target. The MSCI Emerging Markets Index gained 1.3 percent to 1,003.79 in New York, the highest since Nov. 7. The BSE India Sensitive Index (SENSEX) jumped 1.7 percent to the highest close since April 2011 as Goldman Sachs upgraded the country’s shares to overweight.
The world economy is at its healthiest in 18 months, with the U.S. looking likely to avoid tax increases and spending cuts, the latest Bloomberg Global Poll of investors showed. Commodities climbed for the first time this week. “Global risk appetite and investor sentiment has been improving,” Neil Shearing, chief emerging markets economist at Capital Economics Ltd., said by phone from London. “We’ve had pretty good data from the U.S. on top of hopes for action to avoid the fiscal cliff, and commodities are up, so that’s all supportive.”

Yen Remains Lower Versus Euro After Japan CPI Report (Bloomberg)
The yen remained lower versus the euro after data showed Japan’s consumer prices were unchanged last month, fanning speculation the central bank will increase fund provision to spur inflation. Shinzo Abe, leader of Japan’s opposition Liberal Democratic Party, yesterday reiterated his call for the Bank of Japan (8301) to pump unlimited cash into the financial system until inflation reaches 2 percent. The dollar was 0.3 percent from a one-month low against the euro as Democrats and Republicans wrangled over the spending cuts and tax increases of the so-called fiscal cliff looming in the U.S. in January. “Abe’s remarks are pulling down the yen,” said Kazuo Shirai, a trader at Union Bank NA in Los Angeles. “Markets are completely driven by what Republicans and Democrats say over the fiscal cliff.”
The yen traded at 106.55 per euro as of 9:52 a.m. in Tokyo after losing 0.3 percent to 106.58 at the close in New York. It was at 82.11 per dollar from 82.12. The dollar was little changed at $1.2977 per euro after touching $1.3014 yesterday, the weakest since Oct. 31. Japan’s consumer prices excluding fresh food were unchanged in October from a year earlier after a 0.1 percent decline in September, the statistics bureau said in Tokyo today. The BOJ has an annual inflation target of 1 percent. Abe’s LDP had an approval rating of 23 percent, compared with 13 percent for the ruling Democratic Party of Japan, the Nikkei newspaper reported yesterday, citing a Nov. 26-28 opinion poll. The nation will hold elections on Dec. 16 for the lower house of parliament.

Aussie Set for Weekly Drops Versus Majors Before RBA Meeting (Bloomberg)
Australia’s dollar was set for weekly declines against most of its major peers amid speculation the central bank will lower interest rates next week to shield the economy from a slowdown in mining. The so-called Aussie was 0.2 percent from a three-week low versus its New Zealand counterpart as traders added to bets the Reserve Bank of Australia will lower interest rates to 3 percent after a government report yesterday showed a lower mining investment projection for 2012-2013. Australian bonds rose, with the 10-year yield touching the lowest in 10 days. Demand for the New Zealand dollar was limited after data showed building permits unexpectedly fell.
“It wouldn’t be overly surprising if the RBA cuts rates next week given yesterday’s capital expenditure data, which was downgraded,” said Peter Dragicevich, a currency economist in Sydney at Commonwealth Bank of Australia. (CBA) “We don’t think an actual cut next week will put too much downward pressure on Aussie -- a lot of the cuts are already factored into the market.” The Australian dollar slid 0.1 percent to $1.0428 as of 11:01 a.m. in Sydney from yesterday. The currency is poised for a 0.3 percent decline this week, paring its monthly gain to 0.5 percent. The Aussie traded at NZ$1.2673 from NZ$1.2682 yesterday, when it touched NZ$1.2660, the lowest since Nov. 7. New Zealand’s currency bought 82.26 U.S. cents from 82.27 yesterday. It has lost 0.1 percent since the end of last week and is little changed on the month.
Australian government bonds rose, with the 10-year yield falling seven basis points, or 0.07 percentage point, to 3.15 percent. It earlier touched 3.13 percent, the lowest since Nov. 20.

Treasuries Set to Beat Corporate Bonds in November (Bloomberg)
U.S. government bonds were poised to beat corporate debt this month for the first time since May as the pending fiscal cliff and Europe’s debt crisis drove demand for safety. Treasuries returned 0.5 percent in November as of yesterday, according to Bank of America Merrill Lynch data. Bonds in an index of investment-grade and high-yield debt were little changed, the figures show. Consumer spending probably cooled in October, economists said before a report today. “There’s a flight to quality,” said Hiromasa Nakamura, a senior investor for Tokyo-based Mizuho Asset Management Co., which oversees the equivalent of $40 billion and is part of Japan’s third-biggest bank. “The government may increase taxes on higher-end households. That’s negative for the stock market and the economy.”
Benchmark 10-year yields were unchanged at 1.62 percent as of 9:56 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in November 2022 was 100 2/32. The rate slid 7 basis points, or 0.07 percentage point, this month in the first decline since July. Treasury Secretary Timothy Geithner offered Republican House Speaker John Boehner a proposal to avert the end-of-the- year fiscal cliff that would include $1.6 trillion in tax increases and $400 billion in unspecified entitlement program cuts, a Republican aide said yesterday. Household purchases were unchanged in October, after increasing 0.8 percent in September, based on the median estimate from 79 economists surveyed by Bloomberg News before the Commerce Department report at 8:30 a.m. New York time today.

