20130111 1756 Palm Oil Related News.

VEGOILS-Palm slips, set for sharpest weekly loss since mid-Nov BOZ2 DBYF3 FCPOc3 - RTRS
11-Jan-2013 13:58
Futures on track for 4 pct weekly loss Negative surprise in stocks, lower exports weigh on prices Palm oil to drop to 2,334 ringgit -technicals

(Updates prices, adds detail)
By Chew Yee Kiat
SINGAPORE, Jan 11 (Reuters) - Malaysian palm oil futures edged lower on Friday, on track to post their steepest weekly loss since mid-November, as higher stocks and slowing exports weighed on investor sentiment.
Malaysia's palm oil stocks climbed to a record 2.63 million tonnes in December, going against market consensus of a slight drop and fuelling concerns that inventory level may remain high for the first month of the year.
For the week, palm oil is on track to lose 4 percent, with exports for the first ten days of January falling as much as 34 percent from the same period a month ago amid China's stricter regulation on edible oil imports.
"On the overall, we view the latest inventory data negatively as high stocks should keep prices at distressed level of below 2,500 ringgit per tonne for an extended period," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note on Friday.
By the midday break, the benchmark March contract FCPOc3 on the Bursa Malaysia Derivatives Exchange had lost 0.8 percent to 2,367 ringgit ($784) per tonne. Prices fell to a low of 2,356 ringgit on Thursday, a level not seen since Dec. 21.
Total traded volume stood at 12,440 lots of 25 tonnes each, slightly lower than the usual 12,500 lots.
Technicals showed palm oil was expected to fall to 2,334 ringgit per tonne, with a good chance of breaking below this level and heading to 2,289 ringgit, said Reuters market analyst Wang Tao. (Full Story)
Malaysian palm oil exports fell 25 percent and 34 percent for the first 10 days of January from a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance, respectively.
The fall came despite Malaysia's zero percent crude palm oil export tax in January, although analysts said the newly adjusted tax structure is still positive for palm oil in longer term.
"A steep decline in export tax from 23 percent to zero should have some positive impact on shipment. We should see the effects in these one or two months," Alvin Tai, plantations analyst with Malaysia's OSK Research, said in a note on Friday.

Malaysia's weather office maintained its forecast that heavy rains in the key oil palm producing state of Sarawak may bring floods that could disrupt harvesting and lower production. Output is also expected to trend lower on seasonal factors.

Brent crude futures fell further below $112 a barrel on Friday after faster-than-expected inflation in China eased investors' confidence in the growth prospects of the world's second-biggest oil consumer, but output cuts in Saudi Arabia limited the drop. O/R
In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 lost 0.1 percent in early Asian trade, as investors stayed on the sidelines ahead of a U.S. Department of Agriculture supply-demand report due to be released later on Friday. GRA/
The most active May soybean oil contract DBYcv1 on the Dalian Commodity Exchange lost 1 percent by the midday break.

20130111 1626 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to a higher open while Asian shares fell as a pick-up in Chinese inflation prompted profit-taking, although an improving outlook for global economies curbed losses. U.S. stocks rose and the S&P 500 ended at a fresh five-year high on Thursday. (Reuters)

FOREX: The yen slid to 2 1/2-year lows after Japanese Prime Minister Shinzo Abe said the Bank of Japan should consider maximising employment as a policy goal on top of its current price stability mandate. (Reuters)

FOREX-Euro hits 4-month high versus Swiss franc
LONDON, Jan 11 (Reuters) - The euro extended gains to hit to a four-month high against the Swiss franc after the European Central Bank dampened rate cut prospects and Swiss bank Zuercher Kantonal Bank said it may impose charges on savings accounts.
Weaker-than-expected Swiss inflation data on Friday added to Swiss franc selling pressure.


China December inflation accelerates on food prices(Reuters)
China's annual consumer inflation rate accelerated to a seven-month high of 2.5 percent in December on rising food prices, ahead of expectations and narrowing the scope for the central bank to boost the economy by easing monetary policy.

U.S. Fed hawks worry about threat of inflation(Reuters)
Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank's easy monetary policy, in comments suggesting Fed Chairman Ben Bernanke may face more dissent this year.

Rain to help raise Mississippi River, ease shipper woes(Reuters)
A storm moving up the Mississippi River valley will help replenish the river, low in parts from drought, and ease concerns that shipping could be halted along a shallow stretch from St. Louis to Cairo, Illinois.

Saudi Arabia cuts oil output as demand eases(Reuters)
Saudi Arabia has cut oil production substantially, moving to fend off a growing overhang in world oil supply and defend prices well above $100 a barrel.

OIL: Brent crude futures fell further below $112 a barrel on concerns that faster-than-expected inflation in China will limit room for further policy easing to boost growth in the world's second-biggest oil consumer. (Reuters)

Australian cyclone cuts fifth of global iron ore trade(Reuters)
A severe tropical cyclone off Australia's northwest coast that has shut ports handling a fifth of the world's globally traded iron ore and cut supplies of natural gas and oil intensified on Friday.

BASE METAS: London copper inched down from a one-week high hit in the previous session after China's export demand improved in December, while a slightly stronger dollar weighed.  (Reuters)

PRECIOUS METALS: Gold inched lower but was headed for its biggest weekly rise in more than a month, following a decision by the European Central Bank to keep rates unchanged despite signs of stabilisation in the battered economy(Reuters)r


METALS-London copper inches down, China outlook underpins
MELBOURNE, Jan 11 (Reuters) - London copper inched down from a one-week high hit in the previous session after China's export demand improved in December, while a slightly stronger dollar weighed.
"The market was rethinking whether the temporary resolution of the fiscal cliff was going to help or just kick the can down the road. Having that extra shot (China trade data) in the arm was very helpful," said Barclays commodity analyst Sijin Cheng in Singapore.

PRECIOUS-Gold takes breather; Tokyo gold strikes record high
SINGAPORE, Jan 11 (Reuters) - Gold inched lower but was headed for its biggest weekly rise in more than a month, following a decision by the European Central Bank to keep rates unchanged despite signs of stabilisation in the battered economy.
"The record-high gold prices in yen have triggered some liquidation from Japanese customers, which is putting pressure on the market," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.


Baltic index upBaltic index up on higher panamax rates
Jan 10 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for a sixth straight day on Thursday on higher rates for panamax vessels.
The main index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 8 points or over 1 percent to 751 points.

20130111 1113 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares rise on growth optimism, yen slides
TOKYO, Jan 11 (Reuters) - Asian shares rose amid an improving outlook for global economies and reduced anxiety over the euro zone's debt problems, while the yen slid on renewed expectations for aggressive monetary easing in Japan.
"The trade data from China showed a balanced growth in both imports and exports, raising investor confidence and lifting risk assets," said Park Sung-hoon, an analyst at Woori Investment & Securities in Seoul.

China Dec inflation quickens to 2.5 pct on year
BEIJING, Jan 11 (Reuters) - China's annual consumer inflation sped to a seven-month high of 2.5 percent in December from November's 2 percent, data showed, overshooting market expectations and dampening the chance for further policy easing as the economy recovers.
Economists polled by Reuters had forecast December inflation to climb to 2.3 percent. The National Bureau of Statistics also said that China's producer prices fell 1.9 percent in December from a year ago, easing from November's 2.2 percent annual fall but steeper than forecasts for a 1.8 percent decline.

FOREX-Yen pummeled to 2 1/2-year low on Abe, Japan c/a deficit
TOKYO, Jan 11 (Reuters) - The yen slid to 2 1/2-year lows after Japanese Prime Minister Shinzo Abe said the Bank of Japan should consider maximising employment as a policy goal on top of its current price stability mandate.
"The data shows Japan's trade balance is hit by slow trade with China since September (after a territorial dispute that sparked anti-Japan riots.) Deficit in the current account is likely to continue in the next couple of months given its seasonal pattern," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.

OIL-Oil rises after Saudi Arabia cuts output
NEW YORK, Jan 10 (Reuters) - Oil futures rose on Thursday on news that top world oil exporter Saudi Arabia had cut back production in response to flagging demand, and after China reported strong demand for its exports.
"The strong data from China indicates demand might be improving there and the Saudis have cut back production, but the downward revisions by the Philly Fed gave the market a little pause," said Phil Flynn, analyst at Price Futures Group in Chicago.

