20130109 1616 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to a slightly higher open and Asian shares rose as investors resumed buying while also warily bracing for corporate earnings season to kick off in full force. U.S. stocks fell on Tuesday. (Reuters)

FOREX-Dollar rises vs yen as buyers emerge after pullback
SINGAPORE, Jan 9 (Reuters) - The dollar rose against the yen after its retreat this week from a 2-1/2 year high lured buyers who had been waiting for a chance to buy on dips, with the outlook for more Japanese monetary easing expected to weigh further on the yen.
"In terms of the drop that we saw in dollar/yen, there were a lot of dollar buyers coming in," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.

German trade, industry data point to economy shrinking (Reuters)
More evidence of sliding German exports and industry orders on Tuesday compounded concerns that the euro zone crisis may have battered the region's largest economy into contraction at the end of last year.

Indonesia reinstates 5 pct import duty on soybeans (Reuters)
Indonesia reinstated a 5 percent import duty on soybeans on Jan. 1 after scrapping the tariff for the final five months of last year in an effort to ease the impact of high global prices, an official at the industry ministry said.

U.S. crude and fuel stocks rise, gasoline up sharply-API  (Reuters)
U.S. crude oil and refined fuel inventories rose sharply last week as crude imports surged, data from the American Petroleum Institute showed on Tuesday.

U.S. oil production to jump 25 percent by 2014-EIA  (Reuters)
U.S. crude oil production is expected to rise by the largest amount on record in 2013, the Energy Information Administration said on Tuesday, and is set to soar by almost a quarter over the next two years.

OIL: Brent crude held below $112 per barrel as investors awaited Chinese trade data, U.S. corporate earnings and the outcome of a European Central Bank policy meeting to glean insights into the health of the world's biggest economies.  (Reuters)

China avg daily steel output slips to 1.901 mln T in late Dec –CISA (Reuters)
China's daily crude steel output slipped 0.5 percent between Dec. 21-31 from the preceding 10 days, the third consecutive fall during the month as steel mills curbed output amid slowing demand, data from an industry portal showed.

BASE METAS: London copper inched lower as investors trimmed risk on the unfolding corporate earnings season, but hopes that Chinese trade data this week will show the world's top metals consumer extending its recovery helped support prices.   (Reuters)

PRECIOUS METALS: Gold held around $1,660 an ounce as investors awaited policy decisions by central banks in Japan and the euro zone, while physical buying interest from Asia helped support sentiment. (Reuters)


METALS-Copper steady; earnings caution trims risk appetite
MELBOURNE, Jan 9 (Reuters) - London copper was steady supported by hopes that Chinese trade data this week will show the world's top metals consumer was extending its economic recovery but prices were capped by caution as the U.S. corporate earnings season began.
"Concerns over growth coming out of Europe and also the U.S is keeping a lid on prices moving higher," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm.

PRECIOUS-Gold stays off 4-1/2 mth low on Asia physical buying
SINGAPORE, Jan 9 (Reuters) - Gold held around $1,660 an ounce as investors awaited policy decisions by central banks in Japan and the euro zone, while physical buying interest from Asia helped support sentiment.
"One clear signal for gold to sell off is if we see real rates go higher," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. "But that's not for now."


Baltic shipping index up for fourth day on higher capesize rates
Jan 8 (Reuters) - The Baltic Exchange's main sea freight index, used to track rates for ships carrying dry commodities, rose for the fourth straight day on Tuesday as capesize rates strengthened further.
The main index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer rose 22 points or about 3 percent, to 734 points.

20130109 1458 Palm Oil Related News.

VEGOILS-Palm recovers from 2-wk low, investor caution caps gains BOZ2 DBYF3 FCPOc3 - RTRS
09-Jan-2013 13:48
Cargo surveyors to issue Malaysia Jan 1-10 export data on Thurs Malaysia Dec palm oil stocks, output data also due Thurs Palm oil to consolidate in 2,371-2,407 ringgit zone -technicals

(Updates prices, adds detail)
By Chew Yee Kiat
SINGAPORE, Jan 9 (Reuters) - Malaysian palm oil futures rebounded from a more-than-two-week low on Wednesday, snapping four consecutive days of losses, although gains were limited by investor caution ahead of a slew of key industry data this week.
Traders are uncertain whether overseas buyers will increase their purchases after Malaysia set a zero percent crude palm oil export tax in January, especially as China is this month introducing stricter rules on edible oil imports.
They will be looking out for Malaysia's export data for the first 10 days of January due on Thursday for more trading clues. PALM/ITS PALM/SGS
"From the first week of January until now, we have not seen any official data, so market participants have no idea how strictly China is in enforcing the regulation," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.
"But on the other hand, we have this zero percent export tax that could support prices."
By the midday break, the benchmark March contract FCPOc3 on the Bursa Malaysia Derivatives Exchange had edged up 0.5 percent to 2,402 ringgit ($790) per tonne. Prices dropped to a low of 2,382 ringgit on Tuesday, a level last seen on Dec. 21.
Total traded volume stood at 17,396 lots of 25 tonnes each, higher than the usual 12,500 lots.
Technical analysis showed palm oil is expected to consolidate in a zone of 2,371-2,407 ringgit for one trading session before sliding more towards 2,334 ringgit, said Reuters market analyst Wang Tao. (Full Story)
Market participants will also be focusing on Malaysia's December palm oil stocks and output data on Thursday. A Reuters survey earlier showed stocks likely eased to 2.5 million tonnes from a record 2.56 million tonnes thanks to slowing production. (Full Story)
Malaysia's weather office issued a heavy rain advisory on Thursday, saying that intermittent rain may cause floods over low-lying areas in Sarawak, a key oil palm producing state, possibly disrupting harvesting.
In related markets, Brent futures slipped below $112 per barrel on Wednesday as investors awaited Chinese trade data, U.S. corporate earnings and the outcome of a European Central Bank policy meeting to glean insights into the health of the world's biggest economies. O/R
In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 edged up 0.3 percent in early Asian trade. Investors in agricultural markets are taking positions ahead of a U.S. Department of Agriculture supply-demand report due to be released on Friday. GRA/
The most active May soybean oil contract DBYcv1 on the Dalian Commodity Exchange had lost 0.8 percent by 0531 GMT.

20130109 1121 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares in ranges as earnings eyed
TOKYO, Jan 9 (Reuters) - Asian shares inched up but the upside was limited as investors waited warily for corporate earnings season to kick off in full force, preferring in the meantime to book profits from a sharp rally at the start of the year.
"The main index is seen rangebound after steadily declining since last week's rapid gains as caution rules before fourth-quarter earnings," Kim Soon-young, an analyst at IBK Securities, said of Seoul shares.

German trade, industry data point to economy shrinking
BERLIN, Jan 8 (Reuters) - More evidence of sliding German exports and industry orders on Tuesday compounded concerns that the euro zone crisis may have battered the region's largest economy into contraction at the end of last year.
German imports and exports slid in November, narrowing the trade surplus, and industry orders fell more than expected. Imports slid 3.7 percent, while exports fell 3.4 percent, data from the Federal Statistics Office showed on Tuesday. Economists polled by Reuters had expected imports to increase by 0.4 percent and shipments abroad to drop 0.5 percent.

FOREX-Yen rises as investors take profits on dollar, euro
TOKYO, Jan 9 (Reuters) - The yen continued to rise against the dollar and the euro in early Asian trading despite expectations of further easing steps from the Bank of Japan, as investors locked in gains.
"Late last year, the yen sharply weakened in thin conditions. If you had to take a market position, could you see any reason to buy yen? No, so the yen was sold," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo. "But markets can't keep moving for weeks on the same factors, even when the overall trend remains the same, so in the short-term, the yen started moving up again."

OIL-Brent crude up as annual rebalancing widens WTI spread
NEW YORK, Jan 8 (Reuters) - Brent crude rose in heavy trading on Tuesday and U.S. crude dipped as the beginning of the annual rebalancing of a key commodities index widened the spread between the two contracts.
"I know that they (the GSCI) are pulling some of the WTI and going into Brent as we're well supplied here," said Richard Ilczyszyn, chief market strategist of iitrader.com LLC in Chicago.