World Economy in Best Shape for 18 Months, Poll Shows (Bloomberg)
The world economy is in its best shape in 18 months as China’s prospects improve and the U.S. looks likely to avoid the so-called fiscal cliff, according to the latest Bloomberg Global Poll of investors. Two-thirds of the 862 surveyed described the global economy as either stable or improving. That’s up from just over half who said that in September and is the most since May 2011. The U.S. came out on top for the eighth straight quarter when investors were asked which markets will offer the best opportunities over the next year. China ranked second, reversing a decline to fourth in the September poll of investors, analysts and traders who are Bloomberg subscribers. The European Union, beset by a debt crisis, was seen offering the worst returns.
“The global economy is improving, recovering and healing, thanks to the U.S. and the emerging markets,” said Andrea Guzzi, a poll respondent and vice president of IST Investmentstiftung fuer Personalvorsorge, which manages money for Swiss pension funds. “More people are becoming wealthy, less and less are poor.” Stocks were seen as the asset of choice, with more than one in three of those surveyed on Nov. 27 forecasting equities would have the best returns in the coming year. Real estate came in second: Just less than one in five investors singled it out favorably, the best showing since the quarterly poll began in July 2009. Bonds were seen as offering the worst returns.

Jobless Claims in U.S. Decrease as Sandy Effect Dissipates (Bloomberg)
Fewer Americans filed first-time claims for unemployment insurance payments last week as the labor market disruptions wrought by superstorm Sandy ebbed. Applications for jobless benefits decreased by 23,000 to 393,000 in the week ended Nov. 24, Labor Department figures showed today. Economists forecast 390,000 claims, according to the median estimate in a Bloomberg survey. The drop in claims indicates the job market in the mid- Atlantic region, which employs about 14 percent of U.S. workers, may be stabilizing after Sandy put some area residents out of work at the start of the month. Apart from the storm-related damage, job creation will probably be limited as companies navigate the global economic slowdown and U.S. fiscal outlook.
Claims are “going to be distorted for a period of time by the after-effects of the storm,” said James Shugg, a senior economist at Westpac Banking Corp. in London, who forecast applications would drop to 395,000. “We’ve been surprised by the strength of hiring, but we’re anticipating a sharply lower number for the payrolls in the next month because there’s not going to be a strong enough economic growth base.” Estimates for first-time claims ranged from 350,000 to 430,000 in the Bloomberg survey of 49 economists. The previous week’s figure was revised to 416,000 from a previously reported 410,000.

Consumer Spending in U.S. Grows Less Than Forecast (Bloomberg)
Consumer spending in the U.S. grew less than forecast in the third quarter, underscoring why Federal Reserve policy makers are zeroing in on fighting unemployment to spur the world’s largest economy. Household purchases climbed at a 1.4 percent rate, the smallest gain in more than a year and down from a previously reported 2 percent advance, revised figures from the Commerce Department showed today in Washington. Gains in inventories and a smaller trade deficit more than offset the slowdown to propel gross domestic product to a 2.7 percent rate, exceeding the 2 percent pace previously reported. “The economy is moving forward at a moderate pace,” said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. “The pace of consumer spending was disappointing, but it seems less worrisome given that some other sectors of the economy are doing better, like housing.”
Fed policy makers such as William Dudley say joblessness remains too high as central bankers consider whether they need to step up record stimulus heading into the so-called fiscal cliff of tax increases and spending cuts that may take effect next year if lawmakers fail to reach a compromise. At the same time, another report today reinforced signs of a rebound in housing that is helping underpin consumer confidence. Economists projected consumer spending, which accounts for about 70 percent of the economy, expanded at a 1.9 percent pace last quarter, according to the median forecast in a Bloomberg survey. The revised reading was lower than any of the 18 estimates, which ranged from 1.7 percent to 2.7 percent. Purchases advanced at a 1.5 percent pace in the second quarter.

Consumer Comfort in U.S. Picks Up as Buying Climate Improves (Bloomberg)
Consumer confidence climbed to a seven-month high last week as more Americans said it was a good time to make purchases, pointing to a brighter holiday shopping season. The Bloomberg Consumer Comfort Index rose to minus 33 in the period ended Nov. 25, the highest level since April, from minus 33.9 the previous week. It marked the highest level for a Thanksgiving week, when shoppers begin their year-end holiday gift buying, since before the recession began five years ago. Expanded store hours combined with deals, discounts and online offers last week may have helped propel the share of Americans saying it’s a good time to spend to a seven-month high. Improving labor and housing markets will probably lift spirits further, benefiting retailers such as Target Corp. and Macy’s Inc. between now and the final shopping days before Christmas, the most important period of the year for retailers.
“Consumers started the holiday-shopping season their cheeriest since 2007, a hopeful sign for retailers in their make-or-break time of year,” said Gary Langer, president of Langer Research Associates in New York, which compiles the index for Bloomberg. A report from the Commerce Department showed the economy in the third quarter expanded more than previously estimated as a narrower trade deficit and gains in inventory overshadowed a smaller increase in consumer spending. Gross domestic product rose at a 2.7 percent annual rate, up from a 2 percent previous estimate, the agency said. Household purchases climbed at a 1.4 percent rate, the slowest in more than a year.

