Wednesday, January 16, 2013

20130116 1615 Global Markets & Commodities Related News.

STOCKS:European stocks were set for a mixed opening and Asian shares fell after the World Bank cited global growth concerns and uncertainty about the strength of fourth-quarter earnings. The Dow and the S&P closed higher on Tuesday supported by stronger-than-expected retail data.  (Reuters)

FOREX:The yen rose for a second day after a Japanese cabinet minister warned of the potential harm of excessive yen weakness, while the euro slipped after a European official complained about its recent gains.  (Reuters)

FOREX-Dollar falls 1 percent on day versus yen
LONDON, Jan 16 (Reuters) - The dollar fell 1 percent versus the yen, extending losses as investors took profit on the Japanese currency's recent sharp rise.
The dollar fell to 87.825 yen  on trading platform EBS, with market players reporting supporting bids at 87.80 yen. The euro also retreated against the Japanese currency, falling 1.4 percent on the day to 116.53 yen .

U.S. retail sales point to firmer consumer spending(Reuters)
U.S. retail sales rose solidly in December as Americans shrugged off the threat of higher taxes and bought automobiles and a range of other goods, suggesting momentum in consumer spending as the year ended.

UK wheat imports surpass one million tonnes (Reuters)
UK wheat imports surpassed one million tonnes during the first five months of the 2012/13 season, exceeding the total for the entire previous marketing year, customs data showed on Tuesday.

U.S. gasoline and crude stocks rise-API(Reuters)
U.S. gasoline and crude inventories rose last week even as crude imports fell, data from the American Petroleum Institute showed on Tuesday.

Norway sees record demand for mature oil licences(Reuters)
Norway has awarded 51 gas and oil licences after attracting record interest from firms spurred on by high prices to renew exploration in well-developed areas of the country's continental shelf deemed uninteresting a few years ago.

OIL:Brent crude rose towards $111 a barrel after robust U.S. retail sales boosted hopes for stronger demand in the world's top oil consumer, while oil inventories there rose far less than expected. (Reuters)

Workers at S.Africa's Amplats down tools -labour leader(Reuters)
Workers at the Rustenburg operations of South Africa's Anglo American Platinum refused to go underground for overnight shifts to protest company plans to close mines, a labour leader said on Wednesday.

BASE METAS:London copper steadied around two-week lows hit in the previous session as a pick-up in U.S. consumer spending bolstered risk appetite, while prospects for renewed growth momentum from top metals buyer China also underpinned prices.   (Reuters)

PRECIOUS METALS:Gold inched up towards a near two-week high hit in the previous session on expectations easy global monetary policies will continue, while platinum took a breather after rising for six straight sessions to a three-month peak. (Reuters)

EU Commission finds China subsidises steelmakers -sources
BRUSSELS, Jan 15 (Reuters) - The European Commission has concluded China illegally subsidises steel producers and wants EU members to back punitive tariffs, which could anger the bloc's second largest trading partner, trade sources said.
The conclusion would address blame at China itself, rather than Chinese companies. China has in the past accused the European Union of protectionism and has filed its own complaints against the bloc with the World Trade Organisation.

U.S. primary aluminum output rises 4.2 percent in 2012
Jan 15 (Reuters) - Primary aluminum production in the United States rose 4.2 percent to 2.07 million tonnes in 2012, according to data released by the Aluminum Association.
Output of the metal however, fell by almost 4 percent to 171,019 tonnes in December from a year earlier, said the association, which released the data late last week.

METALS-London copper steadies on U.S. spending uptick
SINGAPORE, Jan 16 (Reuters) - London copper held steady slightly above two-week lows hit in the previous session, propped up by a pick-up in U.S. consumer spending which bolstered risk appetite and prospects of further economic growth in top metals buyer China.
"It looks as though there has been some stronger data from China and we're flagging upside risk to our forecasts. It might be that people are just holding out for confirmation," said Alexandra Knight, an economist with National Australia Bank in Melbourne.

PRECIOUS-Platinum reverses losses on Amplats; gold inches up
SINGAPORE, Jan 16 (Reuters) - Platinum reversed early losses to extend its winning streak into a seventh straight session, buoyed by rising supply concerns after staff at top producer Anglo American Platinum downed tools.
"In the short term, platinum may see more strength, boosted by news from Amplats," said Alice Chiu, assistant manager of PGM trading at Heraeus Metals Hong Kong.

20130116 1437 Palm Oil Related News.

VEGOILS-Malaysia's zero export-tax move lifts palm to more than 1-week high BOZ2 DBYF3 FCPOc3 - RTRS
16-Jan-2013 14:29
Zero pct CPO tax in Feb to boost exports -trader Investors see stockpiles coming off in February from record high Palm oil may test resistance at 2,449 ringgit -technicals

(Updates prices, adds detail)
By Anuradha Raghu
KUALA LUMPUR, Jan 16 (Reuters) - Malaysian palm oil futures rose to a more than one-week high on Wednesday on investor optimism a zero-duty tax structure will spur exports from the world's No.2 producer and help boost global demand for the tropical oil.
The positive sentiment was also buoyed by seasonally slowing production which could help curb stockpiles that hit a new record of 2.63 million tonnes in December.
The Malaysian government announced on Tuesday that it will retain its crude palm oil export tax at zero percent for February, in an effort to give a competitive edge over top producer and biggest rival Indonesia. (Full Story)
"Indonesia's crude palm oil is now pricier than Malaysian crude palm oil. So Malaysian exports will definitely pick up," said a trader with a foreign commodities brokerage.
"Most traders are trading on the forward view. Even though exports are not looking so good now, but with the overall drop in production, we are expecting stocks to be lower in February or March," the trader added.
By the midday break, the benchmark April contract FCPOc3 on the Bursa Malaysia Derivatives Exchange had climbed 0.8 percent to 2,433 ringgit ($806) per tonne. Prices earlier touched 2,441 ringgit, the highest level seen since Jan. 7.
Total traded volume stood at 15,373 lots of 25 tonnes each, higher than the usual 12,500 lots.
Technical analysis showed that Malaysian palm oil may test a resistance of 2,449 ringgit per tonne, a break above which will lead to a further gain to 2,522 ringgit, said Reuters market analyst Wang Tao. (Full Story)
Weaker winter demand from Europe and China had taken a toll on palm oil exports, causing shipments to fall more than 20 percent in the first 15 days of January. Palm oil tends to solidify in cold temperatures.
But with warmer weather on its way, traders expect demand to pick up in the coming weeks ahead.
"Moving forward, it can only improve -- it will not go worse. The weather is getting warmer and you will see more imports going into China," the trader added.
Brent crude rose towards $111 a barrel on Wednesday on hopes of a revival in demand growth in the world's top oil consuming nation after U.S. retail sales beat forecasts and oil inventories there rose far less than what was expected. O/R
U.S. soyoil for March delivery BOH3 was almost flat in early Asian trade. The most active May soybean oil contract DBYcv1 on the Dalian Commodity Exchange edged up 0.1 percent.

Indonesia rules out changes to palm export tax structure
JAKARTA | Wed Jan 16, 2013 2:18am EST
Jan 16 (Reuters) - Indonesia, the world's biggest palm oil producer, will not change its export tax structure for the edible oil or follow rival producer Malaysia by cutting tariffs on crude grades to zero, the trade minister said on Wednesday.
"Indonesian government will not change the palm oil export tax structure although Malaysia has been lowering its CPO export tax to zero percent," Trade Minister Gita Wirjawan said.
"We have set up a progressive palm oil export structure in line with our policy to boost the palm oil downstream industry," he added. "Although the Malaysian government has lowered its CPO export tax to zero percent, we will not be."
Malaysia, the world's No.2 palm oil producer, set at zero export taxes for crude palm oil for January and February after announcing last year that it would set duties -- formerly at 23 percent -- on a monthly basis.
The Malaysian tax changes were aimed at clawing back market share from Indonesia, which in 2011 slashed export taxes on refined palm oil in a bid to boost its processing and downstream industries.
Industry group the Indonesian Palm Oil Association (GAPKI) has repeatedly called for a reduction in palm oil export taxes to provide greater parity against Malaysian competitors.
But on the downstream and processing side, the Indonesian Vegetable Oil Association says it wants to keep things as they are to maintain consistency.
Indonesia reduced its export tax on crude palm oil to 7.5 percent for January from 9 percent in December.
Last month, a junior minister in Indonesia's trade ministry said his department was resisting pressure from parts of the palm oil industry to change its export tax system in response to planned tax cuts by Malaysia.