Saudi Arabia cuts oil output as demand eases
DUBAI, Jan 10 (Reuters) - Saudi Arabia has cut oil production substantially, moving to fend off a growing overhang in world oil supply and defend prices well above $100 a barrel.
In the last two months of 2012, OPEC's lead producer responded to slower demand by lowering supply by around 700,000 barrels per day, with output in December falling to around 9 million bpd, an industry source familiar with Saudi policy said.

Europe oil demand: 20 year low and to slide further
By Simon Falush
Oil demand in Europe, already at its lowest in 20 years after five years of declines, is set to fall further, dented by a bleak economic outlook, increasing energy efficiency and a switch to alternative forms of energy.  
The International Energy Agency predicted that demand for oil for the biggest and most developed European nations is set to contract in 2013, while other areas, especially much of Asia, will see robust growth.

20130111 1112 Malaysia Corporate Related News.

RHB Capital: "Still hopeful" of acquiring a stake in Indonesia's PT Bank Mestika Dharma. RHB Capital Bhd (RHB Cap) is "still hopeful" of acquiring a stake in Indonesia's PT Bank Mestika Dharma and will comply with the 40% foreign ownership requirement, according to chairman Tan Sri Azlan Zainol. "We play by the rules, and if the rules say that at the moment foreign ownership is limited to 40%, then we will take 40%," he told StarBiz in an interview. (Source: The Star)

MISC: VTTI to invest MYR1b more in Tanjung Bin oil terminal. VTTI B.V, an equal joint-venture company between MISC Bhd and Vitol Group, will invest another MYR1b or so for the second phase of development of its ATT Tanjung Bin (ATB) oil storage terminal in Tanjung Bin, Johor. VTTI chairman Datuk Kho Hui Meng said this phase of development would double the capacity to more than 1.6m m2 of oil product storage. (Source: The Star)

Oil & Gas: 5 O&G firms' investments for PIPC approved The Government has approved multi-billion ringgit investments from 5 oil and gas-related (O&G) companies for the Johor's Pengerang Integrated Petroleum Complex (PIPC). International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the approval was given to them under the Global Incentives for Trading (GIFT) scheme that aimed to turn Malaysia into an international hub for the O&G industry. (Source: The Star)

Automotive: Mercedes powers to record 2012 sales. Mercedes-Benz Malaysia had another record-breaking achievement in 2012, registering a 9% rise in sales to 8,085 units of passenger cars and commercial vehicles from 7,400 units previously. Mercedes-Benz's core C and E-Class maintained their momentum, accounting for almost 88% of total car sales. Deliveries of the C-Class were up 18% to 2,651 units, while the E-Class kept pace with 2,453 units delivered, up from 2,276 from before. (Source: Business Times)


West Coast Expressway to cost RM6bn, down from RM7bn
The West Coast Expressway is estimated to cost RM6bn, down from earlier estimates of RM7.07bn, and its concession period has been agreed at 50 years with a 10-year extension option. The construction of the expressway will take five years to complete while the 10-year extension for the concession will only kick in should its agreed targeted internal rate of return (IRR) for the project be not achieved. The Government will provide a loan at a 4% p.a. interest rate. (Malaysian Reserve)

DRB-Hicom denies privatization talk
DRB-Hicom has not been approached or notified by controlling shareholder Tan Sri Syed Mokhtar Al-Bukhary of any plans to take the company private. The company said that the listing of the Proton distribution business to unlock the values of the merged entity is one of the possible scenarios but is not part of a plan to de-list DRB-Hicom. (Financial Daily)

Takaso Resources may indirectly win RM1.2bn military contract
Takaso Resources may indirectly win a military vehicles supply job contract worth RM1.2bn. Its partner, Pesaka Astana (M) SB, secured a contract from the Ministry of Defence to supply 300 vehicles, each of which will cost RM400,000, an industry source said. Takaso Resources had on 4 Jan entered into a memorandum of collaboration with Pesaka Astana “to negotiate further on project collaboration”. Takaso later said on 7 Jan that there were three letters of award and that the company and Pesaka Astana “wish to start their collaboration”. (Malaysian Reserve)

MAHB-YTL partnership?
Malaysia Airports (MAHB) is believed to be in preliminary talks with YTL Corp to set up a consortium to bid for the GBP1bn London third hub known as Stansted Airport. Sources said MAHB would likely take the airport management and operation role, while YTL would take up the role of the developer in and around the airport area. Two other bidders that were expected to submit their bids by the final 14 Jan deadline were Manchester Airports Group and Macquarie Group. (StarBiz)

HSL wins RM49m Samalaju infrastructure job
Hock Seng Lee (HSL) has secured an infrastructure project worth RM48.9m at the Samalaju Industrial Park in Bintulu. The scope of works includes earthworks, drainage works, pavement and related external works for a major road of almost 5km. The road would serve the expanding industrial park and is due to be completed in 3Q2014. (Financial Daily)

AirAsia plans to launch Indian airline
AirAsia plans to launch an Indian airline in partnership with a local promoter, Videocon Group. AirAsia was exploring options to set up a company that would be majority-owned by an Indian promoter. Videocon confirmed that they had been approached by AirAsia. Videocon’s core business areas are consumer electronics and home appliances. (StarBiz)

20130111 1112 Global Economy Related News.

Indonesia: Holds rate as IDR decline stokes price pressure
Indonesia kept its benchmark interest rate unchanged for an 11th straight meeting as a slide in the nation’s currency threatens to stoke price pressures. Bank Indonesia Governor Darmin Nasution and his board held the reference rate at a record-low 5.75%, the central bank said. The decision was predicted by all 22 economists surveyed by Bloomberg News. It last cut the benchmark in February 2012. (Bloomberg)

China: Exports accelerate with credit in recovery boost
China’s exports rose more than forecasted last month and a broad measure of credit surged 28%, helping the nation’s new leaders to sustain a pickup in economic growth after a seven-quarter slowdown. Overseas shipments increased 14.1% from a year earlier, the most since May, customs administration data showed, compared with the 5% median forecast in a Bloomberg News survey of 40 economists. (Bloomberg)

UK: Bank of England maintains stimulus as credit plan shows results
Bank of England policy makers refrained from adding further stimulus to the UK economy today after their new credit-boosting program showed signs of success. The nine-member Monetary Policy Committee led by Governor Mervyn King kept the target for quantitative easing at GBP375bn (USD602bn), in line with the forecast of all 39 economists in a Bloomberg News survey. They also held the key interest rate at a record low of 0.5%. (Bloomberg)

US: Consumer comfort falls as US payroll tax bites
Consumer confidence waned last week and firings unexpectedly climbed, the first sign that higher US payroll taxes will slow the economic expansion at the start of this year. The Bloomberg Consumer Comfort Index fell to minus 34.4 in the seven days ended 6 Jan from -31.8 the prior period, the biggest one-week drop since August. Jobless claims increased by 4,000 to 371,000 in the week ended 5 Jan, according to Labor Department figures. (Bloomberg)

20130111 0929 Global Markets Related News.

Asia FX By Cornelius Luca - Thu 10 Jan 2013 17:15:49 CT (www.lucafxta.com/CME)
The appetite for risk surged on Thursday following the burgeoning Chinese trade surplus and after the ECB and BoE left rates unchanged. The markets got confirmation that the world economy will at least muddle along and that the ECB will not interfere with the regional soft production. All European and commodity currencies surged, while the yen drilled down toward a 28-month low. The Australian dollar climbed up to a new high for the uptrend. The US stock markets closed higher. Gold, oil and silver advanced as well. The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long on European currencies and commodity currencies, and short yen. Good luck!

Overnight
US: The initial jobless claims rose 4,000 to 371,000 in the week ended January 5th from the previous week's revised figure of 367,000.
Canada: Building permits contacted 17.9% in November after expanding 15.9% in October.
Canada: The New Housing Price Index edged up 0.1% in November, slower than 0.2% in October.

