Friday, January 18, 2013

20130118 1658 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to a higher open and Asian shares advanced as encouraging data from the United States and China boosted prospects for the global economy.  Stronger-than-expected data on U.S. housing starts and jobless claims lit a fire under stocks on Thursday, pushing the S&P 500 to a five-year high and its third day of gains. (Reuters)

FOREX: The yen hit a 2-1/2 year low against the dollar as markets positioned for the Bank of Japan to take bold action to tackle deflation at a policy-setting meeting early next week.  (Reuters)

FOREX-Yen hits 2-1/2 year low, bold BOJ easing eyed
SINGAPORE/SYDNEY, Jan 18 (Reuters) - The yen hit a 2-1/2 year low against the dollar as markets positioned for the Bank of Japan to take bold action to tackle deflation at a policy-setting meeting early next week.
"There might be a dip after the BOJ, but the drop could turn out to be surprisingly shallow, and I think from there the direction will be a rise towards 93 yen to 95 yen," Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo said.

China's economy rebounds in Q4, 2012 weakest since 1999 (Reuters)
China's economy regained speed in the final quarter of 2012, pulling out of a post-global financial crisis downturn that produced the slowest year of economic growth since 1999.

Argentina cuts wheat crop view due to bad weather (Reuters)
Argentina will produce 10.1 million tonnes of wheat this season, the agricultural ministry said on Thursday, citing extreme weather as the reason for cutting back its previous estimate of 10.5 million tonnes.

UK Brent oil flow resumes, cargo delayed (Reuters)
A Brent crude cargo in January has been delayed by this week's shutdown of the Brent pipeline system, although the restart of the flow on Thursday suggested no lasting disruption to supply of the oil which forms part of the global Brent benchmark.

OIL: Brent crude steadied above $111 per barrel, supported by a rebound in China's growth and encouraging data from the United States, while a steep jump in the previous session, triggered partly by an Algerian crisis, limited further gains.    (Reuters)

China 2012 crude steel output up 3 pct at 716.5 mln tonnes (Reuters)
China produced 716.5 million tonnes of steel in the whole of 2012, up 3 percent from the previous year, despite crumbling profit margins and a slowdown in the economy, data from the country's statistics bureau showed.

BASE METAS: London copper was steady, on track to close the week little changed as improving economic landscapes in China and the United States bolstered the demand outlook, but concerns over the U.S. debt ceiling loomed over prices.  (Reuters)

PRECIOUS METALS: Platinum and palladium hovered near multi-month highs hit in the previous session as upbeat data from the world's top two economies bolstered hopes for global recovery, while gold was little changed after marking a one-month peak.  (Reuters)

METALS-Copper inches up as China, US data lifts demand outlook
SINGAPORE, Jan 18 (Reuters) - London copper climbed on track to close the week with small gains as improving economic landscapes in China and the United States made for a sunnier demand outlook, but concerns about the U.S. debt loomed over prices.    
"The (China) numbers were a little bit higher than expected," said analyst Ed Meir of INTL FC Stone in New York. "We could therefore have a decent uptick going into next week. The macro picture both out of the United States and China look good for metals," Meir said.

PRECIOUS-Palladium hits 16-month high on economic recovery hope
SINGAPORE, Jan 18 (Reuters) - Palladium rose to a 16-month high and platinum hovered near a three-month high hit in the previous session, buoyed by upbeat data from the world's top two economies, as gold traded slightly higher to near a one-month high.
"They are clearly in a sweet spot," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.

Baltic index up on higher capesize demand
Jan 16 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for a tenth straight day on Wednesday as demand for capesizes surged.
The main index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 16 points or 2.09 percent to 781 points.

20130118 1442 Palm Oil Related News.

VEGOILS-Palm rises, overcomes India's import duty jitters
Fri Jan 18, 2013 1:17am EST
* India's palm oil demand still strong despite import tax
    * Malaysian palm oil prices must stimulate exports to cut
stocks -analyst
    * Palm oil signals mixed in 2,332-2,449 ringgit range

 (Updates prices, adds detail)
    By Anuradha Raghu
    KUALA LUMPUR, Jan 18 (Reuters) - Malaysian palm oil futures
rose on Friday on steady buying ahead of the weekend, riding out
market jitters that India's new import duties could potentially
hurt demand and leave bulging stockpiles at record highs.
    India, the world's biggest buyer of vegetable oils, slapped
a 2.5 percent import duty on crude edible oils on Thursday,
triggering a fall of 2.1 percent in prices of palm oil for fear
that the taxes would take a toll on exports, which have been
sluggish in January.
    But traders say India's move, aimed at trimming a hefty
import bill and protecting its domestic oilseed industry, is
smaller than expected and not drastic enough to hurt demand.
    "Earlier there was talk about much higher taxes, but they
came up with this because India still needs oil," said a trader
with a foreign commodities brokerage in Kuala Lumpur.
    "Today, the market is a bit oversold because there is a lot
of covering going on toward the weekend," he added.
    By the midday break, the benchmark April contract
on the Bursa Malaysia Derivatives Exchange was up 1 percent at
2,405 ringgit ($798) per tonne, up from Thursday's close of
2,378 ringgit.
    Total traded volume stood at 18,097 lots of 25 tonnes each,
higher than the usual 12,500 lots, as investors hedged positions
ahead of the weekend.
    Technical analysis showed that Malaysian palm oil will
display mixed signals as long as prices remain in a range of
2,332 to 2,449 ringgit per tonne, Reuters market analyst Wang
Tao said.
    Record high stocks in Malaysia, the world's No.2 producer,
have caused prices to tumble more than 20 percent in 2012,
widening palm oil's discount to competing soybean oil and making
it the cheapest vegetable oil in the market.
    But despite Malaysia's zero-duty tax structure, which it
will retain next month, the country posted dismal export
performance in the first half of January.
    "Going forward, a lot depends on the export pace and whether
prices are low enough to encourage demand," said ANZ
agricultural and commodity strategist Victor Thianpiriya in
    "Prices need to find that point which encourages exports.
The market is going to do whatever it needs to stimulate enough
exports to get stocks lower," he added.
    Brent crude steadied above $111 per barrel on Friday,
supported by a rebound in China's growth and encouraging data
from the United States, while a steep jump in the previous
session, triggered partly by an Algerian crisis, limited further
    U.S. soyoil for March delivery was almost flat in
early Asian trade. The most active May soybean oil contract
 on the Dalian Commodity Exchange rose 0.7 percent.  

20130118 1109 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares rise on strong U.S. data, China in focus
TOKYO, Jan 18 (Reuters) - Asian shares edged higher, tracking overnight gains in global equities markets after firm U.S. data signalled strength in the world's largest economy, lifting sentiment ahead of a batch of economic indicators from China later in the day.
"China's fourth-quarter GDP announcement expected during trading could prove a variable in today's session," said Lim Jong-pil, an analyst at Hyundai Securities in Seoul.

