20121005 1007 Global Market Related News.

Asia FX By Cornelius Luca - Thu 04 Oct 2012 16:49:15 CT (Source:CME/www.lucafxta.com)
All the European and commodity currencies ended higher and even the yen closed off its worst levels. The market will now focus on the US non-farm payrolls, particularly since it will be the second last before the presidential elections. The US stock markets advanced. Gold, oil and silver ended up as well. The short-term outlook for most of the major foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is short on all foreign currencies. Good luck!

Overnight
US: The initial jobless claims edged up to 367,000 from the previous week's revised figure of 363,000 (from the 359,000 originally reported).
US: Factory orders contracted 5.2% in August after expanding 2.8% in July.
Canada: The Ivey Purchasing Managers Index rose to 68.5 in September from 65.2 in August.

Today's economic calendar
Japan: The BoJ will leave interest rate at 0.1%
Japan: Coincident index / leading economic index for August

Asian Stocks Rise as U.S. Economic Data Beats Estimates (Bloomberg)
Asian stocks rose, with a regional benchmark index heading for its highest close in a week, as reports on U.S. jobs and service industries beat expectations, easing concern the world’s biggest economy is slowing. Toyota Motor Corp. (7203), the world’s largest carmaker by market value, climbed 3 percent in Tokyo. Fisher & Paykel Appliances Holdings Ltd. advanced 3.7 percent in Wellington after directors of the refrigerator maker rejected a bid from China’s Haier Corp., saying it is too low. Swire Properties Ltd. fell 2.9 percent after the controlling shareholder of the Hong Kong office landlord said it’s selling shares at a discount. The MSCI Asia Pacific Index (MXAP) increased 0.6 percent to 122.20 as of 6:05 p.m. in Tokyo, with almost two shares rising for each that fell. The regional index gained 4 percent in September amid speculation China will add to stimulus measures, following moves by central banks in the U.S. and Japan, to ease monetary policy through so-called quantitative easing.
U.S. jobs data “was a little bit better than expectations and that’s positive,” said George Boubouras, Melbourne-based head of investment strategy at the Australian wealth-management unit of UBS AG. The Swiss bank has about $1.5 trillion in assets under management. “Stimulus is there for a reason.”

Japan Stocks Rise on ECB Bond Pledge, U.S. Economic Data (Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average heading for the first weekly gain in three weeks, after European Central Bank President Mario Draghi said it stands ready to buy bonds and on U.S. economic data that beat expectations. Brother Industries Ltd., an office-equipment company that gets almost 30 percent of its sales in Europe, climbed 2.8 percent. Bridgestone Corp., a tiremaker that counts on the Americas as its biggest market, rose 2 percent on U.S. jobless claims and factory orders that were better than forecast. EAccess Ltd., a telecom being bought by Softbank Corp., is poised to soar after the trading limit on the stock was raised. The stock has surged 118 percent this week. The Nikkei 225 gained 0.5 percent to 8,867.20 as of 9:26 a.m. in Tokyo, poised to rise less than 0.1 percent on the week. Volume on the gauge was more than 10 percent above the 30-day average ahead of the close of the Bank of Japan’s two-day policy meeting today.
The broader Topix Index rose 0.3 percent to 737.26, with about two shares rising for each that fell. “The market is telling us there won’t be an additional blowup or crisis in Europe in the near term,” said Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about $1 billion. “Equity markets are turning up. It almost doesn’t matter which market you look at.”

U.S. Stocks Rise on Economic Reports Amid Draghi Comments (Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a fourth day, as reports on jobless claims and factory orders were better than forecast and the European Central Bank said it stands ready to buy bonds. All 10 industry groups in the S&P 500 advanced. Financial and commodity shares rose the most, climbing at least 1 percent, as Bank of America Corp. (BAC) and Consol Energy Inc. (CNX) rallied more than 3.3 percent. Gap Inc. (GPS) and Target Corp. (TGT) gained among retailers after monthly same-store sales topped estimates. Ryder System Inc. (R) jumped 6 percent amid an analyst upgrade. The S&P 500 increased 0.7 percent to 1,461.40 at 4 p.m. in New York. The benchmark index for American equities has rallied 1.4 percent this week. The Dow Jones Industrial Average rose 80.75 points, or 0.6 percent, to 13,575.36 today. Volume for exchange-listed stocks in the U.S. was 6.1 billion shares, or 2.2 percent above the three-month average.
“In the last several weeks, we have coordinated global monetary stimulus, and that’s starting to show up in the change of trends in American economic statistics,” Douglas Cote, chief market strategist at New York-based ING U.S. Investment Management, said in a phone interview. His firm oversees about $165 billion. “Employment, manufacturing, services and consumer sentiment have all gone from weakening to strengthening.” U.S. stocks rose as Labor Department figures showed applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. Orders placed with U.S. factories fell 5.2 percent in August, the Commerce Department said. The median forecast of economists in a Bloomberg News survey called for a decline of 5.9 percent.

Emerging Stocks Jump as ECB Bond Buying Plan Boosts Risk (Bloomberg)
Emerging-market stocks climbed from a one-week low as the European Central Bank’s commitment to buy government bonds buoyed the outlook for the global economy and boosted appetite for riskier assets. The MSCI Emerging Markets Index (MXEF) rose 0.3 percent to 1,005.52, rising for the fifth time in six days. The BSE India Sensitive Index (VXEEM) surpassed 19,000 for the first time since July 2011 as India considers more measures to attract foreign investment. Equity indexes in Hungary, Colombia and Mexico also gained. The Micex Index in Moscow slipped 1.1 percent as power company stocks retreated while the Bovespa stock gauge lost 0.3 percent in Brazil. The ECB is ready to purchase sovereign debt once necessary conditions are in place, President Mario Draghi said today, as the pan-European regulator seeks to ease borrowing costs for debt-saddled nations such as Spain.
A less-than-estimated increase in U.S. jobless claims also supported developing market equities, as the 21 countries in the MSCI gauge send about 13 percent of exports there, World Trade Organization data show. “To get a reassuring message from the ECB is viewed as a solid backdrop for risk,” Benoit Anne, the head of emerging- market strategy at Societe Generale SA, said by phone from London. “If we have growth fundamentals improving in America it’s a major signal that the global economy may bottom out soon.”

Canada Stocks Rise to Three-Week High as ECB Is Set to Buy Debt (Bloomberg)
Canadian stocks rose to their highest level in almost three weeks after European Central Bank President Mario Draghi said the bank is ready to buy government bonds as soon as the necessary conditions are fulfilled. Enbridge Inc. (ENB) rose 1.8 percent after analysts at BMO Capital Markets and UBS AG raised their rating on the stock on an improved company outlook. Dundee Industrial Real Estate Investment Trust jumped 9 percent in its first day of trading on the Toronto Stock Exchange. The Standard & Poor’s/TSX Composite Index (SPTSX) gained 88.21 points, or 0.7 percent, to 12,447.68 in Toronto. The benchmark index has risen 4.1 percent this year. Mining and telephone stocks led the advance today as eight of 10 industries rose.
“Draghi’s comments definitely help,” said Bruce Campbell, president of Campbell & Lee Investment Management Inc., in an interview from Oakville, Ontario. “It’s fairly obvious Spain needs some bailout help. We can argue what the number is, but because of what he’s said he’ll do and what he’s already done, it’s become self-fulfilling.” The ECB is ready to start buying government bonds as soon as the necessary conditions are fulfilled by any countries needing assistance, Draghi said today at a press conference in Ljubljana, Slovenia. The central bank is ready to undertake purchases “once all the prerequisites are in place,” Draghi said, after policy makers left the benchmark rate at a historic low of 0.75 percent.

European Stocks Close Little Changed; Halfords Rallies (Bloomberg)
European stocks closed little changed as the European Central Bank and the Bank of England left their benchmark interest rates on hold. Nobel Biocare Holding AG (NOBN) slid 4.3 percent as the health- care company said a deteriorating Japanese market will hurt full-year profit. ThyssenKrupp AG (TKA) gained 2.3 percent on a report that Korean steelmaker Posco submitted a letter of intent for its American unit. Halfords Group Plc (HFD) surged the most ever after saying earnings will be in the upper half of its forecast. The Stoxx Europe 600 Index (SXXP) decreased less than 0.1 percent to 271.33 at the close of trading, having fluctuated between gains and losses at least 20 times. The gauge has still climbed 11 percent this year as ECB policy makers agreed on an unlimited asset-purchase program to bring down borrowing costs in Spain and Italy and the Federal Reserve announced a third round of quantitative easing.
“In the absence of any positive news from Spain, or any news that might help set the direction, markets are languishing a bit,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “Looking ahead, we have the payrolls from the U.S. tomorrow that might help.” The ECB kept its benchmark interest rate at a record low of 0.75 percent, as predicted by 48 of 52 economists in a Bloomberg survey. The central bank is ready to start buying government bonds as soon as the necessary conditions are fulfilled, President Mario Draghi said today at a press conference in Ljubljana, Slovenia. The Bank of England maintained its bond-purchase target at 375 billion pounds ($604 billion) and held interest rates at 0.5 percent, as economists had forecast.

Yen Near 2-Week Low on Stimulus Bets Before BOJ Decision (Bloomberg)
The yen was 0.3 percent from the weakest level in more than two weeks before the Bank of Japan (8301) concludes a meeting today amid speculation policy makers will take steps to bolster growth. The Japanese currency slid versus most of its 16 major counterparts, extending a weekly decline, as economic data over the past week added to the case for the BOJ to expand stimulus after officials increased its asset-purchase program last month. The euro was within 0.1 percent of a two-week high after European Central Bank President Mario Draghi said the bank is ready to start buying government bonds as part of a program to help ease borrowing costs for debt-ridden nations in the region.
“There are expectations for further easing by the BOJ, leading to some selling in the yen,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency margin company. “The ECB’s bond-buying decision has been welcomed by the markets. The risk- averse trade has been receded and we’re seeing a firmer euro.” The yen fetched 78.49 per dollar as of 7:53 a.m. in Tokyo from 78.48 yesterday, when it touched 78.72, the weakest since Sept. 19. It was at 102.20 per euro from 102.17 yesterday, when it completed a six-day decline. The euro was little changed at $1.3021. It rose to as high as $1.3032 yesterday, the strongest since Sept. 21.

FOREX-Euro gains, yen falls before ECB, BOJ meetings
LONDON, Oct 4 (Reuters) - The euro rose, hitting two-week highs against the Japanese yen, the British pound and the Swiss franc before a European Central Bank policy meeting where rates are expected to be left on hold.
"For the next 24 hours going into the BOJ meeting the yen is the weak link, while people are hesitant to put on long dollar positions ahead of U.S. non-farm payrolls data," said Niels Christensen, currency strategist at Nordea in Copenhagen.

Consumer Confidence in U.S. Climbs for a Sixth Week: Economy (Bloomberg)
Consumer confidence in the U.S. climbed for a sixth straight week, the longest such stretch since early 2006, as Americans grew more secure about their finances. The Bloomberg Consumer Comfort Index rose in the week ended Sept. 30 to minus 36.9, a three-month high, from minus 39.6 in the previous period. Households were also less pessimistic about the buying climate and the economy. Another report showed claims for jobless benefits increased last week from a two-month low. Fifty percent of those surveyed had “positive” views of their finances, the most since July, helping explain a pickup in September chain-store sales that beat analysts’ forecasts. Higher home values, rising stocks and stable gasoline prices may be alleviating some of the anxiety caused by an unemployment rate stuck above 8 percent since February 2009.
“The improvement hasn’t been huge, but it’s definitely noticeable,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “There feels like there’s a little more traction.” First-time jobless claims climbed by 4,000 to 367,000 in the week ended Sept. 29, according to a report today from the Labor Department. A Labor Department report tomorrow may show employers took on 115,000 workers in September, more than the prior month, while the jobless rate rose to 8.2 percent from 8.1 percent, according to the Bloomberg survey median.

