Thursday, December 6, 2012

20121206 1826 FCPO EOD Daily Chart Study.

FCPO closed : 2294, changed : +10 points, volume : higher.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : turned upward, buyer seller battling.
Support : 2250, 2230, 2200, 2130 level.
Resistance : 2300, 2350, 2400, 2450 level.
Comment :
FCPO closed little higher with improved volume transacted. Soy oil price currently trading firmer after overnight rallied nearly 2% higher while crude oil trading little higher after overnight loss.
FCPO still traded range bound between gains and losses on higher stock concern and stronger soy oil price influence due to Argentina heavy rain weather.
Technical chart reading revised to calling a pullback correction downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20121206 1723 Global Markets & Commodities Related News.

STOCKS: European stocks opened positively while Asian shares paused after hitting 16-month highs earlier thanks to buying from investors reassured by U.S. President Barack Obama saying a deal to avert the so-called fiscal cliff was possible in "about a week" if Republicans compromise on taxes. A volatile trading session ended with U.S. stocks mostly higher on Wednesday. (Reuters)

FOREX: The euro slipped in Asian trade, moving further away from both a seven-week high against the dollar and a 7-1/2-month high against the yen hit in the previous session, as investors awaited a European Central Bank policy meeting.  (Reuters)

Obama warns will not 'play' games over debt ceiling (Reuters)
President Barack Obama bluntly warned Republican lawmakers on Wednesday that he would not engage in another debt ceiling standoff and predicted a "fiscal cliff" deal could be reached in a week if his opponents would compromise on taxes.

GRAINS:  U.S. soybeans rose to their highest in almost a month, lifted by expectations of a jump in Chinese demand and concerns about supplies from Argentina, where unfavourable wet weather is threatening crop yields.  (Reuters)

Canada wheat crop swells to second-biggest in 16 years (Reuters)
Canada's wheat harvest was its second-biggest in 16 years, according to a Statistics Canada report on Wednesday, offering a bright spot amid growing concerns about crops in many of the world's other leading growers.

US fuel stocks rise sharply as refiners produce more-EIA (Reuters)
Stocks of refined fuel products in the United States rose sharply last week, and crude inventories fell as refineries processed more crude, data from the U.S. Energy Information Administration showed on Wednesday.

US shale production to push oil, gas output higher-EIA (Reuters)
U.S. oil and gas production over the next two decades will be higher than previously expected, the government said on Wednesday, underscoring the push toward greater energy self-sufficiency and more exports of natural gas.

OIL: Brent crude held below $109 per barrel as niggling worries about the global economy and oil demand, following subdued data from the United States and Europe, countered supply fears stemming from simmering Middle East tensions.  (Reuters)

China smelters offer lower premiums to export copper cathodes (Reuters)
China's large copper smelters are offering 2013 exports of refined cathode at cheaper premiums, ranging from about 12 percent to 21 percent less, as they compete with major suppliers such as top world producer Codelco, boosting supply in Asia.

BASE METAS: London copper slipped after five days of gains fuelled by hopes that U.S. lawmakers would forge a last minute deal to avert a budget crisis, building on optimism over accelerating growth in top consumer China.  (Reuters)

PRECIOUS METALS: Gold edged down, holding near a one-month low hit in the previous session, pressured by a slightly stronger dollar as investors await a policy meeting of the European Central Bank for fresh clues to its stance. (Reuters)

20121206 1721 FKLI EOD Daily Chart Study.

FKLI closed : 1615 changed : +0.5 point, volume : lower.
Bollinger band reading : correction range bound downside biased.
MACD Histogram : rising higher, buyer testing market.
Support :  1610, 1600, 1595, 1590 level.
Resistance : 1615, 1623, 1627, 1635 level.
Comment :
FKLI edge up marginally with lesser volume distributed doing 1 points discount compare to cash market that closed recorded small gain. Overnight U.S markets closed higher and today Asia markets ended mixed while European markets currently trading firmer.
Most regional market traded higher after overnight U.S. beat estimates services and factorry orders data plus restores optimism over budget discussion.
Daily chart reading remained calling a correction range bound down side biased market development testing resistance near middle Bollinger band level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20121206 1624 Palm Oil Related News.

VEGOILS-Palm oil perks up on soy crop weather woes, China demand
Thu Dec 6, 2012 1:24am EST
(Updates with details, price moves)
    * China snapping up soy cargoes, pointing to more palm oil
    * Reuters survey shows palm oil stocks likely hit record in
    * Wet weather in Argentine delaying soy plantings, yields
may get hurt

    By Niluksi Koswanage
    KUALA LUMPUR, Dec 6 (Reuters) - Malaysian palm oil futures
edged up 0.7 percent on Thursday on hopes demand would rise as
unfriendly crop weather dents supply of competing Argentine
soyoil, but concerns of record November stockpiles in the
world's No.2 producer kept a lid on gains.
    Palm oil prices have dropped for the last seven consecutive
sessions on worries Malaysia's stocks may hit a record 2.58
million tonnes in November.
    But concerns of a surplus eased as wet weather in No.3
soybean supplier Argentine continued to delay plantings and
threaten yields at a time of strong Chinese demand.
    China, which has been snapping up U.S. soybean cargoes, is
also looking to import more palm oil before Beijing imposes
stricter quality controls on the refined grades on Jan. 1.
    Higher demand could soften the downward trend in palm oil
futures that are set to post three straight quarters of declines
this year on high stocks and concerns of euro zone debt crisis
arresting global economic growth.
    "High stocks hang over the palm oil market but there may be
a bit of hope from the probable decline in South American soy
crops," said a trader with a foreign commodities brokerage.
    By the midday break, benchmark February contract on
the Bursa Malaysia Derivatives Exchange rose 0.7 percent at
2,300 ringgit ($760)per tonne.
    Total traded volumes rose to 20,350 lots of 25 tonnes each,
compared to the usual 12,500 lots.
    Malaysian crude palm oil shipments are expected to rise in
the next few weeks as planters rush to exhaust their annual
tax-free export quota allocation totalling 3.5 million tonnes
and which is set to expire at the end of December.
    Brent crude held below $109 per barrel on Thursday, as
niggling worries about the global economy countered supply fears
from simmering Middle East tensions.
    In palm oil's competing markets, U.S. soyoil for December
delivery edged up 0.6 percent. The most active May 2013
soybean oil contract on the Dalian Commodity Exchange
climbed 0.8 percent.

20121206 1215 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares steady on Obama 'fiscal cliff' comments
TOKYO, Dec 6 (Reuters) - Asian shares were steady near 16-month highs, supported by hopes that U.S. lawmakers will reach a compromise to avoid the so-called 'fiscal cliff' of year-end tax hikes and spending cuts which threaten to push the U.S. economy back into recession.
"The Obama remarks will have a positive impact on today's stock market," said Kwak Byeong-yeol, an analyst at Eugene Investment & Securities, of South Korean shares, which opened 0.1 percent higher.