20130116 1144 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares inch higher, Nikkei down as yen declines pause
TOKYO, Jan 16 (Reuters) - Asian shares inched higher as investors waited for more clues on global growth prospects, while the Japanese stock market took a break from its recent rally as the yen's declines paused.
"There's no real momentum in the market before China's fourth quarter GDP figures on Friday, so shares are likely to coast, with individual stocks aligning with earnings expectations," said Kim Sung-hwan, an analyst at Bookook Securities in Seoul.

Doves push back on Fed's hawks, call for more US easing
GOLDEN VALLEY, Minn./PROVIDENCE, R.I., Jan 15 (Reuters) - T wo dovish Federal Reserve officials pushed back against some of their more hawkish peers on Tuesday, arguing that the U.S. central bank's accommodative policies are appropriate and may even need to be eased further.
In a speech that stamped him as perhaps the most dovish of the central bank's 19 policymakers, Minneapolis Federal Reserve President Narayana Kocherlakota said the Fed "should provide more monetary accommodation" by targeting a 5.5 percent unemployment level.

FOREX-Euro stung by Juncker's comment, yen holds firm
SYDNEY, Jan 16 (Reuters) - The euro had its winning streak clipped after a top European official complained about its recent run higher, while the yen held firm following a warning about its excessive weakness by a Japanese politician.
"The pullback from the 2013 high looks poised to turn into a larger correction, and we may see the euro-dollar fall back towards the $1.3100 region as heightening growth concerns fuels speculation for additional monetary support," said David Song, analyst at DailyFX.

Oil-Oil slips as German data, US debt ceiling worries weigh
NEW YORK, Jan 15 (Reuters) - Oil prices dipped in heavy trading on Tuesday, weighed down by German economic data and concerns about the brewing fight over the U.S. debt ceiling stoked concerns about fuel demand.
"I think the warnings by the Fed Chairman about the debt ceiling seems to have taken the wind out of yesterday's strong close," said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut, referring to gains seen in Brent and U.S. crude on Monday.

POLL-US crude stocks seen rising on higher imports
Jan 15 (Reuters) - U.S. crude oil inventories were forecast to have risen last week, marking the second straight week, on expectations imports rose, an extended Reuters poll of analysts showed on Tuesday.
The poll of nine analysts forecast crude stocks to show a rise of 2.3 million barrels for the week ended Jan. 11, with eight analysts predicting a build in stocks.

U.S. gasoline and crude stocks rise-API
NEW YORK, Jan 15 (Reuters) - U.S. gasoline and crude t week even as crude imports fell, data from the American Petroleum Institute showed on Tuesday.
Gasoline stocks rose 4.1 million barrels in the week to Jan 11, accordingAPI data, compared with expectations for a 2.9 ters poll of analysts.  Crude stockpiles rose by 46,000 barrels in the week to Jan. 11, compared with expectations for a 2.3 million barrel rise. Distillate fuels, which include diesel and heating oil, fell 568,000 barrels, compared with expectations for a 1.9 million barrel rise, the API data showed.

EXCLUSIVE-Iran charters oil ship with Indian insurance- sources
NEW DELHI, Jan 15 (Reuters) - A loophole in an Indian insurance scheme has allowed Iran's state-run tanker company NITC to bolster oil exports by chartering a vessel insured by India's state-run firms, industry and shipping sources said on Tuesday.
European Union and U.S. sanctions to force Iran to curb its nuclear programme cut Iran's oil exports by more than half last year. An EU ban on insuring vessels carrying Iranian oil was among measures that disrupted the flow to top Asian buyers, as the maritime insurance industry is mostly based in Europe.

Norway to cut gas transport charges to encourage output
OSLO, Jan 15 (Reuters) - Norway plans to sharply reduce natural gas transport tariffs for new gas contracts, hoping to encourage higher production in mature fields and more exploration in the frontier areas of the Arctic, the oil ministry said on Tuesday.
The government also aims to reduce the charges for bookings from this spring as pipeline firm Gassled has been earning more than the desired return on its investment, while future returns are seen elevated for years to come, the ministry said in a consultation paper. The lower tariffs would then encourage energy firms to explore for more gas in the Arctic Barents Sea, where only a few discoveries have been made so far.

20130116 1009 Global Economy Related News.

US producer price index lost 0.2% mom in Dec (-0.8% in Nov), double the consensus of  -0.1%, whilst on a yoy basis, the measure gained 1.3% (1.4% in Nov). (Bloomberg)

US inventories gained 0.3% mom in Nov (a revised 0.3% in Oct), matching consensus. (Bloomberg)

Fitch Ratings warned that it might revise downward the US’ rating from its current top "AAA" level if Congress does not reach agreement on raising the ceiling for the national debt. (AFP)

US retail sales gained 0.5% mom in Dec (a revised 0.4% in Nov), more than double the consensus estimate of 0.2%, whilst retail sales less autos and gas gained 0.6% mom, matching Nov‟s revised pace and exceeding the consensus estimate of 0.5%. (Bloomberg)

Chinese sovereign wealth fund China Investment Corp could cut holdings of US Treasury Bonds as they are becoming a less attractive investment, state media said. (AFP)

Without seasonal adjustments, the Eurozone had a trade surplus of €13.7bn, up from €4.9bn in the same month of 2011. (NASDAQ)

Japan’s money stock M2 rose 2.6% yoy in Dec (2.1% in Nov), higher than expectations of a 2.1% gain. (Bloomberg)

Japan’s corporate bankruptcies fell 13.8% yoy in Dec (-12% in Nov). (Bloomberg)

Japan’s machine tool orders fell 27.5% yoy in Dec (-21.3% in Nov), the eighth straight month of decline. (Bloomberg)

Retail sales in Singapore dropped 1.1% yoy in Nov (-1.1% in Oct) as a result of lower sales of motor vehicles. Excluding motor vehicles, retail sales rose 2.0% yoy (1.2% in Oct). (AFP)

Remittances sent home by Filipinos overseas amounted to US$1.92bn in Nov, up 7.6% from US$1.78bn in the same month last year. (Philippine Daily Inquirer)

20130116 1008 Malaysia Corporate Related News.