China Q4 GDP growth picks up to 7.9 pct yr/yr
BEIJING, Jan 18 (Reuters) - China's economy grew 7.9 percent in the fourth quarter from a year earlier with a bounce that snapped seven straight quarters of slowing expansion, official data showed on Friday.
The figures, announced by the National Bureau of Statistics, were slightly stronger than market expectations in the consensus Reuters poll of a 7.8 percent expansion.

FOREX-Yen bears rampage; China data in focus
SYDNEY, Jan 18 (Reuters) - The yen languished at two-and-a-half year lows against the dollar following a dramatic selloff as markets positioned for the Bank of Japan to take bold policy action to tackle deflation.
"We think there is some risk of disappointment at the BOJ meeting and scope for a yen rally. It is now consensus that the BOJ will move to a 2 percent inflation target. However, more aggressive measures may not come until closer to the nomination of the new governor/deputy governors in Q2," said Kiran Kowshik, strategist at BNP Paribas.

OIL-Oil rises on improving U.S. jobs, housing data
NEW YORK, Jan 17 (Reuters) - Oil rose on Thursday as financial markets got a boost from improving U.S. economic data showing jobless claims fell to a five-year low and housing starts rose sharply.
"Oil prices have risen because of broader economic optimism across the markets, which we've seen reflected in the U.S. jobless claims and housing numbers today," said Matt Smith of Summit Energy in Louisville, Kentucky.

20130118 1006 China Economic Data.

China Q4 GDP growth picks up to 7.9 pct yr/yr - RTRS
18-Jan-2013 10:03
BEIJING, Jan 18 (Reuters) - China's economy grew 7.9 percent in the fourth quarter from a year earlier with a bounce that snapped seven straight quarters of slowing expansion, official data showed on Friday.
The figures, announced by the National Bureau of Statistics, were slightly stronger than market expectations in the consensus Reuters poll of a 7.8 percent expansion. (Full Story)
The fourth quarter bounce from Q3's 7.4 percent - the weakest since the first quarter of 2009 when the global financial crisis raged - left full year growth at 7.8 percent, making 2012 the weakest year of economic expansion since 1999.
Other data released alongside GDP showed industrial output grew 10.3 percent in December from a year ago, versus expectations of 10.1 percent.
Retail sales in December rose 15.2 percent on a year ago versus an estimated 14.9 percent in a Reuters poll.
Annual fixed-asset investment growth was 20.6 percent in 2012, versus the 20.7 percent forecast in the Reuters poll. The government only publishes cumulative investment data.

Following is a breakdown of China's quarterly GDP growth rates:
(percent change from a year earlier):
    Q412  Q312  Q212  Q112  Q411  Q311  Q211  Q111  Q410  Q310

     7.9   7.4   7.6   8.1   8.9   9.1   9.5   9.7   9.8   9.6

Other key economic data released by the bureau
(percent change from a year earlier):
                      2012   Dec   F/C-Dec   Nov  
    Industrial output 10.0  10.3      10.1  10.1
    FAI               20.6   n/a      20.7  20.7
    Retail sales      14.3  15.2      14.9  14.9

20130118 0938 Malaysia Corporate Related News.

Malaysian Institute of Economic Research's (Mier)  business conditions index decreased to a three-year low of 94.1 pts in 4Q12 from 96 pts in 3Q12. This indicates that businessmen view that activities are contracting and they do not see a bright picture in 1Q13, said Mier ED Dr. Zakariah Abdul Rahid. The declining business confidence trend among manufacturers could deteriorate further, due to the weak demand from local and overseas markets as a result of dampened domestic manufacturing activities. On the other hand, the  consumer sentiment index increased to 118.7 pts in 4Q12 from 118.3 pts in 3Q12. The residential property index rose to 124.8 pts in 4Q12 from 113.6 pts in 3Q12. The  tourism market index was largely unchanged at 129.8 pts compared with 129.9 pts in 3Q12. The  retail trade index and the  automotive industry index, however, faltered significantly to 105.4 pts and 94.8 pts respectively (vs. 160 pts and 130.2 pts respectively in 3Q12). (Financial Daily)

The Malaysian economy is expected to grow 5.6% this year (5.1% in 2011) driven primarily by domestic economy, while inflation is expected to rise to 2.5% (1.7% in 2011) due to increased inflow of capital into the manufacturing sector, said the  Malaysian Institute of Economic Research. It also projected the GDP growth for 2014 to be within 5% and 6% and inflation to stay at 2.5%. (Bernama)

US jobless claims plunged 37,000 to 335,000 in the 12 Jan week (a revised 372,000 in the earlier week), massively below consensus of 368,000. (Bloomberg)

US housing starts  rebounded by a sharp 12.1% mom in Dec to a seasonally adjusted annualized rate of 954,000 units (a revised 851,000 in Nov) from a 4.3% dip the month before. Economists were expecting a reading of 887,000. (Bloomberg)

Eurozone construction output fell 0.4% mom in Nov (no change in Oct), whilst on a yoy basis, the measure fell 4.7% (-3.3% in Oct). (RTTNews)

China will sharply increase planned railway investment in 2013 to more than US$100bn (Rmb650bn), as part of plans to boost the economy. That marks a 30% increase from the planned investment of Rmb500bn for 2012. (AFP)

Japan’s tertiary industry index fell 0.3% mom in Nov (-0.1% in Oct), underperforming the consensus estimate of +0.1%. (Bloomberg)

Payrolls in Australia advanced 148,300 in 2012 after a 49,800 gain in 2011 for a two-year increase that was the weakest since 1996-1997. Unemployment rose to 5.4% last month (5.3% in Nov) as the number of workers fell by 5,500, against expectations of a 5,000 job gain. (WSJ)

State-run Indian oil marketing companies can now raise diesel prices in line with increases in global crude oil prices, a move that could help the government reduce its vast subsidy bill. (Reuters)

Singapore’s non-oil exports fell 16.3% yoy in Dec (-2.6% in Nov), worse than the median 8% on-year contraction forecast in a poll.  Electronics shipments were especially weak, down 19.1% yoy, following a 16.5% drop in Nov. But  non-electronics exports also sank 14.8% yoy, compared with a 6.1% rise last month. (WSJ)

The Philippines’ money supply (M3) growth rose to 9.8% yoy in Nov (8.6% in Oct).  Credit growth however slowed to 13.3% yoy (14.2% in Oct). (Bloomberg)

The  Bangko Sentral ng Pilipinas reported  that the  gross inflow of foreign portfolio investments reached US$18.46bn last year, the highest in a decade. The amount was also up by 12% from US$16.47bn in 2011. The outflows reached US$14.57bn, up by 17.5% from US$12.4bn the previous year. Thus, the  net inflow of foreign hot money reached US$3.88bn, which was down by about 5% yoy from US$4.1bn. (Philippine Daily Inquirer)

20130118 0937 Local & Global Economy Related News.