FOREX-Euro steady in early Asian trade
TOKYO, Dec 6 (Reuters) - The euro held its ground in early Asian trade after slipping from a seven-week high against the dollar in the previous session, as investors awaited a European Central Bank policy meeting.    
"Politically, LDP leader Abe has softened his aggressive stance on monetary policy. However, we remain bearish on JPY over the medium term, and will look to increase our JPY short once positioning looks less stretched," analysts at Citigroup wrote in a note to clients.

Oil falls after US gasoline inventories leap higher
NEW YORK, Dec 5 (Reuters) - Oil prices fell by around 1 percent on Wednesday after data showed a huge increase in gasoline stockpiles in the United States last week, while disappointing euro zone and U.S. economic figures hurt sentiment about energy demand.
"The report is solidly bearish and a welcomed development for consumers," said John Kilduff, partner at Again Capital in New York.

US fuel stocks rise sharply as refiners produce more-EIA
NEW YORK, Dec 5 (Reuters) - Stocks of refined fuel products in the United States rose sharply last week, and crude inventories fell as refineries processed more crude, data from the U.S. Energy Information Administration showed on Wednesday.
Gasoline stocks rose by the biggest weekly margin since September of 2001, surging 7.86 million barrels to 212.12 million barrels in the week to Nov. 30, the EIA said. The rise was much sharper than a 1.8 million barrel build forecast by analysts in a Reuters poll.

US study says the more LNG exported the better
WASHINGTON, Dec 5 (Reuters) - A U.S. government-sponsored report offered a full-throated endorsement on Wednesday for expanding liquefied natural gas exports, saying that shipping the nation's surplus gas abroad would clearly help the overall economy even though it will raise energy prices.
The report, commissioned by the Energy Department, is expected to help shape the Obama administration's response to more than a dozen proposed export projects that have been put on hold over the past year, as a surge in shale gas production upended the market and depressed domestic prices.

US shale production to push oil, gas output higher-EIA
WASHINGTON, Dec 5 (Reuters) - U.S. oil and gas production over the next two decades will be higher than previously expected, the government said on Wednesday, underscoring the push toward greater energy self-sufficiency and more exports of natural gas.
In its annual outlook, including the first forecasts through 2040, the U.S. Energy Information Administration said imports as a share of total U.S. energy production, including oil, gas and renewables, would be 9 percent by 2040 against 19 percent in 2011 and 29 percent as recently as 2007.

U.S. expects buyers of Iran's crude to deepen cuts
WASHINGTON, Dec 5 (Reuters) - The United States expects countries that buy oil from Iran to further reduce their purchases if they want to avoid U.S. sanctions, a State Department source said on Wednesday.
"The law requires additional cuts so we expect buyers to make additional cuts," a source at the State Department said about the U.S. sanctions law signed a year ago by President Barack Obama.

20121206 1007 Global Economy Related News.

South Korea: Reduces estimate of third quarter expansion to 0.1%
South Korea’s economy grew less in the third quarter than the central bank initially estimated, evidence that signs of a rebound are tenuous ahead of next week’s decision on interest rates. GDP expanded 0.1% during the three months through September from the previous quarter, compared with an October estimate of 0.2%, Bank of Korea data showed. The economy expanded 1.5% from a year earlier, also less than the bank’s October forecast. (Bloomberg)

UK: Services barely grow as contraction risk looms
UK services growth unexpectedly slowed in November as demand fell for the first time in two years, increasing the chance the economy will shrink again this quarter. A gauge fell to 50.2, the lowest in 23 months, from 50.6 in October, Markit Economics and the Chartered Institute of Purchasing and Supply said. The reading is barely above the 50 line that divides contraction and expansion. (Bloomberg)

EU: Manufacturing, services contract for 10th month
Euro-area services and manufacturing output shrank for a 10th month in November, suggesting the economy may struggle to pull out of a recession as governments toughen spending cuts to fight the sovereign-debt crisis. A composite index based on a survey of purchasing managers in both industries rose to 46.5 from 45.7, London-based Markit Economics said. That’s above an initial estimate of 45.8 published on 22 Nov. A reading below 50 indicates contraction. (Bloomberg)

US: Services in US unexpectedly grow at faster pace
Service industries in the US unexpectedly grew at a faster pace in November, showing the biggest part of the economy is weathering concern about looming federal tax increases and spending cuts. The Institute for Supply Management’s non-manufacturing index rose to 54.7 last month from 54.2 in October, the Tempe, Arizona-based group said. Economists projected a decline to 53.5, according to the median estimate in a Bloomberg survey. Readings above 50 signal expansion. (Bloomberg)

US: Gain in US capital equipment orders exceeds prior estimate
Orders for equipment such as computers and electrical gear climbed in October by the most in eight months, indicating US manufacturing is stabilizing heading into the looming fiscal cliff. Bookings for non-defence capital goods excluding aircraft, a proxy for future spending, rose a revised 2.9% after dropping 0.5% in September, the Commerce Department reported. The gain was previously estimated at 1.7%, according to last week’s durable-goods report. (Bloomberg)

20121206 1007 Malaysia Corporate Related News.

Eight gets LTE allocation for broadband speeds in excess of 100Mbps
Eight companies have been allowed access to the 2,600 MHz spectrum band which allows mobile phone users to enjoy long-term evolution (LTE) or 4G services with broadband speeds in excess of 100Mbps. The eight are Celcom Axiata, DiGi, Maxis, Packet One, Puncak Semangat, REDtone, U Mobile and YTL Communications. Malaysian Communications and Multimedia Commission (MCMC) said service providers were expected to enter into smart partnerships and sharing agreements between them which included spectrum and radio access network sharing in order to utilize larger bandwidths, lower the cost of rollout and offer better LTE experience and affordability. (StarBiz)

SP Setia gets another prime tract in KL
SP Setia has bought the parcel of land on which the British High Commission is located in Jalan Ampang for RM294.96m. The price tag was computed at a rate of RM2,200 per sq ft based on land area of about 12,456 sq m. SP Setia plans to undertake an integrated commercial development on the tract, with an estimated GDV of RM1.04bn. (Financial Daily)

Quek to privatize Hong Kong flagship
Tan Sri Quek Leng Chan is likely to privatize his publicly traded Hong Kong flagship, Guoco Group. The company sought a suspension in the trading of its shares. An executive familiar with the company said that “since selling Dao Heng Bank Group to DBS, Guoco has been more of an investment holding company. The privatization could be to make it more nimble.” Guoco Group has a 25.4% stake in Hong Leong Financial Group and 64.98% in Guocoland (M). (Financial Daily)

Bintai Kinden clinches RM214m Singapore job
Bintai Kinden, a mechanical and electrical engineering specialist, has clinched a SGD85.85m (RM214.5m) project from Samsung C&T to undertake improvement works for the Suntec City Convention Centre in Singapore. The company will supply and install mechanical, electrical, plumbing, fire protection, sanitary and gas facilities for the building and is due for completion by 30 Sept 2014. (Financial Daily)

Datasonic gets new MyKad contract
Datasonic has received a letter of award from the Homes Affairs Ministry for the supply of an additional 10m new raw MyKad under a RM180m contract for a two-year duration. The company will supply MyKad made of 100% polycarbonate material with new security features to the National Registration Department. (StarBiz)

20121206 1002 Global Markets Related News.