Alam Maritim has bagged a RM576m contract from Petronas Carigali for the supply of six vessels for five years effective 1 Jan. (BMSB)

Gamuda is in talks to sell its stakes in highway operators Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd (Sprint) and Lingkaran Trans Kota Holdings Bhd (Litrak) for more than RM4 bn, said people familiar with the matter. Business Times was told that Gamuda is talking to a government-linked special purpose vehicle. The whole deal is part of a wider plan by the government to consolidate the toll industry.  Officials from Gamuda declined to deny the existence of the talks when contacted. (BT)

Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) is on track to achieve its 2012 target of RM2bn in pre-tax profit and zakat. Chairman Tan Sri Sabbaruddin Chik said the optimism is based on the bank's nine-month performance ended Sept 30, 2012 of RM1.62bn. This was an increase of 8.1% over the same period in 2011 where it posted RM1.5bn, he said. (Bernama)

DRB-Hicom says there will be more corporate exercises this year as it strives to better its topline and bottomline. "In the next short to mid-term period, there will be a couple of  exercises that we are looking into to assist the progress of enhancing and making sure DRB-Hicom expands,"  MD Datuk Seri Mohd Khamil Jamil  said. Khamil hinted at more acquisitions and ventures but declined to name specific targets or industries. The group expects its services, property and defence business, apart from the automotive division, to grow further and be major revenue contributors in the next 36 months. "We are looking at streamlining and rationalising our core business and creating group synergies within the whole group to further drive the growth of DRB-Hicom," said the group's finance, strategy and planning COO  Datuk Seri Che Khalib Mohamad Noh.  (StarBiz,  Financial Daily)

Sime Darby Bhd  subsidiary, Sime Darby Healthcare Sdn Bhd, has sold its day care facility in Petaling Jaya  (Sime Darby Specialist Centre Megah) to BP Healthcare group. The sale price was not disclosed, but it is believed to be negligible to the group's overall revenue. An industry executive said the disposal of the "small" Sime Darby Specialist Centre Megah will enable Sime Darby Healthcare to concentrate on its three bigger hospitals  - Sime Darby Medical Centre Subang Jaya, Sime Darby Medical Centre Ara Damansara, and Sime Darby Medical Centre ParkCity. (Financial Daily)

Perodua aims to increase its service intake by 5% to 1.88m vehicles this year, from the record 1.78m registered last year, said MD  Datuk Aminar Rashid Salleh. He said the group was also eyeing to increase market share in the after-sales services segment to 55% from the current 53%. "In tandem with the higher demand for after-sales services, we're targeting to increase parts sales by 6% to RM255m this year," he added. Aminar Rashid said Perodua also planned to increase its sales and service centres to 343 outlets this year from the current 267. Perodua has also taken the initiative to reach out to existing customers in the rural areas, starting with Sabah and Sarawak. On exports, he said the group was in  the midst of discussions as to which existing export markets it was likely to introduce the Myvi to, and also consider the need to look into other areas. "Exports for 2014 would depend on how fast we can complete the RM790m manufacturing facility. If it is ready in time, there's a possibility for exports to increase," he said. (Bernama)

Myanmar‟s government has begun the process of opening up the country‟s telecoms industry, inviting foreign companies to submit expressions of interest for two national licences by January 25. The licences, to be issued by June, will be the first of four telecoms licences planned for the sector and could run as long as 20 years with an option for renewal, the government said. The move signals the opening up of a sector long controlled by Myanmar Posts and Telecommunications, the state-owned telephone service provider. The tender comes as Myanmar‟s parliament considers a draft telecoms law – which could be passed within the next few months – that sets out a sweeping overhaul of the industry. Among international operators to have shown interest are Russia‟s VimpelCom, Telenor of Norway, Vietnam‟s VNPT-Fujitsu, a joint-venture between Vietnam and Japan‟s Fujitsu;  Axiata; and Digicel. Myanmar has among the lowest rates of telecoms coverage in Asia, with fixed-line coverage of about 1 per cent and about 5.5m mobile phone subscribers representing a 9 per cent penetration rate, compared with 70% in Cambodia and more than 110% in Thailand. The value of a service licence, under Myanmar‟s telecoms reform plans, could be worth “billions of dollars”, said a Bangkok-based telecoms executive. However, he noted, analysts have been unable to accurately value the sector. (FT)

Axiata  is likely to heed the "call" by the Myanmar to investors  to express interest in two telecoms licenses up for grabs. "The government of Myanmar has asked all interested parties to submit an expression of interest by jan 25 and Axiata will be doing so." (Starbiz)

The state governments of Sarawak and Sabah have dropped their request for stakes in domestic carrier MASwings, a wholly owned subsidiary of Malaysia Airlines (MAS) formed as a rural air service operator to serve rural communities in the two states. State Tourism Minister Datuk Amar Abang Johari Tun Openg said the decision was made following the carrier's business restructuring which met the objectives of the two state governments. Abang Johari said the restructuring fulfilled the state governments' desire to see MASwings not just serving rural routes in Sabah and Sarawak but also fly to new routes within the Brunei, Indonesia, Malaysia, the Philippines-East Asean Growth Area (BIMP-EAGA). The two governments were prepared to inject additional money to the carrier for such an expansion. (BT)

Eversendai Corp has been conditionally awarded a RM325m contract to carry out structural steelworks of the Abu Dhabi International Airport. The award will boost its existing order book to RM1.5bn,  Datuk AK Nathan, executive chairman and group MD of Eversendai, said this is one of the most anticipated projects in the region and reaffirms Eversendai's continued success in winning iconic projects in the Middle East. The work is expect to start next month. (Financial Daily)

20130116 1003 Global Markets Related News.

Asia FX By Cornelius Luca - Tue 15 Jan 2013 16:36:14 CT (CME/
The financial markets were divergent on risk on Tuesday amid worries about the US earnings and after Eurogroup head Jean-Claude Juncker warned that the euro's exchange rate was dangerously high. All European currencies fell, commodity currencies consolidated, while the yen struggled higher after falling steadily in the previous weeks. The US stock markets closed divergently. The gold/oil spread ended higher. 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 long on European currencies and commodity currencies, and short yen. Good luck!

US: The NY Empire state manufacturing index slipped to -7.8 in January from -7.3 in December.
US: The PPI dipped 0.2% in December  after falling 0.8%. The core PPI rose again by 0.1%.
US: The retail sales rose 0.5% in December after rising 0.4% in November.\\\\
US: The business inventories rose 0.3% in November, the same as in October. Business sales rose 1.0% after falling by 0.3% in October.

Today's economic calendar
Japan: Domestic Corporate Goods Price Index for December
Japan: Machinery orders for November
Japan: Consumer confidence index for December

Asian Stocks Drop as Japan Shares Retreat After Yen Gains (Bloomberg)
Asian stocks fell, with the regional benchmark index heading for its first decline in three days, as Japan’s Nikkei 225 Stock Average retreated from a 32-month high after the yen gained, dimming the outlook for export earnings.
Honda Motor Co. (7267), which gets 81 percent of its auto sales overseas, slipped 1.3 percent in Tokyo. Brother Industries Ltd. slid 1 percent after Credit Suisse Group AG recommended selling the shares of the Japanese office-equipment maker. Leighton Holdings Ltd. added 1.1 percent after the Australian Financial Review reported Hong Kong’s PCCW Ltd. may bid for the telecommunications infrastructure of Australia’s biggest construction company.
The MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 132.51 as of 9:34 a.m. Tokyo time, before markets in China and Hong Kong open. The gauge has rallied since November after reports showed China’s economy is recovering and Japanese shares gained on speculation new Prime Minister Shinzo Abe will pursue more aggressive policies to stimulate the world’s third-largest economy. Japan’s Nikkei 225 dropped 0.9 percent, after closing yesterday at the highest level since April 2010.
“There should be some short-term selling amid a feeling that shares are overheating and the yen has stopped sliding,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Investors are confident in the policy mix being put forward by the Abe government and there’s less worry about the global economy, so people are looking to buy on dips.”

Japan Stocks Fall as Rising Yen Outweighs Machine Orders (Bloomberg)
Japanese shares fell, with the Nikkei 225 (NKY) Stock Average retreating from a 32-month high, after the yen climbed for a second day, overshadowing a bigger-than- expected increase in machinery orders.
Canon Inc. (7751), a camera maker that gets 80 percent of its revenue outside Japan, slid 2.5 percent. Dai-Ichi Life Insurance Co. declined 2.3 percent after closing at its highest since May 2011 yesterday. The Nikkei 225’s relative strength index, an indicator of price movements, was at 80 yesterday, above the 70 threshold that some investors view as a sign to sell. Sumitomo Realty & Development Co. fell 2.4 percent after its rating was cut at SMBC Nikko Securities Inc.
The Nikkei 225 fell 1.1 percent to 10,761.79 as of 9:47 a.m. in Tokyo after closing yesterday at the highest level since April 2010. The broader Topix (TPX) Index slid 0.7 percent to 900.23, with about nine stocks declining for every six that rose.
“There should be some short-term selling amid a feeling that shares are overheating and the yen has stopped sliding,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.
The 25-day Toraku index, which compares the number of advancing stocks with declining shares on the Tokyo Stock Exchange, rose to 158 yesterday. The gauge since Dec. 13 has stayed above 120, a level that indicates to some traders that a decline is likely.