Today's economic calendar
China: Consumer Price Index for December
Japan: Current account for November
Japan: Eco watchers survey: current for December

Asian Stocks Rise as Stimulus Bets Boost Japan Shares (Bloomberg)
Asian stocks rose, with the regional benchmark index heading for its eighth weekly advance, as Japanese shares gained after a larger-than-expected current account deficit added to speculation Prime Minister Shinzo Abe will announce more stimulus measures.
Honda Motor Co. (7267), which gets 81 percent of sales overseas, climbed 1.8 percent as the yen fell for a third day, boosting the outlook for overseas income at Japanese exporters. Fast Retailing Co. (9983) rose 3.1 percent in Tokyo after Asia’s largest apparel retailer raised its annual profit forecast. Newcrest Mining Ltd., Australia’s biggest gold producer, added 0.8 percent after the price of the metal jumped.
The MSCI Asia Pacific Index (MXAP) gained 0.2 percent to 132.28 as of 9:36 a.m. in Tokyo, before markets open in Hong Kong and China. The benchmark gauge is heading for a 0.3 percent advance this week, extending gains to an eighth week, the longest streak since March 2012 as the U.S. Congress approved a budget deal and Japanese shares rallied on expectations the nation’s new government would call for more stimulus.
“There is significant scope for the equity market to outperform in 2013 if Abe’s promised reforms are undertaken,” said Sean Darby, chief global equity strategist at Jefferies Group Inc. in Hong Kong. “A weaker yen would be beneficial for export-led sectors such as the automobile, electronics and machinery sectors.”

Nikkei 225 Heads for Longest Weekly Win Streak Since 1988 (Bloomberg)
Jan. 11 (Bloomberg) --　Japanese stocks rose a third day, with the Nikkei 225 (NKY) Stock Average poised to advance for a ninth week, as the yen slid on speculation the government will announce more public works spending.
Canon Inc. (7751), a camera maker that gets 80 percent of its revenue outside Japan, added 1.2 percent. Fast Retailing Co. (9983), Asian’s biggest apparel chain, climbed 3.2 percent after raising its annual profit forecast.
The Nikkei 225 gained 1.5 percent to 10,809.20 as of 9:32 a.m. in Tokyo, with the gauge headed for its longest streak of weekly advances since December 1988. The broader Topix Index advanced 1.2 percent to 899.83, with all 33 of its industry groups advancing.
“Finally, we are seeing recovery signs in Japanese stocks with politics moving in the right direction,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of about $70 billion. “The government needs to boost the economy and tax revenue to be able to rehabilitate its fiscal woes.”

S&P 500 Rises to 5-Year High Amid Chinese Export Data (Bloomberg)
U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level in five years, amid better-than-estimated data on Chinese exports.
Financial shares had the biggest gain in the S&P 500 among 10 industry groups as Bank of America Corp. and Morgan Stanley rallied at least 3 percent. Ford (F) Motor Co. climbed 2.7 percent after boosting its dividend. Supervalu Inc. (SVU) rose 14 percent as a Cerberus Capital Management LP-led investor group agreed to buy five of its chains in a deal valued at about $3.3 billion. Tiffany & Co. (TIF) slumped 4.5 percent as the jewelry retailer said full-year earnings will be at the low end of its forecast.
The S&P 500 advanced 0.8 percent to 1,472.12 at 4 p.m. New York time, the highest level since December 2007. The Dow Jones Industrial Average added 80.71 points, or 0.6 percent, to 13,471.22. About 6.8 billion shares changed hands on U.S. exchanges, or 9.9 percent above the three-month average.
“The market is encouraged by evidence of healing on the international front,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “In the U.S., the earnings season is just getting started and there’s a lot of things that we don’t know. Investors will still be on that wait-and-see mode.”
Equities followed global shares higher as China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted. European Central Bank President Mario Draghi said the euro-area economy will slowly return to health in 2013 as the region’s bond markets stabilize after three years of turmoil. More Americans than forecast filed applications for unemployment benefits last week.

European Stocks Drop From 22 Month-High; Richemont Falls (Bloomberg)
European (SXXP) stocks declined from a 22- month high as European Central Bank policy makers kept the benchmark interest rate at a record low.
Cie. Financiere Richemont SA fell 2.1 percent after peer Tiffany & Co. said full-year earnings will be at the lower end of its forecast. Sanofi (SAN) lost 0.7 percent after U.S. regulators cut the recommended dosage of some drugs including those sold by the French company. Nokia (NOK1V) Oyj surged 11 percent after saying its handset business probably saw a profit in the fourth quarter.
The Stoxx Europe 600 Index retreated 0.3 percent to 287.44 at the close of trading. The gauge last week surged 3.3 percent after U.S. lawmakers agreed on a compromise budget to prevent most scheduled tax increases and delay spending cuts.
“We’ve seen a slightly less accommodating ECB in terms of movement on rates,” said Michael Hewson, a market analyst at CMC Markets Plc in London. “That caution has been tempered by concerns about the economic outlook. Markets are at multi-month highs. Given how skittish investors are, it wouldn’t take much to trigger a small sell-off.”
The volume of shares changing hands on Stoxx 600 companies was 85 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.
ECB policy makers meeting in Frankfurt today left the benchmark rate at a record low of 0.75 percent, as predicted by 50 out of 55 economists in a Bloomberg News survey.

Emerging Stocks Climb as China Trade Data Boosts Shippers (Bloomberg)
Emerging-market stocks climbed the most in a week, boosted by companies tied to economic growth, as better-than-estimated Chinese trade figures added to signs the Asian nation is emerging from its slowdown.
China Southern Airlines Co. (1055) and China Cosco Holdings Co. (1919), climbed at least 7 percent in Hong Kong, leading gains among airlines, shipping companies and raw-material producers. Vietnamese stocks entered a bull market as the prime minister reiterated that the central bank must pursue policies this year that boost growth. Cia. Hering, Brazil’s third-biggest apparel retailer, slumped the most since June 2009 on weaker sales. The MSCI EM Eastern Europe Index climbed to a four-month high.
The MSCI Emerging Markets Index (MXEF) rose 0.4 percent to 1076.99 in New York, the steepest advance since Jan. 3. China’s exports increased 14.1 percent in December from a year earlier, while imports added 6 percent, the customs office said today. The European Central Bank kept its benchmark interest rate on hold as its president, Mario Draghi, said a gradual recovery in the euro-area economy should start later this year.
“That’s some good news on the European economic growth front and will attract investors to look into eastern European emerging markets,” Esther Law, the director of emerging-market strategy at Societe Generale SA in London, said in a phone interview today. “The China exports number is also quite encouraging and external demand is recovering. This is a genuinely good number.”

Yen Drops to 2010 Low on Stimulus Bets, Deficit Concern (Bloomberg)
The yen touched the weakest level since June 2010 against the dollar on speculation the Bank of Japan (8301) will cooperate with Prime Minister Shinzo Abe’s government to ramp up efforts to stimulate the economy.
Japan’s currency extended its ninth week of declines after posting wider-than-expected current account and trade deficits. Demand for the yen was also limited as the BOJ may increase its fiscal 2014 inflation forecast at this month’s policy meeting. The euro remained higher against the greenback after yesterday’s biggest gain in five months before a report that may show the region’s industrial output increased.
“The expectation of monetary and fiscal stimulus under the Abe administration has been driving yen weakness,” said Kikuko Takeda, a senior currency economist in London at Bank of Tokyo- Mitsubishi UFJ Ltd. “It’s no surprise that the currency has been weakening in an environment where Japan continues to post trade deficits. I still think we need to see more reasons to see the yen dropping to the 100 level” versus the dollar.
The yen touched 89.35 per greenback, the weakest since June 29, 2010, before trading at 89.19 at 9:26 a.m. in Tokyo, 0.5 percent lower than yesterday’s close. The Japanese currency depreciated 0.5 percent to 118.35 per euro, after earlier dropping to 118.59, the weakest since May 2011. Europe’s shared currency was little changed at $1.3269 from $1.3272 yesterday, when it rose 1.6 percent, the biggest jump since Aug. 3.