Initial Jobless Claims in U.S. Increase From Two-Month Low (Bloomberg)
The number of Americans filing first- time claims for unemployment insurance payments rose last week, highlighting an uneven improvement in the labor market. Applications for jobless benefits increased 4,000 to 367,000 in the week ended Sept. 29, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. The prior week’s reading was the lowest in two months. The pace of dismissals may clear the way for bigger hiring gains should U.S. lawmakers find a way to resolve the fiscal cliff of tax increase and spending cuts that will take effect next year if they fail to act. A Labor Department report tomorrow may show employers took on 115,000 workers in September, more than the prior month, while the jobless rate rose to 8.2 percent from 8.1 percent, according to the Bloomberg survey median.
“We’re not going anywhere quickly in the jobs market,” said Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who predicted applications would rise to 368,000. “The job market is just more of the same. Layoffs aren’t the big problem, it’s the lack of hiring.” Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.5 percent to 1,452.4 at 8:42 a.m. in New York as investors awaited tomorrow’s employment report. Estimates for first-time claims ranged from 355,000 to 380,000 in the Bloomberg survey of 51 economists. The Labor Department initially reported the prior week’s applications at 359,000.

Jobless Data Seen Aiding Romney If Rate Soars From 8.1% (Bloomberg)
Only a dramatic shift in unemployment rates would alter the presidential campaign, though the jobs figures due this morning might slow or sustain Republican candidate Mitt Romney’s momentum coming out of the first debate. It would take a jarring signal, such as a surge in unemployment to 8.5 percent or a decline below 8 percent, to change the economic perceptions of significant numbers of voters so late in the campaign, said Alan Abramowitz, a political scientist at Emory University in Atlanta. “It probably matters less at this point, because so few voters are moveable,” said Abramowitz, creator of an election forecasting model based on economic indicators and polling data that has predicted the popular vote winner in the last six presidential elections.
Forecasters anticipate the September unemployment rate will rise to 8.2 percent from 8.1 percent in August and the economy will add 115,000 new jobs, according to the median prediction of economists surveyed by Bloomberg News. The jobless rate has fluctuated between 8.1 percent and 8.3 percent since the beginning of the year. Abramowitz’s “Time For Change” model forecasts a 67 percent probability President Barack Obama will be re-elected and projects a victory margin of 1.2 percentage points.

Romney Puts Race Against Obama Back on Track in Debate (Bloomberg)
Mitt Romney aggressively challenged President Barack Obama in their first debate, seeking to recharge his campaign after weeks of setbacks, while a subdued incumbent largely passed up chances to attack a rival he said was hiding his full plans. “I just don’t know how the president could have come into office, facing 23 million people out of work, rising unemployment, an economic crisis at the kitchen table, and spend his energy and passion for two years fighting for Obamacare instead of fighting for jobs for the American people,” Romney said, referring to the health-care overhaul the president championed. “It has killed jobs.” Working to present a moderate image to undecided voters and calm anxiety about his candidacy in Republican circles, the former Massachusetts governor offered no new specifics about his proposals on tax cuts, government regulations or health care. When Obama pressed him on that point during the debate, Romney accused the president of mischaracterizing his plans.
“You may keep referring to it as a $5 trillion tax cut, but that’s not my plan,” Romney said at one point. Later, sparring with Obama over the Dodd-Frank financial-regulation law, Romney responded to the president with: “That’s just not the facts.” Obama said Romney’s tax and health-care proposals would harm the middle class, and that voters should be concerned about the lack of details available to them before the election.

Bullard Says Investors Doubt Fed to Hold Inflation to 2% (Bloomberg)
Federal Reserve Bank of St. Louis President James Bullard said measures of inflation expectations indicate bond holders have doubts the central bank will hold price increases within its 2 percent goal. “Distant inflation expectations from the TIPS market seem to suggest that investors do not completely trust the Fed to deliver on its 2 percent inflation target,” Bullard said today in a speech in Memphis, Tennessee, referring to Treasury Inflation-Protected Securities. Bullard’s comments echoed Dallas Fed President Richard Fisher’s concern about rising expectations following the Federal Open Market Committee’s decision last month to start an asset purchase program. Policy makers said they could change the size of the central bank’s monthly asset purchases to reduce any risks from the program, including higher inflation or a disruption to financial markets, according to minutes of the Sept. 12-13 meeting released today.
The five-year, five-year forward break-even rate, which projects the pace of price increases starting in 2017, rose to 2.88 percent on Sept. 14, the day after the FOMC announced a third round of quantitative easing. That was up half a percentage point from July 26. It dropped to 2.77 percent on Oct. 2. Bullard, who doesn’t vote on monetary policy this year, said inflation “is sometimes seen as a way to partially default on existing nominal debts,” and said that approach would hurt savers, mostly older U.S. households, in his prepared remarks to the Economic Club of Memphis.

Hong Kong Luxury Sales Fall as Chinese Curb Spending (Bloomberg)
Shoppers from China’s mainland curbed spending at Hong Kong luxury stores during the Golden Week holiday, reflecting growing pressure on the city’s economy from faltering tourist demand. Purchase of luxury goods by mainland visitors in Hong Kong is set to fall at least 10 percent from a year ago during this week’s holiday, said Joseph Tung, executive director of the Travel Industry Council. The decline comes even as the number of tourists coming from China increases. Lower spending in Hong Kong hurts consumer companies from U.K.’s Burberry Group Plc. (BRBY) to luxury watchseller Hengdeli Holdings Ltd. (3389) that have invested in stores to profit from Chinese visitors to the city. Weaker retail sales add to the risk of a recession in Hong Kong, where the economy shrank 0.1 percent in the second quarter from the previous three months on declining exports.
“The number of big-ticket transactions has shrunk,” said CCB International Securities Ltd. analyst Forrest Chan, referring to holiday spending. “Fewer people will spend several hundred thousand bucks for a luxury watch. The macro-economic situation is dreadful.” The eight-day Golden Week national holiday, a shopping and travel season for Chinese consumers, began on Sept. 30. Shoppers are pulling back amid a slump in exports and a contraction in manufacturing in the world’s second largest economy.

IMF Won’t Disburse Greek Loan If Debt Not Sustainable (Bloomberg)
The International Monetary Fund won’t disburse its share of the Greek bailout if the country’s debt is not deemed sustainable or if other creditors don’t pledge to fill a financing gap in the aid package, a fund spokesman said. IMF Managing Director Christine Lagarde last week warned that the level of Greek debt would have “to be addressed,” pushing European policy makers to consider writing off some of the aid to the country. While the fund is sticking to a target of 120 percent of gross domestic product by 2020, the Greek government forecast this week that public debt will climb to 179.3 percent of GDP in 2013. For the loan “to move forward, we need two key elements -- we need the debt sustainability and the financing assurances and both of those things need to be in place,” IMF spokesman Gerry Rice told reporters in Washington today. “As to how these requirements will be fulfilled in the context of the current review, we still have to discuss this with the Greek authorities and the European partners.”
While Lagarde also said last week Greece faces a financing shortfall that won’t be solved with just the budget measures currently being discussed, the IMF has indicated that any additional aid will have to come from Europe. Rice said today he couldn’t give a date for the end of talks taking place in Athens, even though “urgency is of the essence.” His comments on the IMF’s requirements for disbursement suggest that an agreement on measures to reduce the deficit won’t suffice to unblock the funds as part of the 130 billion-euro package ($169 billion). Regarding Spain, Rice said that an IMF team will visit Madrid from Oct. 15 to Oct. 26 to monitor the country’s banking bailout and will submit its report to the government and the European Commission.

Draghi Says ECB Stands Ready to Start Buying Govt Bonds (Bloomberg)
European Central Bank President Mario Draghi said the bank is ready to start buying government bonds as soon as the necessary conditions are fulfilled, putting the onus on Spain to decide whether it wants a bailout.
The ECB is ready to undertake Outright Monetary Transactions “once all the prerequisites are in place,” Draghi said today at a press conference in Ljubljana, Slovenia, after policy makers left the benchmark rate at a historic low of 0.75 percent. The plan has “helped to alleviate tensions over the past few weeks” and “now it’s really in the hands of governments.”
A month after Draghi unveiled the unprecedented bond- purchase plan to lower yields on government debt, Spain, the country most likely to take up the offer, is still mulling whether it wants to accept the conditions attached. At the same time, the euro-area economy probably entered a recession in the third quarter as the sovereign debt crisis damped spending and investment.
“With the OMT, the ECB has tackled and exorcised fears of an imminent eurozone break-up,” said Carsten Brzeski, senior European economist at ING Group in Brussels. With governments now under pressure to act, “for the time being, the ECB can lean back, watch and twiddle thumbs.”

No Rate Cut?
The euro extended gains as Draghi spoke, rising to $1.2992 for a 0.7 percent advance on the day. Separately, the Bank of England held its bond-purchase target at 375 billion pounds ($603 billion) today and kept its key rate at 0.5 percent. Under Draghi’s OMT plan, a country must make a formal request to Europe’s bailout fund to buy its debt on the primary market before the ECB considers buying bonds on the secondary market. Spanish Finance Minister Luis de Guindos has said officials are still considering whether they need European Union aid. While bond markets have rallied since Draghi pledged on July 26 to “do whatever it takes” to preserve the euro, Spanish bonds fell for a second day today as the nation sold 3.99 billion euros ($5.2 billion) of two-, three- and five-year securities. Spain sold three-year notes at an average yield of 3.956 percent, up from 3.845 percent at the previous sale on Sept. 20.

Draghi Says Next Move Not His as Spain Resists Bailout (Bloomberg)
European Central Bank President Mario Draghi signaled European governments can’t expect much more help from him until they make the next move. Draghi said nine times during a 54-minute press conference in Slovenia yesterday that the ECB won’t start intervening in bond markets until governments like Spain request a bailout and agree to conditions. He also ruled out allowing the ECB to take losses in any further Greek debt restructuring and damped speculation of another ECB interest-rate cut. “Draghi’s message to governments was that he’s not going to do any more for the time being,” said Jacques Cailloux, chief European economist at Nomura International Plc in London. “The ECB is ready, if needed, but their preference is probably not to have to intervene at all.”
That message puts the onus firmly on Spain to request aid from Europe’s bailout fund and sign up to conditions -- a pre- requisite for the ECB to consider bond purchases. The prime ministers of Italy, Spain, and France may have Draghi’s imperative on their minds when they meet at a summit of Mediterranean leaders in Malta today. Draghi said his bond-purchase plan, called Outright Monetary Transactions, has already lowered borrowing costs for sovereigns across Europe. “Today we are ready with our OMT,” he said. “Now it’s really in the hands of governments.”

EU Doubts on Deficit Cutting May Hinder Spain’s Path to Bailout (Bloomberg)
European officials’ concern over’s Spain’s ability to reach its 2013 deficit-reduction target may obstruct Prime Minister Mariano Rajoy’s path toward a possible bailout. Olli Rehn, the European commissioner in charge of policing budget rules, told Spanish officials their plans to reduce the shortfall to 4.5 percent of gross domestic product next year are based on excessively optimistic assumptions about economic growth, two people familiar with the issue said. Central bank governor Luis Maria Linde, who met Rehn on his Oct. 1 visit to Madrid, echoed that view in comments to lawmakers yesterday. There’s “a potential slowdown in Spain’s application for a European program,” Thomas Costerg, an economist at Standard Chartered Bank in London, said yesterday by e-mail. “There is a rising fear that the 2013 budget and the stress tests may have been some sort of window dressing to get European assistance.”
While European Central Bank President Mario Draghi said yesterday the ECB is ready to start buying bonds of sovereigns that qualify for aid, Spanish officials have backed away from the offer this week. Rajoy on Oct. 2 denied reports a rescue request was imminent. Economy Minister Luis de Guindos last night said no bailout was needed. Spanish bonds have dropped for two days since Rajoy’s statement, with the yield on 10-year notes rising 15 basis points to reach 5.90 percent yesterday.