U.S. crude and fuel stocks rise, gasoline up sharply-API
NEW YORK, Jan 8 (Reuters) - U.S. crude oil and refined fuel inventories rose sharply last week as crude imports surged, data from the American Petroleum Institute showed on Tuesday.
Crude stockpiles rose by 2.4 million barrels in the week to Jan. 4, mpared with expectations for a 1.5 million barrel build in a Reuters poll of analysts.  The build in gasoline stocks was much sharper, with inventories of the motor fuel expanding by 7.9 million barrels in the week, compared with expectations for a 2.3 million barrel build. Distillate fuels, which include diesel and heating oil, were up by 5.9 million barrels, compared with expectations for a 2 million barrel rise, the API data showed.

U.S. oil production to jump 25 percent by 2014-EIA
NEW YORK Jan 8 (Reuters) - U.S. crude oil production is expected to rise by the largest amount on record in 2013, the Energy Information Administration said on Tuesday, and is set to soar by almost a quarter over the next two years.
The EIA, said U.S. crude oil production would grow by 900,000 barrels per day in 2013 to 7.3 million bpd. The agency's forecast in the monthly Short-Term Energy Outlook is 300,000 bpd higher than its estimate in December.

PetroChina 2012 oil production highest in 17 years
BEIJING, Jan 8 (Reuters) - Top Chinese oil and gas producer PetroChina pushed its domestic crude oil output above 110 million tonnes in 2012 for the first time in 17 years, while also achieving its fastest annual output growth in more than a decade.
PetroChina and other state oil majors have been striving to boost their output and reserves to reduce China's dependence on oil imports, which rose to 56 percent of the country's overall requirement in 2011. China, the world's second largest oil consuming country behind the United States, became a net importer in 1993.

PREVIEW-China Dec exports to rebound but recovery seen weak
China's export growth probably rebounded from three-month lows in December, although the recovery is likely to remain shallow due to weak demand in the United States and Europe, the country's two biggest customers.
The median forecast of 25 economists polled by Reuters showed Chinese exports likely grew 4 percent in December from a year ago, up from November's surprisingly sluggish 2.9 percent expansion.

20130109 0954 Local & Global Economy Related News.

Bank Negara Malaysia’s (BNM)  international reserves amounted to RM427.1bn (US$139.7bn) as at 31 Dec 2012, up from RM426.6bn (US$139.2bn) as at 14 Dec 2012. The reserves position is sufficient to finance 9.5 months of retained imports and is 4.2 times the short-term external debt. For 2012 as a whole, the international reserves rose by RM3.8bn to RM427.1bn from RM423.4bn at end-2011. Malaysia's international reserves are expected to continue to remain at a comfortable level in 2013, supported by trade and investment inflows. (BNM)

The US NFIB Small Business Optimism Index  rose to 88.0 in Dec from 87.5 in Nov, beating consensus of 87.9. (Bloomberg)

US consumer credit  rose US$16.0bn in Nov from a revised US$14.1bn gain in Oct, exceeding consensus of US$13.2bn. (Bloomberg)

The IMF will maintain its 2013 economic growth forecast for the US at 2.1% after last week's "fiscal cliff" deal but looming debt ceiling negotiations and sequestration pose risks, managing director Christine Lagarde said. (Reuters)

Eurozone economic confidence  rose to 87 in Dec from 85.7 in Nov. Economists were expecting a reading of 86.3.  Manufacturing sentiment improved to -14.4 from -15 in Nov, whilst  services confidence rose to -9.8 from  -11.9, whilst  consumer sentiment climbed to  -26.5 from  -26.6. (Business Post)

Eurozone unemployment hit 11.8% in Nov, up from 11.7% in Oct, with the number of people out of work in the single currency area now nudging 19m. (Bangkok Post)

Eurozone retail sales  gained 0.1% mom in Nov (-1.2% in Oct), the first increase in four months. (Bloomberg)

China's budget deficit will increase to about 2% of GDP in 2013 from the targeted 1.5% of GDP or Rmb800bn (US$127 billion) in 2012. (China Daily)

Japan plans to use its foreign-exchange reserves to buy bonds issued by the European Stability Mechanism and euro-area sovereigns in a bid to weaken its currency, but the purchase amount is yet undecided. (Bloomberg)

Fitch Ratings reiterated its negative outlook on India's sovereign rating and said it is now worried more about the country's deteriorating fiscal outlook than a slowdown in economic growth and price pressures. (WSJ)

Indonesia’s consumer confidence index  declined to 116.4 in Dec from 120.1 in Nov. (Bloomberg)

Thailand’s cabinet has approved  tax relief proposals for small- and medium-enterprises (SMEs)  affected by the increase in the nationwide minimum daily wage. Almost 2,500 workers were laid off in the first five days after the THB300 daily minimum wage was enforced on 1 Jan. The measures, which will cut tax revenue by about THB2.8bn include: Raising the income tax exemption limit for SMEs from THB150,000 to THB300,000 a year. SMEs declaring income between THB300,000 and THB1m will be taxed at 15% and those with over THB1m profit will pay tax at 20% on the difference. The withholding tax for SMEs will also be cut to 2% from 3%, They will be allowed to claim depreciation on machinery of 100% in the first year of purchase until the end of 2013, an extension of one year from the end of 2012. (Bangkok Post)

20130109 0954 Malaysia Corporate Related News.

UEM Land Holdings has entered into two agreements to sell 43.64 acres of its land in Puteri Harbour, Johor, for RM400.8m to an investment holding and general trading company owned by well-known businessmen. The land will be sold to Liberty Bridge Sdn Bhd, a company equally-owned by MPHB MD Tan Sri Surin Upatkoon, Syarikat Pengeluar Air Selangor Holdings chairman Tan Sri Wan Azmi Wan Hamzah, KL Kepong CEO Tan Sri Dato' Seri Lee Oi Hian and UOB Kay Hian Holdings Ltd MD Wee Ee Chao. UEM Land said the sale would contribute RM240.2m to gross profit and RM180.1m to earnings. (Malaysian Reserve)

AirAsia is introducing additional frequencies to six domestic destinations and one international route this year. The additional frequencies from the Kuala Lumpur hub will be to Bangkok, KotaKinabalu, Sibu, Kuching and Johor Bahru, while the Johor Bahru hub will see additional frequencies to Kuching, Sibu, Miri and Penang. There will also be added frequencies from Penang to Kota Kinabalu and Kuching, as well as from Kota Kinabalu to Kuching. (Bernama)

Top Glove Corp Bhd will increase its glove prices by 3-5% to offset escalating higher labour costs due to the introduction of the minimum wage policy. The policy which took effect 1 Jan 2013 is likely to cause labour costs, which make up 9% of total production cost, to rise by 50%. The company said that it has already informed its customers about the product price increase. (Star Biz)

IOI Corp Bhd's 99.8%-owned subsidiary, Palmy Max Ltd, has acquired 50% stake in a jointly controlled entity, Prime Joy Investments Ltd, for a total cash consideration of RM28.26m. Prime Joy is involved in the development of residential and commercial properties in Ji Mei District, Xiamen in China. (Malaysian Reserve)

Proton Holdings Bhd is not shifting its entire manufacturing plant in Shah Alam to Proton City in Tanjung Malim. The Proton cars that are currently produced in Shah Alam will continue to be produced there, said Proton's Sector Head for Technical Operations for Shah Alam and Tanjung Malim plants, Abdul Rashid Musa on Tuesday. On Monday, Perak Menteri Besar Datuk Seri Dr Zambry Abdul Kadir was reported as saying in Tanjung Malim that the state government would revive plans to develop the township into the national automotive hub within the next five years. Zambry also said Proton would move its manufacturing operations in stages from Shah Alam to the Tanjung Malim plant.  Abdul Rashid told Bernama that only future Proton models would be considered to be manufactured at the Tanjung Malim plant.(Bernama)

US-based theme park operator Six Flags Entertainment Corp is planning to invest between RM1.2bn and RM1.5bn to set up a theme park in  Iskandar Malaysia. Sources said the theme park, which will be double the size of Legoland Malaysia and the company's first theme park in Asia, would offer more than 40 rides. Six Flags Entertainment is the world's largest amusement park corporation based on quantity of properties and fifth most popular in terms of attendance. (Starbiz)