Perisai Petroleum has named its new jack-up drilling rig Perisai Pacific 101. The technologically advanced rig marks the company’s maiden investment in the high-value drilling business segment. “Costing US$208m and under construction in Singapore by established shipyard PPL Shipyard, Perisai Pacific 101 is set to enhance the group’s focus on upstream offshore development and production activities,” said MD Izzet Ishak. (Bernama)

Perisai Petroleum Teknologi Bhd expects its bottom line to register double-digit growth this year, riding on the sector's booming performance, especially in the Asia Pacific region. Perisai Petroleum managing director Izzet Ishak said this year there will be more activities in the oil and gas sector, of which some of the oil majors will be using its services such as chartering its vessels and drilling services. "We will also be allocating US$200m for capital expenditure this year on FPSO (floating, production, storage and offshore) activities,"  Izzet said. He added the company is expected to take delivery of Perisai Pacific which is its first drilling rig by July next year costing US$208m. The first rig will impact Perisai's earnings at around RM50m and RM60m a year. (BT)

Khazanah Nasional saw its portfolio value jump to a record high as at the end of 2012. Its overall realisable asset value increased by 12.4% to a new high of RM121.6bn. Its net worth adjusted (NWA) portfolio value surged 24.3% to a record RM86.9bn, outstripping the stock market benchmark index's total return of 14.1%. "A lot of it was driven by IPOs (like IHH Healthcare and Astro Malaysia), which contributed RM9.1bn to the NWA value, although the telco sector also did well," MD Tan Sri Azman Mohtar said. (BT)

Khazanah Nasional Bhd and  Sun Life Financial Inc, a Canada-based insurer, have agreed to purchase a 98% stake in CIMB Aviva Assurance Bhd, the insurance arm of the CIMB Banking group, in a transaction valued at RM1.8bn. Khazanah and Sun Life are each paying RM900m for the transaction, which includes entering into a new 20-year exclusive bancassurance agreement with CIMB Bank Bhd to distribute the products through its chain of  312 branches nationwide. (Financial Daily)

Tengku Datuk Ibrahim Petra, the former substantial shareholder of  Perdana Petroleum, has been ordered by the High Court to return the shares in the company that he had held on behalf of his former partner Kho Tian Boo by today. On 11 Jan, the Kuala Lumpur High Court ruled that Tengku Ibrahim was holding 833,860 Perdana shares in trust, on behalf of Kho, and ordered Tengku Ibrahim to transfer these shares back within seven days. The High Court also ordered Tengku  Ibrahim to pay damages, an interest of 5% on the damages and costs to Kho. Tengku Ibrahim and Kho founded Perdana, formerly known as Petra Perdana and went on to list the company in 2000. Kho is the father of Perdana's executive directors Datuk Henry Kho and Francis Koh. (Star)

Achiever Development Sdn Bhd, the third biggest shareholder in Perdana Petroleum Bhd, has sold its 35.53m shares (about 7.4%) of the o&g service provider. As such Datuk Tiong Su Kok and Tiong Chiong Hiiung have ceased to be shareholders of Perdana Pertroleum. Su Kok also owns Nam Cheong Ltd, a Singapore-listed company specialising in offshore support vessels. Two weeks ago Perdana Petroleum received a RM430m contract from Petronas Carigali for a five-year charter for anchor handling tug supply vessels with effect from Jan 2013. (Financial Daily)

Shareholders of Scomi Group, including factions that had previously opposed the entry of IJM Corp, are now ready to vote in favour of the construction giant becoming the former's biggest  shareholder, sources said. This means the proposed issuance of RM110m worth of bonds to IJM, is likely to sail through, contrary to earlier reports that two opposing sides within Scomi were preparing to lock horns. The bond issuance, when converted, would make IJM the single largest shareholder in Scomi with a 24.4% stake. IJM will not be entitled to vote at the EGM because it is an interested party. Maju Group executive chairman Tan Sri Abu Sahid Mohamed and his associate Datuk Phillip Siew Mun Chuang were believed to have initially opposed the entry of IJM, citing the dilution of their stakes should the latter convert its debt into equity. (Starbiz)

The RM5.2bn privatisation of  KFC Holdings (M) Bhd and its parent QSR Brands Bhd will be completed on Monday, subsequently paving the way for the delisting of both firms. QSR Brands managing director Datuk Ahmad Zaki Zahid said KFC and QSR shareholders will be paid on January 23 and January 25, respectively.  “The RM5.2bn privatisation cost is being paid by Johor Corp Bhd (JCorp), the Employees Provident Fund and CVC Capital Partners,” Ahmad Zaki told reporters. (BT)

AirAsia Bhd's head honcho  Tan Sri Tony Fernandes    hinted at the possibility of forming another joint venture (JV) airline, but stopped short of saying with whom. However, he dismissed JV opportunities in South Korea, Cambodia, Vietnam, Laos and Brunei. "No (South) Korea. No Cambodia. No Vietnam, etc. We have got a fantastic spread of countries and we will now build all those to (the) size of Malaysia," he said, referring to AirAsia's existing operations in Thailand, Indonesia, the Philippines and Japan. AirAsia was recently reported in the Indian media to have held preliminary discussions with the Videocon group for a possible JV in India. (Sun)

Malaysia Airlines (MAS), which is set to become a full member of the oneworld airline alliance, will start offering a full range of oneworld services and benefits from 1 February. MAS passengers will gain access to the alliance's global network which covers over 850 destinations in almost 160 countries. Current oneworld members include airberlin, American Airlines, British Airways, Cathay Pacific Airways, Finnair, Iberia, Japan Airlines, LAN Airlines, Qantas, Royal Jordanian and S7 Airlines. Separately, Khazanah denied plans to take MAS private, dismissing market speculation that such a move may be on the cards for the ailing airline. Managing director Tan Sri Azman Mokhtar said: “Yes, we can take it private, but if we do so, we still haven't solved the problem of how to put more money into the company." (BT)

Managing director Tan Sri Azman Mokhtar quashed speculation that it is joining a consortium comprising Malaysia Airports and YTL Corp to bid for the UK's Stansted Airport. "Our interest is through MAHB, we are not averse to it (bidding). But Khazanah is not going in directly," he said. To a question on whether Khazanah, which owns 40.4% of MAHB, had found a potential replacement for MAHB's managing director Tan Sri Bashir Ahmad, whose contract ends this June, he said it was "too premature" to talk about the issue of replacement. However, Tan Sri Azman vaguely alluded that former Pos Malaysia Bhd CEO Datuk Syed Faisal Albar Syed Albar is in the running with a few others to potentially replace Bashir. (BT)

AirAsia X CEO Azran Osman-Rani said the carrier is targeting some 50,000 passengers flying to Jeddah in its first year, with commercial services starting from 16 February, starting with three weekly flights, then increasing to 4x weekly from 1 May. He said there was a lot of demand from Malaysians, who are looking for affordable flights into Saudi Arabia and equally from around the region, such as Indonesia.  (BT)

The Malaysian Technology Development Corporation (MTDC), which has granted funds worth RM80m to the country's young technopreneurs, wants to extend the grant to more states this year. Since MTDC launched its Symbiosis Programme in 2008, the focus "seemed to be very federal", said its chief executive Datuk Norhalim Yunus, adding that it's time for it to expand the reach to create the necessary critical mass of start-up companies in technology businesses. (BT)

20130118 0930 Global Markets Related News.