Poland Signals November Cut After Holding Borrowing Costs (Bloomberg)
Poland’s central bank signaled it may cut borrowing costs next month if the economy slows further after unexpectedly leaving them at the highest level since 2009 for a fourth meeting. The Narodowy Bank Polski kept the benchmark seven-day interest rate at 4.75 percent yesterday. Eight economists in a Bloomberg survey predicted no change, while 27 expected a 25 basis-point reduction that would have reversed a rate increase in May, the only one by a central bank in the European Union this year. The NBP last lowered the benchmark in June, 2009. While central banks around the world have eased monetary policy to avert a recession, Poland has kept rates at the highest in three years to tame inflation, even after Governor Marek Belka signaled the need to reduce them amid Europe’s debt crisis. Poland’s expansion eased in the second quarter to 2.4 percent from a year earlier, the slowest since 2009.
“Inflation is still high and we wanted to make sure the trend of weakening economic growth will persist,” Belka said at a news conference yesterday. The central bank “will ease monetary policy” next month should data show the economy slowing further and limited inflation risks, according to an e- mailed statement after today’s meeting. The zloty traded at 4.091 per euro at 3:39 p.m. in Warsaw, down from 4.081 yesterday, when it rose 0.7 percent to post the biggest one-day gain in three weeks. The five-year government bond yield climbed 3 basis points to 4.24 percent.

BOE Maintains Bond-Buying Plan as Split Over QE Looms: Economy (Bloomberg)
Bank of England officials voted to complete their latest round of stimulus amid intensifying dissent on inflation risks that threatens to cause a rift on future aid for the economy. Governor Mervyn King’s nine-member Monetary Policy Committee left the bond-purchase target at 375 billion pounds ($604 billion), as forecast by all 40 economists in a Bloomberg News survey. By next month’s meeting, they’ll have finished spending the 50 billion-pound round they started in July, forcing a decision on whether more stimulus is needed. Rising commodity costs are feeding price pressures, and policy maker Ben Broadbent has said the BOE’s capacity to add to quantitative easing is limited by faster-than-expected inflation. Chief Economist Spencer Dale warned last month of the risks from prolonged loose policy. Their stance may not be enough to overcome the views of a majority of officials who have said it’s likely that more stimulus will be required.
“Next month’s decision will take place against a background which might make members think a bit harder as to whether more QE is justified,” said Philip Shaw, an economist at Investec Securities in London. “We still expect the MPC to sanction a further 50 billion pounds, but the decision could be a close call.” Bank of England policy makers also left their key interest rate at a record low of 0.5 percent. The pound rose 0.4 percent against the dollar today and was at $1.6145 as of 2:35 p.m. Gilts declined, pushing the 10-year yield up 3 basis points to 1.71 percent. It fell to the lowest in more than three weeks yesterday as investors sought the relative safety of U.K. debt amid the euro-area turmoil.

ECB Holds Interest Rates as Spain Keeps Draghi Waiting (Bloomberg)
The European Central Bank kept interest rates on hold today as President Mario Draghi waits for Spain to decide if it needs his help. Policy makers meeting in Ljubljana, Slovenia, left the benchmark rate at a historic low of 0.75 percent, as predicted by 48 of 52 economists in a Bloomberg News survey. Four forecast a cut to 0.5 percent. Draghi will brief reporters on the decision, taken at one of the ECB’s twice-yearly meetings outside Frankfurt, at 2:30 p.m. A month after Draghi unveiled an unprecedented plan to buy the bonds of euro-area countries still mired in the sovereign debt crisis, Spain, the country most likely to take up the offer, is still mulling whether it wants to accept the conditions attached. At the same time, the euro-area economy probably entered a recession in the third quarter as the crisis damped spending and investment.
“From an economic perspective, we don’t need another ECB rate cut,” said Christian Melzer, an economist at Dekabank in Frankfurt. “The focus isn’t on rate changes but on Spain and a possible request for aid paving the way for the ECB bond program. It’s up to Spain to make a move now.”

Draghi Stares at Spain as Brinkmanship Keeps ECB Waiting (Bloomberg)
Mario Draghi is waiting for Spain to get back to him on whether his plan to save the euro is needed. One month after the European Central Bank president unveiled an unprecedented bond purchase program to rescue Europe’s embattled southern fringe, Spanish Prime Minister Mariano Rajoy is showing reluctance to ask for the aid he pushed for with Italy on concern about the terms attached to it. As ECB policy makers meet in Slovenia today, Spanish two-year note yields are more than 50 basis points higher than the five-month low touched on Sept. 7, the day following their last decision. “We’re back at this game of brinkmanship between the ECB and governments again, and it’s a case of who makes some concessions first,” said Nick Matthews, senior European economist at Nomura International Plc in London. “The markets will continue to play a significant role here and Draghi needs them to turn up the pressure.”
Spanish bonds extended losses today after an auction of two-, three- and five-year securities failed to exceed the maximum target of 4 billion euros ($5.2 billion) and the benchmark three-year yield rose. While Finance Minister Luis De Guindos has said officials are still considering whether they actually need ECB help, Catalan President Artur Mas urged Rajoy to ask for a bailout as he rejected the deficit limits for his region next year. Spain can’t overcome its economic crisis without help, Mas said in the statement published yesterday.

20121005 1007 Global Commodities Related News.

DTN Closing Grain Comments 10/04 14:40 (CME)
Beans Extend Wednesday's Rally
The soybean market added sharp gains to Wednesday's recovery rally on continued support from commercial traders. Wheat and corn had a disappointing day, closing well off session highs given the sharp sell-off in the U.S. dollar index.

Pro Farmer: After The Bell Wheat Recap (CME)
Nearby wheat futures enjoyed gains most of the day, but the market softened into the close to end roughly 3 to 5 cents lower in most contracts at all three locations. Wheat futures benefited from spillover support from soybeans and heightened global wheat stocks concerns much of the day. December Chicago wheat ended low-range and within the bottom portion of their long-standing consolidation trading range.

Wheat Market Recap Report (CME)
December Wheat finished down 3 3/4 at 869 1/4, 13 1/2 off the high and 2 1/2 up from the low. March Wheat closed down 4 1/4 at 879 3/4. This was 1 3/4 up from the low and 13 off the high.
December Chicago wheat finished the day lower despite a sharply lower US Dollar and a surging crude oil market. The stronger trade early on for corn and soybeans helped support but gains eroded near the close which might suggest a bearish bias by some. Statistics Canada reported Canadian wheat production at 26.7 million tonnes in 2012 vs. 26.26 in 2011 but slightly below market expectations. The lower than expected production estimate helped support the KC and Minneapolis wheat markets midday. Export sales for the week ending September 27th came in below market expectations which are adding a negative bias to price action. Net weekly export sales for wheat, came in at 307,000 tonnes for the current marketing year and none for the next marketing year. As of September 27th, cumulative wheat sales stand at 40% of the USDA forecast for the current marketing year vs. a 5 year average of 55%. The slow pace of exports might be adding momentum to the bear camp but wheat prices continue to narrow their premium to corn which could imply greater use of feed wheat in the coming quarter. December Oats closed up 7 1/2 at 370 3/4. This was 8 3/4 up from the low and 3 1/4 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
Corn futures favored a firmer tone most of the day, but softened into the close to finish narrowly mixed through the July contract. Deferred futures ended 6 1/4 to 7 3/4 cents lower. Concerns about tight supplies, spillover from sharp gains in the soybean pit and positive outside markets provided support to corn futures at times today. But market bulls are hesitant to extend long positions following last Friday's limit higher move due to signs of demand destruction.

Corn Market Recap for 10/4/2012 (CME)
December Corn finished up 1/4 at 757, 10 1/2 off the high and 4 up from the low. March Corn closed down 1/4 at 757 1/4. This was 3 1/2 up from the low and 10 off the high.
December corn traded mixed on the day and settled near the unchanged. Early support was linked to an explosive soybean market and a sharply lower US Dollar. Bulls believe the USDA may take down the average US corn yield and production next week while bears point to a slow export pace and cheaper South American corn. Net weekly export sales for corn, came in at 326,900 tonnes for the current marketing year and none for the next marketing year. This was slightly above market expectations. As of September 27th, cumulative corn sales stand at 33% of the USDA forecast for current marketing year vs. a 5 year average of 37%. Corn saw pressure late in the session as the wheat market sagged lower and after the US Grains Council reported that the 2012 China corn crop may produce 5-6 million tonnes more than in 2011. The USDA currently has the crop at 200 million tonnes. Long term pressure in corn may come from the fact that officials in Mexico are considering allowing corn imports from Argentina a month after approving imports of grain from Brazil. The US is the main supplier of corn to Mexico but rising food prices around the world have given reason for many world buyers to consider other origins. This could limit price gains going forward. November Rice finished up 0.13 at 15.37, equal to the high and 0.07 up from the low.

Monsanto sees US 2013 corn acres steady at 96 mln acres (Reuters)
Monsanto Co., the world's largest seed company, said on Wednesday that U.S. corn and soybean plantings in 2013 are likely to be similar to what was seen this year, though soybean acres may climb.

INTERVIEW-Mexico considers allowing Argentina corn imports (Reuters)
Mexico is considering allowing corn imports from Argentina, a month after approving shipments of the grain from Brazil, an official at the country's food safety agency said on Wednesday.

GRAINS: U.S. soybeans edged higher, rising for a second consecutive day on bargain hunting by end-users and investors after prices slid to a three-month low in the previous session, although gains were capped by harvest pressure. Corn lost more ground, weighed down by a decline in U.S. ethanol production and record pace of the Midwest harvest. Wheat also eased, tracking corn and as Egypt continued to bypass U.S. wheat in tenders. (Reuters)

Food Prices Jump to Six-Month High as Dairy Costs Rise (Bloomberg)
World food prices rose in September to the highest in six months as dairy and meat producers passed on higher feed costs to consumers, the United Nations’ Food & Agriculture Organization said. An index of 55 food items tracked by the FAO rose to 215.8 points from a restated 212.8 points in August, the Rome-based agency reported on its website today. Dairy costs jumped the most in more than two years. Livestock breeders and dairy farmers are passing on the higher cost of feed, after grain prices jumped in June and July, according to Abdolreza Abbassian, an economist at the FAO in the Italian capital. Higher prices don’t mean a food crisis is imminent, he said today by phone. “Despite a very difficult market, the fundamentals that suggest a food crisis are just not there,” Abbassian said. “Market sentiment is now accepting high prices more as a rule than as an exception.”
The FAO dairy-price index jumped 6.9 percent to 187.7 points from 175.6 in August, the biggest advance since April 2010, the data showed. The index for meat prices rose 2.1 percent to 175, climbing for a second month. The world cereal-price index rose to 262.6 points from 259.9 points the previous month to reach the highest level since April last year. The index for grain prices in July surged 17 percent, the biggest jump since February 2008. “We expected this for both meat and dairy, you have a lag with this big increase in input cost from the grain sector,” Abbassian said. “There will be a limit to how much it goes up. By how much you can raise prices without consumers cutting consumption remains an issue.”

Weather trims Ivorian cocoa output by 2 pct (Reuters)
Cocoa output from the world's top grower Ivory Coast slipped by a smaller-than-expected 2.3 percent in the 2011-12 season as a decline in smuggling masked weather-related production losses, sector regulator CCC said on Wednesday.

SOFTS: Raw sugar futures on ICE touched an eight-week high in early trading , and arabica coffee and cocoa edged up in light volumes, supported by a softer dollar and stronger financial markets. (Reuters)

U.S. ethanol output drops 3 pct to two-year low (Reuters)
U.S. ethanol production fell for the third straight week to the lowest level since the government began releasing the weekly data more than two years ago, the Energy Information Administration said on Wednesday.