U.S. Stocks Rise as Retailer Rally Offsets Debt-Ceiling (Bloomberg)
U.S. stocks advanced, rebounding from earlier losses in the Standard & Poor’s 500 Index, as a rally in retail and transportation companies overshadowed concern about discussions on raising the debt ceiling.
Consumer discretionary companies led the gains in the S&P 500 as data showed retail sales rose more than forecast in December. Dell Inc. (DELL) rallied 7.2 percent, following yesterday’s 13 percent surge, as the computer maker is said to be in buyout talks. Apple Inc. and Hewlett-Packard Co. dropped at least 2.4 percent to pace losses in technology shares. Facebook Inc. retreated 2.7 percent after the company introduced a tool for searching information posted to its social network.
The S&P 500 rose 0.1 percent to 1,472.34 at 4 p.m. New York time, after falling as much as 0.5 percent earlier. The Dow Jones Industrial Average added 27.57 points, or 0.2 percent, to 13,534.89. The Dow Jones Transportation Average gained 0.7 percent to a record 5,639.64. About 5.8 billion shares changed hands on U.S. exchanges, or 5.7 percent below the three-month average, according to data compiled by Bloomberg.
“The retail data is good news for economic expansion,” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. He spoke in a telephone interview. “It’s encouraging. We have the earnings season going on, people are on wait-and-see mode. In addition, there’s a lot of rhetoric on the debt-ceiling front. Though it’s probably a bit early to start getting concerned about that.”

European Stocks Are Little Changed; SAP Shares Tumble (Bloomberg)
European stocks were little changed as concern that debt-ceiling talks will harm the U.S. economy and a report showing weaker-than-forecast German growth offset Spain’s better-than-targeted sale of debt.
IG Group Holdings Plc (IGG) slipped 1.1 percent after saying first-half net trading revenue fell. SAP AG (SAP) sank the most in six months after reporting earnings that trailed estimates. Air Liquide SA dropped 1 percent after Bank of America Corp. cut its recommendation on the stock. Hennes & Mauritz AB (HMB) advanced 3.6 percent after posting sales that beat analyst forecasts.
The Stoxx Europe 600 Index (SXXP) lost less than 0.1 percent to 285.97 at the close of trading. The measure has still gained 2.3 percent since the start of the year after U.S. lawmakers agreed on a budget, avoiding tax increases and spending cuts that threatened to push the world’s biggest economy into a recession.
“We had a relief rally after the fiscal cliff was pushed out,” Lucy MacDonald, chief investment officer for equities at Allianz Global Investors in London, which oversees $401 billion, said in a Bloomberg Television interview. “Now the focus will go back on the fiscal cliff and the debt ceiling. That can be a catalyst for a pause.”
National benchmark indexes fell in 11 of the 18 western European markets. France’s CAC 40 lost 0.3 percent and Germany’s DAX sank 0.7 percent. The FTSE 100 added 0.2 percent.
The volume of shares changing hands on the Stoxx 600 was 17 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.

Emerging Stocks Drop Led by Biggest Technology Slump in 3 Weeks (Bloomberg)
Emerging-market stocks fell, driven by the biggest slump in technology shares in three weeks, on concern waning demand for iPhones will hurt suppliers while energy producers declined with oil prices.
Hon Hai Precision Industry Co. (2317) and Catcher Technology Co. dragged Apple Inc. suppliers lower for a second day, with a gauge of technology stocks falling 1.5 percent. Brazilian oil producer OGX Petroleo & Gas Participacoes SA stoked a 0.6 percent drop in the Bovespa index, while OAO Novatek (NVTK), Russia’s largest independent gas producer, slumped in London.
The MSCI Emerging Markets Index declined 0.7 percent to 1,073.48 in New York. Apple Inc. cut orders for iPhone 5 displays this quarter by about 50 percent, the Nikkei newswire reported yesterday. The U.S. risks economic and social calamity if the $16.4 trillion debt ceiling isn’t increased, President Barack Obama said. The 21 nations in the emerging-markets gauge send an average 17 percent of their exports to the U.S., World Trade Organization data show.
The Apple order reduction report “hit the supply chain and there were big declines in Taiwan’s component producers,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. “Commodity prices are impacting Russia, hurting sentiment in the Middle East.”
The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, dropped 0.4 percent to $44.47. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, climbed 4.3 percent to 17.25.

Yen Rises for 2nd Day Before BOJ Holds Policy Meeting Next Week (Bloomberg)
The yen gained for a second day amid speculation the Bank of Japan (8301) will fail to impress investors with extra policy measures at its Jan. 21-22 meeting.
The euro remained lower following a drop yesterday after Luxembourg Prime Minister Jean-Claude Juncker said the currency is “dangerously high.” European Central Bank Governing Council member Ewald Nowotny speaks on monetary policy today.
A further decline in the yen “requires much bolder measures, as additional easing from the BOJ has been already priced in,” said Ken Takahashi, an assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “The euro will remain susceptible to comments from officials and economic indicators as investors are weighing on the monetary policy outlook.”
The yen rose 0.4 percent to 88.42 per dollar as of 10:11 a.m. in Tokyo following a 0.8 percent jump yesterday. It weakened to 89.67 on Jan. 14, a level unseen since June 2010. The euro was little changed at $1.3302 after dropping 0.6 percent yesterday. It reached $1.3404 on Jan. 14, the strongest since Feb. 29. The currency fell 0.5 percent to 117.51 yen.
BOJ Governor Masaaki Shirakawa and his fellow board members will review the central bank’s 1 percent inflation goal at their policy meeting next week. Prime Minister Shinzo Abe has called for the target to be doubled and said on Jan. 13 that he wants a BOJ chief “who can push through bold monetary policy.”

Euro Exchange Rate Is ’Dangerously High,’ Juncker Says (Bloomberg)
The euro’s 8.4 percent gain against the U.S. dollar in the past six months is posing a fresh threat to the European economy just as it shows signs of escaping the debt crisis, said Jean-Claude Juncker, who leads the group of euro-area finance ministers.
Echoing policy makers from Switzerland to Japan in bemoaning strong exchange rates, Juncker late yesterday called the euro’s value “dangerously high” after the 17-nation currency this week traded above $1.34 against the dollar for the first time since February last year.
The euro has rallied amid growing signs in financial markets that the three-year debt turmoil is fading and after European Central Bank President Mario Draghi last week signaled no immediate plan to ease monetary policy further.
“It was said last year that the euro zone was at risk of breaking and I said last year that this won’t happen,” Juncker, who steps down this month as head of the so-called eurogroup, told an annual gathering of business leaders in Luxembourg. “The euro zone has become more stable after lots of efforts,” Juncker said, adding that now “the euro foreign-exchange rate is dangerously high.”
The European currency dropped as much as 0.9 percent after Juncker’s comments, the biggest intraday decline since Jan. 3. The euro traded at $1.3306 at 5 p.m. New York time, down 0.6 percent. It touched an intraday high of $1.3404 on Jan. 14, the strongest since Feb. 29, 2012.