Asia Media Group Bhd has received the green light from the Securities Commission for its proposed listing transfer from the ACE Market to the Main Market of Bursa Malaysia. (BT)

Paramount Corp Bhd will explore financing options from the capital markets for Paramount Utropolis, its RM800m integrated development in Shah Alam. Executive deputy chairman Datuk Teo Ching Quan expects to finalise the financing structure for the project by the end of this month. "We are looking at a combination of banks and capital markets," he said yesterday, at the unveiling of Paramount Utropolis. (BT)

Brahim's Holdings is expected to supply 11.1m meals a year to the Asian pilgrims and support personnel during the hajj The company is targeting a US$500m project in Saudi Arabia to supply halal meals to  Asian pilgrims performing hajj (annual pilgrimage) in Mecca. The project is an initiative of the Establishment for Southeast Asian Pilgrims (Muassasah) and comes under its food production and distribution programme for hajj pilgrims. Brahim's is preparing to submit its proposal to Muassasah this month, its director Datuk Howard Choo said. Choo  also  said Muassasah is expected to award the job, after evaluating all the proposals, next month. "This is a 20-year contract. We are expected to supply 11.1m meals a year to the Asian pilgrims and support personnel during the hajj," Choo told BT in a recent interview. (BT)

The Sabah Forestry Department has denied reports that Permaju Industries Bhd was close to securing a 80,937ha timber concession in the state.  "There is no such concession issued or going to be issued. Yayasan Sabah has not awarded such a concession and also has no authority to issue concessions, which is strictly the purview of the Forestry Department and state government of Sabah," the department's director Datuk Sam Mannan said in a statement yesterday. The reports alluded that state-controlled Yayasan Sabah was the one awarding the 30 to 60 years concession. Part of the terms of the deal will involve Permaju to help clear the land, said to be a virgin jungle area, and then plant oil palm. (BT)

Silk Holdings' 70%-owned subsidiary, Jasa Merin, has been awarded two contracts by  Petronas Carigali for the provision of two AHTS vessels worth RM251.85m. The five-year contracts were effective from Jan 1, 2013 to Dec 31, 2017. As at end 2011, Jasa Merin has a fleet of 16 vessels which includes three straight supply vessels and 13 AHTS vessels. (Malaysian Reserve)

The planned mega IPO by tycoon Tan Sri Lim Kang Hoo of Iskandar Waterfront Holdings Sdn Bhd (IWH) is looking to value the master developer at around RM5bn, causing excitement among international and local investment bankers looking to play a role in the offering. An earlier reported figure of US$300m to be raised from the exercise might be a conservative figure. IWH's proposition is that it is banking on the potential future earnings from the 1,619ha waterfront city proejct in the southern state of Johor. (Starbiz)

Minetech Resources yesterday said its wholly-owned unit, Optimis Dinamik Sdn Bhd, had received a 60-day notice to cease operation on quarry sites in Pengkalan Baru. The notice was sent by Sri Manjung Granite Quarry Sdn Bhd, the owner of the quarry sites.  The latter also required the company to dismantle and remove all machinery and vacate all buildings and structures at the quarry sites and return the sites to the owner. “Based on the advice given by the legal counsel, the company is strongly contesting the purported termination as it is wrongful and without any valid basis,” Minetech said in a Bursa Malaysia filing yesterday. (BT)

20130109 0945 Global Markets Related News.

Asia FX By Cornelius Luca - Tue 08 Jan 2013 16:53:10 CT (CME/www.lucafxta.com)
The appetite for risk was limited on Tuesday ahead of the earnings system and amid a dearth of new information. The European and commodity currencies slipped after closing up on Monday. The severely oversold Japanese yen recovered further, but remains close to a 28-month low. The US stock markets fell while gold, oil and silver 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 short on European currencies and long on commodity currencies. Good luck!

Overnight
US: The consumer credit surged to $16.05 billion in November from $14.08 billion in October.

Today's economic calendar
Australia: HIA new home sales for November
China:   Industrial production for December
China:   Retail sales for December
UK: BRC Shop Price Index for December
Australia: Retail sales for November

Asian Stocks Decline as Japanese Exporters Fall on Yen (Bloomberg)
Asian stocks fell, with the regional benchmark index heading for its third straight day of losses, as Japanese exporters extended losses after the yen edged higher.
Honda Motor Co. (7267), which gets about 44 percent of sales from North America, dropped 1.3 percent in Tokyo. Hokkaido Electric Power Co. sank 6.4 percent after the Nikkei newspaper reported government regulations being considered will increase the cost for Japanese electricity producers. Alumina Ltd., a supplier of the material used to make aluminum, jumped 6.1 percent in Sydney after its joint venture partner Alcoa Inc. reported fourth- quarter sales that exceeded analysts’ estimates.
The MSCI Asia Pacific Index (MXAP) slipped 0.2 percent to 130.53 as of 9:42 a.m. Tokyo time. Markets in China and Hong Kong have yet to open. The regional benchmark gauge posted its seventh weekly advance last week, the longest winning streak since March last year, after the U.S. Congress approved a budget deal and Japanese shares rallied on expectations the new government would call for more stimulus.
“With investors now having digested the news from the Bank of Japan and Prime Minister Shinzo Abe that Japan will stimulate its economy later this month, the yen has now appreciated against all but one major trading pair, showing that more may need to be done to hold the currency down,” said Evan Lucas, a Melbourne-based markets strategist at IG Markets Ltd., a provider of equities, currencies and commodities trading services.

Nikkei 225 Falls Third Day on Signs Market Overheating (Bloomberg)
Jan. 9 (Bloomberg) --　Japanese shares dropped a third day as technical indicators signaled the market may be overheating after the Nikkei 225 (NKY) Stock Average last week reached a 22-month high.
Honda Motor Co. (7267), a carmaker that generates 81 percent of its sales outside Japan, fell 2.3 percent as the yen remained higher after a two-day advance. Kansai Electric Power Co. slid 3 percent on a report nuclear power producers may face tougher regulations. Furukawa-Sky Aluminum Corp. added 1.2 percent after industry bellwether Alcoa Inc. reported better-than-expected sales.
The Nikkei 225 declined 0.8 percent to 10,419.79 as of 9:28 a.m. in Tokyo. The broader Topix (TPX) Index slid 0.8 percent to 864.72 with about three stocks falling for each that gained.
The Topix has risen about 21 percent as of yesterday since Nov. 14 when elections were announced, driving the gauge into a bull market on expectations a new government would call for more stimulus. An advance of 20 percent or more from a low signals a bull market to some investors. The gauge is trading at 1.04 times book value, compared with 2.19 for the Standard & Poor’s 500 Index (SPXL1) and 1.58 for the Stoxx Europe 600 Index.

U.S. Stocks Fall Before Corporate Earnings Season Starts (Bloomberg)
U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a second straight day, as investors awaited the start of the corporate earnings season.
Yum! Brands Inc. (YUM), the owner of the Taco Bell and KFC fast- food chains, retreated 4.2 percent as same-store sales fell more than projected in China after a government probe into one of its former suppliers hurt demand. GameStop Corp. (GME), the world’s largest video-game retailer, tumbled 6.3 percent amid a narrower sales forecast. Alcoa Inc., the largest U.S. aluminum producer, rose 0.9 percent at 4:29 p.m. as sales beat estimates.
The S&P 500 fell 0.3 percent to 1,457.15 at 4 p.m. New York time. The Dow Jones Industrial Average lost 55.44 points, or 0.4 percent, to 13,328.85. About 6.2 billion shares changed hands on U.S. exchanges, in line with the three-month average.
“We’re waiting for earnings to come out,” said John Manley, who helps oversee about $212 billion as chief equity strategist for Wells Fargo Advantage Funds in New York. He spoke in a telephone interview. “Valuations are far from excessive. Yet we’ve had a strong rally very quickly. Now the market is adjusting.”
Stocks had the biggest gain in 13 months last week as lawmakers passed a bill averting spending cuts and tax increases known as the fiscal cliff. Fourth-quarter profits from S&P 500 companies probably increased 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second- slowest quarterly growth since 2009, the data show.