U.S. Natural Gas Rises on Outlook for Colder Weather (Bloomberg)
Natural gas futures advanced for the seventh time in eight days as an expected blast of cold air signaled stronger demand for heating fuel. Gas gained 0.3 percent as the National Weather Service predicted below-normal temperatures for most of the lower 48 states over the next six to 10 days. Prices retreated from steeper gains after the Energy Department said supplies rose 77 billion cubic feet last week, above the median of 26 analyst forecasts showing an increase of 73 billion. “It’s a shoving match between the bulls and the bears,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “This is a seasonal play as supply is secured for the winter and speculators look to make end users pay up for it. You have so much supply in the ground so people are really bearish on the market rallies.”
Natural gas for November delivery gained 1.1 cents to settle at $3.406 per million British thermal units on the New York Mercantile Exchange after rising as high as $3.464. The futures have climbed 14 percent this year. November $3 puts, bets that prices will fall, were the most active gas options in electronic trading. They fell 0.7 cent to 1.7 cents on volume of 1,411 contracts as of 2:40 p.m. Puts accounted for 63 percent of options volume. The discount for November futures widened to 0.6 cent versus December contracts from yesterday to 27.4 cents.
The low temperature in Detroit on Oct. 12 may be 37 degrees Fahrenheit (3 Celsius), 9 below normal, and New York City may drop 8 below the usual reading to 43 degrees, according to AccuWeather Inc. in State College, Pennsylvania.

Oil Falls After Surging on Middle East, Heads for Weekly Decline (Bloomberg)
Oil fell in New York and headed for a third weekly decline on speculation the biggest gain in two months yesterday was exaggerated amid rising supplies. Futures slid as much as 0.4 percent after surging 4.1 percent yesterday on concern tension between Turkey and Syria will disrupt Middle East output. Saudi Arabia, OPEC’s biggest crude producer, sees no difficulty in meeting demand, according to Oil Minister Ali al-Naimi. Iraq’s exports will increase to 200,000 barrels a day from 170,000 “within days,” Oil Minister Abdul Kareem al-Luaibi said. Prices may drop next week as U.S. production rises, a Bloomberg survey showed. “The situation with the oil market is that current and forecast future demand levels over the next 12 months are well covered by supply and that’s been the driving factor behind the decline we’re seeing in recent weeks,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The most likely scenario is that this will continue to be the case.”
Crude for November delivery fell as much as 36 cents to $91.35 a barrel and was at $91.43 in electronic trading on the New York Mercantile Exchange at 10:04 a.m. in Tokyo. The contract rose $3.57 to $91.71 yesterday. Prices are down 0.8 percent this week, for the longest run of weekly declines since June, and 7.5 percent this year. Brent oil for November settlement was down 45 cents, or 0.4 percent, at $112.13 after advancing $4.41 yesterday on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $20.70 to New York-traded West Texas Intermediate grade.

U.S. crude inventories rose last week, products fell -API
NEW YORK, Oct 2(Reuters) - U.S. crude oil inventories rose less than expected last week while oil product stockpiles fell slightly, data from the American Petroleum Institute showed on Tuesday.
Crude inventories rose 462,000 barrels in the week to Sept. 28, compared with analysts' expectations for a build of 1.5 million barrels, the API reported.

U.S. Oil Output at 14-Year High, Poised to Climb Further  (CME)
Shale Drilling Investments Will Yield Significant Increases
U.S. crude oil production, already at the highest level in 14 years, probably will increase further amid stepped-up horizontal drilling to tap "tight" oil formations in North Dakota and other areas, the Energy Information Administration said in its This Week in Petroleum Report.
Since the start of 2009, North Dakota's oil production has more than tripled, to nearly 675,000 barrels a day, primarily because of increased drilling in the Bakken shale formation. Combined, Montana and North Dakota output may approach 1.1 million barrels a day in January 2014, up 49% from 738,000 currently.
"Companies are making significant capital investments in horizontal drilling rigs and deploying them to tight oil plays," the EIA said. "Development of tight formations will lead to continuing significant increases in U.S. oil production in the coming years."
Additionally, Texas is pumping more oil from its Permian Basin region. During the first eight months of 2012, total U.S. oil production averaged 6.21 million barrels a day. If sustained over the full year, production would be the highest since an average of 6.25 million barrels a day in 1998.

OIL-Oil rallies to $109 as risk appetite returns
LONDON, Oct 4 (Reuters) - Brent crude oil rose towards $109 per barrel as expectations Spain would seek a bailout and better U.S. data encouraged investors back into riskier assets such as oil and commodities.
"There was no really convincing explanation for the fall in price yesterday," said Carsten Fritsch, analyst at Commerzbank. "We are seeing a counter-movement, a slight counter-movement, after the exaggerated decline in price."

Recap Energy Market Report (CME)
November crude oil trended higher throughout the US trading session and managed to overtake Wednesday's high in the process. There seemed to be a number of positive catalysts supporting the day's advance, including weakness in the US dollar, bargain hunting after yesterday's downdraft and gains in the product markets. There were also a number of headlines circulating over the conflict between Syria and Turkey, as well as US officials investigating the Embassy bomb site in Benghazi from the September 11 attack. Reports of a fire at a large Texas refinery offered support to the US gasoline market, which seemed to provide an added lift to crude oil prices.

Copper Rises as Low European Rates Boost Demand Outlook (Bloomberg)
Copper futures advanced for the fifth time in six sessions as European policy makers held borrowing costs at record lows, bolstering prospects for metal demand. The European Central Bank left its benchmark interest rate at 0.75 percent, and the Bank of England held its key rate at 0.5 percent. The dollar headed for the biggest drop in three weeks against a basket of currencies, boosting the appeal of commodities as alternative investments. The Standard & Poor’s 500 Index of equities rose for the fourth straight day. “The positive equity story reflects both a growth and risk story and also expectations of more liquidity, and those same expectations drive other risk assets, in particular copper,” said Justin Smirk, an analyst at Westpac Banking Corp. (WBC) in Sydney and the most accurate forecaster for industrial metals in Bloomberg rankings in the past eight quarters.
Copper futures for December delivery rose 0.1 percent to settle at $3.786 a pound at 1:23 p.m. on the Comex in New York. The price has gained 10 percent this year on speculation that government stimulus plans will shore up their economies. On the London Metal Exchange, copper for delivery in three months climbed 0.1 percent to $8,300 a metric ton ($3.76 a pound). Aluminum, nickel, tin advanced, while lead and zinc fell.

Silver Market Recap Report (CME)
The silver market was pulled up in sync with the gold market but the technical advances in silver weren't nearly as significant as those posted on the gold charts. Certainly silver was benefiting from the weakness in the dollar, but having the added advantage of a flurry of dovish foreign central bank statements probably served to embolden the buyers of silver today. As mentioned in the mid day coverage an apparent escalation of tensions in the South African mining sector probably provided some indirect lift to silver prices today. In the end, a risk-on day with higher equities and higher physical commodity prices created a bullish environment for silver.

Gold Market Recap Report (CME)
The gold market did forge a fresh new high for the move and in the process the December contract reached up to the highest level since February. In addition to ongoing easing dialogue from the ECB and BOE, the gold market was also cheered by US data that was weak but wasn't as weak as expected. News of violence in South African mining areas is another factor that probably added to the upward march on the charts. In fact, given the upside breakout it is also likely that some of the buying in gold today was technically motivated. Some players are suggesting that rising gold prices might actually serve to embolden the Unions wage requests and make the wage negotiations even more troublesome.

Gold Traders More Bullish as Holdings Reach Record: Commodities (Bloomberg)
Gold traders are the most bullish in three weeks as investors’ bullion holdings expanded to a record after central banks pledged to do more to spur economic growth. Twenty of 32 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors are holding the most metal ever through gold-backed exchange-traded products after buying 85.4 metric tons last month, the most since July 2011. Hedge funds’ bets on a rally are the biggest in seven months, U.S. Commodity Futures Trading Commission data show.
The European Central Bank held interest rates at a record low yesterday after agreeing on an unlimited bond-purchase program last month and the Federal Reserve announced a third round of quantitative easing. The Bank of Japan has said it will add to a fund that buys assets and China approved a $158 billion subways-to-roads construction plan. Gold rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011. “More and more people are going to anticipate inflation in the future because of quantitative easing and the amount of debt we’ve got in the system,” said Frederique Dubrion, the Geneva- based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “We can print whatever amount of money we need, but you can’t print gold. It’s nobody’s liability, it’s a hard currency.”

Gold Jumps to Highest Since November on ECB’s Bond Plan (Bloomberg)
Gold futures jumped to the highest in almost 11 months as the European Central Bank said it is ready to start buying government bonds, boosting demand for the metal as a store of value. Silver, platinum and palladium also gained. The ECB will begin purchases “once all the prerequisites are in place,” President Mario Draghi said today after policy makers left the benchmark interest rate at a historic low of 0.75 percent. In the third quarter, gold gained 11 percent, the most since June 2010, as the Federal Reserve announced a third round of U.S. monetary stimulus. “A global accommodative stance will continue to support gold,” William O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. Gold futures for December delivery climbed 0.9 percent to settle at $1,796.50 an ounce at 1:43 p.m. on the Comex in New York. Earlier, the price reached $1,797.70, the highest for a most-active contract since Nov. 9.
UBS AG said in a report that its physical gold sales to India yesterday were the highest since April as the rupee strengthened against the dollar. Silver futures for December delivery advanced 1.2 percent to $35.101 an ounce on the Comex, the highest settlement since March 1. Platinum futures for January delivery rose 1.8 percent to $1,725.10 an ounce on the New York Mercantile Exchange, the highest settlement since Sept. 21, 2011. Palladium futures for December delivery jumped 2.6 percent to $674.75 an ounce on the Nymex, the biggest gain since Sept. 10.

20121005 1007 Soy Oil & Palm Oil Related News.

Palm Oil Poised to Decline After Rebound, Mistry Predicts (Bloomberg)
Palm oil, the most-used cooking oil, is set to resume its decline in the next few days after a bounce, said Dorab Mistry, director at Godrej International Ltd. Prices may decline to $749 a metric ton for cargoes delivered in Rotterdam because the export tax in Indonesia, the biggest producer, drops to zero at that level, said Mistry in response to e-mailed questions from Bloomberg. He correctly predicted a slump in futures in July. Crude palm oil was at $800 in Rotterdam yesterday, data compiled by Bloomberg show. Futures on the Malaysia Derivatives Exchange, the global benchmark, have plunged 22 percent since the end of August as slowing demand increased stockpiles in Indonesia and Malaysia, the biggest producers. Declining prices may reduce revenues for companies including Sime Darby Bhd (SIME) and IOI Corp. and help cap increases in global food costs.
“A bounce is to be expected and natural,” said Mistry. “The market should resume its journey to $749 cif Rotterdam in the next few days. I’m pessimistic about the macro scenario.” With a decline to $749 and no export tax, palm oil producers in Indonesia would be “better off than at present,” said Mistry. “It also means that Malaysian refiners become competitive once again.” The contract for December delivery ended little changed at 2,352 ringgit after trading between a 2.3 percent gain and a 1.3 percent loss. Futures fell 8.5 percent to close at a three-year low of 2,255 ringgit on Oct. 2. That was the biggest drop for the most-active contract since October 2008.

Tax Proposal
Indonesia reduced taxes last year to boost exports of processed oil, increasing competition for refiners in Malaysia. When prices of crude and refined palm oil and olein drop below $750 a ton, no export duty is imposed. The country will maintain its export-tax policy, Deputy Trade Minister Bayu Krisnamurthi told reporters in Jakarta today. A proposal to cut export taxes on crude palm oil to between 8 percent and 10 percent from the current 23 percent will be presented to the Malaysian cabinet tomorrow, Plantations Minister Bernard Dompok said late yesterday. “Indonesian refineries’ competitive advantage comes from their ability to buy CPO cheaper” because the domestic price is reduced by the amount of the export duty, Alvin Tai, an analyst at OSK Investment Bank Bhd., said today.
The price plunge will give some relief to Malaysian refiners in the short term,said Mohammad Jaaffar Ahmad, chief executive of Palm Oil Refiners Association of Malaysia. Even at these prices, Indonesian refiners had an advantage of at least $40 a ton in production costs, he said. Stockpiles in Malaysia will continue to expand in October, November and December and may reach as high as 3 million tons by January, Mistry said Sept. 23. Inventories in Indonesia have hovered between 3.5 million tons and 4 million tons since 2010 as against popular estimates of 1.5 million tons to 2 million tons, he said.