Aussie Dollar Falls Versus Kiwi After Confidence Report (Bloomberg)
The Australian dollar fell versus its New Zealand peer after data showed consumer confidence was little changed from a two-month low, underscoring concern the larger South Pacific nation’s economy is weakening.
The so-called Aussie remained lower following a one-day drop against the yen after the World Bank cut its global growth forecast for this year, damping demand for higher-yielding assets. The New Zealand dollar, known as the kiwi, advanced versus all of its 16 major counterparts.
“We’ve seen over the last week that domestic data hasn’t been that good and the Aussie’s taken perhaps a slight hit,” said Derek Mumford, a Sydney-based director at Rochford Capital, a currency risk-management company. “I wouldn’t say today’s data reflects any kind of booming confidence.”
Australia’s dollar fell 0.2 percent to NZ$1.2557 at 11:28 a.m. in Sydney. It was little changed at $1.0570. The Aussie bought 93.71 yen after sliding 0.8 percent to 93.81 yesterday. New Zealand’s currency gained 0.2 percent to 84.16 U.S. cents. It bought 74.61 yen, 0.1 percent above the close in New York.
Ten-year yields in Australia were at 3.42 percent from 3.44 percent yesterday. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to rate expectations, was little changed at 2.81 percent.
Australia’s sentiment index for January rose 0.6 percent to 100.6, a Westpac Banking Corp. and Melbourne Institute survey taken Jan. 7-13 of 1,200 adults showed today in Sydney. This month’s figure was little changed from the 100.03 level in December, the least since October. Readings above 100 indicate optimists outnumbered pessimists.
The Washington-based World Bank projects the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012. It halved its forecast for Japan, cut the U.S. projection b

Treasuries Hold Three-Day Gain on Debt Debate (Bloomberg)
Treasuries held a three-day gain on concern political wrangling over the U.S. debt ceiling will curb economic growth, fueling demand for the relative safety of government bonds.
Fitch Ratings said yesterday its AAA credit rankings on France, the U.S. and the U.K. are likely to come under pressure this year due to the slow pace of economic expansion and high debt levels.
“We will have a serious problem next month” if politicians don’t raise the debt limit, said Kim Youngsung, the head of fixed income in Seoul at Samsung Asset Management Co., South Korea’s largest private bond investor with the equivalent of $106.4 billion in assets. “It will have a negative impact on the global economy. We’ve seen yields go down over the past couple of days. I hope the problem will be solved, and yields will go up again.”
Ten-year yields were little changed today at 1.83 percent as of 9:42 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in November 2022 was 98 5/32. The rate dropped six basis points, or 0.06 percentage point, over the past three days.
The Treasury uses emergency measures to delay a default as the total value of debt nears the ceiling. Exhausting the extraordinary steps without raising the limit would require the Treasury to fund the government with cash on hand, which wouldn’t be adequate “for any meaningful length of time,” according to Treasury Secretary Timothy F. Geithner.

Treasury Bill Rate Curve Inverts Amid Debt-Ceiling Showdown (Bloomberg)
Rates on Treasury bills maturing around the time the U.S. is forecast to run out of money to pay its obligations are higher than those on longer-maturity securities, suggesting investors are concerned lawmakers may fail to agree to lift the debt ceiling.
Feb. 28 bill rates rose to 0.108 percent, an increase of 2 basis points, or 0.02 percentage point, and the highest since Nov. 14. That compares with 0.08 percent for bills due April 18. At the end of last year, the April bills yielded 7 basis points more than the February securities.
“You can see the debt-ceiling-related move pretty clearly now in the bill curve, which is a dynamic that only started in the last two days,” Andrew Hollenhorst, fixed-income strategist at Citigroup Inc. in New York, said in a telephone interview. “We think it is an opportunity. It’s very unlikely that payments would actually be delayed. If you’re an investor who can take advantage of the tactical situation, we’d wait for yields to move a little bit higher in those maturities and then think about investing.”
The Treasury reached its statutory borrowing limit on Dec. 31 and is using “extraordinary” measures to pay for the government. It will lack sufficient funds to pay all its bills as early as Feb. 15, according to the Washington-based Bipartisan Policy Center.

World Bank Cuts Growth Forecasts as Developed Nations Lose Steam (Bloomberg)
The World Bank cut its global growth forecast for this year as austerity measures, high unemployment and low business confidence weigh on economies in developed nations.
The Washington-based bank projects the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012. It halved its forecast for Japan, cut the U.S. projection by 0.5 percentage point and predicted a second year of contraction in the euro region. It also lowered projections for emerging markets led by Brazil, India and Mexico.
“Overall, the global economic environment remains fragile and prone to further disappointment, although the balance of risks is now less skewed to the downside than it has been in recent years,” the World Bank said in its twice-yearly report.
Developed economies failed to gain steam in 2012 even after measures to stem the European debt crisis helped boost financial markets around the world. Uncertainties surrounding a U.S. political agreement on spending cuts and Japan’s diplomatic tensions with China may weigh further on the global economy just as emerging markets recover from one of their slowest growth rates of the past decade.
“What we’re seeing is the recovery that we anticipated in June being pushed a little further back in time, beginning closer to the end of the first quarter, into the second quarter of 2013,” Andrew Burns, the World Bank’s director of global economic trends, said on a conference call.

Retail Sales Rise in U.S. to Close 2012 on Upbeat Note: Economy (Bloomberg)
Retail sales rose more than forecast in December to end 2012 on a positive note, indicating Americans may be able to rise above Washington’s budget rancor to keep contributing to economic growth.
Purchases climbed 0.5 percent, the biggest gain in three months, after a revised 0.4 percent increase in November that was larger than previously reported, according to Commerce Department data issued today in Washington. Another report showed wholesale prices retreated more than forecast last month to cap the smallest annual gain in four years.
An improving job market, a rebound in housing, lower gasoline prices and discounting by chains such as Macy’s Inc. (M) will give households the means to keep shopping after the holidays. Consumers need the support as they deal with a tax- induced drop in take-home pay and warnings from President Barack Obama that the economy will suffer if Congress fails to raise the debt limit and agree on budget cuts.
“It looks like households are saving us from a lot worse outcome for the economy,” said Jonathan Basile, a U.S. economist at Credit Suisse in New York. “The first quarter is going to be about adjusting to higher taxes and taking home less pay. It doesn’t mean the end of the expansion.”
Stocks fell, extending yesterday’s decline in the Standard & Poor’s 500 Index, as concern about discussions on raising the debt ceiling intensified. The S&P 500 fell 0.2 percent to 1,467.85 at 11:34 a.m. in New York.

Fed’s Rosengren Sees More QE on If No Jobless Progress (Bloomberg)
Federal Reserve Bank of Boston President Eric Rosengren said the central bank could still enlarge its $85 billion monthly purchases of bonds if policy makers are not making progress toward their twin goals of stable prices and full employment.
“I think there is the capacity to enlarge it if that were to become necessary,” Rosengren, 55, said in a telephone interview with Bloomberg News.
Rosengren added that it’s “difficult to strategize what our response would be without knowing what the source of potential weakness would be” and that he expects the economy to make enough progress to avoid the need to enlarge the program.
The Boston Fed chief becomes a voting member of the Federal Open Market Committee this year as part of a rotation among Fed regional presidents. He will lend his voice to a debate over when to halt or shrink the $40 billion monthly purchases of mortgage bonds and $45 billion monthly purchases of Treasuries announced last year.
Minutes of the central bank’s most recent meeting showed policy makers already debating when it would be appropriate to halt purchases. “Several members” said it would be appropriate to slow or stop purchases “well before the end of 2013” and a “few” willing to let the program run to the end of the year.

Bernanke presses Congress to raise U.S. debt ceiling (Reuters)
Federal Reserve Chairman Ben Bernanke urged U.S. lawmakers on Monday to lift the country's borrowing limit to avoid a potentially disastrous debt default, warning that the economy was still at risk from political gridlock over the deficit.