Pending Sales of Existing U.S. Homes Rose 5.2% in October (Bloomberg)
Americans signed more contracts in October to purchase previously owned homes, another sign the recovery in the housing market is being sustained. The index of pending home resales climbed 5.2 percent, exceeding the highest estimate in a Bloomberg survey of economists, to 104.8 after a revised 0.4 percent gain in September, figures from the National Association of Realtors showed today in Washington. The median forecast in the Bloomberg survey called for a 1 percent gain. The lowest mortgage rates on record, stable prices and waning foreclosures are helping underpin sales three years after the last recession ended. Federal Reserve policy makers have targeted the industry with purchases of mortgage-backed securities as they seek to bolster the labor market and the expansion.
“As folks start to feel a little more comfortable about their home price, they’re going to put it on the market and you’re going to start to see this trend continue” of higher sales, Anika Khan, a Charlotte, North Carolina-based senior economist at Wells Fargo & Co., said before the report. “We still see the overall residential market continuing to add to growth in the coming quarters.” Estimates in the Bloomberg survey ranged from a 1 percent drop to a 4 percent gain. The prior month’s figure was originally reported as a 0.3 percent advance. Compared with a year earlier, the index increased an unadjusted 18 percent after an 8.7 percent gain in the 12 months ended in September. After seasonal adjustment, pending purchases climbed 13.2 percent from a year ago. Stocks held gains after the figures and amid optimism lawmakers will reach a budget deal. The Standard & Poor’s 500 Index climbed 0.5 percent to 1,416.47 at 10:08 a.m. in New York.

Cliff-Skeptics in Both Parties Deepen Fiscal Challenges (Bloomberg)
President Barack Obama says going over the fiscal cliff by missing the deadline for a deficit reduction deal by year’s end would be a “rude shock” for Americans. Republican House Speaker John Boehner says it would be a “fiasco.” Yet a small and potentially influential group of lawmakers in both parties is emerging as fiscal-cliff skeptics, willing -- and some even arguing -- to take the dive. Their attitude may make striking a compromise a messy and drawn-out process. Allowing the more than $600 billion mix of tax increases and automatic spending cuts to begin in January if no deal is reached isn’t their first choice, these lawmakers said, yet it’s a better alternative than a compromise that violates their principles. Senator Patty Murray of Washington, the fourth-ranking Democrat in the leadership, said her side is willing to push the debate into 2013 if Republicans refuse to raise taxes on high earners as part of the deal.
“No one wants to go off any cliff or hill or slope; there is a responsible way to resolve this,” Murray said yesterday on MSNBC. “But if we take a bad deal and say that all of the nation’s fiscal problems are to be balanced on the back of middle-class families and the wealthy don’t participate, that’s a bad deal that we cannot and should not live with.”

China Economic Optimism Returns in Poll as Xi Beats Hu (Bloomberg)
Confidence in China’s economy is at the highest in more than a year amid optimism that the new leadership headed by Xi Jinping will be better for the financial climate, according to a Bloomberg investor poll. Respondents who see the Chinese economy improving or remaining stable surged to 72 percent this week from September’s 38 percent in the quarterly global poll of investors, analysts and traders who are Bloomberg subscribers. Fifty-three percent said they’re more optimistic about the effect of Xi’s policies on investors, up from 42 percent who were asked in September about President Hu Jintao. The renewed faith in the world’s second-largest economy reflects data from factory production to retail sales showing growth picking up this quarter after a seven-quarter slowdown. Almost half of respondents anticipate Xi’s government will pursue policies that boost expansion or keep it stable.
“China’s growth trajectory will accelerate moderately on a six- to 12-month horizon based on the new leadership immediately finalizing and implementing projects toward urbanization, rural development and services,” said respondent Brad Bechtel, head of sales at Stamford, Connecticut-based Faros Trading LLC. “Going into 2013 a lot of the concerns regarding China growth falling off a cliff will subside.”

Hong Kong Bourse Wins Approval for $2.2 Billion LME Deal (Bloomberg)
The London Metal Exchange’s $2.2 billion takeover by Hong Kong Exchanges & Clearing Ltd. won approval from the Financial Services Authority, a British regulator. The acquisition still needs approval of the High Court of England and Wales, with a hearing set Dec. 5, Hong Kong Exchanges said in a statement on its website yesterday. The transaction will take effect on or around Dec. 6, the LME said in a separate statement. The LME backed Hong Kong Exchanges’ offer on June 15 over bids from CME Group Inc., Intercontinental Exchange Inc. and NYSE Euronext. LME shareholders approved the takeover a month later. The LME handles more than 80 percent of metals trading, and Hong Kong Exchanges may help the exchange gain access to China, the biggest metals buyer. “This is what we’ve been waiting on,” Thomas Monaco, an analyst at Mizuho Securities Asia Ltd. in Hong Kong, said in a telephone interview. “It’s a little later than we would have thought, probably about a month or so.”
Hong Kong Exchanges plans to sell about $995 million of shares (388) at HK$118 each, a 5.4 percent discount to yesterday’s closing price of HK$124.80, according to a statement from the bourse today. The share sale will help fund the LME takeover, it said. Deutsche Bank AG, HSBC Holdings Plc and UBS AG will manage the sales, it said. The exchange also sold $500 million in convertible bonds in September for the deal. They have an initial conversion price of HK$160 a share.