Soybeans Gain a Second Day as Price Drop May Boost Import Demand (Bloomberg)
Soybeans rose for second day in Chicago on speculation import demand may strengthen after prices fell from a record. Soybeans have dropped 14 percent from the all-time high of $17.89 a bushel on Sept. 4. Global exports will climb 4.1 percent to a record 93.7 million metric tons in 2012-13, the U.S. Department of Agriculture forecasts. China bought 110,000 tons from U.S. exporters and another 180,000 tons, the USDA said on Sept. 27 and Sept. 28. “There have been some pretty heavy exports lately so some demand is being met,” William Adams, a fund manager at Resilience AG in Zurich, said today by phone. “If there is a good season in Australia and South America, we could see some more weakness.” Soybeans for delivery in November climbed 0.9 percent to $15.46 a bushel on the Chicago Board of Trade at 12:39 p.m. in London. The oilseed yesterday advanced 0.1 percent after dropping 4.4 percent in two sessions.
Taiwan bought 60,000 tons of Brazilian soybeans from Bunge Ltd. for delivery in February at a tender today, the Breakfast Soybean Procurement Association-Taichung Group said by e-mail. Corn for December delivery gained 0.6 percent to $7.6125 a bushel and wheat for delivery in the same month was up 0.2 percent at $8.7475 a bushel. Milling wheat futures jumped 0.9 percent on NYSE Liffe in Paris.

Pro Farmer: After The Bell Soybean Recap (CME)
Soybean futures enjoyed strong gains throughout the day, but the market moved well off its highs after midday to settle 17 to 19 3/4 cents higher in the November through March contracts. Soybean futures surged following the release of USDA's Weekly Export Sales Report this morning, but saw settled off the daily high amid light profit-taking.

Soybean Complex Market Recap (CME)
November Soybeans finished up 19 3/4 at 1551 1/2, 17 1/4 off the high and 20 1/2 up from the low. January Soybeans closed up 18 3/4 at 1551. This was 19 up from the low and 16 1/2 off the high. December Soymeal closed up 4.5 at 468.9. This was 5.0 up from the low and 7.9 off the high. December Soybean Oil finished up 0.71 at 51.44, 0.34 off the high and 0.83 up from the low.
November soybeans traded sharply higher early in the session but gains eroded into the close and the market closed off session highs, but still in positive territory. The lower US dollar and a relentless export sales pace by the US added to the supportive tone. Some traders believe that despite the possibility of a yield increase in next week's USDA report; the likelihood of increased demand could mean extra supply will not improve this year's US soybean carryout drastically. The soybean market reported an explosive weekly export sales number this morning with sales for soybeans coming in at 1,296,600 tonnes for the current marketing year and 6,300 for the next marketing year. As of September 27th, cumulative soybean sales stand at 82% of the USDA forecast for the current marketing year vs. a 5 year average of 43%. Only 108,000 tonnes of sales are needed each week to reach the USDA forecast. Total net soybean meal sales were pegged at 375,100 tonnes and total net soybean oil sales at 3,300 tonnes. Traders reported that basis in the Gulf of Mexico held steady to firm on good demand which is s short term positive for the soybean market.

EDIBLE OIL: Malaysian palm oil futures ended flat, as traders awaited a government decision on a proposal to cut export tax on the crude shipments that could help spur exports at a time when stocks are rising at a faster pace. (Reuters)

20121004 1256 Malaysia Corporate Related News.

GW Plastics Holdings is selling all its business under the two subsidiaries, Great Wall Plastic Industries and GW Packaging, to Scientex for RM283.2m. GW Plastics will then return virtually all the sales proceed to its shareholders and ultimately seek delisting from Bursa Malaysia. Estimated cash per share payout is RM1.19. This deal will turn Scientex into one of the world's largest industrial plastic packaging players. Scientex said the acquisition, which is due for completion by Mar-2013,  will enlarge its industrial cast film production capacity to 154,000 tonnes from 120,000 tonnes. The takeover  will also allow Scientex to gain entry into the rapidly expanding global food and beverage (F&B) market segment via GW Plastics' blown film, and downstream printing and lamination facilities. Scientex MD Lim Peng Jin said the enlarged entity will see about RM1bn in sales. "It will also be earnings' enhancing, allowing the post-acquisition enlarged entity to benefit from cost-savings as a result of economies of scale, in terms of operations and administrative efficiencies as well as in the procurement of raw materials," Lim said. Scientex has a cast stretch film facility in Pulau Indah, Selangor, which currently has nine production lines. Cast stretch film is mainly used for applications in the logistics and industrial sectors.(BT)

MRT Corp has awarded three elevated station contracts worth RM732.2m in total for MRT SBK line.  Naim Holdings won a RM204.7m job to build stations at Taman Industri Sungai Buloh, PJU 5 and Kota Damansara. UEM Construction will build stations at The Curve, One Utama and Dataran Sunway for RM275.8m. Apex Communication won the RM251.7m job to build stations at Saujana Impian, Bandar Kajang and Kajang. MRT Corp CEO Datuk Azhar Abdul Hamid said he three winning companies were the appointed, nominated sub-contractors for the elevated civil work packages held by  Gadang, Mudajaya, and UEM Construction. No contract for track works is awarded yet, which involves 41.5km of track laying from Sungai Buloh to Kajang. The job is estimated to worth some RM850m. MRT Corp has awarded 48 out of the total 85 packages for the SBK line. (BT)

The Malaysian crude palm oil export tax policy that is unchanged since the 1970's will likely see a downward revision to between 8-10% from the current 23%. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said he would present a proposal to the cabinet tomorrow and the proposal is understood to contain some measures to stabilise the current CPO price. "I think this (lowering of CPO export duty) will put us in a very much competitive position as the difference will be the same as Indonesia, which has a 13.5% export tax." he said. (StarBiz)

The  Construction Industry Development Board (CIDB) is initiating a proposal for the setting up of a  Construction Court as a response to the construction industry's demand for a dedicated channel to resolve construction-sector disputes. Should the proposed Construction Court materialise, Malaysia will be the second country in the world after Britain to have established a specialist court dedicated for the construction industry. CEO Datuk Seri Dr Judin Abdul Karim said the board has worked closely with the Bar Council and industry leaders to initiate discussions on the setting up of a specialist court, which will focus on resolving  complex and technical construction disputes. "Establishing the Construction Court is vital for the construction sector as speedy dispute resolutions often require knowledge of industry intricacies and technical complexities," he said. (BT)

UEM Group expects to sell its 45% subsidiary  Time Engineering  by year-end. Government-linked UEM has been mulling over divesting its Time Engineering stake since 2010, which it sees as a non-core asset. UEM has four core business divisions  - expressways, township and property development, engineering and construction, and asset and facility management. Group MD/CEO Datuk Izzaddin Idris said the diversified group is currently in talks with local suitors and hopes to complete the sale by year-end. "Once the board of directors meets and approves the sale, we will call you (the media) in due course," he said. Time Engineering previously owned a 24.7% stake in Internet service provider Time dotCom before disposing of it for RM287m in 2011. As at 2011, its price tag was said to be at least RM166m. (BT)

AZRB has won a RM673m job to redevelop Bangunan MAS in Jalan Sultan Ismail. The contract was awarded by  Permodalan Nasional Bhd (PNB). PNB bought the 35-storey building from national carrier Malaysia Airlines about five years ago for RM130m. AZRB will demolish an existing podium at the 35-storey building, build a 50-storey hotel and upgrade the existing 35-storey office building. The hotel will also have six-storey basements for car park and mechanical and electrical service area. Construction is expected to be completed by Oct 17. (BT)

The country's four largest banks have agreed to cooperate with the government to offer a housing loan scheme to civil servants. A concrete plan will be announced by the end of the year. "If we outsource to the banks, we don't have to fork out RM6bn annually...the amount we allocate for housing loans to civil servants. But we have to cover the difference in interest...the civil servants still pay 4%." Finance secretary-general, Datuk Dr Mohd Irwan Serigar Abdullah said. (Financial Daily)

Maxis chief executive officer  Sandip Das said in a statement "We laud the measures announced (by the prime minister) particularly in the areas of education and training, which is a key part of nation-building,". The incentives announced for smartphones and the establishment of Internet centres is a reflection of Maxis' ambition to bridge the digital divide and expedite adoption of contemporary global technology by the underserved, he added. (BT)

Tobacco growers and curers in Kelantan have joined the global fight against the World Health Organisation (WHO) plan that threatens their jobs and livelihoods. About 15k local players will be among millions of tobacco growers worldwide waiting for their fate come next month following discussion on the WHO's Framework Convention on Tobacco Control (FCTC).  Kelantan Tobacco Growers and Curers Association said draft recommendations on tobacco farming and environmental practices could force its communities out of business through punitive measures. Under the earlier WHO's FCTC, the proposals encouraged governments to help tobacco growers find viable alternatives to growing tobacco with the assumption that demand would decline over time. At present, WHO has taken a radically different track to phase out tobacco growing without finding viable solutions to tobacco growers' livelihoods. (BT)

Malayan United Industries (MUI) chairman Tan Sri Khoo Kay Peng continued to accumulate shares in the group, effectively increasing his stake to 11.8%. There has been speculation over Khoo's possible comeback to the Malaysian corporate scene after he was seen at a luncheon with Prime Minister Datuk Seri Najib Razak and other leading Chinese businessmen. (Financial Daily).

Danainfra Nasional is finalising plans to issue RM1.5bn sukuk tranche by mid-November to finance the MRT SBK line, with one portion to be marketed as retail bond as mooted by Budget 2013. The issuance, part of the RM8bn ICP/MTNs programme signed in early July, will see one fifth of it, or RM300m, being floated as retail bond. "This is an opportunity to widen the investor base for the MRT project. However, should retailers fall short, we expect the corporates to snap up the retail bond portion." Principal officer Fazlur Rahman Ebrahim said. (Malaysian Reserve)

Instacom Group, a Sarawak-based telecommunications engineering and services provider, has forecast a revenue of RM88m for its 2012 financial year. Its chief executive officer, Anne Kung, said the confidence on the forecast was based on the after-tax profit guarantee of about RM15m made for the current financial year, as well as for FY2013. "That guarantee gives an indication of our confidence to generate this profitability," she said in a media briefing to announce the re-listing of Instacom on Bursa Malaysia Securities. She said last year the group achieved a turnover of RM87m and profit after tax of RM9.9m. On the re-listing of the group, she said the exercise commenced after the conclusion of a reverse takeover of I-Power Bhd, which was approved by Bursa Malaysia in April. The re-listing is a very important milestone for Instacom, being a Sarawakian company with a strength in the services sector, rather than resource- or manufacturing-based, she added. (Bernama)

20121004 1226 Local & Global Economy Related News.