Asia FX By Cornelius Luca - Wed 05 Dec 2012 17:20:03 CT (CME/
The appetite for risk was mixed on Wednesday. Most foreign currencies ended lower, with only the Aussie gaining on the day. There is no change in the big political picture of the "fiscal cliff" negotiations, so the markets remain vulnerable to leaks, rumors and personal guesses about the success. The US stock markets ended divergently on a day when Apple was hit hard. Gold, oil and silver also ended divergently. The short-term outlook for most 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 ISM's non-manufacturing index inched up to 54.7 in November from 54.2 in October.
US: The ADP employment change fell to 118,000 in November from the downwardly revised 157,000 in October.US: Factory orders increased by 0.8% in October following a revised 4.5% increase in September.US: The final labor productivity for the third quarter was revised upward to 2.9% from the preliminary estimate for a 1.9% increase.Today's economic calendar
US: Factory orders increased by 0.8% in October following a revised 4.5% increase in September.
US: The final labor productivity for the third quarter was revised upward to 2.9% from the preliminary estimate for a 1.9% increase.

Today's economic calendar
Australia: Trade balance for October
Australia: Unemployment rate for November

Asian stocks rose, with the regional benchmark index headed for its highest close in eight months, as all industry groups advanced after data on U.S. services and factory orders beat estimates. (Bloomberg)
Toyota Motor Corp., the world’s biggest carmaker by market value, gained 0.7 percent in Tokyo. Rio Tinto Group (RIO), the world’s second-largest mining company, climbed 0.9 percent in Sydney as metal prices rose. The MSCI Asia Pacific Index (MXAP) gained 0.3 percent to 125.6 as of 9:47 a.m. in Tokyo, heading for its highest close since April 3. Markets in China and Hong Kong have yet to open. The measure advanced last month amid signs of economic improvement in the world’s two largest economies and optimism U.S. lawmakers will agree on a budget deal to avert the so-called fiscal cliff. “The economic data looks OK and that’s been supporting the share market,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “Markets will have to see a resolution of the U.S. fiscal cliff for the rally to continue.”

China’s Stocks Rise Most in Three Months; Machinery Makers Surge (Bloomberg)
China’s stocks rose the most in three months after the government allowed insurers to invest more in banks and investors speculated profits at construction and cement companies will increase. Sany Heavy Industry Co. jumped 10 percent and Anhui Conch Cement Co. climbed to a six-month high as analysts said the first meeting by the ruling party under new leader Xi Jinping signaled increased urban development. Industrial Bank Co. led a gauge of financial stocks to the biggest gain in two months as a regulation limiting investment in banks by insurers was abolished. Ping An Insurance (Group) Co. of China Ltd. jumped 4.1 percent as HSBC Holdings Plc agreed to sell its stake.
The Shanghai Composite Index (SHCOMP) surged 2.9 percent to 2,031.91 at the close, capping the biggest advance since Sept. 7. Trading volumes were 102 percent above the 30-day average, according to data compiled by Bloomberg. The CSI 300 Index rose 3.6 percent to 2,207.88, with the materials, industrial and financial gauges climbing at least 3.6 percent. “Lately, the government had been relaying messages about improving the economy, in particular its plans for urbanization,” said Mao Sheng, an analyst for Huaxi Securities Co. in Chengdu. Investors “see a clearer direction and roadmap for government reforms,” Mao said. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong increased 2.7 percent. The Bloomberg China- US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, lost 0.1 percent in New York. Thirty-day volatility in the Shanghai gauge was at 16.5, compared with this year’s average of 16.9.

Japan Stocks Rise on Optimism U.S Will Avoid Fiscal Cliff (Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average heading for a seven-month high, on optimism U.S. lawmakers will reach a budget compromise to avoid the so- called fiscal cliff, boosting Japanese exporters. Toyota Motor Corp., an automaker that gets 25 percent of its sales in North America, rose 1 percent after U.S. services and factory data beat estimates. Canon Inc. (7751), the world’s top camera maker, rose 1 percent on a Wall Street Journal report the company plans to triple its China sales in five years. Renesas Electronics Corp. climbed 0.7 percent amid optimism lenders will relax terms on emergency loans to the chipmaker.
The Nikkei 225 gained 0.7 percent to 9,533.67 as of 9:32 a.m. in Tokyo. The equity gauge capped the biggest monthly gain since February last month on speculation Japan’s opposition will win the Dec. 16 election and call for more stimulus. The broader Topix Index climbed 0.8 percent to 788.38, with about four stocks rising for each that fell. All of the measure’s 33 industry groups advanced. In the U.S. budget debate, “there are distant signs that both parties should come to at least a short-term agreement,” said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne. “Certainly the market is seeing it that way and giving the situation the benefit of the doubt. U.S. data on the whole was positive.”
Futures on the Standard & Poor’s 500 Index climbed 0.1 percent today. The gauge rose 0.2 percent yesterday as a few dozen Republicans joined a bipartisan call to break the impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest-earning Americans, signing a letter calling for exploration of “all options.” Obama told a business group that the budget debate could be solved in about a week if Republicans move.

U.S. Stocks Snap Two-Day Slump Amid Optimism Over Budget (Bloomberg)
U.S. stocks advanced, following a two-day decline in the Standard & Poor’s 500 Index, amid optimism lawmakers will reach a budget agreement before the end of the year and after economic data topped estimates. Plains Exploration & Production Co. and McMoRan Exploration Co. (MMR) surged at least 23 percent as Freeport-McMoRan Copper & Gold Inc. (FCX) agreed to acquire them for about $9 billion. Citigroup Inc. gained 6.3 percent on plans to eliminate more than 11,000 jobs and pull back from some emerging markets. Apple Inc. (AAPL) fell 6.4 percent on concern about Nokia Oyj getting a leg up in China and traders betting that a recent rally may have sputtered. The S&P 500 rose 0.2 percent to 1,409.28 at 4 p.m. New York time. The Dow Jones Industrial Average added 82.71 points, or 0.6 percent, to 13,034.49. The Nasdaq Composite Index declined 0.8 percent to 2,973.70. More than 7 billion shares changed hands on U.S. exchanges, or 12 percent above the three-month average, according to data compiled by Bloomberg.
“The economy is still on track for moderate growth, but there are bigger issues to focus on,” said Jay Wong, a Los Angeles-based portfolio manager with Payden & Rygel, which oversees $75 billion. “The market’s reaction is based on investors’ focus on headlines and a strong appetite for a fiscal cliff resolution. The market will continue to react to any news in connection with a potential resolution.” Equities rose as a few dozen Republicans joined a bipartisan call to break the impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest- earning Americans, signing a letter calling for exploration of “all options. (COST)” Obama told a business group that “nobody wants to get this done more than me” and lawmakers probably could solve the budget debate in about a week if Republicans move.