China Defends Export Data After Economists’ Skepticism (Bloomberg)
China’s customs administration said every dollar of trade is documented, defending the quality of export data that analysts at UBS AG and Australia & New Zealand Banking Group Ltd. (ANZ) said may fail to capture the true picture.
“Customs import and export statistics are based upon actual customs declarations,” the General Administration of Customs said in an e-mailed statement yesterday, responding to questions submitted by Bloomberg News on Jan. 11. “In our published export and import data, every dollar has a corresponding customs declaration document to back it.”
Last week’s customs report showing export growth of 14.1 percent in December from a year earlier, after a 2.9 percent gain in November, spurred skepticism from economists at banks including UBS, which cited discrepancies with other nations’ imports from China. Smaller trade gains could signal a less robust recovery from a seven-quarter slowdown.
“It is possible that local governments may have tried to boost exports data by either making round trips in special trade zones” or by exporting “earlier than otherwise in an attempt to improve the annual exports data,” Goldman Sachs Group Inc.’s Beijing-based economists Yu Song and Yin Zhang wrote in a Jan. 10 note. “Having said that, there is no concrete evidence to suggest this is what actually happened.”
Goldman Sachs and ANZ also cited a divergence from overseas orders in a manufacturing index, while Mizuho Securities Asia Ltd. said the increase could indicate exporters’ rush to finish year-end orders and government pressure to report exports before the end of the year to reach the official 2012 target of 10 percent growth.
Customs collects trade statistics “in accordance with the relevant laws and regulations,” according to the agency’s statement. Companies within special-trade zones, or bonded zones, that have actual transactions with overseas partners are included in the statistics, while transactions with domestic companies aren’t included in data, customs said.

Li’s Urban Planning Sends Invesco Into Machinery Stocks (Bloomberg)
China’s move to develop urban areas is luring Invesco Great Wall Fund Management Co. and Harvest Fund Management Co. to industrial stocks that are trading at an 11 percent premium to the benchmark index.
Yu Guang, who manages the $350 million Invesco Great Wall Energy fund, and Zhang Tao, who oversees the $480 million Harvest Research Selective Equity fund, are buying construction machinery stocks and railway companies. Their funds beat at least 92 percent of rivals in the past 12 months, data compiled by Bloomberg show.
A gauge of industrial companies in the CSI 300 Index (SHSZ300) has rallied 20 percent since Dec. 4, trailing the 22 percent advance in the benchmark measure, when the official Xinhua News Agency cited the nation’s new leaders as saying they would promote urban development. Urbanization is a “huge engine” of China’s future growth, Li Keqiang, poised to succeed Wen Jiabao as premier in March, wrote in a full-page article in the People’s Daily on Nov. 21.
“There are a lot of expectations for reforms and urbanization,” Invesco’s Yu said by phone yesterday. “I am optimistic about China’s stocks.”
Li is among a new generation of Chinese leaders headed by Xi Jinping that is due to take power in two months. Urbanization is expected to spur 40 trillion yuan ($6.4 trillion) of investment by 2020, the Southern Metropolis Daily reported Dec. 25, citing a draft plan by the National Development and Reform Commission, the nation’s top economic planner.

Japan Machine Orders Rise More Than Expected in November (Bloomberg)
Japan’s machinery orders rose more than expected in November, suggesting that companies were optimistic about the economic outlook as the yen weakened.
Orders, an indicator of capital spending, climbed 3.9 percent from the previous month, the Cabinet Office said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.3 percent increase. Large orders can cause volatile results.
Prime Minister Shinzo Abe last week unveiled a 10.3 trillion yen ($116 billion) stimulus package that Nomura Securities Co. forecasts will help deliver real annualized growth of 3.5 percent in the April-June quarter. Prospects for exporters may also improve this year as the yen has fallen about 10 percent against the dollar since mid-November.
“The current recession may end up being very short,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former central bank official. “The rapid depreciation of the yen may make companies more inclined to invest in the coming months.”
Economy Minister Akira Amari said yesterday that the nation faces risks from any excessive decline in the yen, adding that the currency is “correcting” to a level in line with economic fundamentals. He declined to comment on an appropriate value.
The yen has fallen amid expectations the central bank will increase cash infusions to jump-start growth and defeat deflation. The currency was at 88.78 per dollar as of 8:52 a.m. in Tokyo.
The Bank of Japan (8301) will adopt a 2 percent inflation target advocated by Abe at its Jan. 21-22 meeting, according to people familiar with officials’ discussions.

India Banks System Face Worsening Asset Quality, IMF Says (Bloomberg)
India’s financial system has been made vulnerable by a deterioration in bank assets and a lack of capital as the economy slowed, according to the International Monetary Fund.
“The main near-term risks to the financial system are a worsening of bank asset quality and renewed pressures on systemic liquidity,” the Washington-based lender said in a statement today. Stress tests have shown the risks are “manageable” for now, according to the IMF, which concluded its assessment of India’s financial stability in February 2012.
Increasing involvement of the state in the financial industry leaves the government exposed to losses at banks and is acting as a brake on economic growth, the IMF said. India’s economy will expand 6 percent this year, the body said in October, after gross domestic product rose 4.9 percent in 2012, the least since at least 2005.
The IMF urged Indian regulators to loosen a mandatory requirement for banks to hold government securities, saying that it would boost the flow of capital to other industries. India should also foster development of the local corporate bond market to broaden funding sources, according to the statement.
India remains committed to adopting international standards “in a phased manner and calibrated to local conditions,” the Reserve Bank of India said in a statement.

U.K. Inflation Stays Above BOE Goal (Bloomberg)
U.K. inflation held at the highest rate since May last month as increases in gas and electricity bills helped to keep consumer-price growth above the Bank of England’s target.
Consumer prices rose 2.7 percent from a year earlier, the same as in November and October, the Office for National Statistics said today in London. That matched the median estimate of 36 economists in a Bloomberg News survey. Housing and utility costs added 0.26 percentage points to inflation. From the previous month, prices rose 0.5 percent.
Britain’s economy is struggling to recover after emerging from a double-dip recession in the third quarter. Still, with inflation above the Bank of England’s 2 percent goal, that may leave some of the Monetary Policy Committee reluctant to support more stimulus to help bolster growth.
“Inflation could pick up a bit further in the near-term, quite possibly reaching 3 percent,” said Vicky Redwood, an economist at Capital Economics in London. “It will probably stay relatively high for most of this year, prompting households’ real pay to fall again in 2013. But we continue to expect inflation to fall back below its target towards the end of the year.”
The pound pared gains against the dollar after the report and was trading at $1.6087 as of 9:56 a.m. in London, up 0.1 percent on the day. The yield on the benchmark 10-year U.K. government bond was little changed at 2.04 percent.

Spanish Underlying Inflation Rate Declines Amid Recession (Bloomberg)
Spain’s core inflation rate fell in December as price pressures ease in an economy confronting a second straight year of contraction.
Annual core inflation, which excludes energy and fresh food prices, fell to 2.1 percent from 2.3 percent in November, the National Statistics Institute in Madrid said today. That compares with an 2.3 percent median forecast of five estimates in a Bloomberg survey. Underlying prices were unchanged from the previous month.
The recession in the euro region’s fourth-biggest economy is deepening as Prime Minister Mariano Rajoy struggles to tackle a budget deficit that matches that of Greece as the euro-area’s second biggest after Ireland. The European Central Bank last week left its benchmark interest rate unchanged as it sees flat growth in the region in 2013.
Spain’s headline inflation rate, based on EU calculations, was 3 percent, matching an estimate published on Jan. 2. Tax increases are fueling price increases even as a 26.6 percent jobless rate undermines demand. Retail sales fell 7.8 percent in November, after 9.7 percent in October.
Stripping out their impact, inflation was 0.9 percent in December, according to the Spanish statistics institute, and 0.2 percent if fresh food and energy were also excluded, according to the Spanish measure.