The government's continuing quest to build up a strong domestic economy is crucial to ensure sustainable growth and cushion the nation against downside risks due to the volatile global economy,  PM Datuk Seri Najib Tun Razak said yesterday. He said that creating a stronger domestic economy and consolidating subsidies are among pivotal thrusts of the government as evidenced by proposals made in the 2013 Budget. Getting a fresh mandate from the upcoming general election is crucial to ensure continuity of the  Economic Transformation Programme (ETP) and Malaysia achieving its high-income nation status, he said. Through the implementation of projects under the ETP, Malaysia would be able to reduce the country's dependency on resources like oil as the major source of revenue while developing other sectors that can generate new revenues, he said. Besides diversifying the income stream for the country, he said that it was important to rationalise  subsidies and deliver targeted subsidies to certain groups. He said that it would not be right to raise prices of subsidised items just after getting a mandate for the next five years as the people might question the government's sincerity. He also pointed out the importance of having free trade agreements on the back of global uncertainties and strengthening trade relations between Asean countries and East Asian countries to build a strong domestic economy. (BT)

PM Datuk Seri Najib Tun Razak  highlighted his administrations’ growing resolve to rein in government debt by pointing out smaller deficit goals and let on the possibility of a  budget surplus materializing after 2016 during an interview with CNBC Asia anchor Martin Soong yesterday. “By 2015, the budget deficit would be 3% of GDP. And beyond that, I would like for us to see a surplus, if possible. But I’m not going to commit to that surplus yet. Let’s get to 2015 first,” he said. (Financial Daily)

The  world economic crisis could take  10 years to run its course, the IMF's chief economist Olivier Blanchard said, whilst urging greater solidarity between member countries of the eurozone and more integration in fiscal and economic policy. (AFP)

The US ISM non-manufacturing index rose to 55.1 in Sep, the most in six months, from 53.7 in Aug. Economists were expecting a reading of 53.4. (Bloomberg)

The ADP National Employment Report showed US private employers added 162,000 jobs in Sep, but fewer than the revised 189,000 hired in Aug. (Reuters)

Eurozone producer prices climbed 0.9% mom in Aug, the most since Jan, after rising from a downwardly revised +0.3% in Jul. On a yoy basis, the measure gained 2.7% in Aug, faster than the 1.6% recorded in Jul. (MNI News)

The final reading of the  eurozone composite PMI fell to 46.1 in Sep from 46.3 in Aug, above an initial estimate of 45.9 published 20 Sep. The  services PMI slipped to 46.1 from 47.2. (Bloomberg)

Eurozone retail sales  rose 0.1% mom in Aug (a revised 0.1% in Jul). Economists had forecast a decline of 0.1%. (Bloomberg)

Portugal unveiled a 4% extraordinary tax and income tax brackets would be reduced from eight to five. The average tax hike would rise from 9.8% in 2012 to 13.2% in 2013. New measures also include new levies on capital gains and a financial transaction tax, though details of these moves have yet to be finalized. (CAN)

The ADB forecast Asia excluding Japan’s expansion will hit 6.1% this year (6.6% in the Jul estimate; 6.9% in the Apr prediction), the slowest pace since 2009, before rising to 6.7% in 2013. It also reduced the  region’s inflation forecast for 2012 to 4.2% from 4.4%. China's GDP was tipped to expand 7.7% this year before bouncing back to 8.1% in 2013, but still well below the 9.3% achieved last year. India would see GDP growth slow to 5.6% in 2012 before picking up to 6.7% next year. Thailand’s 2012 growth forecast was lowered from 5.5% to 5.2%, whilst 2013’s growth was cut to 5% from 5.5%. (Bloomberg, AFP, Bangkok Post)

China’s official services PMI fell to 53.7 in Sep from 56.3 in Aug, indicating the industry’s expansion was the least in over a year. (Bloomberg)

Japan’s monetary base rose 9% yoy in Sep to a record ¥124.3tr (6.5% in Aug), as ultra-easy monetary policy led to an increase in the current account deposits that commercial banks keep with the Bank of Japan. (Business Times)

Japan’s labour cash earnings grew 0.2% yoy in Aug following a 1.6% fall in Jul. Economists expected a 1% fall in wages in Aug. (RTTNews)

Indian Prime Minister Manmohan Singh is seeking to build on the biggest opening of the country’s economy in a decade with the cabinet today scheduled to consider proposals to lift caps on foreign investment in insurance and pension industries. (Bloomberg)

Thailand’s consumer confidence index fell to 77 points in Sep, down from 77.9 points in Aug and 78.1 in Jul, according to the University of the Thai Chamber of Commerce's Center for Economic and Business Forecasting.(Bangkok Post)

Eight key areas in Bangkok could be under as much as 30cm of water for up to two weeks this month, especially when  Tropical Storm Gaemi brings in torrential rain this weekend, a Bangkok seminar on flood prevention was told yesterday. (The Nation)

Bank of Thailand chairman Virabongsa Ramangkura is adamant that the  policy rate could be slashed without damaging long-term economic stability, arguing that lower interest rates would benefit the economy as well as the central bank's finances. He added that the  Pheu Thai government's massive investment in infrastructure  will be the catalyst to strengthen the country's manufacturing and logistics competitiveness (The Nation)

The revised  Power Development Plan (PDP) spanning 2013-30 requires a total budget of THB800bn for power plants and transmission lines, said the Electricity Generating Authority of Thailand (Egat). (Bangkok Post)

Myanmar's economic growth will speed up as most other economies in developing Asia are expected to see slower growth amid a slump in global demand, the Asian Development Bank said. (The Nation)

Hundreds of thousands of workers from more than 700 companies in 80 industrial estates across Indonesia staged a one-day strike Wednesday in the latest of the country's frequent labor protests. The protesters allege that employers largely ignore legal obligations to contribute to pension funds and state health care. They are also seeking higher levels of minimum wage and a reversal of the government's plan to require low-income workers to contribute to payment for health-care premiums beginning 2014. (WSJ)

Australia's trade deficit blew out to A$2.03bn (US$2.07bn) in Aug (-A$1.5bn in Jul), its widest in three-and-a-half years, as falling prices for iron ore and coal ate into export earnings. (WSJ)

20121004 1220 Global Market Related News.

Asia FX By Cornelius Luca - Wed 03 Oct 2012 15:29:46 CT (Source:CME/www.lucafxta.com)
The appetite for risk was mixed on Wednesday amid mixed US data. Yet, most of the foreign currencies ended lower. The US stock markets made little progress, while oil plunged 4%. The short-term outlook for most of the major foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is short on all foreign currencies. Good luck!

Overnight
US: The ADP employment survey showed a drop to 162,000 in September from 201,000 in August.
US: The ISM service sector rose to 55.1 in September from 53.7 in August.

Today's economic calendar
Australia: AiG Performance of Services Index for September
Australia: Building permits for August

GLOBAL MARKETS-Asian shares steady, investors wait for more US data
TOKYO, Oct 4 (Reuters) - Asian shares steadied and the safe-haven dollar eased after positive U.S. data, leaving investors waiting for more economic indicators from the world's largest economy later in the day and a European Central Bank policy meeting.
"The FOMC minutes may shed some light on any possible dimensions surrounding the improvement in the labour market the committee is looking for and scale of purchases they are willing to undertake," ANZ Bank said in a research.

Asia Stocks Swing Between Gains, Losses on U.S. Data, Oil (Bloomberg)
Asian stocks swung between gains and losses as exporters rose on reports on U.S. jobs and service industries beat economist estimates. Energy companies dropped as oil traded near a two-month low. Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, rose 2 percent. Fisher & Paykel Appliances Holdings Ltd. gained 1.7 percent in Wellington after directors of the refrigerator maker rejected a bid from China’s Haier Corp., saying it is too low. Woodside Petroleum Ltd., Australia’s second-largest oil producer, slid 1.9 percent in Sydney. The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 121.43 as of 10:45 a.m. in Tokyo, reversing gains of as much as 0.3 percent. The regional index gained 4 percent in September amid speculation China will add to stimulus measures, following moves by central banks in the U.S. and Japan. Australia cut its benchmark interest rate this week.
U.S. jobs data “was a little bit better than expectations and that’s positive,” said George Boubouras, Melbourne-based head of investment strategy at the Australian wealth-management unit of UBS AG. The Swiss bank has about $1.5 trillion in assets under management. “Stimulus is there for a reason.” The Nikkei 225 Stock Average (NKY) rose 0.1 percent and Australia’s S&P/ASX 200 Index was little changed. Hong Kong’s Hang Seng Index dropped 0.1 percent. South Korea’s Kospi Index declined 0.6 percent. Markets in China remain closed today for holidays. Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The index gained 0.4 percent in New York yesterday, when ADP Employer Services said companies added 162,000 jobs last month, exceeding the median forecast of economists surveyed by Bloomberg for a 140,000 advance. Service industries in the U.S. expanded more than forecast in September.
The MSCI Asia Pacific Index gained 6.7 percent this year through yesterday as policy makers boosted stimulus measures to counter a global economic slowdown and tame Europe’s debt crisis. The Asian benchmark index traded at 12.8 times estimated earnings, compared with 13.8 times for the Standard & Poor’s 500 Index and 12 times for the Stoxx Europe 600 Index.

Japanese Stocks Advance on U.S. Employment, Services Data (Bloomberg)
Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average headed for its first gain in five days, as reports on U.S. jobs and service industries beat expectations. Shares extended gains after the yen weakened. Honda Motor Co. (7267), a carmaker that depends on North America for 44 percent of its sales, climbed 3 percent. Izumi Co., a shopping-center operator, jumped 23 percent after announcing a share buyback and raising its net-income forecast. Computer- printer maker Canon Inc. (7751) fell 2.7 percent after Hewlett-Packard Co., the world’s largest manufacturer of personal computers, projected 2013 profit that missed estimates. The Nikkei 225 gained 0.6 percent to 8,800.76 as of the midday break in Tokyo, with volume was 13 percent above 30-day average. The broader Topix Index advanced 0.9 percent to 733.79, with about two stocks rising for each that fell.
U.S. jobs data “was a little bit better than expectations and that’s positive, but stimulus is there for a reason,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth-management unit. The Swiss bank oversees about $1.5 trillion in assets. “They need to really address true labor-market accelerations in North America.” The Topix has fallen 0.2 percent this year as of yesterday on a strengthening yen as investors sought refuge amid a slowing global economy, weighing on export-heavy Japan. Shares on the Topix trade for about 0.87 times book value, compared with 2.25 for the Standard & Poor’s 500 Index and 1.51 times for the Stoxx Europe 600 Index. A number lower than one means a company can be bought for less than the value of its assets.

U.S. Stocks Rise as Service, Jobs Data Offset China (Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as better- than-forecast growth in American employment and service industries offset concern about China’s economy. PulteGroup Inc. (PHM) led homebuilders to the biggest rally since July as mortgage applications climbed to the highest level in more than three years. Best Buy Co. jumped 4.7 percent on a report the retailer’s founder and buyout firms are scrutinizing the company’s finances. Hewlett-Packard (HPQ) Co. tumbled 13 percent after the computer maker forecast fiscal 2013 profit that missed estimates as Chief Executive Officer Meg Whitman said a turnaround effort won’t happen any time soon.
The S&P 500 rose 0.4 percent to 1,450.99 at 4 p.m. in New York. The benchmark index for American equities has climbed 0.7 percent in three days. The Dow Jones Industrial Average added 12.25 points, or 0.1 percent, to 13,494.61 today. Volume for exchange-listed stocks in the U.S. was 6.2 billion shares, or 4.4 percent above the three-month average. “Today’s data is saying very clearly that we’re not heading to a recession,” Thomas Sowanick, chief investment officer of Omnivest Group LLC, which oversees $3 billion in Princeton, New Jersey, said in a phone interview. “Investors are getting a little bit more optimistic about the future,” he said. Weak data from China “increased the likelihood that the Chinese central bank or some other mechanism is focusing on providing liquidity to the economy.”

European Stocks Little Changed as Data Offsets Spain (Bloomberg)
European stocks closed little changed as U.S. reports on private hiring and services-industry growth beat estimates, offsetting Spain’s stance that it won’t ask for a sovereign bailout soon. EasyJet Plc (EZJ), Europe’s second-biggest discount airline, rose 3.5 percent as full-year earnings beat its forecasts. BTG Plc (BTG) gained the most in almost a year after increasing its financial- year revenue forecast. FirstGroup (FGP) Plc plunged 21 percent after Britain’s biggest train operator was stripped of the country’s premier express route. The Stoxx Europe 600 Index (SXXP) slipped 0.1 percent to 271.37 at the close in London, after swinging between gains and losses at least 12 times today. The gauge has rallied 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing.
“It’s a good sign when the market starts reacting to macro data again,” said Anja Hochberg, head of investment strategy at Credit Suisse Group AG in Zurich. “The latest economic numbers show that the economy is bottoming out. However -- and this speaks for an even bigger upside potential of the markets -- the economic hopes still need to show in real terms. The sentiment is not yet exhausted. One more reason to invest in equities.” National benchmark indexes fell in half of the 18 western European markets today. France’s CAC 40 retreated 0.2 percent, the U.K.’s FTSE 100 gained 0.3 percent while Germany’s DAX rose 0.2 percent.