Recap Stock Index Market Report (CME)
The December S&P 500 experienced a volatile trading session that culminated in a positive outside day reversal. Equities came under pressure shortly after the Wall Street opening, weighed down by 15% slide in the shares of Freeport-McMoran on a $9 billion acquisition deal. The technology sector remained a drag throughout the session, weighed down by a more than 4% downdraft in Apple, on news that a clearing firm boosted margin requirements for the stock. Equity market sentiment took a positive turn during the later morning hours on comments from President Obama that a deal on the fiscal cliff could come next week. Financial shares were among the upside leaders on the session, helped by gains in Citigroup on reports the company was reducing its workforce by 11%. Shares of Travelers were up 5% on the session on slightly smaller than expected damages from Hurricane Sandy.

European Stocks Rise to 18-Month High on China Optimism (Bloomberg)
European stocks rose to an 18-month high as China signaled wider policy support for economic recovery, outweighing a report that showed euro-area manufacturing and services output shrank for a 10th month. HSBC Holdings Plc climbed to 1 1/2-year high after the bank agreed to sell its stake in China’s Ping An Insurance (Group) Co. for $9.4 billion. Vedanta Resources Plc (VED) jumped 2.6 percent. Tesco Plc rallied the most in 14 months after starting a review of its U.S. Fresh & Easy business. Nokia Oyj (NOK1V) gained 9.7 percent after winning a deal to sell its flagship smartphone in China. The Stoxx Europe 600 Index added 0.2 percent to 276.91 at the close of trading. The benchmark gauge has surged 18 percent from this year’s low on June 4 as the European Central Bank and the Federal Reserve expanded economic support and optimism grew that U.S. lawmakers will avoid a looming fiscal deadlock.
“Investor sentiment is improving, and the market is receptive for positive news, such as the news out of China,” Otto Waser, chief investment officer at Research & Asset Management AG in Zurich, said in a telephone interview. “There’s still a wall of worry regarding the fiscal cliff that causes investors to be cautiously positioned which implies room to increase equity allocations.” National benchmark indexes climbed in 12 of the 18 western European markets. France’s CAC 40 and Germany’s DAX each added 0.3 percent. U.K.’s FTSE 100 (UKX) rose 0.4 percent.

Yen (Bloomberg)
The yen remained lower against the dollar amid speculation the Bank of Japan (8301) will roll out additional stimulus this month, debasing the currency. The yen traded 0.2 percent from a seven-month low versus the euro before a general election on Dec. 16 in Japan where the front-runner to become the next prime minister is calling for unlimited central-bank easing. New Zealand’s dollar gained to an eight-month high against the yen after Reserve Bank Governor Graeme Wheeler said the outlook for the nation’s economy is stronger as policy makers kept interest rates unchanged. “Government pressure on the BOJ to ease will increase,” said Greg Gibbs, Singapore-based senior currency strategist at Royal Bank of Scotland Group Plc. “If there’s any currency out there that you have to assume is at risk of a major change toward a weaker trend next year, it’s the yen.”
Japan’s currency traded at 82.37 per dollar as of 9:33 a.m. in Tokyo from yesterday, when it depreciated 0.7 percent to 82.47. The yen bought 107.71 per euro from 107.78 yesterday, when it touched 107.96, the weakest since April 20. The 17- nation euro was little changed at $1.3073. It fell 0.2 percent yesterday after reaching $1.3127, the highest since Oct. 18. New Zealand’s dollar rose 0.2 percent to 83.02 U.S. cents, extending a 1 percent, three-day gain. The so-called kiwi touched 68.4 yen, the highest since April 2, before trading at 68.38 yen, little changed from yesterday.

Bailout Cash Gives Europe Edge Over U.S. in Debt: Credit Markets (Bloomberg)
Companies in Europe are perceived to be the safest compared with their U.S. counterparts in 17 months as risks of a currency breakup diminish while politicians in the world’s biggest economy struggle to cut the nation’s deficit. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies from Spain’s Telefonica SA to engine-maker Rolls Royce Plc exceeds the U.S. equivalent by the least since July 2011, with the gap narrowing to 20 basis points yesterday. Their bonds are also gaining, with relative yields dropping below their U.S. peers for the first time since June of last year.
Europe is making a comeback in the debt markets as European Central Bank President Mario Draghi pledges to do whatever’s necessary to protect the euro, with the government bonds of Greece, Portugal, Ireland, Italy and Spain generating the biggest returns since June of 26 sovereign markets tracked by Bloomberg/EFFAS indexes. At the same time, lawmakers in the U.S. are bickering over how to avert more than $600 billion in mandated spending cuts and tax increases. “The U.S. fiscal cliff has eclipsed the euro zone crisis as the focal point for market uncertainty,” said Nicholas Spiro, managing director at sovereign risk consulting firm Spiro Sovereign Strategy in London. The ECB “is underwriting everything now,” he said.

ADP Says U.S. Companies Added 118,000 Workers in November (Bloomberg)
Companies in the U.S. added fewer workers in November than a month earlier after superstorm Sandy battered the East Coast and temporarily shuttered some businesses. The 118,000 increase in employment followed a revised 157,000 gain in October that was less than initially estimated, data from the Roseland, New Jersey-based ADP Research Institute showed today. The median forecast of 38 economists surveyed by Bloomberg projected a 125,000 rise in November. The report estimated that Sandy reduced payrolls by about 86,000. Hiring plans were put off by companies in the mid-Atlantic, a three-state region that employs about 14 percent of U.S. workers, as they recovered from Sandy. Firms are also awaiting a solution by lawmakers in Washington to avoid automatic tax increases and budget cuts that raise the risk of recession in 2013.
“The manufacturing, retailing, leisure and hospitality, and temporary help industries were hit particularly hard by the storm,” Mark Zandi, chief economist at Moody’s Analytics Inc., said in a statement. Moody’s produces the figures with ADP. Aside from Sandy, “the job market turned in a good performance during the month,” Zandi said. “This is especially impressive given the uncertainty created by the presidential election and the fast-approaching fiscal cliff.”

Obama Lesson on Debt Talks Is Standing Firm on Tax Rates (Bloomberg)
President Barack Obama is hardening his stance in his first post-election confrontation with Republicans, declaring he will make no deal on the country’s fiscal future unless congressional leaders first accept tax-rate increases on top earners. During an appearance yesterday on Bloomberg Television, Obama’s first media interview since his re-election, the president paired his ultimatum on taxes with signals he is ready to make concessions to Republican House Speaker John Boehner’s calls for cuts to entitlement programs such as Medicare health insurance for the elderly. His demands on taxes and a public relations offensive to engage voters are a shift from Obama’s approach to the budget battles of the last two years, reflecting greater political leverage after his re-election and lessons the administration has drawn from past negotiations.
“He is in a much stronger position now and he’s acting like it,” said Paul Begala, a Democratic communications strategist who worked in President Bill Clinton’s White House. “This is a very different negotiating position than last time.” Many Democrats criticized Obama for agreeing to an extension of President George W. Bush’s tax cuts in December 2010 and for focusing on private negotiations with Boehner on raising the debt limit in 2011 rather than mounting a public appeal.