Asia FX (CME/
The appetite for risk improved selectively on Thursday. The euro, pound and Canadian dollar ended higher amid greater optimism about the euro zone, while the franc, Aussie and yen declined. The yen sank to a new low for the downtrend on concern of further easing next week. The US stock markets advanced. 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 euro, yen, and the commodity currencies, and short pound and franc. Good luck!

US: The initial jobless claims fell 37,000 to 335,000 in the week ending January 12th from the previous week's revised figure of 372,000 (371,000 originally reported).
US: Housing starts rose to 0.954 million in December from 0.861 million in November, while building permits rose 0.903 million from November's 0.899 million.
US: The Philly Fed manufacturing survey fell 5.8 in January after rising 8.1 in December.
Canada: Canadian residents have purchased C$7.81 billion in foreign securities in November, up from C$3.36 billion in October, while foreign residents incremented their holdings of Canadian securities by C$5.62 billion during the same period, less than C$12.7 billion in October.

Today's economic calendar
Australia: Export / import Price Index for the fourth quarter
China: House Price Index for December
China: Gross Domestic Product for the fourth quarter
China: Industrial Production for December
China: Retail sales for December
China: Urban investment for December
Japan: Industrial production for November

Asian Stocks Snap Rise on Better-Than-Forecast U.S. Data (Bloomberg)
Asian stocks rose for the first time in three days, with the regional benchmark index erasing its weekly loss, after initial jobless claims and housing data in the U.S. beat estimates, boosting the outlook for exporters.
Honda Motor Co. (7267), the Japanese carmaker that gets about 44 percent of sales from North America, climbed 3.9 percent. Fanuc Corp., a supplier of factory automation equipment to Chinese factories, gained 1.2 percent before that release of data that’s expected to show China’s economy accelerated from a three-year low. Alacer Gold Corp. jumped 4.3 percent in Sydney after reporting increased output.
The MSCI Asia Pacific Index (MXAP) gained 0.6 percent to 132.04 as of 9:41 a.m. Tokyo time. The gauge has advanced 2.1 percent this month amid signs the U.S. and Chinese economies are recovering and Japanese shares rallied for a 10th week on speculation Prime Minister Shinzo Abe will pursue more aggressive stimulus policies.
“The macroeconomic risks that the markets have been dealing with for the last couple of years continue to recede,” Mark D. Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said on Bloomberg Television. His firm manages about $54 billion in assets. “As a result, equity risk premiums will compress around the world. The intervention the Bank of Japan is undertaking to weaken the yen should produced better profits for Japanese multinationals.
The Nikkei 225 Stock Average (NKY) jumped 2.2 percent, heading for its longest streak of weekly gains since April 1987, as the yen traded near a 2 1/2-year low amid speculation the Bank of Japan will decide to conduct open-ended asset buying to stoke inflation at a two-day policy meeting starting Jan. 21. South Korea’s Kospi Index added 0.6 percent, while Australia’s S&P/ASX 200 Index gained 0.4 percent. Markets in China and Hong Kong have yet to open.
Data due to be released today is expected to show China’s gross domestic product expanded 7.8 percent in the fourth quarter, according to the median estimate of 53 economists surveyed by Bloomberg. That’s up from 7.4 percent in the previous three months.

Japanese Stocks Head for 10-Week Gain on Yen, U.S. Data (Bloomberg)
Jan. 18 (Bloomberg) -- Japan stocks rose, with the Topix Index headed for its longest weekly winning streak since 1986, after the yen fell below 90 to the dollar for the first time since June 2010, and U.S. housing and jobs data beat estimates.
Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, jumped 8.1 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, advanced 2.1 percent after the Nikkei newspaper reported the Bank of Japan is preparing to ease policy next week. Advantest Corp. (6857), the world’s biggest maker of memory-chip testers, gained 6.7 percent after bellwether Intel Corp. beat earnings estimates.
The Topix advanced 1.9 percent to 907.08 as of 9:24 a.m. in Tokyo, heading for a 0.9 percent weekly gain. The equity gauge is poised to rise a 10th week, the longest such streak since July 1986. The Nikkei 225 Stock Average (NKY) gained 2.2 percent to 10,843.10.

S&P 500 Advances to Five-Year High on Economic Reports (Bloomberg)
U.S. stocks advanced, sending the Standard & Poor’s 500 Index to a five-year high, amid better- than-forecast initial jobless claims and housing data.
A measure of homebuilders in S&P indexes jumped 3 percent to the highest level since 2007. EBay Inc., operator of the largest online marketplace, increased 2.4 percent after revenue topped some estimates. Intel Corp. fell 4.9 percent in after- hours trading after reporting a second quarter of declining sales. BlackRock Inc. (BLK), the biggest money manager, added 4.4 percent after earnings increased 24 percent and the firm boosted its dividend and its buyback program.
The S&P 500 (SPXL1) rose 0.6 percent to 1,480.94 at 4 p.m. New York time. The Dow Jones Industrial Average added 84.79 points, or 0.6 percent, to 13,596.02. It briefly topped the highest closing level since 2007. About 6.5 billion shares changed hands on U.S. exchanges, 5.2 percent above the three-month average.
“The economy is entering the year maybe not with a running start, but certainly a head start,” said Jack Ablin, who helps oversee about $66 billion as chief investment officer of BMO Private Bank in Chicago. He spoke in a telephone interview. “It helps build a nice story for 2013.”
Equities rose as builders broke ground on more houses than forecast in December, capping the best year for the industry since 2008, another sign residential real estate is boosting the U.S. economic expansion. The number of Americans filing first- time claims for unemployment insurance payments fell more than forecast last week to the lowest level in five years, pointing to further improvement in the labor market.

European Stocks Rise on Retailer Rally, U.S. Housing Data (Bloomberg)
European stocks gained the most in a week as retailers climbed on increased revenue and U.S. housing starts jumped more than forecast to a four-year high.
Carrefour SA, France’s biggest retailer, Delhaize Group SA, the Belgian owner of Food Lion supermarkets, and Associated British Foods Plc (ABF) advanced more than 3 percent. Petropavlovsk Plc surged the most in four months after the gold producer reported better-than-forecast output. SAP AG fell 1.5 percent as Citigroup Inc. lowered its recommendation on the shares.
The Stoxx Europe 600 Index (SXXP) rose 0.5 percent to 287.35 at the close of trading, the biggest increase since Jan. 9. The measure has rallied 2.7 percent this year after U.S. lawmakers agreed on a budget that avoided most tax increases and spending cuts, extending the advance from its June 4 low to 23 percent.
“This is further confirmation that the market is recovering in many regions of the U.S.,” said Michael Morris, who oversees $1 billion as head of European equities at Mitsubishi UFJ Asset Management in London. “It’s another sign that we are in an upward phase. For some time now, there have been positive signs and we are well past a trough.”
The volume of shares changing hands in Stoxx 600 companies today was 6.7 percent greater than the average of the last 30 days, according to data compiled by Bloomberg.
The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said late yesterday in its Beige Book business survey.