Emerging Stocks Fall for First Time in Five Days on Oil (Bloomberg)
Emerging-market stocks declined for the first time in five days as falling crude-oil prices dragged producers lower and China’s service industries expanded at the weakest pace in more than a year. The MSCI Emerging Markets Index (MXEF) slid 0.4 percent to 1,002.50. Brazil’s Bovespa stock index (VXEEM) dropped 1 percent, with power company Cia. Energetica de Sao Paulo and state-controlled oil producer Petroleo Brasileiro SA falling. Russian oil company OAO Tatneft (TATN) declined 2.2 percent, after profit sank 17 percent in the first half. PetroChina Co., China’s biggest oil producer, slid 1 percent. Indexes in Russia, Turkey and Mexico retreated.
Oil fell below $90 a barrel in New York after U.S. crude stockpiles climbed for a fourth week and concern rose that demand will decline as the Chinese economy weakens. China’s non- manufacturing purchasing managers’ index slid to 53.7 from 56.3 in August, according to official reports today, underscoring a slowdown that spurred the Asian Development Bank to lower its 2012 regional growth estimate. “The Chinese PMI figure was not fantastic, and even though services is not a main sector in China, it has some negative impact,” Guillaume Tresca, a senior emerging market strategist at Credit Agricole Corporate & Investment Bank, said in a phone interview from Paris. “Falling oil prices may lead the market lower in the short term, but it provides emerging market central banks with some leeway to carry out rate cuts.”

Yen Holds Losses Versus Major Peers Before BOJ Decision (Bloomberg)
The yen remained lower against all 16 major counterparts before the Bank of Japan (8301) begins a two-day policy meeting today after expanding stimulus last month. The euro was 0.9 percent from a three-week low versus the dollar before Spain sells bonds as investors weigh whether the debt-saddled nation will ask for an international bailout. European Central Bank policy makers convene today to discuss ways to contain fiscal turmoil in the region. The Australian dollar slid to a four-week low after data showed the nation’s retail sales rose by less than economists had expected. “In a situation where stock prices fall and dollar-yen declines, I expect the BOJ to bolster aggressive monetary easing,” said Kengo Suzuki, a currency strategist in Tokyo at Mizuho Securities, a unit of Japan’s third-largest bank by market value. “Such a move would keep the yen in check.”
The Japanese currency slid 0.2 percent to 78.65 per dollar as of 11:41 a.m. in Tokyo after touching 78.66, the weakest since Sept. 19. It dropped 0.3 percent to 101.60 per euro, set for a sixth-straight decline. The 17-nation euro fetched $1.2922 from $1.2905. The currency reached $1.2804 on Oct. 1, the lowest since Sept. 11. The BOJ increased its asset-purchase program by 10 trillion yen ($127 billion) to 55 trillion yen at the previous meeting on Sept. 19, saying the economy’s pick-up was slowing while prices were flat. Data over the past week have added to the case that the BOJ will need to expand stimulus to boost growth and achieve its 1 percent inflation goal. Consumer prices in August matched the steepest decline in 16 months and the nation’s biggest manufacturers grew more pessimistic last quarter.

FOREX-Euro waits for Spain's move; Aussie slips on trade data
SYDNEY/TOKYO, Oct 3 (Reuters) - The euro steadied on Wednesday as traders tried to gauge how close Spain is to asking for European financial aid, while the Australian dollar slid to a four-week low after Australia posted its biggest trade deficit in 3-1/2 years.
"Rajoy has taken reform steps so he can apply for aid anytime he needs. That should discourage speculators from selling the euro too aggressively," said Seiya Nakajima, chief economist at Itochu Corp, referring to Spanish Prime Minister Mariano Rajoy.

Treasury Yields Near Month-Low Before German Factory Data (Bloomberg)
Treasury 10-year yields were near the lowest in almost a month before data tomorrow that may show factory orders in Germany dropped, adding to evidence the euro bloc’s debt crisis is hurting the economy, the region’s biggest. U.S. government bonds remained higher following a four-day advance ahead of an auction of Spanish debt today as investors weigh whether the nation will ask for an international bailout. The Federal Reserve is scheduled to buy today as much as $2.25 billion of Treasuries maturing from February 2036 to August 2042 as part of its program to replace shorter-term notes in its holdings with longer-maturity debt. “The euro area’s core countries, such as Germany, have supported the region’s growth, but their economies are getting worse now,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest lender by market value. “Demand for Treasuries as a safe asset remains strong.”
The yield on 10-year notes was little changed at 1.62 percent as of 10:53 a.m. in Tokyo. It fell to 1.60 percent yesterday, the lowest since Sept. 7. The 1.625 percent security due August 2022 traded at 100 1/32 today, according to Bloomberg Bond Trader data. Japan’s bonds were little changed, with 10-year yields at 0.765 percent in Tokyo, according to Japan Bond Trading Co., the nation’s largest interdealer debt broker. The rates fell to 0.755 percent on Oct. 2 and 3, the lowest since Aug. 7. German factory orders, adjusted for seasonal swings and inflation, probably slid 0.5 percent in August from the previous month, according to the median estimate of economists in a Bloomberg News survey.

Global Services Weaken as Europe Slides Into Recession: Economy (Bloomberg)
Services industries from Asia to Europe cooled last month after the euro-area debt crisis pulled economies including Spain and Italy into recession and damped global growth prospects. The purchasing managers’ index fell to 53.7 in September from 56.3 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing said today. That’s the lowest since at least March 2011. In the euro-area, a gauge slipped to 46.1 last month from 47.2 and a U.K. measure also fell. Readings below 50 indicate contraction. China’s weaker services number underscores a slowdown that spurred the Asian Development Bank to lower its 2012 regional growth estimate. As Europe’s economic slump deepens amid a fiscal squeeze and weakening confidence, the ADB said the threat of a “shock emanating from the unresolved euro-area sovereign debt crisis” is among the biggest downside risks to Asia.
“The global environment will remain challenging,” said Silvio Peruzzo, an economist at Nomura International Plc in London. “In the euro area, there’s a lack of demand because of austerity; some countries have suffered more than others. We expect the economy to shrink again in the third quarter with a significant chance for another contraction in the fourth.”

U.S., Europe Nowhere Close to Ending Crisis, Krugman Says (Bloomberg)
The U.S. and the European Union are “nowhere close to ending” the financial crisis and German-led austerity efforts may lead to a 1930s-style economic depression, Nobel laureate Paul Krugman said. Five years into the crisis, the U.S. needs “another round of stimulus” and Federal Reserve officials “should be doing whatever they can” to aid the recovery, while Europe needs a fiscal union to save its single currency, Krugman said in a speech in Belgrade today. “Europe must accept there are limits to austerity and that additional austerity won’t do anything but bring societies on the verge of collapse,” said Krugman, an economics professor at Princeton University. “No country will have prosperity until Germany and the ECB have decided that too much pain has been inflicted.”
The European Central Bank and the Fed have unveiled plans to fight the crisis and reduce borrowing costs. ECB President Mario Draghi last month announced an unlimited bond-buying program for distressed euro-area nations, while Fed Chairman Ben S. Bernanke has committed to another round of so-called quantitative easing.

Services in U.S. Expanded More Than Forecast in August (Bloomberg)
Service industries in the U.S. expanded in September by the most in six months, underpinning an economy that lost momentum in the first half of the year. The Institute for Supply Management’s non-manufacturing index climbed to 55.1, exceeding the most optimistic projection in a Bloomberg survey, from 53.7 in August, figures from the Tempe, Arizona-based group showed today. Readings above 50 signal expansion. ADP Employer Services said in a separate report that private payrolls increased 162,000 last month. “The economy seems to be leveling off,” said Paul Edelstein, director of financial economics at IHS Global Insight in Lexington, Massachusetts, who projected the services index would rise. “Domestic factors are starting to improve. Jobs are being created and people are feeling a little more confident so they are going to spend more.”
A sustained pickup in industries from construction to retailing that account for almost 90 percent of the economy will help make up for recent weakness in manufacturing. At the same time, a cooling global economy has prompted some service providers such as FedEx Corp. (FDX) to trim growth forecasts. Stocks advanced after the U.S. figures, with the Standard & Poor’s 500 Index climbing 0.3 percent to 1,450.34 at 2:37 p.m. in New York. The U.S. figures stand in contrast to other data today showing services industries from Asia to Europe slowed after the euro-area debt crisis pulled economies including Spain and Italy into recession.

ADP Says U.S. Companies Added 162,000 Workers to Payrolls (Bloomberg)
Companies added more workers than projected in September, evidence the labor market may be perking up, a private report based on payrolls showed. The 162,000 increase in employment followed a revised 189,000 jump in August, figures from Roseland, New Jersey-based ADP Employer Services showed today. The median forecast of 38 economists surveyed by Bloomberg projected a 140,000 advance. The hiring gains, which were led by companies with fewer than 500 workers, will help shore up consumer confidence and spending, which in turn will bolster economic growth. A Labor Department report on Oct. 5 may show private payrolls increased by 128,000 in September and unemployment rose to 8.2 percent from 8.1 percent the prior month, according to the Bloomberg survey median.
“Small and medium-size firms continue to be the driving force behind job growth,” Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, said in a research note. “Hiring at startup and small firms will continue to be the key to the sustainability of the labor market recovery going forward.” Stock-index futures rose after the report. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.1 percent to 1,442.6 at 9:09 a.m. in New York. Estimates for the ADP employment figures ranged from 90,000 to 190,000 in the Bloomberg survey.

U.S. States Teetering on Brink of Fiscal Cliff, Ganeriwala Says (Bloomberg)
The possibility of automatic federal budget cuts threatens U.S. states’ well-being, even as their revenue recovers, said Manju Ganeriwala, the incoming president of the National Association of State Treasurers. “We’re approaching the cliff, and hopefully it’s a climbing down and not just jumping from the cliff,” Ganeriwala, Virginia’s treasurer, said today at the State & Municipal Finance Conference hosted by Bloomberg Link in New York. If Congress doesn’t agree on how to reduce the federal deficit, states may lose funding and jobs when $600 billion in automatic tax increases and spending cuts take effect in January, said Ganeriwala, 56, who will head the association next year. That may further hinder progress for governments that cut jobs as tax revenue fell. The number of public positions in 2011 shrank by 1.3 percent, about 280,000 positions, according to data from the U.S. Department of Commerce. More than half those positions were from state and city administrations.
States already are confronting the “stupidity factor” of Congress’s waiting until the last minute to act, said Chipman Flowers Jr., the Delaware treasurer. “They’re going to solve the problem,” Flowers said. “They’re just going to wait until the 11th hour.”

China’s Slowdown Reverberates as ADB Cuts Forecasts (Bloomberg)
China’s services industry expanded the least in more than a year, underscoring a slowdown that spurred the Asian Development Bank to lower its 2012 regional growth estimate and caused a slide in Australian coal exports. The purchasing managers’ index from the Chinese government and logistics federation fell to 53.7 in September from 56.3 the previous month, a report showed today, while Australia recorded its widest trade deficit since March 2008 in August. The ADB today forecast Asia excluding Japan will expand 6.1 percent this year, the slowest pace since 2009. Asian stocks fell and commodities declined for a second day, while Australia’s dollar slipped to its lowest level in a month on concern global demand is faltering, putting pressure on authorities to support growth. Central banks in Japan, South Korea, Indonesia, Thailand, India and the Philippines are scheduled to meet this month to determine monetary policy as the region gauges the need for more stimulus measures.
“Deceleration in the region’s two giants -- the People’s Republic of China and India -- and in other major exporting economies is tempering earlier optimism,” the ADB said. “The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the U.S. pose major risks to the outlook.” Asia’s exports have faltered as slower global growth crimps demand for the region’s goods. Malaysia’s shipments abroad unexpectedly slipped for the first time in three months in July, while Thailand and South Korea have recorded three straight months of declines in overseas sales.