Singh Wins India Vote on Retail in Boost to Flagging Policy Push (Bloomberg)
Indian lawmakers endorsed in a vote the government’s decision to allow the entry of overseas retail chains, boosting Prime Minister Manmohan Singh’s bid to push through policies to revive a slowing economy. While 253 members of the 545-member of the lower house supported the government plan yesterday, 218 voted against. Singh’s Congress Party-led minority coalition emerged victorious as two regional parties that oppose the arrival of foreign supermarkets walked out rather than vote with ideological rivals. The September move to enable companies like Wal-Mart Stores Inc. (WMT) and Tesco Plc (TSCO) to open stores in India didn’t require parliamentary approval to become law. Singh’s government agreed to a vote to end protests that had stalled legislative business as it seeks to push through the country’s biggest embrace of foreign investment in a decade.
This vote in parliament on FDI in retail “shows the resolve of the government and will boost foreign investor sentiment,” said Kishor Ostwal, managing director at CNI Research Ltd. in Mumbai. “We expect foreign inflows into stocks to rise. If the government can implement this smoothly and initiate one or two more reforms, then it will be a re-rating of the Indian markets.” As the debate began Dec. 4, opposition lawmakers contended that the policy would throw small shopkeepers out of work, further impoverish farmers and hurt consumers. Ruling coalition members defended the retail plan, which can be rejected by state administrations.

RBA’s Lowe Calls Australian Dollar ‘Uncomfortably High’ (Bloomberg)
Australia’s exchange rate is “uncomfortably high” and business confidence subdued, breaking with past experience during interest-rate reductions, Reserve Bank Deputy Governor Philip Lowe said. “Countries that are in relatively good shape and have not seen large-scale expansion of the central bank balance sheet are experiencing stronger currencies than those that are in relatively poor shape,” Lowe said in a speech yesterday in Sydney. “In response to this, interest rates are lower than they otherwise would be to offset some of the effects of an uncomfortably high exchange rate.” Lowe highlighted a split between Australian households, where data have “picked up somewhat” in response to 1.75 percentage points of rate cuts in the past 14 months, and businesses, where confidence and conditions have not. “This difference will obviously bear close watching over the period ahead,” he said.
The No. 2 RBA official’s speech titled ‘What Is Normal?’ sought to place Australians’ higher savings and lower retail spending, as well as stagnant asset prices in the context of the economy’s performance of the past 30 years. He said consumers were “prudent” rather than “cautious” and indicated that their behavior was simply returning to pre-boom levels. The RBA lowered rates six times in the past 14 months to 3 percent, matching a half-century low reached at the height of the 2009 global recession. Lowe said it is possible that lending rates will be “somewhat lower” for a period, reflecting global weakness and fallout from the credit boom last decade.

N.Z. Extends Interest-Rate Pause as Growth and Inflation Slow (Bloomberg)
New Zealand’s central bank extended a period of record-low borrowing costs that began in March last year as rising unemployment and falling retail sales slow the economic recovery and contain inflation. Reserve Bank Governor Graeme Wheeler left the official cash rate at 2.5 percent, according to a statement released today in Wellington. The decision is the former World Bank official’s second on borrowing costs since he took over from Alan Bollard in late September. Wheeler is betting that weakness in the economy doesn’t justify a rate cut because earthquake-related construction and housing investment will boost growth next year. Economists forecast that benign inflation gives him scope to delay raising borrowing costs until the second half of next year, or later.
“Given the outlook for inflation, we think it likely that the RBNZ’s central projection will point to yet another small delay in the expected timing of the first policy tightening,” Darren Gibbs, chief New Zealand economist at Deutsche Bank AG in Auckland, said ahead of the statement. He doesn’t expect a rate rise until the first quarter of 2014. New Zealand’s dollar gained, buying 82.75 U.S. cents at 9:02 a.m. in Wellington from 82.54 cents immediately before the statement. Today’s decision was forecast by all 16 economists in a Bloomberg News survey. Annual inflation slowed to the weakest pace in more than 12 years in the year through September, and fell beneath the 1 percent to 3 percent range the central bank targets, as a stronger currency made imports cheaper.
The New Zealand dollar has gained 6.1 percent the past 12 months, the best performing Group of 10 currency. The country’s jobless rate unexpectedly rose to a 13-year high of 7.3 percent in the third quarter, as retail sales fell, adding to the case for gross domestic product to slow in the second half of the year. Still, construction expanded the most in 10 years in the July-September period, boosted by rebuilding in the South Island city of Christchurch which was devastated by earthquakes in 2010-11.

Osborne Says U.K. Growth Forecast Cut as Deficit Seen Wider (Bloomberg)
Chancellor of the Exchequer George Osborne unveiled a cut in the government’s economic growth forecasts and said the budget deficit will take longer to tame than he originally planned. Forecasts from the Office for Budget Responsibility show the economy will shrink 0.1 percent this year instead of the 0.8 percent growth predicted in March, and expand 1.2 percent next year instead of 2 percent, Osborne said in his autumn statement to Parliament. He extended his fiscal consolidation by one year to the 2017-18 fiscal year and said he will miss his target to start cutting debt as a percentage of gross domestic product in 2015 by a year. The announcement drew attacks from the opposition Labour Party, which says he is damaging the economy by trying to cut the deficit too quickly. The chancellor is already struggling to rebuild his reputation after a decision to cut income taxes for the highest earners in his March budget and a series of policy U-turns cost his Conservative Party support with voters.
“While our deficit is forecast to go on falling, instead of taking three years to get our debt falling, it’s going to take four,” Osborne said. “Some say we should abandon our deficit plan, and try to borrow more. They think by borrowing more, they can borrow less. That would risk higher interest rates, more debt interest payments and a complete loss of Britain’s fiscal credibility.”

Bailout Cash Gives Europe Edge Over U.S. in Debt: Credit Markets (Bloomberg)
Companies in Europe are perceived to be the safest compared with their U.S. counterparts in 17 months as risks of a currency breakup diminish while politicians in the world’s biggest economy struggle to cut the nation’s deficit. The Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies from Spain’s Telefonica SA to engine-maker Rolls Royce Plc exceeds the U.S. equivalent by the least since July 2011, with the gap narrowing to 20 basis points yesterday. Their bonds are also gaining, with relative yields dropping below their U.S. peers for the first time since June of last year.
Europe is making a comeback in the debt markets as European Central Bank President Mario Draghi pledges to do whatever’s necessary to protect the euro, with the government bonds of Greece, Portugal, Ireland, Italy and Spain generating the biggest returns since June of 26 sovereign markets tracked by Bloomberg/EFFAS indexes. At the same time, lawmakers in the U.S. are bickering over how to avert more than $600 billion in mandated spending cuts and tax increases. “The U.S. fiscal cliff has eclipsed the euro zone crisis as the focal point for market uncertainty,” said Nicholas Spiro, managing director at sovereign risk consulting firm Spiro Sovereign Strategy in London. The ECB “is underwriting everything now,” he said.