Draghi Boosts 30-Year German Index-Linked Debt Hope (Bloomberg)
The prospect of an economic rebound midwifed by Mario Draghi’s successful calming of the European bond market may finally prompt Germany to sell 30-year inflation-linked government debt.
Draghi’s European Central Bank forecasts the euro region will rally from recession in 2013, while European Union leaders say the worst of the debt crisis is over. The prospect of those forces stoking inflation is sharpening investor appetite for a top-rated, long-dated security after France’s rating downgrade left the region without a AAA index-linked security with more than 10 years to maturity.
“We are likely to be a buyer of German 30-year index- linked debt if they offer,” said Robin Marshall, a fixed-income director at Smith & Williamson Investment Management in London, which oversees the equivalent of $19 billion. “Inflation may not be a threat in the euro zone now, but I would like to be able to express a longer-term view on that without having to take a credit risk. At the moment, it’s not easy to do that.”
Germany came late to the inflation market, selling its first bonds linked to consumer prices in March 2006. The U.K. issued inflation-protected securities in 1981, with France tapping the market in 1998 and Italy debuting in 2004. The debt is designed to keep its value when consumer prices rise.

20130116 1002 Global Commodities Related News.

Wheat Market Recap Report (CME)
March Wheat finished up 15 3/4 at 782 3/4, 7 off the high and 16 1/4 up from the low. May Wheat closed up 17 1/2 at 791. This was 17 1/2 up from the low and 7 1/4 off the high.
KC and Chicago wheat traded sharply higher on the day. Short covering and technical buying helped to support the move higher. Wheat saw significant gains on corn as some suggested wheat's premium to corn had narrowed too much given the likely increases in feed wheat usage going forward. Export demand remains weak despite Chicago wheat's competitive price structure in the world market. Syria and Algeria have tendered for soft wheat and many expect the US to be active in each tender. A tightening global supply outlook caused by less than ideal weather conditions has added optimism that the US will begin to sell a greater share of world export business. Recent sales to Egypt by the US has been supportive but as a whole, total sales and shipments continue to lag the pace needed to reach this crop years USDA export estimate. Active rainfall patterns east of Missouri have helped improve soil moisture levels but conditions in the west remain too dry. Much of the snowfall has melted in areas of the western plains which is raising concern that wheat could be subject to winterkill if temperatures plummet.
March Oats closed up 2 1/2 at 356 1/2. This was 5 up from the low and 4 1/4 off the high.

Corn Market Recap for 1/15/2013 (CME)
March Corn finished up 6 1/2 at 730 1/2, 4 off the high and 8 1/2 up from the low. May Corn closed up 7 3/4 at 730 3/4. This was 9 3/4 up from the low and 3 off the high.
March corn traded higher on the day as with support coming from active bull spreads and a firm interior basis. A slightly drier forecast for areas of Argentina and Southern Brazil continue to add support but many are still positive in the aftermath of last Friday's USDA report that showed a small than expected December 1st stocks and 2012/13 ending stocks estimate. Feed and ethanol demand continue to be supportive demand features but exports have shown no signs of improvement this year which could limit gains in the short term. Taiwan was in for corn overnight seeking US, Argentina, and Brazil origins. Argentina's Agriculture of Ministry reported midday that they expect the 2012/13 corn harvest to come in between 28-30 million tonnes, up from prior estimates of 24.5 and against the current USDA estimate of 28 million tonnes. Argentina began the year with too much rainfall which delayed planting but a shift to more favorable conditions in December has likely benefited the crop production outlook.

Corn Futures Record Longest Rally in a Year; Wheat Gains (Bloomberg)
Corn futures rose, capping for the longest rally in a year, as dry weather depletes soil moisture and increases crop stress in South America, boosting demand for shrinking U.S. supplies. Wheat also advanced, and soybeans fell.
Parts of Argentina, Paraguay and southern Brazil will have dry conditions in the next 10 days, Mike Tannura, the president of T-Storm Weather LLC in Chicago, said in a telephone interview. Rain will be needed by late January to prevent crop damage after parts of Brazil and Argentina got less than 60 percent of normal rain since Dec. 1, he said.
“South American weather is less than ideal for big crops,” Jerry Gidel, the chief feed-grain analyst at Rice Dairy LLC in Chicago, said in a telephone interview. “If it’s still dry at the start of February, there could be some real yield losses.”
Corn futures for March delivery rose 0.9 percent to close at $7.305 a bushel at 2 p.m. on the Chicago Board of Trade. The price climbed for the seventh straight session, the longest rally since Dec. 28, 2011. Earlier, the grain reached $7.345, the highest for a most-active contract since Dec. 17.
Inventories of corn as of Dec. 1 fell to the lowest in nine years for that date, the U.S. Department of Agriculture said on Jan. 11. The grain surged to a record $8.49 on Aug. 10 after the worst drought since the 1930s reduced Midwest production.
Wheat futures for March delivery jumped 2.1 percent to $7.8275 a bushel in Chicago. The price rose for the third straight session, the longest rally since Nov. 28, as drought and cold threatened U.S. winter plants.
Temperatures may fall as low as minus 10 Fahrenheit (minus 23 Celsius) as far south as Kansas and Illinois, increasing risk for damage to crops without a blanket of snow protection, Tannura of T-Storm Weather said. The U.S. Drought Monitor showed severe to exceptional drought conditions on 86 percent of the six-state Great Plains region as of Jan. 8.
Soybean futures for March delivery fell 0.3 percent to $14.135 a bushel. Earlier, the oilseed reached $14.3625, the highest since Dec. 26.

Brent Crude Oil Market Report (CME)
March Brent crude oil grinded lower throughout the session and encountered a late day selling spree that took prices below the $110.00 level. The outside market tone seemed to be under pressure throughout the session, first by weaker than expected Q4 growth data out of Germany, then a sell off in European equity markets. It seemed that Brent crude oil came under added pressure on prospects for a near term boost in supply, highlighted by a third cargo being added to the February loading schedule. Some traders also noted a near term boost in North Sea Forties supply coming from strong output in the Buzzard oil field. The added weakness in March Brent crude oil, relative to March WTI, tightened that spread differential below the $16.00. February Brent crude oil expires during Wednesday's session.

Oil Trades Near One-Week Low as U.S. Crude Inventories Increase (Bloomberg)
Oil traded near the lowest level in almost a week in New York after U.S. crude stockpiles increased and a gauge of New York-area manufacturing contracted for a sixth consecutive month.
Futures were little changed after slipping the most in almost a month yesterday. U.S. crude supplies gained a second week and inventories at Cushing, the delivery point for West Texas Intermediate, rose to a record, data from the industry- funded American Petroleum Institute showed. An Energy Department report today may show stockpiles climbed 2.2 million barrels, according to a Bloomberg News survey. The Federal Reserve Bank of New York’s general economic index fell to minus 7.8 this month from a revised minus 7.3 in December.
Crude for February delivery was at $93.44 a barrel, up 16 cents, in electronic trading on the New York Mercantile Exchange at 10:58 a.m. Sydney time. The contract declined 86 cents to $93.28 yesterday, the lowest close since Jan. 9. Prices dropped 7.1 percent last year.
Brent for February settlement, which expires today, fell $1.58 to $110.30 a barrel on the London-based ICE Futures Europe exchange yesterday. The more active March contract slid $1.32 to $109.63. The front-month European benchmark contract closed at a premium of $17.02 to West Texas Intermediate futures, the narrowest spread since Sept. 19.
Total U.S. crude stockpiles rose 46,000 barrels last week, according to the API. Supplies at Cushing increased 1.8 million barrels, a sixth weekly gain, to a record 51.8 million.
U.S. gasoline supplies rose 4.1 million barrels, the API said. They are projected to gain by 2.7 million in the Energy Department report, according to the median estimate of 11 analysts. Distillate inventories, a category that includes heating oil and diesel, fell 568,000 barrels, compared with a forecast 1.5 million barrel gain in the survey.