Emerging Stocks Rise From Week Low on Earnings; Asia Stocks Fall (Bloomberg)
Emerging-market stocks rebounded from the lowest level in a week on prospects of improved earnings for companies Koc Holding AS (KCHOL), Dubai Financial Market PJSC (DFM) and OAO Gazprom. Asian shares retreated.
Koc, Turkey’s biggest industrial group, climbed to a record as Dubai Financial led the benchmark DFM General Index (DFMGI) to a two- year high. Gazprom, the world’s biggest natural-gas producer, drove gains in Russia’s Micex index. Brazil’s Bovespa rose to a two-week high as the central bank signaled borrowing costs would remain at a record low. Shares fell in Shanghai (SHCOMP) for a second day ahead of China’s fourth-quarter growth figures.
The MSCI Emerging Markets Index (MXEF) rose 0.2 percent to 1,073.15 in New York. Koc said it targeted a 6 percent profit increase while investors expected the emirates’ biggest companies to report improved full-year earnings as the region’s economy recovers from a property market crash that started in 2008. Gazprom said profit doubled in the third quarter. Data released today in the U.S. showed signs of an improved labor and housing market.
“Some of the earnings recently have been absolutely fantastic,” Gavin Redknap, an emerging-markets strategist at Nikko Asset Management, said by phone from London. “If we’re in a situation where monetary policy is relatively loose across the globe and economic data is improving, that’s clearly good for equity markets.”

Yen Is Near 2 1/2-Year Low Before BOJ Meets; Volatility Rises (Bloomberg)
The yen traded near a 2 1/2-year low amid speculation the Bank of Japan (8301) will decide to conduct open- ended asset buying to stoke inflation at a two-day policy meeting starting Jan. 21.
One-week implied volatility on the dollar against the yen surged to the highest in 17 months after Reuters reported the central bank may introduce the plan, citing people familiar with the BOJ’s thinking. Australia’s dollar was headed for a third- weekly advance before Chinese data today that may show growth accelerated in the world’s second-largest economy.
“Expectations for additional easing by the BOJ haven’t yet peeled off,” said Masato Yanagiya, the head of currency and money trading in New York at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest financial group by market value. “With rising implied volatility, there are quite a few people who are alerted by the pace of dollar-yen moves.”
The yen declined 0.1 percent to 89.93 per dollar as of 9:54 a.m. in Tokyo after touching 90.13 yesterday, the weakest since June 23, 2010. The currency dropped 0.1 percent to 120.29 per euro. The European currency was at $1.3376 after climbing 0.7 percent to $1.3376.
Implied volatility on the dollar-yen rate, derived from option premiums, surged to 16.6 percent, the highest since August 2011.
The Australian dollar, known as the Aussie, was little changed at $1.0541, having gained 0.1 percent since Jan. 11.

Housing Accelerates in Boost to U.S. Expansion: Economy (Bloomberg)
The rebound in U.S. homebuilding accelerated in December, capping the best year for the industry since 2008 and adding to signs residential real estate is contributing to economic growth.
Housing starts climbed 12.1 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists, according to Commerce Department data today in Washington. Other reports showed fewer Americans applied for jobless benefits last week and manufacturing in the Philadelphia region unexpectedly contracted in January.
Spurred by record-low mortgage rates, home construction will probably keep making headway in 2013 as it recovers from the worst slump since the Great Depression. Consumers, buttressed by an improving job market, rising home prices and lower fuel costs, may also be able to move ahead even as the debate over the federal budget heats up and taxes cut paychecks.
“Housing clearly continues to be one of the bright spots in an otherwise gloomy and sluggish economic-growth story,” said Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a subsidiary of the largest U.S. mortgage lender. “On the labor market side of things, we continue to get overall positive momentum.”
The number of Americans filing first-time claims for unemployment insurance payments fell last week to the lowest level in five years, pointing to further improvement in the labor market, figures from the Labor Department also showed.

Lockhart Sees Fed’s Bond Buying Continuing Beyond Mid-2013 (Bloomberg)
Federal Reserve Bank of Atlanta President Dennis Lockhart said he expects the central bank to continue buying bonds beyond mid-year to achieve sustained improvement in the labor market.
“It is probably going to be a struggle to see by mid- year” enough progress in the jobs outlook to warrant stopping, Lockhart said, speaking in an interview with Matthew Winkler, editor-in-chief of Bloomberg News, in New York today at the Bloomberg Global Markets Summit hosted by Bloomberg Link.
While the U.S. economy will probably expand by about 2 percent this year, resolution of U.S. fiscal challenges may spur deferred business spending and fuel better-than-forecast growth, Lockhart said. He predicted that Congress will agree to raise the nation’s statutory borrowing limit “because it has to.”
Lockhart backed the Federal Open Market Committee decision in December to add $45 billion in purchases of Treasury notes each month to $40 billion in monthly buying of mortgage bonds. Policy makers have pushed the benchmark interest rate close to zero and expanded Fed assets to $2.93 trillion to stoke growth and reduce 7.8 percent unemployment. They are debating whether to continue stimulus this year or stop adding to it.
Minneapolis Fed President Narayana Kocherlakota said this week the Fed should ease more to boost hiring, while Boston Fed President Eric Rosengren said bond-buying could be expanded if necessary. Charles Plosser of Philadelphia and Jeffrey Lacker of Richmond have voiced doubts about the effectiveness of bond purchases and warned of inflation risks.

Manufacturing in the Philadelphia Area Unexpectedly Shrinks (Bloomberg)
Manufacturing in the Philadelphia region unexpectedly contracted in January, an indication companies are becoming more concerned about across-the-board U.S. government spending cuts that could slow growth.
The Federal Reserve Bank of Philadelphia’s general economic index dropped to minus 5.8 from 4.6 in December. Readings lower than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. The median forecast of 58 economists surveyed by Bloomberg was 5.6. Estimates ranged from minus 3 to 10.
The report follows New York Fed data released earlier this week showing factory activity shrank for a sixth straight month and raises the risk manufacturing, once a pillar of the recovery, will again weaken in early 2013. Looming changes in federal spending and stagnant prices give companies little reason to expand inventories, which may hurt manufacturers.
“Manufacturing is going to be touch-and-go over the next few months until we get some fiscal clarity,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, the only economist to project the index would turn negative. The New York and Philadelphia surveys are “a sign that the fiscal deal struck on new year’s was a good first step, but it didn’t reduce the uncertainty.”
Other reports today showed housing starts surged more than forecast in December, fewer Americans than projected applied for jobless benefits last week and Americans’ economic outlook deteriorated in January to a three-month low as paychecks began reflecting higher taxes.