Bull Market in U.S. Equities to End in 2013, UBS Says (Bloomberg)
The bull market in U.S. equities that began in 2009 may end this year, followed by a drop of as much as 30 percent in the Standard & Poor’s 500 Index by next year, according to technical analysts at UBS AG.
The S&P 500 may gain 7.4 percent to as high as 1,570 forming a top for the 116 percent rally from March 2009 in late summer this year, Michael Riesner and Marc Mueller in Zurich wrote in a report yesterday. A “cyclical” bear market will then follow, with the gauge dropping as low as 1,100 by 2014, they added. The measure fell 0.3 percent to 1,461.89 yesterday.
“The March 2009 cyclical bull market is moving into a mature stage and in this context, we see the S&P 500 and risk assets moving into a major top in 2013, followed by a new cyclical bear into 2014,” the analysts wrote in the note.
They said the benchmark gauge began a long-term bearish pattern in 2000 which, in turn, consisted of medium-term, or cyclical, ups and downs. One part of this was the increase from 2009, which is now looking to reverse based on a triangular pattern called the rising wedge forming on its price chart, the analysts said.
The ensuing slump will not only end the current rally, it will also complete the larger bearish trend that began at the turn of the millennium, Riesner and Mueller wrote. Further, it will set the stage for the start of a similarly long-term bullish pattern about two years from now, they added.
Technical analysts describe a structural pattern as one that lasts more than a decade and a cyclical trend as one that goes on for several months to a few years.

Most European Stocks Fall as German Exports Slide (Bloomberg)
Most European stocks fell after German exports dropped and investors speculated recent gains have overshot the outlook for company profits as Alcoa Inc. prepared to kick off the U.S. earnings season.
Debenhams Plc (DEB) slid the most in more than three years after the retailer cut its profit-margin forecast. Vodafone Group Plc (VOD) added 1.7 percent as the Wall Street Journal reported that Verizon Communications Inc. said it’s feasible it will buy the U.K. company’s stake in their Verizon Wireless joint venture. TGS Nopec (TGS) Geophysical ASA rallied 7 percent as the Norwegian offshore surveyor forecast revenue that exceeded estimates.
The Stoxx Europe 600 Index (SXXP) slipped 0.1 percent to 286.25 at the close of trading, as three shares fell for every two that gained. The volume of trading was 46 percent greater than the 30-day average, Bloomberg data show. The measure climbed to the highest level since February 2011 last week after U.S. lawmakers agreed on a compromise budget.
“We have to realize that economic data coming out of the euro zone is going to be very poor,” Bob Parker, senior adviser at Credit Suisse Asset Management in London, said on Bloomberg Television. “I would want to diversify in equities across the euro zone. Markets are going to be frustrating. We are going to see a lot of day-to-day volatility.”
National benchmark indexes declined in 10 of the 18 western European markets. Germany’s DAX Index slipped 0.5 percent and the U.K.’s FTSE 100 dropped 0.2 percent. France’s CAC 40 was little changed.
The Stoxx 600 has increased 2.4 percent in 2013, pushing its valuation to 19 times reported earnings, near the highest level since March 2010, according to data compiled by Bloomberg.

Emerging Stocks Fall a 3rd Day as Power Stocks Hit Brazil (Bloomberg)
Emerging-market stocks fell for a third day as power producers led declines in Brazilian equities and markets in China, South Korea and Poland retreated. Russian shares advanced on their first day of 2013 trading.
Centrais Eletricas Brasileiras SA (ELET6) was the worst performer on the MSCI Emerging Markets Index, and led a 1.3 percent slide in the Bovespa index. Industrial and raw materials stocks led declines on the MSCI gauge, as Embraer SA (EMBR3), the world’s fourth- largest planemaker, slid 4.2 percent in Sao Paulo after JPMorgan Chase & Co. downgraded the stock. HTC Corp. (2498) and Samsung Electronics Co. (005930) fell after their earnings disappointed some investors. Russia’s Micex index rallied 2.7 percent during the day.
The MSCI emerging-markets measure fell 0.5 percent to 1,069.68 in New York after jumping 2.2 percent last week in its steepest surge since November. The iShares MSCI Emerging Markets exchange-traded fund also dropped, tumbling 0.9 percent to $44.25 for the biggest one-day decline since Dec. 21. Brazil is considering energy rationing amid lower water levels at hydropower dams, the O Estado de S.Paulo newspaper reported, citing a government official it didn’t identify.
“In Brazil the utilities sector is pretty weak, and whenever you have a major name down that much, it’s going to drag on the benchmark,” Alec Young, a global equity strategist at S&P Capital IQ, said by phone in New York. “Whether it’s the Bovespa or the MSCI Emerging Markets Index, it’s been kind of straight line up for the last few weeks so it’s also a natural place for some profit-taking.”

Yen Remains Higher on Bets Losses Were Excessive (Bloomberg)
The yen remained higher after a two- day advance amid speculation recent losses related to monetary easing in Japan were overdone and as Asian shares extended a global decline.
The yen was also supported as investors sought a haven on concern U.S. lawmakers will struggle to agree on raising the debt ceiling. The euro halted a loss from yesterday on prospects European Central Bank officials meeting tomorrow will refrain from lowering borrowing costs. The Australian dollar slid against its peers after data showed that retail sales unexpectedly declined.
“The market probably did get quite ahead of itself in terms of pricing in actions from the Bank of Japan,” said Kymberly Martin, a strategist at Bank of New Zealand Ltd. in Wellington. “We may see the Japanese yen strengthen a little in the near term.”
The yen traded at 87.14 per dollar as of 9:55 a.m. in Tokyo from 87.05 yesterday, after climbing 1.3 percent in the previous two days. It was little changed at 113.90 per euro. Europe’s shared currency bought $1.3071 from the $1.3081 close in New York.
Japan’s newly elected Prime Minister Shinzo Abe has called for a doubling of the central bank’s 1 percent inflation goal in a bid to reverse more than a decade of deflation. Bank of Japan policy makers next meet on Jan. 21-22, after boosting stimulus and refraining from altering their price-gain measure at their December gathering.

U.S. Set for Biggest State-Local Jobs Boost Since 2007 (Bloomberg)
State and local governments are in their best financial shape since the recession, giving them leeway to cushion the U.S. economy from federal budget cuts with spending and hiring of their own.
After slashing their workforces by about half a million in the past five years, state and local authorities will add employees in 2013, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. Their payrolls in the fourth quarter will be 220,000 larger than in the same period for 2012, he projects.
Their expenditures and investment also will be higher, rising by 1.8 percent, triple the increase last year, according to projections by St. Louis-based Macroeconomic Advisers.
“The bloodletting on the state- and local-government level has finally passed through,” said Jim Diffley, chief U.S. regional economist for IHS Global Insight in Philadelphia. “They’re no longer subtracting from growth.”
The shift will help the U.S. weather the blow from federal tax increases and spending cuts, keeping the expansion on course, Zandi said. He forecasts that gross domestic product will climb 2.1 percent this year after rising 2.3 percent in 2012, with the expansion getting stronger as the year progresses.
States and municipalities, which accounted for 12 percent of GDP in 2011, won’t be a drag on growth this year for the first time since 2009, said Ben Herzon, a senior economist at Macroeconomic Advisers. The economic rebound means they’re collecting more taxes, reducing the need for more spending cuts.

Consumer Credit Rose in November on U.S. Auto, Student Loans (Bloomberg)
Consumer credit in the U.S. increased more than forecast in November, led by borrowing for student loans and automobiles.
The $16 billion gain followed a $14.1 billion advance in October, Federal Reserve figures showed today in Washington. The median forecast of 34 economists surveyed by Bloomberg called for a $12.8 billion November rise.
With sustained gains in the labor market, reflected by December’s 155,000 increase in payrolls, and strong demand for student loans and cars, economists expect consumer credit to continue to grow in the early months of 2013. The ability to borrow, combined with an improved labor market, signals consumer spending, which accounts for about 70 percent of the economy, will bolster the expansion.
“We’ve seen four straight months now of very significant increases in overall consumer credit,” Thomas Simons, a money market economist at Jefferies Group Inc. in New York, said in a phone interview. “I would expect that’s going to continue.”
Stocks fell, sending the Standard & Poor’s 500 Index down for a second straight day, as investors awaited the start of the corporate earnings season. The 500 Index declined 0.3 percent to 1,457.14 at the close in New York.