Japan’s Industrial Production Unexpectedly Gains in October (Bloomberg)
Japan’s output unexpectedly rose the most since December, signaling a contraction in the world’s third-largest economy may be short lived. Industrial production in October increased 1.8 percent from the previous month, when it dropped 4.1 percent, the Trade Ministry said in Tokyo today. The median estimate of 23 economists surveyed by Bloomberg News was for a 2 percent fall. Japan’s economy is at risk of a recession as a contraction in Europe and a diplomatic dispute with China hurt exports and the expiry of car-purchase subsidies weakens consumer demand at home. Government reports showing signs of recovery in the U.S. and China, the world’s two biggest economies, may alleviate an economic slump in Japan.
“Japan’s economy will probably return to growth in the first quarter of 2013, after possibly having two consecutive quarters of contraction” through December, Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo, said before the report. “The U.S. economy is looking solid and China’s economy may have a clear rebound this quarter, boding well for Japanese exports.” The Japanese yen has weakened more than 4 percent against the dollar in the past three months, the most among Asia’s 11 most-traded currencies, according to data compiled by Bloomberg. The currency was trading at 82.12 at 9:12 a.m. in Tokyo after touching a seven-month low of 82.84 last week.

Japan’s Consumer Prices Unchanged as Abe Calls for More Easing (Bloomberg)
Japan’s consumer prices were unchanged in October after five months of declines, limiting the case for more monetary easing being made by Shinzo Abe, the front-runner to become the nation’s next prime minister. Consumer prices excluding fresh food didn’t change from a year earlier, the statistics bureau said in Tokyo today. The median of 23 estimates was for a 0.1 percent drop. The nation’s jobless rate stayed at 4.2 percent for a third month, according to a separate report. Today’s data show the Bank of Japan (8301)’s 1 percent inflation goal remains distant, and will keep pressure on Governor Masaaki Shirakawa to add stimulus at next month’s policy meeting. Abe, head of the Liberal Democratic Party that polls suggest will win the election, called again yesterday for unlimited easing and a price-gains target of 2 percent.
“It’s hard to imagine consumer prices will rise steadily when the economy is at risk of falling into a recession,” said Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo. “The BOJ will come under pressure to ease more.”

Dung Sees Vietnam Inflation at Decade Low With Investment Rising (Bloomberg)
Vietnam’s Prime Minister Nguyen Tan Dung pledged to bring inflation down to a decade low as the nation seeks to boost foreign investment and cope with the aftermath of a credit boom that’s hobbled the banking industry. “Inflation in 2012 will be about 7 percent and next year we will have even better control of it, at about 6 percent,” Dung, 63, said in an interview in Hanoi on Nov. 28. He said overseas investment will rise “sharply” in the next two years as officials overhaul state enterprises and recapitalize banks. Slower gains in consumer prices would reduce the risk of labor strikes undermining Vietnam’s campaign to position itself as an alternative manufacturing base to China. Concern that growth has peaked after a quarter-century of market opening, and that policy makers are struggling to manage a legacy of non- performing loans, contributed to a 21 percent slide in investment pledges from abroad so far this year.
“It would help Vietnam’s image significantly” to contain inflation, said Peter Ryder, the Hanoi-based chief executive of fund manager and property developer Indochina Capital. “Clearly the fact that inflation hit 20-plus percent in two of the last four years has made people question the government’s management of the economy.” Dung’s administration has made inroads into quelling what was Asia’s fastest inflation in 2011, at 18 percent in December from the previous year. Consumer prices rose 7.1 percent in November. The last year costs rose less than 6 percent was in 2003, according to data compiled by Bloomberg.

Brazil Signals Key Rate to Stay at Minimum for Record Period (Bloomberg)
Brazil signaled it plans to keep its benchmark rate at a record low for a period that economists predict will be the longest in history to prop up an economy heading toward its worst two-year performance in a decade. Policy makers last night kept the Selic rate at 7.25 percent, ending the second-longest streak of reductions in an effort to prevent inflation from accelerating. The unanimous decision, which was forecast by all 75 economists surveyed by Bloomberg, took into account the “the balance of risks for inflation,” the board said in its statement, which was almost identical to last month’s announcement. Central bankers led by President Alexandre Tombini reiterated their intent to keep rates steady for a “prolonged period” as they try to keep inflation within their 2.5-to-6.5 percent target range without derailing the economy’s recovery. Economists surveyed by the central bank forecast that the Selic will remain unchanged through 2013.
“Interest rates are at a level that allow for the economy to rebound at a pace moderate enough to contain inflation below the upper range of the target,” Marcelo Salomon, co-head for Latin America economics at Barclays Plc, said in a phone interview from New York. “The idea is to leave interest rates at a minimum for as long as possible.” Swap rates on the contract maturing in January 2014 rose three basis points, or 0.03 percentage point, to 7.32 percent at 9:04 a.m. local time. The real strengthened 0.2 percent to 2.0896 per U.S. dollar.

Euro-Area Economic Sentiment Unexpectedly Up in November (Bloomberg)
Economic confidence in the euro area unexpectedly rose in November even as the single-currency bloc was mired in its second recession in four years and leaders worked to contain the debt crisis. An index of executive and consumer sentiment in the 17- nation euro area increased to 85.7 from a revised 84.3 in October, the European Commission in Brussels said today. Economists had forecast no change from an initial October reading of 84.5, the median of 33 economists’ estimates in a Bloomberg News survey showed. Euro-area finance ministers earlier this week eased the terms on emergency aid for Greece, declaring that after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health.
“Today’s numbers are good news and could mean a turnaround,” Marco Valli, chief euro-zone economist at UniCredit Global Research in Milan, said by telephone. “While the final quarter of this year still will be clearly negative, the unexpected rise indicates that the economy could stabilize at the beginning of 2013.”

EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
The European Union is quarreling over thresholds on how big euro-area lenders must be in order to be designated for direct oversight by the European Central Bank, according to draft proposals. Nations are at odds over three different size thresholds, according to the document drawn up by Cyprus, which holds the EU’s rotating presidency. Some countries are seeking to set the bar as low as banks with more than 2.5 billion euros ($3.2 billion) in assets, while others are calling for divisions at 20 billion euros or 60 billion euros, according to the text, dated Nov. 27 and obtained by Bloomberg News. States are also split over having direct ECB supervision triggered by a ratio between a bank’s assets and the gross domestic product of its home country, according to the proposals, intended to forge a deal on the supervision plan. Suggested thresholds in the text put the tipping points at assets of more than 20 percent, 50 percent or 75 percent of GDP.
Governments are racing to meet an end of 2012 deadline to set up a single supervisor at the Frankfurt-based ECB. EU finance ministers will meet next week to seek compromises on the bank-oversight plan, which the bloc’s leaders have labeled as an essential step to break the bank-sovereign link that has worsened Europe’s debt crisis. The draft document didn’t reveal what nations held what positions in the talks.

German Unemployment Rose for an Eighth Month in November (Bloomberg)
German unemployment climbed for an eighth straight month in November as Europe’s debt crisis curbed company investment and economic growth. The number of people without a job increased a seasonally adjusted 5,000 to 2.94 million, the Federal Labor Agency in Nuremberg said today. Economists forecast a gain of 16,000, the median of 37 estimates in a Bloomberg News survey shows. The adjusted jobless rate held at 6.9 percent. Separately, a gauge of economic confidence in the euro area unexpectedly rose. With the 17-nation currency bloc in recession and growth slowing in emerging markets, German firms are postponing investment and hiring decisions. The unemployment rate rose for the first time in three years in September. While Europe’s largest economy expanded 0.2 percent in the third quarter, latest reports suggest growth may grind to a halt in the fourth as export demand wanes.
“It is doubtful whether private consumption can really take over the baton as the main growth driver for the German economy,” said Carsten Brzeski, an economist at ING Group in Brussels. “German unemployment looks set to increase further. This increase, however, should only be very mild, mainly located in the export industry.” The euro advanced to $1.2983 at 11:15 a.m. in Frankfurt for a 0.2 percent gain today. European stocks rose to their highest level in three weeks amid optimism that U.S. President Barack Obama will reach an agreement with Congress over a new budget. The Stoxx Europe 600 Index (SXXP) climbed 0.8 percent to 275.39.

20121130 1021 Global Commodities Related News.

New Norm High Food Costs Boost Supply Risk as World Hunger Grows (Bloomberg)
High and volatile global food prices have become the “new norm,” creating increased risk for supplies at a time when 12 percent of the population remains chronically undernourished, the World Bank said. Even after the World Bank’s food-price index slipped from a record in July, the measure was still 7 percent higher in October than a year earlier, the Washington-based lender said today in a report. While costs have dropped in recent months, fats and oils still are 12 percent more expensive than a year earlier, and grains are “very close” to the all-time high reached in 2008, the bank said. “A new norm of high prices seems to be consolidating,” Otaviano Canuto, the World Bank Group’s vice president for poverty reduction and economic management, said in an e-mailed statement. “Although we haven’t seen a food crisis as the one of 2008, food security should remain a priority.”
Weather will play a large role in determining food prices in the near future, along with the cost of fuel and export competition, the bank said. About 870 million people live in chronic undernourishment, the United Nations Food and Agriculture Organization estimates. The world population will rise to 7.02 billion this year, according to the U.S. Census Bureau. Also, malnutrition accounts for more than one-third of mortality of children under 5 years old and is responsible for more than 20 percent of maternal mortality, according to the World Bank report. “The world cannot afford to get used to or be complacent” about high food costs, Canuto said. The World Bank Group committed more than $9 billion to agriculture and related sectors in the year ended June 30, the bank said.

Corn Market Recap for 11/29/2012 (CME)
December Corn finished down 8 3/4 at 751 1/2, 11 1/2 off the high and 1/2 up from the low. March Corn closed down 5 1/4 at 758 3/4. This was 2 1/2 up from the low and 8 1/4 off the high.
March corn traded lower on the day on light profit taking and pressure from a weaker wheat market. Above normal precipitation in Argentina and below normal in Southern Brazil continues to help the market move higher but it seems the recent run to the upside needed a break and traders took profits. Export sales were disappointing which likely triggered the move lower. Sales came in at 236,100 tonnes for the current marketing year and 27,400 for the next marketing year for a total of 263,500. As of November 22nd, cumulative corn sales stand at 42% of the USDA forecast for the current marketing year versus a 5 year average of 49%. Sales of 421,000 tonnes are needed each week to reach the USDA forecast. The last two weeks of sales have been slightly better than earlier in the crop year but cheaper corn continues to flow out of South America and Ukraine. Some traders suggest that Asia may be short corn supplies from January forward which could mean the US may become very active in the export market in 2013.
January Rice finished down 0.08 at 15.11, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
December Wheat finished down 6 3/4 at 869 1/4, 10 1/2 off the high and 4 1/4 up from the low. March Wheat closed down 5 3/4 at 885 1/2. This was 4 3/4 up from the low and 9 1/2 off the high.
Chicago and KC wheat traded lower into the closing bell on light profit taking following an export sales report that came in below market expectations. Net weekly export sales came in at 279,300 tonnes for the current marketing year and no sales were reported for the next marketing year. As of November 22nd, cumulative wheat sales stand at 54% of the USDA forecast for the current marketing year vs. a 5 year average of 68%. Sales of 506,000 tonnes are needed each week to reach the USDA forecast. The US missed out on the 50,000 tonne Algerian tender today and it's being reported that the purchase was for 375,000 tonnes, likely French origin. Poor weather conditions in the western plains continue to support the US wheat markets this week. No significant precipitation is expected in the next two weeks. The EU granted export licenses for 438,000 tonnes of soft wheat bringing the 2012/13 season total to 7.3 million tonnes vs. 6.5 for the same period last year.
December Oats closed down 10 at 360 3/4. This was 3/4 up from the low and 11 3/4 off the high.