Euro-Area Manufacturing, Services Contract for 10th Month (Bloomberg)
Euro-area services and manufacturing output shrank for a 10th month in November, suggesting the economy may struggle to pull out of a recession as governments toughen spending cuts to fight the sovereign-debt crisis. A composite index based on a survey of purchasing managers in both industries rose to 46.5 from 45.7, London-based Markit Economics said today. That’s above an initial estimate of 45.8 published on Nov. 22. A reading below 50 indicates contraction. The economy of the 17 nations that use the euro has shrunk for two successive quarters and economists foresee a further drop in the final three months of the year as the debt crisis continues to weigh on confidence. The Organization for Economic Cooperation and Development projected last week that the euro- area economy will shrink 0.4 percent this year and 0.1 percent in 2013.
“The euro zone’s recession looks to have deepened in the final quarter, with GDP likely to have fallen by considerably more than the modest 0.1 percent decline seen in the third quarter,” Chris Williamson, chief economist at Markit, said in the report. “France, Spain and Italy continue to see strong contractions, while a milder downturn is evident in Germany.” The euro was off its session highs against the dollar after the data, trading at $1.3103 at 10:51 a.m. in Brussels, up 0.1 percent on the day.

20121206 1002 Global Commodities Related News.

DTN Closing Grain Comments 12/05 14:34 Beans Hit High Near Close (CME)
Unlike Tuesday's session that saw a late rally turn the grain sector around, soybeans were strong throughout the day, hitting a new session high shortly before the close.

Corn Market Recap for 12/5/2012
March Corn finished up 5 3/4 at 757 3/4, 1 1/2 off the high and 7 1/2 up from the low. May Corn closed up 5 1/2 at 758 1/2. This was 7 up from the low and 1 1/2 off the high.
March corn traded higher into the closing bell seeing support from a stronger day in the soybean and wheat market. Very wet weather in Argentina this week is helping to support the trade and many analysts are expecting a drastic cut to production in next week's USDA report. The USDA is projecting Argentina corn production at 28 million tonnes while some analysts are near 23. Export demand remains very weak and Brazil continues to be an aggressive trader in the global market. The EIA ethanol production report was slightly bullish for the corn market. Ethanol production for the week ending November 30th averaged 835,000 barrels per day which was up almost 4% vs. last week but down 12.5% vs. last year. Total ethanol production for the week was 5.85 million barrels. Corn used in last week's production is estimated at 87.7 million bushels which was up from 84.32 last week. This crop year's cumulative corn used for ethanol production is 1.10 billion bushels. Corn use needs to average 86.62 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels. Stocks as of November 30th were 19.3 million barrels, up 5.4% vs. last week and up 7.9% vs. last year. January Rice finished up 0.145 at 15.555, equal to the high and 0.035 up from the low.

Wheat Market Recap Report
March Wheat finished up 3 1/2 at 860, 3 1/2 off the high and 7 1/2 up from the low. May Wheat closed up 3 1/4 at 868 1/2. This was 6 3/4 up from the low and 3 1/4 off the high.
March Chicago and KC wheat traded positive on the day with KC leading the way higher. Soybeans surged over 20 cents and corn was up 6 to help support the overall market. The weather outlook for the eastern Midwest calls for light showers which should benefit soil conditions but much of the crop has already entered dormancy. Dry areas of eastern Colorado, southern Nebraska, and northwest Kansas could see rainfall by the weekend. Only an inch or less is expected which likely adds no relief to the region. Soil moisture conditions will continue to deteriorate with little relief after this weekend. Statistics Canada released their estimate for Canadian wheat production this morning. This year's production estimate was pegged at 27.2 million tonnes vs. 26.7 previously. This would be the second largest wheat harvest in 16 years according to the Canadian agency. US export demand remains very soft but fears that global supply may contract further continues to add speculative support. The KC market gained on Chicago due to the dry conditions in the western plains. March Oats closed up 12 at 397. This was 12 3/4 up from the low and 3 off the high.

Commodities ‘Super Cycle’ Not Ending as Goldman Sees More Gains (Bloomberg)
The “super cycle” of gains for commodity prices is not ending as improving global economic growth boosts demand for raw materials, Goldman Sachs Group Inc. said. Rising consumption may create limited availability of immediate supplies and boost near-term prices higher than long- term levels, a trading opportunity that may provide “significant” returns, New York-based Jeffrey Currie, Goldman’s head of commodity research, said in an e-mailed report today. The bank reiterated its recommendation that investors should be “overweight” in commodities, and that prices will return 7 percent in 12 months. “As economic growth improves into the latter half of 2013, we believe current fundamentals are likely to create near-term shortages,” Currie said. “We now believe that any upside will be more near term and demand driven in nature as opposed to long term and supply driven, which leads us to expect a return to high near-term prices relative to long-term prices.”
The Standard & Poor’s GSCI Spot Index of 24 raw materials which has increased almost fourfold since 2001, is little changed this year as growth slowed in economies including China, the world’s biggest consumer of cotton, soybeans and copper. Goldman’s view contrasts with Citigroup Inc., which said the “super cycle” has ended in a Nov. 19 report written by analysts including Edward L. Morse, the bank’s global head of commodities research.

Best-Performing Fund Manager Sees U.S. Pipeline Growth (Bloomberg)
Kevin McCarthy, the world’s best- performing energy fund manager in the past year, stared at the tangle of tax-exempt partnerships and corporate parents that drive the U.S. oil and gas pipeline business and kept his cool. That was in 2010, when the Kayne Anderson Capital Partners LP manager in Houston said he found a way to profit from the mess: He realized the most undervalued of the bunch were the companies managing the partnerships, the so-called general partners, especially since they were positioned to earn escalating shares of cash flow as pipeline assets expanded.
McCarthy’s Midstream/Energy Fund Inc. (KMF) made 32 percent in the last 12 months, the best return of 259 energy funds with more than $100 million worldwide, data compiled by Bloomberg show. His top investments are general partners such as Williams Cos. (WMB) and Kinder Morgan Inc. (KMI), according to Sept. 30 data. The industry has room to increase profit in 2013, as the drilling boom in U.S. shale fields creates a need for more pipelines, processing plants and compressor stations, McCarthy said. “We think the development of the unconventional fields is a multiyear, if not a multidecade, process,” McCarthy, 53, formerly a banker at UBS Securities LLC, said in an interview.