China to Encourage Dividend Payouts to Lure Investors (Bloomberg)
Chinese companies trading on the Shanghai Stock Exchange will be encouraged to pay at least 30 percent of their annual profits to shareholders as the bourse seeks to lure more investors to equities.
Companies that fail to do so will need to disclose the reason in annual reports, the Shanghai exchange, the nation’s main bourse, said in a dividend-payment guideline on its website yesterday. There was no mention of penalties in the statement.
“This is the first time the Shanghai exchange has issued such a guideline on dividend payments,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “This makes dividend payments for companies more implementable and is positive for the market.”
Guo Shuqing, chairman of the China Securities Regulatory Commission, has encouraged dividend payments, tightened rules on delisting companies and cut trading costs to boost the appeal of Asia’s third-largest stock market. The CSI 300 Index of the 300 biggest companies on the Shanghai and Shenzhen stock exchanges entered a bull market yesterday after rallying 20 percent from last year’s low on signs economic growth is picking up.
“Only the establishment of an efficient and stable dividend-payment mechanism for listed companies can attract long-term institutional investors seeking steady dividend returns and reasonable capital gains,” the exchange said in the statement. “That’ll make the valuations of the market reasonable and stable.”

China-Japan Dispute Takes Rising Toll of Asia’s Top Economies (Bloomberg)
The last time a dispute between Japan and China blew up in 2010 over eight uninhabited islands, the economic fallout lasted less than a month. This time, the spat is prolonging a recession in the world’s third-largest economy.
Four months after Chinese consumers staged a boycott of Japanese products over the islands in the East China Sea, sales of Japanese autos in China have yet to recover, Chinese factories began to favor South Korean component suppliers, and the U.S. has displaced China as Japan’s largest export market.
“The spats have become increasingly costly as Japan’s dependence on China as an export market has risen,” said Tony Nash, a Singapore-based managing director at IHS Inc., which provides research and analytics for industries including financial companies. “Nationalism around the issue has resulted in lower demand for Japanese products in China and even Chinese firms sourcing products from Korean suppliers.”
As China’s confidence in asserting its territorial claims has grown, and trade between the two nations has tripled since 2000 to more than $300 billion, the commercial cost of failing to resolve the dispute keeps rising. The latest flare-up came after property developer Kunioki Kurihara sold three of the islands to the Japanese government for 2.05 billion yen ($23 million) in September, a transaction Xi Jinping, the new head of the Chinese Communist Party, called “a farce.”
The fallout from the sale may have cut Japan’s growth in the latest quarter by about one percentage point, JPMorgan Chase & Co. estimated. That would be enough to keep the economy in recession after two quarters of contraction up to Sept. 30. Gross domestic product may have shrunk an annualized 0.5 percent in the final three months of 2012, according to the median forecast in a Bloomberg News survey.

Japan to Buy European Debt With Currency Reserves to Weaken Yen (Bloomberg)
Japan plans to use its foreign- exchange reserves to buy bonds issued by the European Stability Mechanism and euro-area sovereigns, as the nation seeks to weaken its currency, Finance Minister Taro Aso said.
“The financial stability of Europe will help the stability of foreign-exchange rates, including the yen,” Aso told reporters today at a briefing in Tokyo. “From this perspective, Japan plans to buy ESM bonds,” he said. The purchase amount is undecided, Aso said.
The move may help Prime Minister Shinzo Abe temper criticism of Japan’s currency policies from trading partners such as the U.S. The yen has fallen around 8 percent against the dollar since mid-November on Abe’s pledge to reverse more than a decade of deflation as his Liberal Democratic Party won an election victory last month.
“The Europeans would be happy to see Japan buy ESM bonds, so Japan can avoid criticism from abroad and at the same time achieve its objective,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. and a former central bank official.
The yen erased gains after Aso’s comments, reaching 87.81 per dollar, before appreciating again to 87.51 as of 7:14 a.m. New York time. The Japanese currency appreciated 0.3 percent to 114.86 per euro.
The ESM held its first debt auction today, selling 1.9 billion euros ($2.5 billion) of three-month bills at an average yield of minus 0.0324 percent. Investors placed bids for 6.2 billion euros of the securities, the Bundesbank said.

South Korea Adds Workers as December Jobless Rate Holds at 3% (Bloomberg)
South Korea’s workforce expanded last month, with the unemployment rate unchanged from November as jobs increased in manufacturing and in the service sector.
The jobless rate was at 3 percent in December, Statistics Korea said in an e-mailed statement from Sejong, south of Seoul. The median estimate in a Bloomberg News survey of 11 economists was for a rate of 3 percent. The number of employed people increased by 277,000, or 1.1 percent, to 24.4 million last month from a year earlier.
Incoming President Park Geun Hye has vowed to make it more difficult for companies to fire employees and to increase assistance for low-income workers burdened with record household debt. The nation will create 320,000 jobs this year, the Finance Ministry said in a Dec. 27 report, down from an estimated 440,000 million new positions in 2012.
“The unemployment rate looks good, but it is unlikely to help lift domestic consumption,” Ma Ju Ok, an economist at Kiwoom Securities Co. in Seoul said before the release. “There are many workers in temporary positions.”
The ranks of self-employed increased to 5.7 million as of last month, from 5.6 million in December 2011, according to the most recent report from Statistics Korea.
South Korea’s won is Asia’s best-performing currency this year, dragging on exports that unexpectedly fell in December for the first time in three months. The won strengthened 0.1 percent to 1,062.90 per dollar yesterday in Seoul.

New Zealand House Building Approvals Reach Highest Since May ’10 (Bloomberg)
New Zealand building approvals for detached houses surged to the highest in 2 1/2 years in November amid record-low interest rates and rebuilding in the earthquake- devastated Canterbury region.
Permits for dwellings excluding apartments rose 4.6 percent from October to 1,382, the most since May 2010, Statistics New Zealand said in Wellington today. Total approvals fell 5.4 percent as apartment consents slumped to a 19-month low.
Increases in construction plans add to signs of a revival in the housing market, led by low mortgage interest rates and by rebuilding in Christchurch city and the surrounding Canterbury district after earthquakes in 2010 and 2011. Central bank Governor Graeme Wheeler on Dec. 6 said lower funding costs were helping keep borrowing costs at bay, adding he will be monitoring the housing market for signs of emerging inflation pressure.
“Conditions have certainly eased on the interest rate front,” Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington, said in an interview yesterday. “We all know interest rates need to be on the low side but just how low?”
New Zealand’s dollar was little changed after the report, buying 83.65 U.S. cents at 10:48 a.m. in Wellington.
New Zealand’s effective home-lending rate in October was the lowest since records began in 1998, according to central bank figures.
The central bank has kept the official cash rate at a record-low 2.5 percent since March 2011. Eight of 16 economists surveyed by Bloomberg News forecast Wheeler will raise borrowing costs this year.
Total approvals rose 20 percent from November last year, the statistics agency said, citing unadjusted figures. Consents in Canterbury surged 71 percent to the highest in more than five years, it said. Auckland approvals were little changed.

Euro-Area Economic Confidence Rises More Than Estimated (Bloomberg)
Economic confidence in the euro area increased more than economists forecast in December even as the 17-nation currency bloc remained mired in its second recession in four years.
An index of executive and consumer sentiment rose for a second month to 87 from 85.7 in November, the European Commission in Brussels said today. Economists had forecast an increase to 86.3, according to the median of 24 estimates in a Bloomberg News survey. The unemployment rate in the euro region rose to a record 11.8 percent in November, the European Union’s statistics office said in a separate report.
The improvement in sentiment is in line with strengthening business confidence in Germany, Europe’s largest economy. Still, German factory orders fell more than economists expected in November amid weak demand from outside the euro area.
“We expect the uncertainty emanating from the sovereign debt crisis, which has been hanging like dark clouds over the euro-zone economy, will continue to ease,” said Christoph Weil, an economist at Commerzbank AG in Frankfurt. “From the spring, the economy in the core countries should start to grow again.”
The euro pared gains after the data were released and traded at $1.3119 at 12:25 p.m. in Brussels, little changed on the day.
The euro-area economy shrank 0.1 percent in the third quarter after a 0.2 contraction in the three previous months. Gross domestic product probably fell another 0.3 percent from October through December, according to the median estimate of 22 economists in a Bloomberg survey. The EU is due to publish GDP data for the fourth quarter on Feb. 14.