Wheat Halts Weeklong Rally as Demand for U.S. Exports Slackening (Bloomberg)
Wheat futures fell for the first time in five sessions on signs of declining demand for supplies from the U.S., the world’s biggest exporter. Export sales in the week through Nov. 22 totaled 279,337 metric tons, down 56 percent from a week earlier, the U.S. Department of Agriculture said today. Since June 1, overseas buyers have agreed to purchase 16.2 million tons, down 10 percent from the same period a year earlier, USDA data show. The government said Nov. 9 that exports would rise 4.8 percent. “Demand bearishness has reared its head after the export- sales report came out,” Mike Zuzolo, the president of Global Commodity Analytics & Consulting in Lafayette, Indiana, said by telephone. Wheat futures for March delivery slid 0.6 percent to close at $8.855 a bushel at 2 p.m. on the Chicago Board of Trade. The price has gained 36 percent this year as dry weather reduced global production 6.4 percent to a five-year low.
The grain climbed 3.7 percent in the previous four sessions as dry weather eroded conditions for winter varieties grown in the U.S. Great Plains. About 78 percent of Kansas, the biggest grower of the variety, was in extreme or exceptional drought as of Nov. 27, compared with 36 percent a year earlier, data from the weekly U.S. Drought Monitor show. Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.

Corn Futures Drop as Export Demand Ebbs; Soybeans Advance (Bloomberg)
Corn futures fell from a five-week high as demand by producers of grain-based fuel, animal feed and food ebbed. Soybeans gained. U.S. export sales of corn in the week ended Nov. 22 tumbled 69 percent to 263,140 metric tons from a week earlier, the Department of Agriculture said today. Production of ethanol slid 1 percent in the week ended Nov. 23 to the lowest in five weeks, the Energy Department said yesterday. The number of chicks placed on feed last week dropped 3.8 percent from a year earlier, USDA data show. “The rally in prices slowed exports and ethanol production,” Jerrod Kitt, the director of research at the Linn Group on Chicago, said in a telephone interview. “The drop in chicken production also weighed on the market.”
Corn futures for March delivery dropped 0.7 percent to close at $7.5875 a bushel at 2 p.m. on the Chicago Board of Trade. Yesterday, the price reached $7.675, the highest for a most-active contract since Oct. 19. The grain has gained 17 percent this year after a Midwest drought reduced production. Soybean futures for January delivery rose 0.1 percent to $14.48 a bushel in Chicago. Earlier, the price reached $14.60, the highest since Nov. 9. Export demand increased last week for animal feed and cooking oil made from supplies in the U.S., the world’s biggest producer. U.S. exporters sold 365,058 metric tons of soy-based animal feed in the week ended Nov. 22, up 84 percent from a week earlier and the most in two years, the USDA said today. Soybean- oil sales surged more than 13-fold to 121,527 tons from a year earlier.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

Natural Gas Futures Tumble After Inventories Advance (Bloomberg)
Natural gas futures tumbled in New York, heading for the biggest weekly decline since June, after a government report showed an unexpected gain in U.S. stockpiles as mild weather reduced demand. Gas dropped 4 percent after an Energy Department report showed supplies rose by 4 billion cubic feet last week to 3.877 trillion cubic feet, the latest seasonal gain since 2009. Analyst estimates compiled by Bloomberg showed a decline of 9 billion cubic feet. Gas has slid 7.2 percent on moderating temperatures after reaching a one-year high on Nov. 23. “That’s a pretty bearish inventory number,” said Gordy Elliott, a risk-management specialist at FC Stone LLC in St. Louis Park, Minnesota. “December forecasts have turned warmer and there are no supply issues at all. This storage report could be the thing that breaks the market.”
Natural gas for January delivery fell 15.3 cents to settle at $3.648 per million British thermal units on the New York Mercantile Exchange. Gas futures have dropped 6.5 percent this week, heading for the biggest decline since the seven days ended June 1. February $3.50 puts were the most active gas options in electronic trading. They were 4.4 cents higher at 13.4 cents on volume of 2,510 contracts as of 3:07 p.m. Puts accounted for 57 percent of options volume. The five-year average gas stockpile change for the week is a decline of 18 billion cubic feet, department data show. A surplus to the five-year average rose to 5.2 percent from 4.5 percent the previous week, widening for the first time since the week ended Oct. 26.