Recap Energy Market Report (CME)
January crude oil prices trended lower throughout the US trading session and registered a new four day low in the process. The market garnered early support from favorable comments from China's new government regarding new urbanization projects. However, a weaker than expected European Retail Sales reported tempered early optimism. January crude oil price registered their low of the session following EIA inventory data that showed a larger than expected draw last week of 2.357 million barrels. While the headline number was seen as a positive force, unexpectedly large builds in the product markets served to take the complex lower. The refinery operating rate was up 2% to 90.6%, which contributed to the large product builds. EIA gasoline stocks rose 7.860 million barrels and distillate stocks rose 3.027 million barrels. Upbeat comments from President Obama that a deal on the fiscal cliff could come next week helped risk assets pare some of their mid-day deficit.

Nod to Gas Exports in U.S. Study Seen Downplaying Consumer Cost (Bloomberg)
A U.S. Energy Department report that supports expanded exports of natural gas cheered drillers wanting to sell overseas while drawing warnings from opponents that it may have underestimated the potential costs to consumers. The study, which was conducted by NERA Economic Consulting, is an almost unqualified endorsement of exports, a win for energy producers such as Sempra Energy (SRE) and Dominion Resources Inc. (D) looking to alleviate a domestic natural gas glut that earlier this year pushed prices down to a decade low. Energy stocks and gas prices rose yesterday, when the report was released. The Energy Department asked for the analysis as it weighs at least 15 applications from energy companies looking to build terminals for export. Initial reactions show the analysis won’t end the debate in Washington over how to shape the U.S. energy mix as a drilling technique known as hydraulic fracturing, or fracking, unlocks once-inaccessible reserves in shale rock formations.
“Forecasts and scenarios are worthwhile, but the department has an obligation to consider the impacts of each of the actual applications before it,” Senator Ron Wyden’s office said in a statement. Wyden, an Oregon Democrat and incoming chairman of the energy committee, has said he’s worried more exports could raise costs for U.S. consumers and trade away an economic advantage of cheap gas.

Oil Trades Near One-Week Low as U.S. Gasoline Stockpiles Surge (Bloomberg)
Oil traded near its lowest level in a week in New York after a government report showed U.S. gasoline inventories increased the most in 11 years as demand weakened. West Texas Intermediate futures were little changed after falling for a second day yesterday as the Energy Department said gasoline stockpiles rose 7.86 million barrels last week, the most since Sept. 21, 2001. Demand for the motor fuel slid for a third week and refineries ran at the highest rate since August. Crude for January delivery was at $87.83 a barrel, down 5 cents, in electronic trading on the New York Mercantile Exchange at 9 a.m. in Tokyo. Prices fell 62 cents yesterday to close at $87.88 a barrel, the lowest since Nov. 28. Futures have dropped 11 percent this year. Brent oil for January settlement on the London-based ICE Futures Europe exchange slid $1.03, or 0.9 percent, to end the session at $108.81 a barrel yesterday. The European benchmark crude closed at a premium of $20.93 to New York-traded WTI, the narrowest gap since Nov. 2.
U.S. gasoline inventories in the week ended Nov. 30 were forecast to increase by 1.55 million barrels, according to the median of 12 analyst estimates in a Bloomberg survey. Demand for the motor fuel declined 73,000 barrels a day and refineries ran at 90.6 percent of capacity, the highest level since Aug. 24, the Energy Department report showed. Supplies of distillate fuels, including heating oil and diesel, climbed 3.03 million barrels, according to the report. They were predicted to gain 850,000 barrels.

America's Oil Production Heading for '80s Flashback (CME)
By U.S. Energy Information Administration - Wed Dec 05 12:35:00 CST 2012 CT
Output Poised to Rise Sharply, Hit Three-Decade Highs
U.S. crude oil production is poised to rise sharply over the coming decade, by 2020 reaching the highest levels since the late-1980s, amid a shale-drilling boom North Dakota, Texas and other areas, the Energy Information Administration said in a new long-term forecast.
In 2020, the nation's crude output is projected to peak around 7.47 million barrels a day, an average annual increase of 3.5% from 2011 levels and the highest since 1989, according to the administration's Annual Energy Outlook 2013, released December 5. The report included projections as far out as 2040.
Additionally, Americans' gasoline use is expected to decline over the next three decades, dropping to 1970s levels, as autos become more fuel-efficient, while natural-gas exports will be greater than previously forecast.
The updated forecast "shows how evolving consumer preferences, improved technology, and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy and reduced energy imports," EIA Administrator Adam Sieminski said in a statement.

U.S. Crude Output Near 15-Year High on Shale Boom (CME)
By U.S. Energy Information Administration - Tue Dec 04 12:45:00 CST 2012 CT
North Dakota, Texas Account for Bulk of Surge
U.S. crude oil production reached the highest level in nearly 15 years during September, driven by a shale-drilling boom in North Dakota and Texas, the Energy Information Administration said.
Crude output, including drilling byproducts known as lease condensates, averaged about 6.5 million barrels a day in September, the highest monthly production since January 1998, according to an Energy Information Administration update released December 4. September’s production was up 900,000 barrels, or 16% from the same month in 2011.
“Most of that increase is due to production from oil-bearing rocks with very low permeability through the use of horizontal drilling combined with hydraulic fracturing,” the administration said.
The states with the largest increases were North Dakota and Texas, the respective homes to much of the Eagle Ford and Bakken shale formations. Oklahoma, New Mexico, Wyoming, Colorado, and Utah also contributed to rising domestic crude oil production.

Bank of Korea Raises Gold Holdings as Central Banks Buy (Bloomberg)
The Bank of Korea increased gold reserves 20 percent last month to diversify investments, boosting holdings for the fourth time since June 2011 and underscoring increased demand by central banks. Prices gained. The bank added 14 metric tons in November, bringing the total to 84.4 tons, the bank said in a statement today. By value, holdings increased about $780 million to $3.76 billion, equivalent to 1.2 percent of total reserves, the bank said. Central banks from Brazil to Kazakhstan have been expanding their gold reserves at a time when investors increased holdings in exchange-traded products to a record to protect against weaker currencies and the potential for faster inflation. Gold is poised for a 12th annual gain as the U.S. Federal Reserve boosts stimulus to buttress the recovery in the world’s largest economy and European policy makers battle the debt crisis.
“Central-bank buying is a solid pillar for gold,” Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore. “It’s not a story that will go away soon.” Countries bought 373.9 tons in the first nine months of the year, according to the producer-funded World Gold Council, which said in November that full-year additions will probably be at the “bottom end” of a range from 450 to 500 tons. Last year, central banks purchased 456 tons. “Gold is a physical, safe asset,” the Bank of Korea said in the statement. The precious metal “is a way of diversification, which helps reduce investment risk in terms of foreign-exchange reserves management,” it said.

Silver Market Recap Report (CME)
The silver market also saw a fresh new low for the move early today but prices were able to reject those losses well ahead of mid session. Silver was probably knocked a little off balance by a brokerage firm price forecast down grade and perhaps silver and other metals markets were a little discouraged by the ebb and flow of the Washington fiscal cliff debacle. In the end, minor negative influences from the currency markets were probably countervailed in the silver trade by decent US scheduled data and periodic gains in US equities.