German factory orders fell more than economists expected in November amid weak demand from outside the euro area. (Bloomberg)
Orders, adjusted for seasonal swings and inflation, dropped 1.8 percent from October, when they jumped a revised 3.8 percent, the Economy Ministry in Berlin said today. Economists had predicted a 1.4 decline, according to the median of 24 forecast in a Bloomberg News survey. From a year earlier, orders fell 1 percent when adjusted for work days.
“The drop was to be expected after last month’s increase,” said Carsten Brzeski, an economist at ING Group in Brussels. “While there will be an economic dip in the fourth quarter and the recovery will be very gradual, the outlook for Germany is not bad at all. The lull in the crisis means companies are confident to invest again.”
Germany’s economy has shown some signs of stabilization in recent weeks, even as the euro economy, Germany’s biggest trading partner, fights recession. Unemployment increased less than economists expected in December, while business confidence improved for a second month. Investors also were more optimistic.
At the same time, exports plunged 3.4 percent in November, marking the steepest decline in more than a year, the Federal Statistics Office in Wiesbaden said earlier today.
Export sales fell 4.1 percent in November, driven by a 6.5 percent decline in demand from outside the 17-nation currency bloc, today’s report shows. Orders from the euro area rose 0.2 percent and domestic orders gained 1.3 percent.

U.K. Stores Set for Tough 2013 After ‘Underwhelming’ Holiday (Bloomberg)
Christmas was “underwhelming” for U.K. retailers with sales barely rising and the outlook for 2013 is little better, according to the British Retail Consortium.
Sales at stores open at least a year gained 0.3 percent in December from a year earlier, the worst performance since 2010, when snowy conditions deterred shoppers, the lobby group said today in a statement. Total revenue climbed 1.5 percent, but would have fallen excluding buoyant online revenue, BRC Director General Helen Dickinson said. Web sales climbed 18 percent.
Britons held off making holiday purchases until the last minute in order to find discounts, and overall shopper numbers were “disappointingly low,” the BRC said. U.K. consumer confidence fell in December as optimism about the outlook for the economy plunged, according to GfK NOP Ltd., while food and fuel inflation is weighing on household budgets.
“The sheer endurance test of a marginal, if any, growth environment is making it very, very difficult for retailers,” Dickinson said. The BRC expects “more of the same” in 2013.
Some retailers had a better Christmas than others, the BRC said. John Lewis Partnership Plc said last week that department- store sales rose 15 percent over the Christmas season. Smaller competitor Debenhams Plc (DEB) today reported a 2.9 percent gain in 18-week same-store revenue, though lowered its margin forecast after it stepped up discounting.

German Exports Dropped More Than Forecast in November (Bloomberg)
German exports declined more than economists forecast in November as the sovereign debt crisis weighed on euro-area demand.
Exports adjusted for working days and seasonal changes fell 3.4 percent from October, when they unexpectedly rose 0.2 percent, the Federal Statistics Office in Wiesbaden said today. That’s the steepest decline in more than a year. Economists had forecast a 0.5 percent drop, according to the median of 9 estimates in a Bloomberg News survey. Imports fell 3.7 percent from October.
Weaker demand for its goods from the 17-nation euro region is hurting the German economy, which probably contracted markedly in the fourth quarter, the Bundesbank said last month. Still, euro-area investor confidence as measured by Sentix jumped to the highest level since 1 1/2 years in January as signs multiply that the region’s debt crisis may be beginning to ease.
“The big problem has been subdued demand in neighboring economies, and November saw a particularly weak level of activity in other euro-area countries,” said Sarah Hewin, head of European research at Standard Chartered Bank in London. “On a positive front, we think that the German economy should grind higher in the coming quarters.”
The trade balance widened to 17 billion euros ($22.3 billion) from 15.7 billion euros in October. The surplus in the current account, a measure of all trade including services, was 15.3 billion euros, up from 13.2 billion euros.

Merkel Economy Shows Neglect as Sick Man Concern Returns (Bloomberg)
German Chancellor Angela Merkel’s economic machine is beginning to show signs of neglect.
As the continent’s growth engine and self-appointed fiscal paragon orders budget cuts for its peers, investors, economists and policy makers are starting to warn Germany is turning a blind eye to its own weaknesses. Joerg Asmussen, a European Central Bank board member nominated by Merkel, has gone as far as to predict a return to the status of “Sick Man of Europe” should they go unfixed.
Without Merkel and a largely supportive German electorate ready to back over 300 billion euros ($393 billion) in bailouts and guarantees, Europe’s debt crisis could have already broken up the single currency. At the same time, the drive to rescue Europe has distracted her from signs of economic drift at home as labor costs rise at the fastest pace in a decade, erasing most of the progress made under predecessor Gerhard Schroeder.
“Merkel has had to work with the cards that history has dealt to her and Europe has been a priority,” said Irwin Collier, professor of economics at the Freie Universitaet in Berlin. “But you have to do a lot of things at the same time, and it’s clear now things have to change at home too.”
The chancellor, in office since 2005, thus far has had to do very little to the economy.

20130109 0944 Global Commodities Related News.

U.S. Smashes Previous Lower-48 Heat Record in 2012 (Bloomberg)
Last year was the warmest on records going back to 1895 for the 48 contiguous U.S. states and the second-worst for weather extremes including drought, hurricanes and wildfires, according to a U.S. report.
The average temperature in the region in 2012 was 55.3 degrees Fahrenheit (12.9 Celsius), 3.2 degrees higher than the average for the 20th century, the National Oceanic and Atmospheric Administration’s Climatic Data Center said today in an analysis of the year.
U.S. Climate Extremes Index, which takes into account temperatures as well as tropical storms and drought, showed 2012 followed 1998 into the record books for extreme weather with almost twice the average value, the center said. Eleven disasters caused at least $1 billion in damage, including hurricanes Isaac in August and Sandy in October.
“The heat we saw in the U.S. is consistent with what we expect in a warming world,” Deke Arndt, chief of the climate monitoring branch at the center, said on a conference call. “It’s a huge exclamation point on the end of several decades.”
The 2012 heat surpassed 1998’s record by 1 degree, a significant amount considering that only 4.2 degrees separate 1998 from the coldest year on record, 1917, said Jake Crouch, a climate scientist at the center in Asheville, North Carolina. The warmth is a reflection of natural variability as well as the impact of climate change, he said.