Oil Trims First Monthly Gain Since August as Rise Seen Excessive (Bloomberg)
Oil trimmed its first monthly gain since August in New York amid speculation that the biggest daily rise in almost two weeks was excessive. Futures slid as much as 0.7 percent after climbing 1.8 percent yesterday, the most since Nov. 19, as a Commerce Department report showed the U.S. economy expanded more than previously estimated last quarter. West Texas Intermediate is giving up gains after failing to trade higher than the 50-day moving average, a sign of technical resistance, according to data compiled by Bloomberg. This indicator, at about $88.61 a barrel today, is where sell orders may be clustered. “The market climbed to the top-end of a range and people have grabbed some profits,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney.
Crude for January delivery dropped as much as 60 cents to $87.47 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.73 at 12:12 p.m. Sydney time. The contract increased $1.58 yesterday to $88.07. Prices are down 0.6 percent this week, the first weekly decline in four, and up 1.7 percent this month. Brent for January settlement slid 26 cents to $110.50 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.77 to West Texas Intermediate futures, from $22.69 yesterday.

Recap Energy Market Report (CME)
January crude oil prices trended higher throughout the session and climbed to their highest level since November 20th in the process. Early support for the crude oil market came from a decisive risk-on vibe, supported by gains in global equity markets and weakness in the US dollar. It seemed that a shift in sentiment that US lawmakers would be able to compromise on budget negotiations and avert the fiscal cliff was taken as a positive. Added support for the crude oil market came from rising tensions in the Middle East and the potential disruption of near term supply. The geopolitical risk came from Iran's uranium enrichment program and comments from the IAEA to take quick action to resolve the conflict. Further protests are being called for in Egypt in opposition to President Mursi's decree. Sentiment in the market took a slightly negative turn around the mid-session following comments from US House Speaker John Boehner that no substantive progress had been made on budget negotiations. January WTI crude oil finished the US trading session up 1.8% and back above the $88.00 level.

Copper Shortage Seen Extending as China Accelerates: Commodities (Bloomberg)
Copper supply shortages will extend into the first half of next year as an accelerating Chinese economy more than doubles the pace of growth in global consumption even as mines extract a record amount of metal. Demand will outpace supply by 316,000 metric tons in the first six months, more than all copper in London Metal Exchange warehouses, before a surplus emerges in the second half, Barclays Plc estimates. Production has lagged behind consumption since 2010, according to the International Copper Study Group. The metal may average $8,300 a ton in the second quarter, 5.1 percent more than now and the most in a year, according to the median of 21 analyst and trader estimates compiled by Bloomberg.
China, which uses 41 percent of the world’s copper, is rebounding from seven quarters of slowing growth after the government approved a $161 billion subways-to-roads construction plan in September. It’s being joined by central banks from the U.S. to Europe to Japan, who also pledged more stimulus. Housing starts in the U.S., the second-largest consumer, reached a four- year high last month and business confidence unexpectedly strengthened in Germany, Europe’s biggest economy. “U.S. growth will be moderate and Europe is stabilizing, so that drag might reverse partially, and then it all falls back to China,” said Dominic Schnider, Singapore-based global head of non-traditional assets at UBS AG’s wealth-management unit. “Economic activity doesn’t have to be that strong in China for inventories to get drawn down and you could see a rally in the first half, but then you come into the second half where mine supply comes in on the strong side.”

Gold, Silver Rise on Bets Fed Will Expand U.S. Stimulus (Bloomberg)
Gold rose for the first time in four days on speculation that the Federal Reserve will buy more debt to boost the U.S. economy. Silver climbed to a seven-week high. “I will be assessing the employment and inflation outlook in order to determine whether we should continue Treasury purchases into 2013,” Federal Reserve Bank of New York President William C. Dudley said in a speech in New York. Treasury Secretary Timothy F. Geithner began talks with congressional leaders on a budget accord. “Talks about more stimulus measures being introduced are bullish for gold,” Bart Melek, the Toronto-based head of commodity strategy at TD Securities, said in a telephone interview. “The market is expecting some sort of resolution soon to avert the fiscal-cliff crisis” on U.S. spending and taxes, he said. Gold futures for February delivery gained 0.6 percent to settle at $1,729.50 an ounce at 1:49 p.m. on the Comex in New York. The price slumped 1.9 percent in the previous three days.
The metal has climbed 10 percent this year, heading for the 12th straight annual gain, as the Fed announced stimulus measures. Silver futures for March delivery increased 2 percent to $34.431 an ounce on the Comex. Earlier, the price reached $34.49, the highest since Oct. 8. The metal has advanced 23 percent this year. On the New York Mercantile Exchange, platinum futures for January delivery rose 0.5 percent to $1,619.50 an ounce. Palladium futures for March delivery gained 1.8 percent to $687.45 an ounce. Earlier, the price reached $692, the highest since Sept. 17.

Silver Market Recap Report (CME)
December silver took a setback today and kept on ticking. In fact, from the Wednesday low to the mid afternoon high, December silver prices managed a very impressive recovery bounce of roughly $1.40 an ounce. With the rally today December silver prices reached up to the highest level since October 8th. Silver clearly benefited from favorable US scheduled data early on and mostly positive action in US equities throughout the trading session.

Gold Market Recap Report (CME)
The bull camp has to come away from the action today somewhat emboldened as two sided political dialogue today could have swamped physical commodity markets today. However, favorable equity market action, supportive currency market action, mostly positive US scheduled data and ongoing hopes for an eventual fiscal cliff solution, simply left the bull camp in gold with the benefit of the headlines today. Others are suggesting that the brunt of the gains in gold today were simply technical in nature after the sharp compacted slide in the prior trading session.