Gold Seen Peaking in 2013 by Goldman After 12-Year Bull Market (Bloomberg)
Gold, still in its longest winning streak in at least nine decades, will probably peak in 2013 and keep declining the following year as U.S. growth accelerates, Goldman Sachs Group Inc. said. Prices will peak in 2013 before declining even as the Federal Reserve expands stimulus, the bank said in an e-mailed report today. Bullion will be at $1,825 an ounce in three months, $1,805 in six months and $1,800 in a year’s time, it said, lowering its three-month forecast from $1,840 and its six- and 12-month outlooks from $1,940. It introduced an average 2014 estimate of $1,750. This year’s average is $1,670.
The metal is headed for a 12th consecutive annual gain as central banks from the U.S. to Europe to China pledged more steps to spur economic growth. Investors are holding a record amount in gold-backed exchange-traded products and nations from Russia to South Korea added to gold reserves this year. Global growth will accelerate to 3.6 percent in 2013, from 3.3 percent this year, the International Monetary Fund estimates. “In the short term, the combination of more easing and weaker growth should prove supportive to gold,” Jeffrey Currie, an analyst at the bank, wrote in the report. “Medium term, however, the gold outlook is caught between the opposing forces of more Fed easing and a gradual increase in U.S. real rates on better US economic growth. Our expanded modeling suggests that the improving U.S. growth outlook will outweigh further Fed balance sheet expansion and that the cycle in gold prices will likely turn in 2013.”

Gold Market Recap Report (CME)
The gold market forged a fresh new low for the move this morning but managed to reject a noted portion of those losses into mid session. However, February gold seemed to run into some overhead resistance around the Tuesday close. The bull camp in gold saw some lift off the lows, but gold prices during the session didn't show a directly positive reaction to US data that was better than expected. However, gold did seem to gather some minor lift off the US recovery in equities, even if that recovery followed a slide off the beginning of a fiscal cliff press conference in Washington. While gold continues to see signs that central bankers are poised to continue buying gold, fears of a broad based physical commodity market washout are real in the face of the nearing end of the Lame Duck Congress.

20121206 1001 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
January Soybeans finished up 23 3/4 at 1479 1/4, 1/2 off the high and 25 3/4 up from the low. March Soybeans closed up 23 1/2 at 1473 3/4. This was 25 1/2 up from the low and 1/4 off the high.
January Soymeal closed up 6 at 446.3. This was 6.5 up from the low and 0.6 off the high.
January Soybean Oil finished up 0.94 at 51, 0.04 off the high and 1.04 up from the low.
January soybean saw double digit gains on the day due to strong Chinese demand and a positive technical setup. Thoughts that the Chinese economy has turned the corner and inflation fears may be subsiding added to the bullish tilt. Chinese crush margins have improved in the last couple of weeks and basis in the PNW has firmed this week. Rumors that the US may have sold up to 6 cargos to China fueled the rally throughout the day. The South American weather outlook is mostly favorable with Brazil seeing timely rainfall in the north and better precipitation is expected in the southern region. Argentina is trending too wet at the moment which has delayed corn sowings. Some analysts expect soybean acreage to increase due to these delays. Strong calendar spread buying and firm basis at US export ports helped to support the positive tone to the marketplace.

EDIBLE OIL: Malaysian palm oil futures slipped 0.3 percent as expectations of record stocks in November weighed on sentiment, although traders are looking at higher exports and slowing output this month. (Reuters)

Palm Oil Stockpiles in Malaysia Seen Holding Near Highest Ever (Bloomberg)
Palm oil stockpiles in Malaysia, the world’s biggest producer after Indonesia, probably held near a record last month as production exceeded exports, according to a Bloomberg survey.
Inventories were 2.5 million metric tons compared to 2.51 million tons in October, according to the median of estimates from four analysts and two plantation companies. Output probably fell 5.7 percent to 1.83 million tons, while exports gained 1.7 percent to 1.79 million tons, the survey showed. The Malaysian Palm Oil Board is scheduled to release official data on Dec. 10.
Futures of the oil used in food and biofuels are headed for the worst annual slump since the financial crisis in 2008 on lower demand and the biggest ever reserves. That decline may pare profits and revenues at producers including Sime Darby Bhd. (SIME) and Golden Agri-Resources Ltd. (GGR) For 2013, Rabobank International has picked palm oil as likely to be the best-performing agricultural commodity as the stockpiles drop and sales revive.
“It’s still a buyers’ market because they know there’s a lot of stock and they don’t need to hurry,” said Ivy Ng, an analyst at CIMB Group Holdings Bhd. (CIMB) in Kuala Lumpur. Prices are “unlikely to rebound significantly,” she said.
Palm oil for February delivery ended at 2,284 ringgit ($751) a ton on the Malaysia Derivatives Exchange in Kuala Lumpur yesterday, down 28 percent this year. Most-active prices touched a three-year low of 2,220 ringgit on Nov. 12.

‘Cool Down’
“People were expecting that perhaps stocks could cool down a bit in the month of November,” said Ng. “It doesn’t seem like that is going to be the case because the production didn’t drop as much,” with strong output seen in Sabah, she said.
Sabah, on Borneo Island, is Malaysia’s top producing state, accounting for about 29 percent of total output in the first 10 months of 2012, according to palm oil board data. Production usually peaks from July to October, then tapers off in November.
Dorab Mistry, director at Godrej International Ltd., revised his forecast for Malaysian stockpiles on Jan. 1 to 2.7 million to 2.8 million tons from a previous call of 3 million tons. Prices will trade between 2,300 ringgit and 2,600 ringgit a ton between now and February, he told a conference Nov. 30.
Prices may have bottomed as stockpiles are set to drop amid a pick-up in demand from buyers including India, Thomas Mielke, executive director of Oil World, said Nov. 30. Futures may gain to 3,100 ringgit to 3,200 ringgit between March and May, he said.
Palm oil may be the best performer next year, trading at 2,700 ringgit a ton by the fourth quarter, Rabobank analysts led by Luke Chandler said in a Nov. 28 report. Demand may climb from importers including India, Rabobank said.

China Rules
Inventories may take longer to deplete in the New Year as China, the biggest cooking oil user, may import less once new food-safety rules come into effect Jan. 1, said CIMB’s Ng. “The concern post-December is how the demand will move,” she said.
China’s palm oil inventories at major ports may exceed 1 million tons by the year-end as an estimated 700,000 tons will arrive in China in each of the final two months of the year, the China National Grain & Oils Information Center said on Dec. 3.
Exports from Malaysia rose 3.9 percent to 1.66 million tons in November from a month earlier, surveyor Intertek estimated on Nov. 30. Shipments gained 5.2 percent to 1.65 million tons in the same period, according to Societe Generale de Surveillance.