Fed Concerned About Overheated Markets Amid Record Bond Buys (Bloomberg)
Federal Reserve officials are voicing increased concern that record-low interest rates are overheating markets for assets from farmland to junk bonds, which could heighten risks when they reverse their unprecedented bond purchases.
Investors have been snapping up riskier assets since the Fed boosted its bond buying to reduce long-term borrowing costs after cutting its overnight rate target close to zero in December 2008. Enthusiasm for speculative-grade bonds is at unprecedented levels, driving a Credit Suisse index that tracks the yield on more than 1,500 issues to a record-low 5.9 percent last week.
Now, as central bankers boost their stimulus with additional bond purchases, policy makers from Chairman Ben S. Bernanke to Kansas City Fed President Esther George are on the lookout for financial distortions that may reverse abruptly when the Fed stops adding to its portfolio and eventually shrinks it.
“Prices of assets such as bonds, agricultural land, and high-yield and leveraged loans are at historically high levels,” George said in a speech last week. “We must not ignore the possibility that the low-interest rate policy may be creating incentives that lead to future financial imbalances.”
Bernanke himself raised that concern this week, saying the central bank has to “pay very close attention to the costs and the risks” of its policies during a Jan. 14 discussion at the University of Michigan’s Gerald R. Ford School of Public Policy in Ann Arbor.

Americans’ Economic Outlook Fell in January to Three-Month Low (Bloomberg)
Americans’ economic outlook deteriorated in January to a three-month low as paychecks began reflecting higher taxes.
The gap between positive and negative expectations widened to minus 7 this month from zero in December as the share saying the U.S. economy is improving dropped to the lowest since September, according to the Bloomberg Consumer Comfort Index. The weekly measure declined to minus 35.5, the weakest since Oct. 7, from minus 34.4 in the prior period.
Households may find it harder to boost spending after payroll taxes to fund Social Security benefits reverted to 6.2 percent this year from 4.2 percent. While improving property values and cheaper gasoline are providing some relief, Americans are being subjected to constant political bickering over the federal debt limit and the budget.
“The depressed attitudes are undoubtedly a function of a diminished paycheck and uncertainties surrounding the U.S. fiscal situation,” said Richard Yamarone, a senior economist at Bloomberg LP in New York. “Consumers can’t spend what they don’t have.”
Other reports todays showed housing starts surged more than forecast in December and fewer Americans than projected applied for jobless benefits last week.
Builders broke ground on 12.1 percent more houses last month, taking starts to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists and the most since June 2008, the Commerce Department reported. For all of last year, construction began on 780,000 homes, up from 608,800 in 2011 and also the most since 2008. 1

Jobless Claims in U.S. Fell to Lowest Level in Five Years (Bloomberg)
The number of Americans filing first-time claims for unemployment insurance payments fell more than forecast last week to the lowest level in five years, pointing to further improvement in the labor market.
Applications for jobless benefits decreased by 37,000 to 335,000 in the week ended Jan. 12, the lowest level since the period ended Jan. 19, 2008, Labor Department figures showed today. Economists forecast 369,000 claims, according to the median estimate in a Bloomberg survey. A spokesman for the agency said the drop may reflect the difficulty the government has in adjusting the data after the holidays when seasonal workers are let go.
Fewer claims indicate businesses have grown comfortable with their current headcounts, a necessary development before hiring starts to pick up. At the same time, higher payroll taxes that shrink paychecks may prompt companies to hold the line on expanding headcount should Americans cut back on discretionary spending.
“The labor market is certainly getting better,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who projected 345,000 claims. Even with the seasonal adjustment issues, “this is still a good report. Chances are claims remain at a fairly low level.”
Another report today showed housing starts climbed 12.1 percent in December to a 954,000 annual rate, capping the best year for the industry since 2008. For all of 2012, builders began work on 780,000 homes, up from 608,800 a year earlier, Commerce Department figures showed.

Japan Learned to Love Deflation in Wage Malaise Facing BOJ (Bloomberg)
A decade and a half after Japan slumped into deflation, the central bank is set to signal its strongest effort yet to reverse the trend. The biggest challenge may be that the nation has come to rely on falling prices.
More than 80 percent of respondents in a Bank of Japan (8301) survey released this month who noticed rising prices last year said it was bad. More than a third of those who said prices fell were happy about it. Even so, the BOJ next week will adopt the government’s desired 2 percent inflation target, according to 20 of 22 economists surveyed by Bloomberg News.
Ending consumer price declines would give companies and households more incentive to borrow, and boost revenue for businesses and the government in a nation that saw its third recession in five years in 2012. The danger: prolonged deflation has altered behavior across the economy, from entrenching declines in pay to driving more than half of savings into cash.
“The key is wages,” said Nobuyasu Atago, principal economist at the Japan Center for Economic Research and a former BOJ official in charge of price data. “Without pay increases, the economy won’t recover and households will only suffer from inflation.”
Japan’s main business lobby signaled it won’t endorse pay rises at regular wage negotiations with labor unions this spring, Kyodo News reported Dec. 20. Prime Minister Shinzo Abe’s Liberal Democratic Party is considering tax breaks for companies that raise pay or expand hiring.

Abe Currency Policy Stokes Gaffe Risk as Amari Roils Yen (Bloomberg)
Japan’s newly installed government saw one danger of verbal intervention in the foreign-exchange market this week, with a Cabinet member’s remarks interpreted as indicating a shift in stance that he later disowned.
Economy Minister Akira Amari today told reporters in Tokyo that the yen is still correcting from excessive appreciation, two days after flagging the danger of the exchange rate getting too weak. His Jan. 15 remarks stoked a two-day gain in the yen. Today, comments by Amari snapped the rise, with the currency down 0.9 percent at 89.15 per dollar at 7:06 p.m. in Tokyo.
The Abe administration’s determination to end deflation through coordinated action with the central bank has driven a 4.4 percent slide in the yen since it took office Dec. 26. A cheaper yen aids the competitiveness of exporters from Panasonic Corp. (6752) to Nissan Motor Co. (7201) that have labored under years of exchange-rate strength that saw the currency reach a postwar high in 2011.
“This is what I feared,” said Takahiro Sekido, a strategist at Bank of Tokyo-Mitsubishi UFJ Ltd and a former Bank of Japan (8301) official. “Abe has put correcting a strong yen at the center of his agenda -- that prompts various ministers to talk about the currency, bringing volatility to the market.”
Further risk of official comments roiling the currency may come next week, when the Bank of Japan meets and is forecast to adopt an inflation target and reach a policy agreement with the government.

Brazil to Hold Key Rate as Inflation Quickens Amid Slow Growth (Bloomberg)
Brazil’s central bank signaled it will keep borrowing costs at a record low this year as it tries to manage faster inflation amid a slower than expected recovery.
The central bank board, led by Alexandre Tombini, kept the benchmark interest rate at 7.25 percent for the second straight meeting yesterday, matching the forecast of all 56 analysts surveyed by Bloomberg. In the statement accompanying the unanimous decision, policy makers reiterated that the best strategy is to keep monetary policy conditions unchanged for a “prolonged period.”
While inflation is slowing in Mexico and Chile, price pressures are building in Brazil as the government pumps demand by reducing taxes and expanding credit amid record low unemployment. At the same time, a contraction in investment and industrial output is complicating President Dilma Rousseff’s efforts to revive the slowest growth in three years.
The Selic rate “will stay unchanged the whole year,” Andre Perfeito, the chief economist at Gradual Investimentos, said by phone from Sao Paulo. “The bank doesn’t have much room to maneuver between a slow economy and rising inflation.”
Inflation in December accelerated more than economists’ estimates for the sixth straight month and ended 2012 at 5.84 percent, higher than the bank’s 4.5 percent target for the third straight year.
The central bank ended the steepest rate-cutting cycle among Group of 20 nations in November after adverse climate in the U.S. and Brazil led to a jump in food prices.