Aussie Dollar Touches 4-Month High on Global Growth (Bloomberg)
The Australian dollar touched a level that matched the highest in almost four months as a brighter economic outlook in the world’s biggest economies spurred demand for higher-yielding assets.
The so-called Aussie headed for a second-straight weekly advance before a report today that may show the U.S. trade deficit narrowed. The currency strengthened yesterday after European Central Bank President Mario Draghi said the euro-area economy will slowly return to health this year. The New Zealand dollar, also known as the kiwi, rose to a three-week high as commodities gained the most in two weeks.
“The global backdrop is improving for the Australian dollar,” said Hans Kunnen, the chief economist at St. George Bank Ltd. in Sydney. “Risk appetite has increased.”
The Australian dollar bought $1.0580 as of 11:03 a.m. in Sydney after earlier rising to $1.0599, matching yesterday’s high that was the strongest level since Sept. 14. It added 0.3 percent to 94.36 yen. New Zealand’s currency touched 84.61 U.S. cents, the most since Dec. 17, before trading at 84.33, 0.3 percent below yesterday’s close. It climbed 0.2 percent to 75.22 yen.
The Aussie climbed 1 percent versus its U.S. counterpart this week. The kiwi has risen 1.4 percent since Jan. 4.
Australia’s 10-year bond fell, pushing the yield up five basis points, or 0.05 percentage point, to 3.5 percent, the highest since Aug. 17. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates which is sensitive to interest-rate expectations, was little changed at 2.81 percent.
The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials gained 0.9 percent yesterday, the biggest increase since Dec. 26. Physical iron ore with 62 percent content at the Chinese port of Tianjin advanced to $158.50 a ton on Jan. 8, the highest close since October 2011, according to The Steel Index Ltd.
In the U.S., the gap between imports and exports probably narrowed to $41.3 billion in November from $42.2 billion in the previous month, according to the median estimate of economists surveyed by Bloomberg News. The Commerce Department is due to release the figures today.

Jobless Claims in U.S. Unexpectedly Increased Last Week (Bloomberg)
More Americans than forecast filed applications for unemployment benefits last week, a sign improvement in the labor market remains uneven.
Jobless claims increased by 4,000 to 371,000 in the week ended Jan. 5, Labor Department figures showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a drop to 365,000. The prior week’s figures were revised to 367,000 from an initially reported 372,000.
A consistent decline in firings, along with a rise in payrolls, is needed to spur consumer spending, the biggest part of the economy. While an agreement reached by Congress this month averted sweeping tax increases and delayed budget cuts that threatened the expansion, the impending battle over the debt limit may weigh on the outlook for jobs.
“Claims are in a pretty steady range, but the story isn’t in firings so much as it is in hiring,” said Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York, who projected 375,000 claims for the week. “Hiring has been okay. The process is sluggishly moving forward. We need to see better payrolls data to get faster economic growth.”
Estimates in the Bloomberg survey of economists ranged from 340,000 to 380,000. No state data were estimated, according to a Labor Department official, who said there was “nothing unusual” in the figures.
Stock-index futures maintained gains after the figures, with the contract on the Standard & Poor’s 500 Index expiring in March rising 0.4 percent to 1,461.9 at 8:43 a.m. in New York.
The four-week moving average, a less volatile measure than the weekly figures, climbed to 365,750 last week from 359,000.

Fed’s Bullard Sees Difficulty Tying QE to Economic Levels (Bloomberg)
Federal Reserve Bank of St. Louis President James Bullard said it may be difficult to tie the central bank’s $85 billion monthly bond purchases to numerical levels of unemployment and inflation.
After settling a debate over how long to hold interest rates near zero, Fed officials are discussing when to halt their purchases of Treasuries and mortgage-backed securities. At its December meeting, the Federal Open Market Committee agreed to hold the target interest rate near zero so long as unemployment remains above 6.5 percent and inflation stays below 2.5 percent.
“Attempts to also put thresholds on the timing of asset purchases may be a bridge too far,” Bullard said today to the Wisconsin Bankers Association in Madison, Wisconsin.
Bullard said last week that unemployment could drop to about 7 percent by the end of this year, which may be enough improvement for the FOMC to halt the purchases, known as QE3 for the third round of quantitative easing.
He said his forecast would be a continuation of the unemployment decline seen since October 2009 when the rate hit 10 percent. The rate has since declined about 0.7 percentage point per year, he told reporters after the speech.
If that pace continues the current 7.8 percent jobless rate could decline to around 7 percent by the end of this year and “would get us to 6.5 percent sometime in the middle of 2014,” Bullard said.

Fed’s George Says Low Rates Risk Stoking Inflation Surge (Bloomberg)
Federal Reserve Bank of Kansas City President Esther George said the Fed’s record stimulus may fuel the risk of financial instability and a surge in inflation.
“A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the” Fed’s 2 percent inflation goal, George said today in a speech in Kansas City, Missouri.
Fed officials are debating when to end purchases of mortgage bonds and Treasury securities that are aimed at fueling economic growth and reducing 7.8 percent unemployment. Policy makers decided last month to hold the target interest rate near zero so long as unemployment remains above 6.5 percent and inflation stays below 2.5 percent. George holds a vote on the Federal Open Market Committee, which next meets Jan. 29-30.
Since becoming leader of the Kansas City Fed in October 2011, George has spoken mainly about financial regulation. Her predecessor, Thomas Hoenig, dissented from policy actions in 2010 and called for raising the benchmark interest rate from near zero percent.
Asset purchases by the Fed, now totaling $85 billion per month, will “almost certainly increase the risk of complicating the FOMC’s exit strategy” because bonds will need to eventually be sold, George said.
“Like others, I am concerned about the high rate of unemployment, but I recognize that monetary policy, by contributing to financial imbalances and instability, can just as easily aggravate unemployment as heal it,” George said to the Central Exchange, a group that promotes leadership development for women.

Consumer Comfort Falls as U.S. Payroll Tax Takes Hold: Economy (Bloomberg)
Consumer confidence waned last week and firings unexpectedly climbed, the first sign that higher U.S. payroll taxes will slow the economic expansion at the start of this year.
The Bloomberg Consumer Comfort Index fell to minus 34.4 in the seven days ended Jan. 6 from minus 31.8 the prior period, the biggest one-week drop since August. Jobless claims increased by 4,000 to 371,000 in the week ended Jan. 5, according to Labor Department figures.
Paychecks are shrinking after Congress last week let the tax that funds Social Security benefits revert to 6.2 percent from 4.2 percent. That means Americans will have to rely on increases in salaries to counter some of the lost income at the same time the job market shows little sign of further progress and the debate in Washington turns to federal spending cuts and the debt.
“Consumers are coming to the realization that their take- home pay is going to get smaller,” said Richard Yamarone, a senior economist at Bloomberg LP in New York. “That will translate into weaker spending. I expect the economy will spin its wheels for many months until the jobs picture, and associated incomes, improves.”
Shares climbed as optimism about China’s economy tempered a decline in technology stocks. The Standard & Poor’s 500 Index rose 0.3 percent to 1,465.98 at 12:58 p.m. in New York.

Wholesale Inventories in U.S. Increase 0.6% as Sales Surge (Bloomberg)
Inventories at U.S. wholesalers rose more than forecast in November as companies tried to keep up with a surge in demand.
The 0.6 percent increase in stockpiles followed a 0.3 percent rise in October that was less than initially estimated, the Commerce Department said today in Washington. The median forecast in a Bloomberg survey called for a 0.2 percent gain. Sales jumped 2.3 percent, the most since March 2011, as auto demand rebounded from a superstorm Sandy-related drop.
The acceleration in purchases left wholesalers with enough goods on hand to last 1.19 months at the current sales pace, the lowest since May. Stabilization in global growth and clarity on U.S. budget issues may help bolster demand and spur companies to step up orders.
“If you look at sales over the final two months of the year, this was a good thing,” Brian Jones, a senior U.S. economist at Societe Generale in New York, said before the report. “They were building inventories and importing cars in anticipation of solid year-end demand.”
The median forecast for wholesale inventories was based on a Bloomberg survey of 23 economists. Estimates ranged from a decrease of 0.4 percent to a 0.9 percent gain after an initially reported 0.6 percent advance in October.
Another report today showed initial jobless claims climbed to 371,000 last week from 367,000. A consistent decline in firings, along with a rise in payrolls, is needed to spur consumer spending, the biggest part of the economy.
Wholesalers’ stockpiles of durable goods, or those meant to last several years, increased 0.4 percent, led by autos, electrical equipment and machinery, today’s report showed. Demand for goods meant to last at least three years surged 2.7 percent, the biggest gain since December 2011.