Corn Is Biggest Gainer as Cocoa Declines: Commodities at Close (Bloomberg)
The Standard & Poor’s GSCI gauge of 24 commodities climbed 0.2 percent to 650.04 at 5:11 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was up 0.1 percent at 1,573.016.
GRAINS, OILSEEDS
Wheat rose for a second day on speculation that rainfall in parts of Kansas and Oklahoma won’t boost soil moisture as the worst drought since the 1930s persists. Corn advanced, and soybeans were little changed.
Wheat futures for delivery in March climbed 0.7 percent to $7.565 a bushel on the Chicago Board of Trade. Prices reached $7.3975 on Jan. 4, the lowest for a most-active contract since June.
Corn futures for delivery in March gained 1.1 percent to $6.93 a bushel in Chicago. Soybeans futures for the same delivery month rose less than 0.1 percent to $13.89 a bushel on the CBOT.
SOFT COMMODITIES
Arabica coffee retreated in New York, after gaining as much as 2.5 percent yesterday, on speculation investors will continue to bet on lower prices as production in top-grower Brazil may be large next season. Cocoa slumped 2.3 percent.
Arabica coffee for March delivery slid 0.6 percent to $1.4955 a pound on ICE Futures U.S. in New York. Robusta coffee for March delivery advanced 0.3 percent to $1,969 a metric ton on NYSE Liffe in London.
Raw sugar for March delivery gained 0.2 percent to 18.90 cents a pound in New York. White sugar for March delivery was down 0.2 percent at $509.70 a ton in London.
Soft commodities markets: NI SOMKTS
BASE METALS
Copper rose in New York, rebounding from three sessions of declines, on speculation investors were buying futures as the metal’s weighting climbs in a benchmark commodity index.
Copper for delivery in March advanced 0.1 percent to $3.681 a pound by 7:43 a.m. on the Comex in New York. Copper for delivery in three months rose 0.2 percent to $8,087 a metric ton on the London Metal Exchange.
Aluminum, zinc and tin declined in London as lead and nickel rose.
PRECIOUS METALS
Gold futures gained for the first time in four sessions as demand increased in China, the world’s second-biggest buyer.
Gold futures for February delivery rose 0.6 percent to $1,656.70 an ounce at 10:18 a.m. on the Comex in New York. The price dropped 2.5 percent in the previous three sessions.
Silver futures for March delivery rose 1 percent to $30.38 an ounce on the Comex. On Jan. 4, the price touched $29.24, the lowest for a most-active contract since Aug. 21.
NATURAL GAS
Natural gas futures declined for a second day in New York on forecasts of milder weather that would reduce demand for the heating fuel.
Natural gas for February delivery fell 3.4 cents, or 1 percent, to $3.232 per million British thermal units at 9:29 a.m. on the New York Mercantile Exchange. Trading volume was 26 percent below the 100-day average. Futures tumbled to $3.05 per million Btu on Jan. 2, the lowest intraday price since Sept. 26. Gas is up 5.6 percent from a year ago.
U.K. natural gas: NI NUKMKT Gas market: NI GASMARKET Americas natural gas: NI AGASMARKET European natural gas: NI EGASMARKET
POWER
Power for February delivery in Germany dropped after rising to a record yesterday amid forecasts for colder weather. The equivalent French contract fell for the first time in four days.
Baseload German next-month electricity, for supplies delivered around the clock, lost 0.9 percent to 50.65 euros ($66.23) a megawatt-hour as of 4:20 p.m. Berlin time. The French February contract, which yesterday rose as high as 60 euros, the most since Dec. 6, slipped 1.2 percent to 58.80 euros a megawatt-hour.
CRUDE OIL
Oil fell for the first time in three days in New York on expectations that U.S. stockpiles rose from a three-month low last week.
Crude oil for February delivery slid 41 cents, or 0.4 percent, to $92.78 a barrel at 10:39 a.m. on the New York Mercantile Exchange. Prices are down 8.6 percent from this point last year. Trading volume was 7 percent below the 100-day average.
Brent oil for February settlement advanced 13 cents to $111.53 a barrel on the London-based ICE Futures Europe exchange. Brent volume was 15 percent above the 100-day average.
OIL PRODUCTS
Heating oil advanced on speculation that refinery unit shutdowns will reduce supplies and that higher gasoil prices in Europe will attract diesel shipments from the U.S.
Heating oil for February delivery rose 3.13 cents, or 1 percent, to $3.0634 a gallon at 10:17 a.m. on the New York Mercantile Exchange, after touching $3.0752.
Gasoline for February delivery gained 1.49 cents, or 0.5 percent, to $2.2923 a gallon on the exchange.
The average nationwide retail price for regular gasoline rose 0.3 cent to $3.30 a gallon, AAA said today on its website.
Oil Products Europe: NI OPEMKT Gasoline: NI GASOLINE Heating oil: NI HEATOIL

Corn Market Recap for 1/8/2013 (CME)
March Corn finished up 3 1/4 at 688 3/4, 5 3/4 off the high and 5 up from the low. May Corn closed up 3 1/2 at 688 3/4. This was 5 1/2 up from the low and 4 3/4 off the high.
March corn traded higher into the closing bell as active bull spreading, firm basis and short covering were seen as reasons for the higher trade. US corn cargos remain a premium to South American cargos which continues to stifle any positive progress in the export demand outlook. South Korea was back in the market overnight with two separate tenders. One buyer purchased 137,000 tonnes of corn for May shipment with half coming from South America and the other half was a US/South American option. The second tender was for 110,000 tonnes which will likely be sourced from South America for June arrival. The trade is looking ahead to this Fridays December 1st Grain Stocks and Supply and Demand report. December 1st stocks are estimated to come in near 8.2 billion bushels and production could fall just under 10.7 billion bushels vs. 10.725 currently. This will depend on if there is a significant adjustment to the yield and harvested acreage. Some expect a sharp decline in harvested acreage given the historically high abandonment rate in previous drought years.
January Rice finished down 0.015 at 14.96, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
March Wheat finished down 3/4 at 750 1/2, 8 3/4 off the high and 1 1/2 up from the low. May Wheat closed down 3/4 at 760 1/4. This was 1 1/2 up from the low and 8 3/4 off the high.
KC and Chicago wheat spent most of the day in positive territory as European wheat futures rebounded and technical short covering was active. Kansas City wheat basis was firm on the day. Thoughts that China may have bought wheat from the US and Canada in the last week was supportive. Weather patterns point negative in the short term with another storm system set to develop in Texas by mid-week. The storms are expected to drop heavy rainfall in central TX with some flooding expected. Rainfall will push into Oklahoma and then moved into the eastern Corn Belt helping improve soil moisture conditions. US wheat remains competitively priced in the world market but major buyers from the Middle East have failed to tender this week. Some suggest buyers have good supply at the moment which could put the US export demand forecast at risk of a downgrade in this Friday's USDA report. India has become a major influence in the global wheat trade this year and Indian officials reported domestic wheat stocks as of January 1st at a whopping 34.4 million tonnes, more than four times the official target of 8.2 million tonnes for the quarter ending March. The data suggests India will continue to aggressively export wheat this crop year.
March Oats closed up 1/4 at 331 3/4. This was 3 up from the low and 2 3/4 off the high.

Corn Rises on U.S. Supply Concerns; Wheat, Soybeans Drop (Bloomberg)
Corn futures rose for the second straight day on speculation that the U.S. Department of Agriculture will lower its crop projectins following the most- severe Midwest drought since the 1930s. Wheat and soybeans fell.
The 2012 harvest probably was 10.65 billion bushels, down 0.7 percent from the USDA’s estimate in December, according to a Bloomberg News survey of 31 analysts. Corn futures reached a record $8.49 a bushel on Aug. 10. The USDA is set to release its latest crop statistics on Jan. 11.
“It scares me that everybody is thinking production will be lowered because our stockpiles are already low enough,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview. “If we come in even 100 million bushels lower on production, there’s room for prices to go higher.”
Corn futures for March delivery gained 0.5 percent to settle at $6.8875 a bushel at 2 p.m. on the Chicago Board of Trade. The price, up 0.8 percent yesterday, has gained 7 percent in the past 12 months.
Wheat futures for March delivery fell 0.1 percent at $7.505 a bushel. The price has gained 20 percent in the past 12 months.
Soybean futures for March delivery dropped 0.1 percent to $13.865 a bushel. The oilseed has advanced 16 percent in the past 12 months.
Corn is the biggest U.S. crop, followed by soybeans, hay and wheat, USDA data show.

Rice Stock Estimates Studied by FAO on Lack of Reliable Data (Bloomberg)
Rice-stock estimates for several countries including China may not be accurate due to a lack of reliable data on consumption and post-harvest losses, according to the United Nations’ Food & Agriculture Organization.
The estimate for China’s stocks may be too high, Concepcion Calpe, the FAO’s senior rice analyst, said by phone from Rome today. The UN agency is studying the rice balance sheets of several countries as part of creating the Agricultural Market Information System, she said.
The FAO has forecast world rice stocks will climb to a record 169.8 million metric tons at the end of 2012-13 from 159.3 million tons a year earlier. Growing rice stockpiles avoided a food crisis last year even as wheat and corn prices jumped on drought in the U.S. and Russia, the World Food Programme said in September.
“It’s very difficult to get any clue about the stocks,” Calpe said. “Even developed countries have problems, it’s general. FAO has very high estimates for stocks in China, and we’re worried that this might not be the case.”
The FAO, the U.S. Department of Agriculture and the International Grains Council all have different estimates for rice inventories, according to Calpe.
“We have no idea what the stocks are,” Calpe said. “Even the definition of stocks is difficult. We’re trying through AMIS to come up with a normalized method to improve the overall balances.”