Euro Area Seen Stalling as Draghi’s Pessimism Shared: Economy (Bloomberg)
The euro-area economy won’t return to growth until the next quarter as a recovery in Italy is delayed and France continues to shrink, according to a survey of economists.
Gross domestic product in the 17-nation currency region will stay unchanged in the three months through March, before rising 0.1 percent and 0.2 percent in the second and third quarters, the median forecast in a Bloomberg News monthly survey showed. GDP probably fell 0.4 percent last year and will decline 0.1 percent in 2013, economists said.
The survey follows a downbeat assessment by European Central Bank President Mario Draghi last week when he said that while the euro-area crisis has eased, “we are not at all seeing an early and strong recovery.” The 17-nation region’s economy last grew in the third quarter of 2011 and remains under pressure from government budget cuts and weak confidence. Goldman Sachs Group Inc. says authorities need to resolve the debt turmoil “fully” to encourage growth.
“Without a decisive resolution it will be hard to fully restore private-sector confidence and credit availability, and stimulate growth,” Goldman analysts including George Cole in London said in a report. “As a result, 2013 promises to be another year of weakness for Europe’s economy.”

20130118 0930 Global Commodities Related News.

Wheat Market Recap Report (CME)
March Wheat finished down 3 3/4 at 781 1/4, 8 1/4 off the high and 5 1/4 up from the low. May Wheat closed down 4 at 789 3/4. This was 4 3/4 up from the low and 8 off the high.
KC and Chicago wheat traded lower on the day despite positive export demand data this morning. Chicago wheat export sales were impressive while Kansas City continues to struggle with new sales given its premium price in the world market. Wires reported this morning that Iraq bought 300,000 tonnes of milling wheat from Australia and Canada while Algeria bought close to 400,000 tonnes of soft wheat from France yesterday. Export sales this morning were positive towards price direction but the US remains well behind the pace needed to reach this crop year's USDA export estimate. Net weekly export sales came in at 536,200 tonnes for the current marketing year and 38,500 for the next marketing year for a total of 574,700. As of January 10th, cumulative wheat sales stand at 69% of the USDA forecast vs. a 5 year average of 76%. Sales of 431,000 tonnes are needed each week to reach the USDA forecast. The EU reported that they granted export licenses for 340,000 tonnes of soft wheat taking the total since the beginning of the crop year to 10.4 million tonnes vs. 7.7 for the same period in 2011/12.
March Oats closed down 2 1/4 at 355. This was 3 up from the low and 5 off the high.

Corn Market Recap for 1/17/2013 (CME)
March Corn finished down 6 3/4 at 724 1/2, 9 1/2 off the high and 2 up from the low. May Corn closed down 6 at 725 1/4. This was 2 1/4 up from the low and 8 1/2 off the high.
March corn traded slightly lower on the day due to light profit taking following surprisingly positive export data this morning. Traders noted that the 9 day rally may have gotten a bit over extended and some were taking money off the table. Net weekly export sales came in at 393,300 tonnes for the current marketing and as of January 10th, cumulative sales stand at 54.5% of the USDA forecast vs. a 5 year average of 60%. Sales of 328,000 tonnes are needed each week to reach the USDA forecast, down from 330,000 last week. The market continues to keep a watchful eye on weather in South America as warmer and drier conditions settle into Argentina and South Brazil over the next 10-14 days. A private consultant in Brazil raised their corn production estimate to 74.7 million tonnes for 2012/13 from last year's 72.7 million tonnes. The analyst cited beneficial rainfall in key growing regions that should help boost the yield outlook. The USDA is estimating production at 71 million tonnes.

Corn Drops on Slowing Fuel, Export Demand; Soybeans, Wheat Fall (Bloomberg)
Corn declined for the first time in nine sessions after a government report showed slowing demand for the grain to make fuel in the U.S., and exports tumbled. Soybeans and wheat dropped.
Ethanol production fell last week to the lowest since the government began reporting data in June 2010, and inventories rose to the highest in four weeks, the Energy Department said yesterday. Export sales of corn were 48 percent smaller than a year earlier in the week ended Jan. 10, and commitments since Sept. 1 were down 49 percent compared with the same date a year ago.
“The slowdown in ethanol production will curb demand for corn,” Jerry Gidel, the chief market analyst for Rice Dairy LLC in Chicago, said in a telephone interview. “Corn exports remain depressed.”
Corn futures for March delivery slid 0.9 percent to close at $7.245 a bushel at 2 p.m. on the Chicago Board of Trade. The grain jumped 7.5 percent in the prior eight sessions, the longest rally since December 2011.
Corn and soybeans also fell as rain overnight in Argentina and forecasts for more in northern Brazil increased crop potential, reducing the outlook for U.S. exports when harvesting begins in South America next month, Roy Huckabay, an executive vice president for the Linn Group in Chicago, said in a telephone interview.
Soybean futures for March delivery declined 0.4 percent to $14.3025 a bushel on the CBOT. Earlier, the price touched $14.48, the highest since Dec. 19.
Wheat futures for March delivery slipped 0.5 percent to $7.8125 a bushel in Chicago, after gaining 5.4 percent the prior four sessions. Yesterday, the price touched $7.91, the highest since Dec. 26.
Corn is the biggest U.S. crop, valued at a record $76.5 billion in 2011, with soybeans in second place at $35.8 billion, government figures show. Wheat is the fourth-biggest crop, behind hay, with a value of $14.4 billion.

China Said to Have Bought 250,000 Tons of Sugar as Price Falls (Bloomberg)
China, the second-biggest sugar consumer, bought 250,000 metric tons of the sweetener as a 23 percent decline in prices in the past year has made imports more attractive, said two executives with direct knowledge of the matter.
The raw-sugar cargos will arrive in January and February at about $460 a ton, cost-and-freight to China, said the executives, who asked not to be identified because the information is private. At least one cargo will be sourced from Guatemala, they added.
China’s purchases may help absorb the global sugar surplus. Goldman Sachs Group Inc. cut its price forecast this week amid the glut.
Sugar in New York dropped in the past year as farmers from Russia to Thailand planted more crops.