China Data Suspected Says 75-Year-Old Theory: Cutting Research (Bloomberg)
A mathematical tool devised by an American physicist in the 1930s underscores doubts about the quality and reliability of Chinese economic data, according to research by Australia & New Zealand Banking Group Ltd. (ANZ)
The results are based on “Benford’s Law,” which holds that in any series of numbers, certain patterns will be found only if the statistics are naturally generated. The rule, created by former General Electric Co. (GE) engineer Frank Benford, suggests patterns for the first and second digits in a numeric series and can be used to detect phony data, Li-Gang Liu, ANZ’s chief economist for Greater China, and colleague Louis Lam said in a Jan. 8 report.
Benford’s work has already been adapted to show Greece should have been suspected of manipulating its data before the European debt crisis and that now-jailed financier Bernard Madoff was overstating investment returns.
The ANZ economists studied China’s annual nominal gross domestic product data from 1952 to 2011 to measure how frequently numbers from one to nine appeared as the first digit. While the 24 occurrences of “one” is higher than the 18 suggested by the rule, the economists said the statistics largely abide by what Benford’s Law allows. The same is true of industrial production data.
Suspicions emerged when the data was probed more deeply and reported in percentage terms, the ANZ report said, adding that the guilty party was often the second digit. An examination of the quarterly GDP growth rate from December 1991 to September 2012 shows zero occurred as the second digit 21 times, much higher than what Benford would calculate and suggesting a rounding-up to achieve a bigger leading digit. One through four also appeared more regularly than the law reckons, while seven through nine featured less.
Inflation reported on a percentage basis also failed to fit the law.
“Non-conformity to the Benford’s law does not always indicate data manipulation, but nevertheless it raises doubts about the quality of Chinese data,” the authors said. “Our statistical analysis seems to have confirmed the long-rooted suspicion on quality and reliability of Chinese data.”

Japan Current Account Slides Into Deficit Ahead of Stimulus (Bloomberg)
Japan posted a larger-than-expected current account deficit as exports fell, underscoring the challenges facing Prime Minister Shinzo Abe as he prepares a stimulus package to pull the economy out of a recession.
The shortfall in the widest measure of the nation’s trade in November was 222.4 billion yen ($2.5 billion), the Ministry of Finance said in Tokyo today. The median estimate of 19 economists surveyed by Bloomberg News was for a 17.1 billion yen deficit.
The government will announce economic stimulus measures today, with Nomura Securities Co. estimating that the spending will increase gross domestic product by 0.8 percentage point in the year starting in April. Exporters may receive a boost this year from a yen that has fallen around 10 percent against the dollar since mid-November.
“The trade numbers are weak now because of the global slowdown last year,” Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo, said before the report. “The Abe administration may keep on pushing for a weaker yen.”
The currency slid through 89 per dollar after the data, before trading at 89.27 as of 8:54 a.m. in Tokyo, the weakest since June 2010.
The current account is the sum of the balance of trade, earnings on investments and cash transfers. November is traditionally a weak month for Japan’s account because smaller dividend payments reduce income from overseas investments, according to Maruyama. Today’s deficit is the first since at least 1985 in months other than January, when seasonal trade factors drag down the account.

BOJ Said to Consider Boosting Inflation Forecast After Yen Falls (Bloomberg)
The Bank of Japan (8301) may increase its fiscal 2014 inflation forecast at this month’s policy meeting as stimulus measures and a weaker yen boost growth prospects, according to people familiar with officials’ discussions.
The central bank may raise an October projection for an 0.8 percent increase in consumer prices excluding fresh food, the people said on condition of anonymity because the discussions are private. They didn’t specify a new number. The current forecast was made before Prime Minister Shinzo Abe took office last month, pledging aggressive measures to counter deflation.
The BOJ is set to adopt the 2 percent inflation target advocated by Abe, doubling its existing goal of 1 percent, without setting a deadline for achieving it, the people said. Nomura Holdings Inc. economist Tomo Kinoshita said yesterday that Japan’s struggle to exit deflation means the higher objective may not be attained until after 2015.
“Two percent is a very ambitious target,” Kinoshita said in Tokyo. “The government and Bank of Japan have tried various means of getting out of deflation, but they have yet to produce a result.”
Japan’s consumer prices excluding fresh food, a benchmark monitored by the central bank, fell 0.1 percent in November from a year earlier. The economy has been gripped by deflation since the late 1990s, caused by burst stock and land-price bubbles, and the ensuing hobbling of the financial system by non- performing loans.

Lew-for-Geithner Switch Ends Era of Tight Fed-Treasury Ties (Bloomberg)
Timothy F. Geithner’s replacement by Jack Lew as Treasury secretary will end a period of unusually strong ties between the department and the Federal Reserve. For the Fed, the result may be less insulation from critics, yet greater influence in financial market regulation.
Geithner worked closely with Fed Chairman Ben S. Bernanke in fighting the financial crisis and cleaning up its aftermath, first as head of the Federal Reserve Bank of New York and then as Treasury secretary. Going through the “searing experience of the panic together” created a bond between the two that “you get from that kind of combat,” Geithner said in a 2010 interview
“You’ve never had a secretary with the type of credentials” that Geithner had, including his relationships and knowledge as a former Fed insider, said Edwin M. Truman, who has worked at both the central bank and under Geithner at the Treasury. “The only thing that comes close” was when Paul Volcker headed the Fed after being a senior Treasury official.
President Barack Obama said he will nominate Lew, his White House chief of staff, to succeed Geithner at the Treasury, calling him “a master of policy.” Obama said Geithner will “go down as one of our finest secretaries of the Treasury.”

Draghi Hails ‘Positive Contagion’ as Euro Markets Stabilize (Bloomberg)
European Central Bank President Mario Draghi said the euro-area economy will slowly return to health in 2013 as the region’s bond markets stabilize after three years of turmoil.
“We have signs that fragmentation is being gradually repaired,” Draghi told reporters in Frankfurt today after the ECB kept its benchmark interest rate at 0.75 percent. “We spoke a lot about contagion when things go poorly but I believe there is a positive contagion when things go well. And I think that’s also what is in play now. There is a positive contagion.”
Draghi chaired the Governing Council’s first decision of the year as the crisis that has rampaged through the economy since early 2010 shows signs of waning. The ECB’s pledge to buy as many government bonds as needed, plus “significant” political progress on melding the euro’s 17 economies together, has diminished concerns the currency bloc would break up.
“A gradual recovery should start” later this year as ECB measures work their way through the economy, Draghi said.
Spain’s 10-year borrowing costs, which hit a euro-era record of 7.75 percent in July, today fell below 5 percent for the first time since March after a bond sale. The euro climbed the most in four months against the dollar, rising 1.2 percent to $1.3219. The currency advanced to the highest since July 2011 against the yen.

20130111 0928 Global Commodities Related News.

Commodities Rise to Highest in 11 Weeks on China Demand Outlook (Bloomberg)
Commodities rose to their highest in more than 11 weeks, led by energy and metals, amid optimism that an economic recovery in China will boost demand. Gold advanced to a one-week high.
The Standard & Poor’s GSCI Index of 24 raw materials gained to the highest level since Oct. 22, as aluminum advanced as much as 2 percent and crude climbed to the highest level in more than three months. China’s exports jumped 14.1 percent last month, compared with a 5 percent median forecast in a Bloomberg News survey. The nation is the world’s biggest user of industrial metals and energy.
“From a broad commodity perspective, what is good is the fact that China’s exports have picked up quite significantly in December and well above expectations,” Walter de Wet, head of commodities research at Standard Bank Plc, said by phone from Johannesburg today. “There is no doubt that things are stabilizing in China.”
Oil for February delivery gained as much as $1.60 to $94.70 on the New York Mercantile Exchange, the most since Sept. 19. Saudi Arabia cut crude production in December to a 19-month low, according a Gulf official with knowledge of the kingdom’s energy policy who asked not to be identified because the information is confidential.
Aluminum for three-month delivery on the London Metal Exchange advanced for a fourth day, gaining 1.5 percent to $2,105.50 a ton. Usage of the lightweight metal in China will rise 11 percent this year, aided by stimulus spending, Alcoa Inc., the biggest U.S. producer, said this week.
Gold advanced to a one-week high after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth.