Platinum Advances to Three-Month High on Production Cuts (Bloomberg)
Platinum surged to a three-month high, exceeding the price of gold for the first time since April, after the world’s largest producer said it will cut production. Palladium reached a 10-month high and gold rose.
Anglo American Platinum Ltd. (AMS) said today it will idle four shafts in South Africa, cutting output by 400,000 ounces a year, after a review of its operations. The reduction is equal to almost 7 percent of total global production. The metal is mainly used in pollution-control devices in cars and in jewelry, and Barclays Plc estimated last month that supply will fall short of demand by 38,000 ounces this year.
“There is a rush to buy platinum as today’s news means that the market will be pushed further into deficit,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “We are seeing strength in other precious metals as well.”
Platinum futures for April delivery climbed 1.9 percent to settle at $1,689.90 an ounce at 1:15 p.m. on the New York Mercantile Exchange after touching $1,706.80, the highest for a most-active contract since Oct. 9. The precious metal has gained 9.6 percent this month, compared with last year’s 9.8 percent advance.
An ounce of gold bought as little as 0.99 ounce of platinum in London earlier today, compared with about 1.16 ounces in August, data compiled by Bloomberg show.
Palladium futures for March delivery added 1.4 percent to $713.35 on the Nymex, after reaching $725, the highest since Feb. 29.

Silver Market Recap Report (CME)
March silver prices rose back within striking distance of the 2013 highs today. Some think that most of silver's upside action is coming from outside market pressures, while others think that silver is just as undervalued as gold and platinum in the face of revived inflationary hopes, ongoing US easing and another round of pathetic Washington antics looming directly ahead. While silver isn't seeing as direct of a threat to its supply as either gold or platinum, that situation is probably lending silver some support.

Gold Market Recap Report (CME)
Gold prices started out strong, fell back ahead of mid session and then returned to the highs of the day in the early afternoon action. Many traders think that gold was primarily lifted in the wake of renewed assurances that the US Fed was going to continue to support the economy while others think that the approach of another significant Washington fiscal battle is sparking increased safe haven interest in the precious metals markets. To a certain degree some of the ongoing gains in gold, platinum and silver prices are probably the result of evidence of severe turmoil in certain areas of the South African mining sector!

20130116 1002 Soy Oil & Palm Oil Related News.

ITS CPO export down 25% to 570,510 tonnes for the period of 1~15 Jan 2013.

SGS CPO export down 22.2% to 571,481 tonnes for the period of 1~15 Jan 2013.

Soybean Complex Market Recap (CME)
March Soybeans closed down 6 at 1412. This was 4 up from the low and 24 1/4 off the high.
March soybeans traded both sides of the unchanged today but ended the day in negative territory. Profit taking and losses in the soybean meal market helped to limit gains on the day. A slightly drier forecast for areas of Argentina and Southern Brazil kept buying support in the market but scattered showers are expected in areas of Northern Brazil which should ease drier areas. CIF basis bids for soybeans in the Gulf of Mexico were steady to slightly weaker midday. Demand remains strong for US soybeans but river levels on the Mississippi have risen in the last week which is helping to promote better grain movement southbound to the Gulf of Mexico. Production estimates in South America continue to show signs of optimism but traders contend that weather in the month of February could be the key to the production capabilities for both Argentina and Brazil. Some suggests that soybean prices could trend lower if the weather cooperates and as demand shifts away from the US border.

U.S. soybean crush biggest since January 2010 –NOPA (Reuters)
U.S. soybean processors crushed 159.899 million bushels in December, the biggest crush in nearly three years, the National Oilseed Processors Association said on Monday.

VEGOILS-Palm oil up on soyoil gains; record stocks weigh on prices
Tue Jan 15, 2013 5:14am EST
* Malaysia's Jan. 1-15 exports down 20.7 pct from a month
ago -ITS
    * Shipments for same period down 22.2 pct on month -SGS
    * Malaysia sets Feb crude palm oil export tax at zero
    * Palm oil signals mixed -technicals

 (Updates prices, adds SGS export data)
    By Chew Yee Kiat
    SINGAPORE, Jan 15 (Reuters) - Malaysian palm oil futures
edged up on Tuesday, tracking increases in the price of rival
soybean oil, but gains were capped by persistently weak exports
and record high stocks in the world's second largest producer of
the edible oil.
    Exports of Malaysian palm oil products for Jan. 1 to 15 fell
20.7 percent to 570,510 tonnes from a month earlier, cargo
surveyor Intertek Testing Services said on Tuesday.
    Another cargo surveyor, Societe Generale de Surveillance,
reported a steeper 22.2 percent fall for the same period.
Shipments were also lower in the first 10 days of the month.

    The drop came amid China's stricter quality control rules on
edible oil imports that may have prompted some exporters to hold
back shipments.
    Exports to Europe also took a hit as buyers refrain from
purchasing palm oil, which solidifies in winter.  
    "The market is up a bit, tracking gains in Dalian and
Chicago soybean oil," said a trader with a foreign commodities
brokerage in Malaysia. "Exports were down but they were slightly
better than the first 10 days and we hope for further
improvement in the second half of the month."
    The benchmark March contract on the Bursa Malaysia
Derivatives Exchange gained 1.1 percent to close at 2,397
ringgit ($796) per tonne, taking its cue from U.S. March soyoil
futures, which had gained 2.5 percent in the previous
session as bargain hunting and hopes of Chinese buying boosted
    Total traded volume stood at 42,040 lots of 25 tonnes each,
higher than the usual 25,000 lots.
    Technical analysis shows mixed signals for Malaysian palm
oil as it is not clear that a downtrend starting from the Jan. 2
high of 2,524 ringgit will be reversed, Reuters market analyst
Wang Tao said.
    Malaysia will set its crude palm oil export tax for February
at zero percent, unchanged from January, a government circular
showed on Tuesday, and traders hope the zero percent tax will
help clear record-high palm oil stocks, which stood at 2.63
million tonnes in December.
    Brent crude rose above $112 per barrel on Tuesday, although
a lack of an agreement over the U.S. debt ceiling and a forecast
increase in the country's oil inventory still weighed on prices.

    U.S. soyoil for March delivery edged 0.2 percent higher in
late Asian trade. The most active May soybean oil contract
 on the Dalian Commodity Exchange closed 0.5 percent

Vietnam may put emergency tariffs on soyoil and palm oil imports
GENEVA | Tue Jan 15, 2013 6:12am EST
Jan 15 (Reuters) - Vietnam is considering putting emergency import tariffs on soyoil and palm oil to prevent a flood of imports damaging its own producers, according to a World Trade Organization filing seen by Reuters on Tuesday.
Under WTO rules, countries may temporarily impose such tariffs - known as "safeguard measures" - if they can show that there is a serious threat to domestic producers, but other WTO members can challenge the decision to do so.

Vietnam said the National Company for Vegetable Oils, Aromas and Cosmetics of Vietnam (VOCARIMEX) had requested the government use safeguard measures and it was considering doing so on imports of refined soy oil, RBD (refined bleached and deodorised) palm olein oil and RBD palm stearin oil.

VOCARIMEX had submitted data showing an increase in imports that was causing or threatening to cause as serious injury to the domestic industry, it said, without giving details.

"The data currently available also showed a situation of sharply declining in domestic production and market share, productivity, and profits or losses, in conjunction with the increase in imports," the filing said.

Palm oil imports by China are set to plunge this month after the government imposed more stringent inspections on shipments, potentially increasing global inventories. Imports may be 300,000 metric tons in January, less than half of those in December, according to the median of estimates from six traders and researchers compiled by Bloomberg. (Bloomberg)

Malaysia will set its crude palm oil  export tax for February at zero percent, unchanged from January, a government circular showed. The Southeast Asian country calculated a reference price of RM2,110.72 per tonne for crude palm oil for February, effectively setting the export duty for the grade at zero. Reuters also reported that exports of Malaysian palm oil products for Jan. 1-15 fell 20.7% to 570,510 tonnes from 719,817 tonnes shipped during Dec. 1-15, according to cargo surveyor Intertek Testing Services. (Reuters)