Recap Energy Market Report (CME)
February crude oil experienced another choppy trading session that began with a morning push toward last week's high of $93.87. The early morning gains lacked more upside follow-through and seemed to slip into negative territory following weakness in equity markets. Some traders also noted that the upside action in the crude oil market might have been tempered by expectations that this week's EIA inventory report could show a build in supplies last week in the range of 1.75 to 2.0 million barrels. Meanwhile, the product markets managed to maintain most of their early gains, supported by further refinery complications at a crude distillation unit in Texas.

Brent Crude Oil Market Report (CME)
February Brent crude oil registered a new four day high during the session and climbed back above the $112.00 level. Early support seemed to come on prospects that this week's trade data out of China will show further improvement in global oil demand prospects. It is also possible that some traders saw recent weakness in the February Brent vs. WTI crude oil spread, back below $18 premium to Brent, as fairly valued. Meanwhile, Brent crude oil is expected to benefit from active beginning of the year index fund rebalancing. While there was little cash market trade in North Sea Forties, traders noted bids holding near their highest level since March 2012.

Oil Fluctuates on Signs U.S. Crude, Fuel Stockpiles Increasing (Bloomberg)
Oil fluctuated in New York after an industry report showed rising stockpiles in the U.S., the world’s biggest crude-consuming nation.
West Texas Intermediate futures swung between gains and losses after slipping 4 cents yesterday. U.S. crude supplies increased 2.4 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show inventories gained 2 million barrels, according to a Bloomberg News survey of analysts. Gasoline and distillate inventories also climbed, the API said.
Crude for February delivery was at $93.14 a barrel, down 1 cent, in electronic trading on the New York Mercantile Exchange at 10:34 a.m. Sydney time. The contract dropped to $93.15 yesterday, the lowest settlement since Jan. 4. Prices declined 7.1 percent last year.
Brent for February settlement climbed 54 cents to $111.94 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $18.79 to WTI futures.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Alcoa Sales Top Estimates on Aluminum Prices (Bloomberg)
Alcoa Inc. (AA), the largest U.S. aluminum producer, reported fourth-quarter sales that exceeded analysts’ estimates after the company sold the commodity at a higher-than- expected average price.
Sales fell to $5.9 billion from $5.99 billion, beating the $5.6 billion average of 11 estimates. Net income of $242 million, or 21 cents a share, compared with a loss of $191 million, or 18 cents, a year earlier, the New York-based company said today in a statement. Profit excluding a gain on the sale of a power plant and other one-time items was 6 cents a share, matching the average of 20 estimates compiled by Bloomberg.
“The metal price helped out,” said Kuni Chen, an analyst at CRT Capital Group in Stamford, Connecticut, who recommends buying the shares. “They’re meeting their revenue growth goals in the downstream.”
Aluminum prices are rising as demand in China and the U.S. increases while record amounts are being shut away in warehouses as part of financing deals. Alcoa, which said today that global aluminum demand growth will accelerate to 7 percent in 2013, is trying to avoid a downgrade to junk by Moody’s Investors Services. The ratings company said Dec. 18 it was reviewing its rating on the company’s debt.
Alcoa rose 0.8 percent to $9.17 at 6:39 p.m. in New York after the close of regular trading. The shares have declined 0.7 percent in the past 12 months while the Dow Jones Industrial Average rose 7.6 percent. Alcoa is the first company in the index to report earnings.

Gold Rises Most in a Week on Chinese, U.S. Coin Demand (Bloomberg)
Gold futures gained the most a week as demand increased in China, the world’s second-biggest buyer.
Imports by China from Hong Kong almost doubled in November from a month earlier, government data showed today. The U.S. Mint has sold 71,500 ounces of American Eagle gold coins this month, compared with 76,000 ounces for all of December. On Jan. 4, futures touched a four-month low on signals from the Federal Reserve that its latest stimulus program may end this year.
“Last week’s price drop has attracted buyers,” Anthem Blanchard, the chief executive officer of Blanchard Vault, a Las Vegas-based online retailer of gold and silver, said in a telephone interview. “We are also seeing elevated demand from China.”
Gold futures for February delivery rose 1 percent to settle at $1,662.20 an ounce at 1:48 p.m. on the Comex in New York, the biggest gain for a most-active contract since Dec. 31. The price dropped 2.5 percent in the previous three sessions.
A measure of trading on the Shanghai Gold Exchange surged to a record yesterday, according to data tracked by Bloomberg.
Japanese pension funds will more than double their gold holdings to 100 billion yen ($1.1 billion) by 2015 as the new government pushes for a higher inflation target, Itsuo Toshima, an adviser to the funds, said in an interview.
India is the top gold buyer.
Silver futures for March delivery rose 1.3 percent to $30.465 an ounce on the Comex, the biggest gain since Jan. 2. On Jan. 4, the price touched $29.24, the lowest since Aug. 21.
On the New York Mercantile Exchange, platinum futures for April delivery gained 1.7 percent to $1,583.20 an ounce, the biggest gain since Nov. 23.
Palladium futures for March delivery fell 0.3 percent to $667.85 an ounce. The price declined for the fourth straight session, the longest slump in 10 weeks.

Silver Market Recap Report (CME)
The silver market managed a quasi upside breakout on the charts today and managed the gains in the face of some adverse outside market action. With the gains today made in silver, in the face of weakness in copper and equities, which would seem to suggest to some traders that silver was potentially tracking financial or safe haven developments today. Like gold, silver might have been bolstered today by news that derivative investment into silver increased because of the recent slide in prices.

Gold Market Recap Report (CME)
The gold market generally maintained a positive tilt today and managed that action in the face of adverse currency market action and weaker US equities. Gold might have been supported by a rise in gold derivative holdings and gold might also have been supported by ideas that China might see improved gold demand in 2013. In retrospect, the gold trade seems to have come away from the temporary sub $1,636 trade in February gold with signs of value hunting or bargain hunting buying and that might have contributed to the gains in gold prices today. However, there did seem to be a noted range up extension in gold today right around noon central time and that reaction didn't seem to correlate with similar moves in outside markets.

20130109 0943 Soy Oil & Palm Oil Related News.

Palm oil export from Indonesia may climb about 10% to an all-time high this year as output gains to a record and sales of refined products increase, according to an industry group. Shipments may climb to 20m tonnes from an estimated 18.2m tonnes last year, according to the Indonesian Palm Oil Association. It added Indonesian palm oil output will probably expand 5.7% to 28m tonnes.  (Bloomberg)

Soybean Complex Market Recap (CME)
January Soybeans finished up 3 at 1413 3/4, 6 1/4 off the high and 8 3/4 up from the low. March Soybeans closed down 1 3/4 at 1386 3/4. This was 10 1/4 up from the low and 7 off the high.
January Soymeal closed up 2.1 at 410.6. This was 5.0 up from the low and 1.2 off the high.
January Soybean Oil finished down 0.36 at 49.14, 0.55 off the high and 0.04 up from the low.
March soybeans traded both sides of the unchanged on the day as trader's positioned ahead of Friday's USDA report and weighed a favorable supply outlook in South America against Chinese demand. Basis in the Gulf of Mexico for soybeans and meal was weaker midday due to softer demand which added a negative tilt to the futures outlook. The South American forecast is largely unchanged for the week with Brazil seeing light showers and some may slip into the drier regions of northeast Brazil. Argentina will dry down this week. The trade is looking ahead to this Friday's USDA report with December 1st Stocks estimated near 2 billion bushels vs. 2.37 billion the same period last year. Some in the trade are expecting a slight uptick in the average yield from 39.3 to just below 40 bushels per acre. Production is seen near 3 billion bushels with some estimates coming in as high as 3.1 billion and as low as 2.935. Thoughts that demand will continue to shift away from the US border to South America is seen as a negative to the price outlook for soybeans long term.

Indonesia palm sector may face strikes despite wage hikes -trade union (Reuters)
Indonesia's palm sector, the world's largest producer of the edible oil, faces the risk of wildcat strikes this year despite increasing minimum wages, a trade union said on Tuesday, as employers eye redundancies and benefit cuts to fund the hikes.

EDIBLE OIL: Malaysian palm oil futures fell to their lowest in more than two weeks dragged lower by concerns about demand and caution ahead of key industry data due out later in the week. (Reuters)