Corn Market Recap for 1/10/2013 (CME)
March Corn finished up 4 1/2 at 698 3/4, 1 3/4 off the high and 4 1/4 up from the low. May Corn closed up 3 3/4 at 697 1/2. This was 3 3/4 up from the low and 1 1/2 off the high.
March corn traded slightly higher on the day as trader's position ahead of tomorrow's USDA report. Some in the trade are leaning slightly bullish for the report on expectations that supply may be cut if harvested acreage is revised lower. The positive supply side sentiment was offset after export sales came in well below market estimates and show no real sign of improving. Net weekly export sales came in at only 12,600 tonnes for the current marketing year and a cancellation of 11,600 for the next marketing year for a total of only 1,000 tonnes. As of January 3rd, cumulative corn sales stand at 44% of the USDA forecast for current marketing year vs. a 5 year average of 57.5%. Sales of 478,000 tonnes are needed each week to reach the USDA forecast, up from 464,400 the week prior. South American corn continues to trade at a discount to the US which could be considered a long term negative to price direction.
January Rice finished down 0.13 at 14.87, equal to the high and equal to the low.

Wheat Market Recap Report (CME)
March Wheat finished down 1 at 744 1/2, 12 off the high and 1/2 up from the low. May Wheat closed down 1 at 753 1/2. This was 1/2 up from the low and 11 1/4 off the high.
KC and Chicago wheat traded lower into the closing bell. It was reported that the US sold a portion of the Egyptian wheat tender this morning which added a supportive tilt to the market but some were disappointed after a portion of the trade went to Canada. This limited gains on the day along with light volume ahead of tomorrow's report. Total tonnage on the trade amounted to 115,000 tonnes. France has missed out on export business recently after being active sellers last fall. The EU granted export licenses for 373,000 tonnes of soft wheat this week, taking the total since the beginning of the crop year to 10.1 million tonnes vs. 7.5 last year. The US export sales report was considered bearish against trade estimates after coming in at 233,700 tonnes for the current marketing year. As of January 3rd, cumulative wheat sales stand at 68% of the USDA forecast for the current marketing year vs. a 5 year average of 75%. Sales of 435,000 tonnes are needed each week to reach the USDA forecast. The fact that sales came in below the pace needed to reach this year's USDA export estimate is seen as a negative to price direction.
March Oats closed up 3 at 339 1/2. This was 6 1/4 up from the low and 1 off the high.

Corn Supply Dropping Most Since 1995 Signals U.S. Rally (Bloomberg)
U.S. corn supplies, the world’s biggest, are dropping at the fastest pace in 17 years as drought damage exceeds government forecasts and five months of declining prices spur demand from livestock producers.
Inventories on Dec. 1 were 15 percent lower than a year earlier at 8.22 billion bushels (208.8 million metric tons), the smallest post-harvest stockpile since 2003, according to the average of 26 analyst estimates compiled by Bloomberg. Goldman Sachs Group Inc., Morgan Stanley and Macquarie Group Ltd. expect prices to rebound at least 17 percent to $8.14 a bushel in 2013.
While futures surged to a record $8.49 in August as the drought spread, they then tumbled 18 percent as U.S. exports slowed and buyers sought cheaper supply from Brazil and Ukraine. Prices will rebound because the government overestimated the harvest and probably will lower the figure when it reports tomorrow, the analysts said. The U.S. Department of Agriculture already expects global stockpiles on Oct. 1 to be the smallest relative to consumption since 1974.
“Consumers have become too complacent waiting for lower prices,” said Christopher Gadd, an analyst at Macquarie in London who expects prices to reach $8.50 this year. “The story going forward will be an improvement in U.S. exports. Buyers have nowhere else to turn.”
Corn rose as much as 68 percent from June 15 to mid-August on the Chicago Board of Trade before retreating. It ended the year up 8 percent, compared with a 0.3 percent gain in the Standard & Poor’s GSCI gauge of 24 commodities. The MSCI All- Country World Index of equities jumped 13 percent. A Bank of America Corp. index shows Treasuries returned 2.2 percent.

Corn Extends Rally on Tightening U.S. Inventories: Soybeans Drop (Bloomberg)
Corn rose for a fourth day, heading for the longest rally since October, on speculation that the worst drought since the 1930s sent U.S. inventories to a nine- year low. Soybeans dropped.
The government probably will say tomorrow that domestic corn reserves on Dec. 1 fell 15 percent from a year earlier, the biggest drop since 1995, according to a Bloomberg survey. Cash prices yesterday in Kansas City were almost double the 10-year average, while ethanol producers in Cedar Rapids, Iowa, were paying a premium of 28.4 cents a bushel over Chicago futures, compared with a 4.4-cent discount a year earlier.
“Gains were fueled by expectations for the federal government to trim its estimate for 2012 domestic corn production,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a report to clients. “Cash markets are firming” on increasing completion for supplies from U.S. livestock producers and ethanol plants, he said.
Corn futures for March delivery gained 0.4 percent to $6.9675 a bushel at 9:55 a.m. on the Chicago Board of Trade, heading for the first four-day rally since Oct. 19. Prices rallied as much as 68 percent since mid-June to a record $8.49 on Aug. 10 before retreating.
Soybean futures for March delivery slid 0.2 percent to $13.825 a bushel in Chicago. Through yesterday, the most-active contract fell 23 percent since reaching a record $17.89 on Sept. 4 as rains boosted crops in Brazil and Argentina, the two biggest producers after the U.S. last year.
Earlier, the contract gained 0.7 percent after the U.S. Department of Agriculture reported export sales of 120,000 metric tons to China for delivery in the 12 months starting Sept. 1 and 60,000 tons for delivery before Aug. 31. Exporters reported sales of 281,500 tons to unknown destinations for delivery by Aug. 31.
In the U.S., corn is the biggest crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