20121130 1021 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
January Soybeans finished up 1 3/4 at 1448, 12 off the high and 6 3/4 up from the low. March Soybeans closed up 6 at 1441. This was 9 1/4 up from the low and 9 1/4 off the high. December Soymeal closed up 2.8 at 442.7. This was 3.7 up from the low and 2.9 off the high. December Soybean Oil finished down 0.34 at 49.77, 0.69 off the high and 0.03 up from the low.
January soybeans ended the day near the unchanged. Early gains eroded near 11 am cst after outside markets lost momentum due to negative comments in regards to the Fiscal Cliff by a Republican leader. Early strength was linked speculation that China will be in the market for 3-4 million tonnes of soybeans in the coming weeks after canceling cargos earlier this month. Net weekly export sales for soybeans came in at 319,100 tonnes for the current marketing year and as of November 22nd, cumulative sales stand at 75% of the USDA forecast for the current marketing year vs. a 5 year average of 61%. Net meal sales came in at 365,100 tonnes for the current marketing year and cumulative meal sales stand at 64% of the USDA forecast vs. a 5 year average of 42%. Net oil sales came in at a whopping 121,500 tonnes for the current marketing year and 1,000 for the next marketing year for a total of 122,500. As of November 22nd, cumulative soybean oil sales stand at 105% of the USDA forecast vs. a 5 year average of 32%. At this point, sales exceed the current USDA export estimate for the current crop year.

EDIBLE OIL: Malaysian palm oil futures fell to a 2-week low extending losses for a third straight session as weak sentiment dominated the market with investors worrying about record high stocks. (Reuters)

Refinery growth to boost Indonesia's palm oil output next year
By Michael Taylor
NUSA DUA, Indonesia | Thu Nov 29, 2012 6:05am EST
Nov 29 (Reuters) - An expansion in the edible oil processing industry in top palm oil producer Indonesia is expected to boost its consumption to about 7.5 million tonnes next year, which may reduce the amount available for export, industry officials said on Thursday.
After years of increasing the acreage devoted to palm oil, Indonesia is now rapidly expanding its downstream and processing industries. Last year, it slashed export duties for refined oil in a bid to boost investment in the sector.
Palm oil consumption this year is expected to rise to 7 million tonnes from the 5 million-6 million tonnes used up in 2011, and is set to increase further in 2013, delegates at the 8th Annual Indonesian Palm Oil Conference told Reuters.
"The increase will mostly be in olein chemical and food," said Derom Bangun, chairman of the Indonesian Palm Oil Board.
An increase in domestic consumption will benefit palm oil producers who do not sell overseas such as BW Plantation .
Sebastian Sharp, BW Plantation's head of investor relations, expects Indonesia to soon overtake India as the world's biggest palm oil consumer. He also forecast the company's output to rise by up to 25 percent next year from 130,000 tonnes this year.
"Indonesia is the fastest growing consumer and overtook China last year," said Sharp. "It will eventually overtake India."
According to industry estimates, Indian palm oil consumption will be about 7.8 million tonnes in 2013, rising from 7.3 million tonnes this year.

Palm oil is used mainly as an ingredient in food such as biscuits and ice cream, or as a biofuel.
Producers are seeking new ways to generate demand after benchmark prices fell by about a quarter this year, but their efforts to drum up sales to their traditional European customers may be hampered by renewed attacks by Western governments on the oil's green credentials.
Environmental groups have been critical of the expansion in the palm sector, which they blame for deforestation, speeding up climate change and killing wildlife.
The U.S. Environmental Protection Agency recently visited Indonesia to review the environmental aspects of its palm oil industry, while France has proposed an increase in duties on foods using palm oil, which has been dubbed the "Nutella tax".
Bangun of the Indonesian Palm Oil Board said attempts by European countries to curb the use of palm oil were simply protectionism masked as green and health concerns.
"In France's case, maybe they also need additional funds for their budget," he added.
It hasn't all been bad news from Europe for palm oil. This week, the European Commission said it had approved a scheme that would certify as sustainable transport fuel made from palm oil.
"It is one access to the European biodiesel (market)," said Bangun. "It will give more opportunity for producers to get into this industry, which is very important."

Malaysia will announce details of its proposed cut to crude palm oil export taxes by the end of  December, a government official said.  "We will make an announcement on the exact pricing in the last few days of December," said the official who declined to be named due to sensitivity of the issue.  The tax, due to take effect on Jan. 1, is aimed at making crude exports more competitive in the face of a tax cut for refined grades by top producer Indonesia last year. The Malaysian government has proposed pegging the tax at between 4.5 and 8.5% depending on the market prices, a cut from the current 23%. (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. (Reuters)

An expansion in the edible oil processing industry in Indonesia is expected to boost its consumption to about 7.5m tonnes next year, which may reduce the amount available for export, industry officials said. Palm oil consumption this year is expected to rise to 7m tonnes from 5-6m tonnes used in 2011. (Reuters)

Indonesia is discussing changes to its export tax structure to counter competition from Malaysia which will cut tariffs from Jan. 1 to boost shipments and pare record inventories. “We want the taxes to be similar if not exactly the same as Malaysia,” Joko Supriyono, secretary-general of the Indonesian Palm Oil Association said. (Bloomberg)