Natural Gas Jumps to 6-Week High on Above-Forecast Supply Drop (Bloomberg)
Natural gas futures jumped to the highest price in almost six weeks after a government report showed a bigger-than-expected U.S. inventory decline.
Gas rose 1.7 percent after the Energy Information Administration said stockpiles fell 148 billion cubic feet last week to 3.168 trillion. Analyst estimates compiled by Bloomberg showed a decrease of 139 billion. Supplies were 4.4 percent below year-earlier levels, the widest deficit in 17 months. Frigid Northeast and Midwest weather may boost demand next week.
“It’s a supportive report,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “The current weather and weather forecasts for key gas-consuming areas for the weeks ahead are supportive of prices.”
Natural gas for February delivery increased 5.9 cents to $3.494 per million British thermal units on the New York Mercantile Exchange, the highest settlement price since Dec. 7. Trading volume was 34 percent above the 100-day average at 2:54 p.m. Gas has climbed 40 percent from a year ago.
April $4.50 calls were the most active gas options in electronic trading. They were 0.1 cent higher at 1 cent on volume of 6,760 contracts as of 2:53 p.m. Calls accounted for 47 percent of options volume.

Oil Declines From Four-Month High Before China Economic Reports (Bloomberg)
Oil fell from the highest level in four months in New York, paring the longest weekly winning streak in 14 months, before reports that will show whether China halted a seven-quarter economic slowdown.
Futures slid as much as 0.4 percent after rising the most in two weeks yesterday. The economy in China, the world’s second-biggest crude user, probably expanded 7.8 percent in the fourth quarter from a year ago, up from 7.4 percent in the three months through September, according to a Bloomberg survey before data from the National Bureau of Statistics. The bureau may also say factory output and retail sales accelerated in December.
Crude for February delivery slid as much as 34 cents to $95.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.17 at 10:56 a.m. Sydney time. The contract advanced 1.3 percent to $95.49 yesterday. That’s the biggest gain since Jan. 2 and the highest close since Sept. 17. Prices are up 1.7 percent this week for a sixth weekly advance, the longest winning streak since November 2011.
Brent for March settlement increased $1.42, or 1.3 percent, to $111.10 on the London-based ICE Futures Europe exchange yesterday. The front-month European benchmark contract closed at a premium of $15.16 to West Texas Intermediate futures, the narrowest spread since July 24.
London-traded Brent will struggle to advance past the combined barrier of a one-year resistance line and a downward- sloping trend channel at $112.82 a barrel, according to technical analysis by Societe Generale SA.

Brent Crude Oil Market Report (CME)
March Brent crude oil traded higher on the session and back above the $111.00 level. Some of the support for the market came from an improvement in macroeconomic sentiment following better than expected US economic readings, as well as a boost in geopolitical tension in Algeria. Meanwhile, North Sea Forties traded sharply lower relative to Brent crude oil on the session, weighed down by a boost in near term supply flows. UAE's TAQA indicated that oil flows from the Brent pipeline had restarted after this week's stoppage. As a result, North Sea Forties traded below dated Brent crude oil. The March Brent vs. West Texas crude oil spread came under added pressure early in the session, trading down to $14.61 premium to Brent. The spread differential rallied to $15.10 later in the session, up about $.10 compared to yesterday's settlement.

Silver Market Recap Report (CME)
The silver market ranged up sharply today and in the process the March silver contract reached back up to the highest level since December 19th. Technical players might be emboldened by the fact that March silver rejected a lower low today and then flashed back up to a multi-week high. In addition to favorable scheduled data from the US, silver might have been able to draft support from higher copper prices, strength in equities and marginally supportive currency market action.

Gold Market Recap Report (CME)
The gold bulls have to come away from the action today emboldened as the market appeared to be on the ropes in the morning trade and then the gold market seemed to fall even further in the face of better than expected US scheduled data. Eventually the gold market recovered and charged back into positive ground as the overall attitude in the market returned to a widely embraced risk-on stance. From a technical perspective February gold showed what appeared to be a rather definitive reversal and that had to put some gold bears back on their heels today.

20130118 0929 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
January Soybeans finished down 5 1/2 at 1431, 17 off the high and 8 3/4 up from the low. November Soybeans closed down 11 3/4 at 1285 1/4. This was 2 1/2 up from the low and 15 3/4 off the high.
January Soymeal closed up 2.1 at 414.0. This was 3.3 up from the low and -2.1 off the high.
January Soybean Oil finished up 0.18 at 51.49, 0.17 off the high and 0.57 up from the low.
March soybeans traded lower on the day despite explosive export sales data this morning. Net weekly export sales for soybeans came in at 1,608,800 tonnes for the current marketing year and 180,000 for the next marketing year for a total of 1,788,800. The USDA also reported that US exporters sold 240,000 tonnes of soybeans to an unknown destination for the 2013/14 crop year. Sales of only 117,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 236,100 tonnes for the current marketing year and 9,000 for the next marketing year for a total of 245,100 tonnes. Sales of 45,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 12,900 tonnes for the current marketing year and sales of 8,000 tonnes are needed each week to reach the USDA forecast. Strong demand from international buyers continues to add support to the market but an expected record crop in Brazil could limit gains long term. A private analyst in Brazil raised their production forecast for Brazil to 84 million tonnes, up 900,000 tonnes from their prior estimate and vs. the USDA forecast of 82.5 million tonnes.

Palm oil inventories in Indonesia will probably rise to almost 90%of capacity as exports from the largest grower drop after Malaysia set its tariff at zero and as China imposed more stringent rules on shipments. Stockpiles may gain to 3.5m metric tons in January from 3.25m tons in December, according to the median of estimates from two plantation companies, a refiner and an analyst compiled by Bloomberg. Shipments may decline 0.6% to 1.54m tons, while production is seen stable at 2.5 million tons, the medians of estimates from the same four respondents and a third plantation company showed. (Bloomberg)

India Taxes Palm Oil for First Time Since 2008 to Shield Growers (Bloomberg)
India, the world’s biggest cooking oil consumer after China, will tax crude palm oil imports for the first time since 2008 after a slump in prices spurred record shipments, hurting domestic oilseed growers.
Crude palm and soybean oil imports will be taxed at 2.5 percent, while the tariff on purchases of refined cooking oils will be maintained at 7.5 percent, the Agriculture Ministry said in a statement yesterday. The benchmark price for calculating the tariff will be changed for the first time since 2006 on all cooking oils on a fortnightly basis, the government said in another statement on its website.
The taxes may cut Indian imports, boosting palm oil inventories in Indonesia and Malaysia, the world’s largest producers, and pressure futures in Kuala Lumpur. Futures will trade between 2,300 ringgit ($763) and 2,600 ringgit a metric ton until February, keeping inventories high, Dorab Mistry, director at Godrej International Ltd., said Nov. 30.
“Crude palm oil demand from Indian refiners are probably going to decline and the extent may not be significant because palm oil is still far cheaper than alternatives,” said Ben Santoso, an analyst at DBS Group Holdings Ltd. in Singapore. “We expect prices to remain range-bound until at least May, when demand normally picks up again.”
Futures for delivery in April fell 2.1 percent to 2,379 ringgit ($792) a ton yesterday on the Malaysia Derivatives Exchange, the most at close in more than a week. The most-active contract has rebounded 7.3 percent after slumping to a three- year low of 2,217 ringgit on Dec. 13.

EDIBLE OIL: Malaysian palm oil futures fell after India imposed an import duty on crude palm oil imports, a move that could hurt demand and leave stocks near record highs.  (Reuters)