Natural Gas Gains Most as Nickel Declines: Commodities at Close (Bloomberg)
The Standard & Poor’s GSCI gauge of 24 commodities rose 0.5 percent to 653.11 at 4 p.m. in New York. Natural gas and cocoa led the advance, while nickel declined.
The UBS Bloomberg CMCI index of 26 raw materials gained 0.6 percent to 1,581.247.
NATURAL GAS
Natural gas futures advanced for the first time in four days after a government report showed that U.S. stockpiles declined by the most in almost two years.
Gas gained 2.6 percent after the Energy Information Administration said inventories fell 201 billion cubic feet in the seven days ended Jan. 4 to 3.316 trillion cubic feet, the biggest weekly decline since February 2011. Analyst estimates compiled by Bloomberg showed an expected drop of 191 billion.
Natural gas for February delivery rose 8 cents to settle at $3.193 per million British thermal units on the New York Mercantile Exchange. Prices have climbed 8.6 percent from a year ago.
BASE METALS
Copper climbed for the first time in six sessions in New York as trade data for all goods signaled an economic rebound in China, the world’s biggest metals consumer. Aluminum gained for a fourth day.
Chinese customs figures showed today that total exports jumped 14 percent in December from a year earlier. That was the biggest increase since May and more than the 5 percent gain predicted by analysts surveyed by Bloomberg. A broad measure of credit surged 28 percent, according to the central bank.
Copper futures for delivery in March advanced 1 percent to settle at $3.709 a pound on the Comex in New York. The metal fell 1.8 percent in the previous five sessions, the longest string of declines since late October.
On the LME, copper for delivery in three months rose 0.4 percent to $8,115 a ton ($3.68 a pound).
Aluminum for delivery in three months gained 1.9 percent to $2,113.50 a ton on the LME. Demand for the lightweight metal in China will rise 11 percent this year, aided by stimulus spending, according to Alcoa Inc. (AA), the biggest U.S. producer.
Lead, zinc and tin climbed in London. Nickel fell.
CRUDE OIL
Oil rose to the highest level in three months as exports from China accelerated and European Central Bank President Mario Draghi said “a gradual recovery should start” in the region this year.
Crude oil for February delivery gained 72 cents to $93.82 a barrel on the Nymex, the highest settlement since Sept. 18.
Brent oil for February settlement increased 13 cents to $111.89 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to New York futures narrowed 59 cents to $18.07 a barrel, the narrowest spread since Sept. 24.
PRECIOUS METALS
Gold jumped the most in more than two months after Draghi said economic weakness in the region will continue into 2013, boosting speculation that policy makers will do more to revive growth.
Gold futures for February delivery gained 1.4 percent to settle at $1,678 an ounce on the Comex in New York, the biggest jump for a most-active contract since Nov. 6.
Silver futures for March delivery advanced 2.2 percent to $30.918 an ounce in New York, the third gain in four days.
On the Nymex, platinum futures for April delivery jumped 2.1 percent to $1,634.30 an ounce, the biggest climb since Sept. 12.
Palladium futures for March delivery gained 2 percent to $702.20 an ounce, the second straight rise.
SOFT COMMODITIES
Orange-juice futures gained the most in four weeks on speculation that the U.S. will cut its forecast for output in Florida, the world’s second-biggest citrus grower. Sugar, coffee, cocoa and cotton also advanced.
Orange juice for March delivery rose 1.5 percent to settle at $1.124 a pound on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Dec. 13. A box weighs 90 pounds, or 41 kilograms. Brazil is the top producer.
Raw-sugar futures for March delivery climbed 1.3 percent to 18.96 cents a pound in New York.
Arabica-coffee futures for March delivery increased 1.2 percent to $1.4965 a pound.
Cocoa futures for March delivery rallied 2.1 percent to $2,269 a metric ton.
Cotton futures for March delivery advanced 0.5 percent to 75.2 cents a pound.
GRAINS, OILSEEDS
Wheat fell for the third straight day on speculation that the U.S. Department of Agriculture tomorrow will say winter seeding from September through November surged to a four-year high.
Wheat futures for March delivery fell 0.1 percent to settle at $7.445 a bushel on the Chicago Board of Trade. Last quarter, the price tumbled 14 percent, the most since mid-2011, on prospects for improving supplies.
In the U.S., wheat is the fourth-largest crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.
Corn rose for a fourth day, capping the longest rally since October, on speculation that the worst drought since the 1930s sent U.S. inventories to a nine-year low. Soybeans declined.
Corn futures for March delivery climbed 0.6 percent to close at $6.9875 a bushel on the Chicago Board of Trade, capping the first four-day rally since Oct. 19. Prices rallied as much as 68 percent since mid-June to a record $8.49 on Aug. 10 before retreating.
Soybean futures for March delivery slid 0.4 percent to $13.7975 a bushel in Chicago. The most-active contract has fallen 23 percent since reaching a record $17.89 on Sept. 4 as rains boosted crops in Brazil and Argentina, the two biggest producers after the U.S. last year.
OIL PRODUCTS
Heating oil fell after imports of gasoil to the U.S. East Coast increased, replenishing stockpiles.
Heating oil for February delivery declined 1.56 cents, or 0.5 percent, to settle at $3.0543 a gallon on the Nymex.
Gasoline for February delivery advanced 1.44 cents, or 0.5 percent, to $2.7933 a gallon.
The average nationwide retail price for regular gasoline gained 0.6 cent to $3.31 a gallon, AAA said today on its website. That’s the highest price since Dec. 11.

Oil Rises a Second Day on Saudi Production Cut, Economic Outlook (Bloomberg)
Oil rose, extending the longest weekly winning streak since August, amid a cut in production by Saudi Arabia and signs of global economic growth.
Futures gained as much as 0.3 percent after closing at the highest level in almost four months yesterday. Saudi Arabia, the world’s largest crude exporter, reduced production in December to the lowest in 19 months as booming U.S. output and recovering shipments from Iraq threaten to oversupply the global oil market, according to a person with knowledge of the kingdom’s energy policy. Prices also advanced after Chinese exports accelerated and European Central Bank President Mario Draghi said the euro-area economy will gradually recover.
Crude for February delivery rose as much as 31 cents to $94.13 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.99 at 11:08 a.m. Sydney time. The contract increased 72 cents to $93.82 yesterday, the highest since Sept. 18. Prices declined 7.1 percent last year.
Brent for February settlement gained 13 cents to $111.89 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract closed at a premium of $18.07 to West Texas Intermediate futures, the narrowest since Sept. 24.
Saudi Arabian production fell 4.9 percent to 9.025 million barrels a day in December, the person in the Persian Gulf said, asking not to be identified because the information is confidential. The 465,000 barrel cut is the largest monthly drop since November 2008, when the country and other members of the Organization of Petroleum Exporting Countries reduced supplies amid a global recession.

Recap Energy Market Report (CME)
February crude oil prices rallied sharply higher during the initial morning hours, climbing to a new three month high in the process. The combination of stronger than expected Chinese trade data overnight and headlines of a further cutback in Saudi Arabian oil production in December contributed to the morning advance. Some traders noted that a new contract high in the March S&P 500 and weakness in the US dollar offered an added source of support. A measure of late-day profit-taking trimmed some of the early gains but February still closed up $0.72 on the session

Brent Crude Oil Market Report (CME)
February Brent crude oil prices broke out of their recent congestion zone and climbed to the highest level since October 16th. Much stronger than expected Chinese trade day overnight and reports of a further cut in Saudi Arabian oil output in December were seen as supportive forces. Meanwhile, reports of an extra cargo added to January North Sea loadings put pressure on Forties and robust output from the Buzzard oil field was seen as an added negative. The February Brent vs. WTI crude oil spread narrowed around $0.40 on the session and just above the $18 level.

Gold Climbs to One-Week High as Draghi Sees Weakness (Bloomberg)
Gold jumped the most in more than two months after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth.
“The economic weakness in the euro area is expected to extend into 2013,” Draghi said at a press conference in Frankfurt today. The metal climbed 7 percent last year, a 12th straight gain, as central banks in Europe, the U.S. and China increased stimulus measures to boost economies.
“Draghi made it clear that Europe is still on the weaker side, and they will continue to lean towards accommodative policy,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview.
Gold futures for February delivery gained 1.4 percent to settle at $1,678 an ounce at 1:47 p.m. on the Comex in New York, the biggest jump for a most-active contract since Nov. 6. Earlier, prices touched $1,678.80, the highest since Jan. 3.
“A gradual recovery should start” later this year as ECB measures work their way through the economy, Draghi said.
The metal also rose after better-than-expected China trade figures spurred optimism that demand for raw materials will increase. Data this week showed China’s net imports of gold rose to a seven-month high in November, while volumes traded on the Shanghai Gold Exchange jumped.
“The market was already trading higher on the Chinese data, and Draghi’s statements gave it a further boost,” O’Neill said.
Silver futures for March delivery advanced 2.2 percent to $30.918 an ounce in New York, the third gain in four days.
On the New York Mercantile Exchange, platinum futures for April delivery jumped 2.1 percent to $1,634.30 an ounce, the biggest climb since Sept. 12.
Palladium futures for March delivery gained 2 percent to $702.20 an ounce, the second straight rise.

OPEC to Boost Supply for Final Winter Demand, Oil Movements Says (Bloomberg)
The Organization of Petroleum Exporting Countries will increase crude shipments this month to meet the final phase of peak winter demand in the northern hemisphere, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 24.15 million barrels a day in the four weeks to Jan. 26, up 210,000 barrels, or 0.9 percent, from the previous period, the researcher said today in an e-mailed report. The figures exclude Angola and Ecuador.
“Winter demand is still strong in the east, near the tail- end but not quite there,” Roy Mason, the company’s founder, said by phone from Halifax, England. “We’ve got another two or three weeks to go before we’re at the peak.”
Brent crude rose as high as $113.29 a barrel on the ICE Futures Europe exchange in London today, its strongest level in almost three months, amid signs of economic recovery and lower production by Saudi Arabia. The kingdom cut output by 465,000 barrels a day, or 4.9 percent, in December to 9.025 million, according to a Gulf official who declined to be identified.
“It’s probably the right time to put the brakes on,” said Mason. “Looking ahead, they must be able to see a price decline in the spring” because OPEC is currently supplying more than the market needs, he said.
Middle East shipments will increase 1.3 percent to 17.83 million barrels a day in the period, compared with 17.6 million in the four weeks to Dec. 29, according to the report. That figure includes non-OPEC members Oman and Yemen.
Crude on board tankers will average 476.1 million barrels, down 2 percent on the previous period, the data show. Oil Movements calculates the volumes by tallying tanker bookings. Its figures exclude crude held on vessels for storage.
OPEC comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The organization is next scheduled to meet in May.

Silver Market Recap Report (CME)
The silver market managed a very impressive range up extension today and in the process the March contract reached up to the highest level since the big washout day of January 3rd. Like gold and other physical commodity markets, silver seemed to lifted by revived macro economic optimism from China. Silver probably saw some added lift from strength in the Euro and weakness in the Greenback. With silver taking out some consolidation resistance and ranging upward on the charts, it is possible that some of the buying today was technical in nature.

Gold Market Recap Report (CME)
A big day for the bull camp as gold showed a minor run up to start before ranging up rather aggressively just ahead of mid session. After seeing a couple weeks where gold wasn't exactly tracking a specific focus some traders might come away from the action today with the view that gold has shifted back into a physical commodity market in need of improvement in the global economy. After all inflationary hopes were dashed last week by the US Fed and for the time being, extreme flight to quality hopes were tempered by the partial avoidance of the fiscal cliff and that might have left gold with a physical commodity market status.

20130111 0928 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
January Soybeans finished down 2 1/4 at 1417 1/2, 12 off the high and 3 up from the low. March Soybeans closed down 7 1/2 at 1378. This was 1 3/4 up from the low and 16 3/4 off the high.
January Soymeal closed down 2.6 at 408.7. This was equal to the low and 4.1 off the high.
January Soybean Oil finished up 0.15 at 49.39, 0.32 off the high and 0.14 up from the low.
March soybeans traded mixed on the day but saw pressure at the closing bell to settle in negative territory. Traders continue to shift focus to the favorable weather conditions in South America and large production estimates, as well as tomorrow's big USDA report. The USDA reported this morning that US private exporters sold a total of 587,500 tonnes of soybeans to China and unknown destinations and 246,000 of the total were for delivery in 2013/14. Export sales were reported slightly below market expectations with sales coming in at 321,800 tonnes for the current marketing year and 85,000 for the next marketing year for a total of 406,800. As of January 3rd, cumulative sales stand at 85% of the USDA forecast for the current marketing year vs. a 5 year average of 71%. Sales of 160,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in at 118,200 tonnes for the current marketing year and as of January 3rd, cumulative meal sales stand at 80% of the USDA forecast vs. a 5 year average of 50.5%. Sales of 39,000 tonnes are needed each week to reach the USDA forecast. Net oil sales came in at 10,900 tonnes and as of January 3rd, cumulative oil sales stand at 82% of the USDA forecast vs. a 5 year average of 41%. Sales of 4,000 tonnes are needed each week to reach the USDA forecast.

European vegoils: Palm oil down on bearish data - RTRS
11-Jan-2013 02:59
ROTTERDAM, Jan 10 (Reuters) - Palm oil on the European vegetable oils market eased on Thursday following data showing disappointing Malaysian exports during the first 10 days of January and new record high palm oil stocks. OILS/E PALM/SGS PALM/ITS (Full Story)
* “Palm oil eased a little with palm oil futures but ended the day off the lows, underpinned by a weak dollar. Buyers remained cautious ahead of Friday’s fresh USDA crop and supply/demand data,” one broker said.
Palm oil was offered mostly between unchanged and $7.50 a tonne down from Wednesday after Malaysian palm oil futures closed down between 15 and 32 ringgit per tonne on further growth in already record stocks, which could rise even more after lower-than-expected exports. 0#FCPO: Feb delivery RBD palm olein changed hands at $800 and $802.50 a tonne fob Malaysia, while April/June traded $5 down from Wednesday between $847.50 and $835, and July/Sept fetched from $860 down to $847.50 and back up to $850, which was down $5 on the day. Crude palm oil changed hands at $862.50 and $865 a tonne cif Rotterdam for April/June, and July/Sept traded between $870 and $875 cif. At 1700 GMT CBOT soyoil was between 0.22 cents down and 0.14 cent per lb up, supported by a weak dollar, while position squaring ahead of the USDA supply/demand report weighed on levels. Liquid oils – soyoil, rapeoil and sunoil - were offered between 5 and 9 euros per tonne down due to the dollar weakness, which weighs on euro-priced products, and to bearish sentiment ahead of Friday’s USDA data and to prospects for a bumper South American soybean crop, which also weighed on rapeseed futures. 0#COM: Feb/April EU rapeoil changed hands at 900 euros per tonne fob exmill, down 8 euros from Wednesday, while May/July traded 11 euros down at between 900 and 987 euros, and Aug/Oct fetched 888 euros fob, down 7 euros. July/Sept EU sunoil traded between $1,235 and $1,230 a tonne extank. Lauric oils were offered between unchanged and $15 a tonne down from Wednesday in sympathy with palm oil.

VEGOILS-Palm falls to 3-wk low on slowing exports, high stocks BOZ2 DBYF3 FCPOc3 - RTRS
10-Jan-2013 18:26
Malaysia's Jan 1-10 palm exports fall 25 pct -ITS Exports drop 34 pct for same period -SGS Malaysia Dec palm oil stocks up 2.4 pct to record 2.63 mln tonnes -MPOB

(Updates prices, adds SGS exports data)
By Chew Yee Kiat
SINGAPORE, Jan 10 (Reuters) - Malaysian palm oil futures fell to a three-week low on Thursday, weighed down by falling exports and persistently high stocks in the world's No.2 producer of the edible oil.
Exports of Malaysian palm oil products for Jan. 1-10 tumbled 25 percent to 373,462 tonnes from a revised 499,732 tonnes shipped during Dec. 1-10, cargo surveyor Intertek Testing Services said on Thursday. PALM/ITS
Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 34 percent drop in exports during the same period, to 343,081 tonnes. PALM/SGS
The fall came despite Malaysia's zero percent export tax that was expected to boost crude palm oil shipments and amid stricter Chinese regulations on edible oil imports that may have deterred some exporters.
"Exports were bad for the first ten days. A lot of people think that with the new tax structure, exports should improve, but it's not necessarily so because for the past few years we already have a 3-million-tonne per year duty-free export quota," said a trader with a foreign commodities brokerage in Malaysia.
"For the longer term, yes, the tax structure is positive but if you expect an immediate impact for the first ten days, I don't think it's possible."
The benchmark March contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 1.2 percent to close at 2,383 ringgit ($789) per tonne, off an earlier low at 2,356 ringgit, a level not seen since Dec. 21.
Total traded volume stood at 50,625 lots of 25 tonnes each, more than twice the usual 25,000 lots.
Palm oil could face further pressure as data released by the Malaysian Palm Oil Board after the midday break showed stocks climbed 2.4 percent from the previous month to a new record at 2.63 million tonnes, fuelling concerns that inventory levels could remain high well into January. (Full Story)
The data went against market expectations that stocks are likely to have dropped 2.5 percent to 2.5 million tonnes. PALM/POLL
Malaysia's weather office maintained its forecast for heavy rain, saying the downpour may cause floods in low-lying areas in the key palm producing state of Sarawak and could disrupt harvesting.
Brent crude futures jumped towards $113 on Thursday after news of a sharp cut in Saudi oil production, an explosion in Yemen which halted most of the country's oil exports and following bullish Chinese trade data. O/R
In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 was flat in late Asian trade, with investors awaiting 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 edged up 0.2 percent by 0540 GMT.


Palm oil stocks at all time high
Palm oil stocks rose to an all-time high of 2.62m tonnes in Dec 2012, higher than expectations of 2.5m tonnes. CPO stocks decreased by 5.5% to 1.58m tonnes, but processed palm oil jumped 17.2% to 1.05m tonnes. Production fell by 5.8% m-o-m to 1.78m tonnes and export fell 0.7% m-o-m to 1.64m tonnes. (Financial Daily)