China services PMI falls to lowest in nearly two years(Reuters)
China's normally robust services sector weakened sharply in September to its lowest point since November 2010, as slow growth in manufacturing finally began to feed through to the rest of the economy, an official survey showed on Wednesday.

India Pushes Economy Opening With FDI Insurance, Pension Plans (Bloomberg)
Indian Prime Minister Manmohan Singh is seeking to build on the biggest opening of the country’s economy in a decade with the cabinet today scheduled to consider proposals to lift caps on foreign investment in insurance and pension industries. Ministers will consider allowing overseas companies to own as much as 49 percent of local insurance ventures, from the current 26 percent, and for the first time permit foreign direct investment of as much as 26 percent in pension funds, according to two government officials with direct knowledge of the matter, who asked not to be identified, citing rules. The plans would need parliamentary approval to become law, which may prove difficult for a minority government.
After two years of policy paralysis, the Congress party-led government burst into life last month with decisions to throw open retail and aviation sectors, and its energy markets, to foreign investment and cut fuel subsidies. While the moves, which didn’t need the support of lawmakers, splintered Singh’s biggest ally from the ruling coalition, the prime minister defended his actions saying only strong economic growth would pay for programs to aid millions of poor people. “It’s amazing how quickly expectations of the government have changed,” said Alex Mathews, research head at Geojit BNP Paribas Financial Services Ltd. (GBNP) in the southern city of Kochi. “The government looks set to continue with bold reforms.”
Singh’s administration has rejected a recommendation by a parliamentary panel, which in December said a further increase in foreign direct investment may not be in the interest of the country’s insurance industry, according to the people, who spoke yesterday.

Euro-Region August Retail Sales Unexpectedly Increase on Germany (Bloomberg)
Euro-area retail sales unexpectedly increased for a fourth month in August as demand rebounded in Germany, Europe’s largest economy. Sales in the 17-member euro area rose 0.1 percent from July, when they also gained a revised 0.1 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast a decline of 0.1 percent, according to the median of 17 estimates in a Bloomberg News survey. From a year earlier, sales dropped 1.3 percent. European households are tightening their belts as the region’s economy shows signs of a deepening slump. Euro-area unemployment held at a record 11.4 percent in August and economic confidence fell last month after the fiscal crisis and budget cuts forced at least five euro nations into recessions. In Germany, retail sales rose 0.3 percent from July, when they fell 1 percent, today’s report showed. France reported a drop of 0.8 percent, while sales rose 2.1 percent in Spain.

Poland Signals November Cut After Holding Borrowing Costs (Bloomberg)
Poland’s central bank signaled it may cut borrowing costs next month if the economy slows further after unexpectedly leaving them at the highest level since 2009 for a fourth meeting. The Narodowy Bank Polski kept the benchmark seven-day interest rate at 4.75 percent yesterday. Eight economists in a Bloomberg survey predicted no change, while 27 expected a 25 basis-point reduction that would have reversed a rate increase in May, the only one by a central bank in the European Union this year. The NBP last lowered the benchmark in June, 2009. While central banks around the world have eased monetary policy to avert a recession, Poland has kept rates at the highest in three years to tame inflation, even after Governor Marek Belka signaled the need to reduce them amid Europe’s debt crisis. Poland’s expansion eased in the second quarter to 2.4 percent from a year earlier, the slowest since 2009.
“Inflation is still high and we wanted to make sure the trend of weakening economic growth will persist,” Belka said at a news conference yesterday. The central bank “will ease monetary policy” next month should data show the economy slowing further and limited inflation risks, according to an e- mailed statement after today’s meeting. The zloty strengthened 0.4 percent to trade at 4.0931 per euro at 5:01 p.m. in Warsaw yesterday, compared with 4.1171 before the release. The five-year government bond yield jumped as many as 9 basis points after the decision and was at 4.210 percent, up 5 basis points on the day.

Eurozone Sept PMI slide suggests no growth return (Reuters)
Dwindling new orders and faster layoffs marked a worsening decline for euro zone companies last month, according to business surveys that dent hopes the economy will return to growth before 2013.

20121004 1220 Global Commodities Related News.

DTN Closing Grain Comments 10/03 14:52 (CME)
Soybeans Stage Impressive Recovery
A return of commercial interest, possibly signaling fresh Chinese business, stoked a strong rally near support in the bean market Wednesday. Corn and wheat had a quiet day with the former trading near unchanged for a majority of the day.

Pro Farmer: After The Bell Wheat Recap (CME)
Wheat futures improved to mixed trade in late-morning trade. Chicago and Kansas City futures ended mixed, while Minneapolis futures ended slightly higher. Early pressure in the wheat pit was tied to spillover from soybeans and a lack of fresh news, but as soybeans firmed around midday, wheat followed suit.

Wheat Market Recap Report (CME)
December Wheat finished up 1 1/2 at 873, 5 1/2 off the high and 15 up from the low. March Wheat closed up 1 at 884. This was 15 1/2 up from the low and 5 1/2 off the high.
December Chicago wheat ended the session nearly unchanged while KC ended lower and Minneapolis higher. Long liquidation continued overnight as outside market instability became prevalent following the European open and the downside momentum accelerated after it was announced that the US failed to do any of the Egyptian wheat tender overnight. Egypt bought 240,000 tonnes of French and Argentinian soft wheat for December 11-20th shipment. The spread between French and US soft wheat narrowed from the last tender and there was no Russian or Ukrainian wheat offered. The wheat market rallied late in the session after corn and soybeans climbed off session lows and turned positive. The lower trader early on was linked to weather forecasts that suggest more rain for areas of Kansas, Oklahoma, and Texas next week which will likely ease soil moisture deficits for wheat planting. Outside markets offered very little support throughout the day with crude oil trading 4% lower and the US Dollar climbed higher.
December Oats closed up 3 at 363 1/4. This was 5 1/4 up from the low and 2 1/4 off the high.

Pro Farmer: After The Bell Corn Recap (CME)
Corn futures improved to choppy trade around midday and the market remained in a similar posture into the close. Futures settled 1 1/2 to 2 1/4 cents lower through the July contract, while deferred months were roughly 1 to 3 cents higher. Futures faced pressure overnight and this morning, but around midday, a rebound in soybeans returned some bargain buying interest to the corn market.

Corn Market Recap for 10/3/2012 (CME)
December Corn finished down 1 1/2 at 756 3/4, 6 3/4 off the high and 9 3/4 up from the low. March Corn closed down 2 1/4 at 757 1/2. This was 9 1/4 up from the low and 6 3/4 off the high.
December corn ended the session slightly lower on the day but traded into positive territory near the closing bell. Corn found support late in the session after soybeans and wheat rallied off session lows. Midsession weakness was linked to sharply lower wheat and soybean markets and profit taking after a closely followed trade house reported their average corn yield at 123.9 bushels per acre vs. 121.4 previously. Production rose to 10.827 billion bushels vs. 10.607 previously. The USDA in September showed a 122.8 yield and production at 10.727 billion bushels. Additional pressure was added after Ethanol production for the week ending September 28th averaged 785,000 barrels per day. This is down 3% vs. last week and down 9% vs. last year. Corn used in last week's production is estimated at 82.4 million bushels vs. 84.9 the week prior. Weekly ethanol production and weekly corn usage in ethanol production were pegged at their lowest levels since October 30, 2009. The US Dollar traded higher throughout the day and crude oil fell 4% which limited gains in the grain market. November Rice finished down 0.13 at 15.24, 0.08 off the high and equal to the low.

India's Oct-Sept'12 coffee exports fall from record levels (Reuters)
Coffee exports from India eased from the previous year's record levels, falling 8.6 percent in the coffee year that started in October 2011, weighed by depleting stocks and lack of buyers for arabica.

Oil Trades Near Two-Month Low as U.S. Output Rises, Demand Drops (Bloomberg)
Oil traded near a two-month low in New York after the government reported that U.S. crude production climbed to the highest level in more than 15 years while fuel consumption decreased. Futures fluctuated after dropping 4.1 percent yesterday, the most since June, following an Energy Department report that output rose by 11,000 barrels a day to 6.52 million last week, the most since December 1996. Fuel demand fell 0.3 percent to 18.3 million barrels a day in the four weeks ended Sept. 28, the lowest level since April. Crude and distillate stockpiles declined as gasoline supplies increased.
“The market just believes that there is too much supply, and when it doesn’t have the economic activity to back it up, generally the price must go down,” said Jonathan Barratt, chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney, who sees prices as low as $82 a barrel if inventories don’t shrink and the global economy doesn’t improve. “We don’t have the economic activity that should send prices higher.” Crude for November delivery was at $87.99 a barrel, down 15 cents, on the New York Mercantile Exchange at 11:02 a.m. in Tokyo. It earlier fell as much as 26 cents, or 0.2 percent. Futures dropped $3.75 yesterday to close at $88.14, the lowest level since Aug. 2. Prices are down 11 percent this year.

OIL-Oil falls as global economic data dims demand outlook
NEW YORK, Oct 3 (Reuters) - Oil prices fell sharply on Wednesday as disappointing economic data from China and Europe reinforced concerns about slowing growth and a weakening demand for petroleum, even as supportive U.S. data strengthened the dollar.
"The global economy is in a rut, and even with supportive EIA data crude is down," said Dan Flynn, an analyst at Price Futures Group in Chicago.

US oil stocks fall unexpectedly last week, distillates drop-EIA
NEW YORK, Oct 3 (Reuters) - U.S. crude oil stocks declined unexpectedly last week and distillate inventories fell more steeply than forecast, government data showed on Wednesday.  
Domestic stocks of crude dropped by 482,000 barrels in the week to Sept. 28, the Energy Information Administration reported, despite an increase in imports. Analysts polled by Reuters ahead of the data release had forecast a stock gain of 1.5 million barrels.

NATURAL GAS-US natgas futures post 1st loss in 7 sessions
NEW YORK, Oct 3 (Reuters) - U.S. natural gas futures ended lower on Wednesday for the first time in seven sessions, hit by a slightly milder turn in the extended weather forecast and profit-taking ahead of Thursday's inventory report despite the still-cool outlook for next week.
"The latest forecast from NOAA is showing a slightly smaller area of colder temperatures with the severity of the cold also eased somewhat. The early winter season demand bump may not be as large as thought just a week or so ago," Energy Management Institute's Dominick Chirichella said in a report.

EURO COAL-Stable prices, flurry of S.African trades seen
LONDON, Oct 3 (Reuters) - Prompt physical coal prices were barely changed again as the market waited for a much-needed seasonal rise in demand to absorb some of the persistent oversupply.
"There were various types of buyers involved, I wouldn't say it's driven by Indian buying," one European trader said.

Recap Energy Market Report (CME)
November crude oil prices experienced a wide range downdraft on the session, with very active trading volume. Prices trended lower throughout the session and breeched last week's low of $88.95 in the process. Early weakness came on demand concerns in the wake of weaker than expected economic readings in China and Europe. While there was a round of positive US economic data this morning, traders said the more dominant concern was a global economic slowdown. This morning's EIA inventory data showed an unexpected decline in crude stocks last week of 482,000 barrels. Current inventory levels stand at 364.698 million barrels, which is the highest for this week since 2010. However, soft import activity of 8.106 million barrels per day contributed to the weekly stock draw. The refinery operating rate was 88.2%, up 0.8% from last week. November crude oil managed a brief reprieve from early selling but ultimately turned lower, falling to its lowest level since August 2nd in late-afternoon trade.

METALS-Copper slips after 4-day rise, economic woes drag
SINGAPORE, Oct 3 (Reuters) - Copper fell on Wednesday after climbing for four days, as a fragile global economy and Europe's lingering debt crisis curbed buying interest, with a week-long public holiday in top copper consumer China keeping trading volumes extremely thin.    
"On one hand you have the more positive vibe from U.S. players with people encouraged by policy action there. But data from China is still showing the economy is bottoming -- not yet improving -- and you still have this political paralysis going on ahead of the leadership transition in China," said ANZ commodity strategist Nick Trevethan.

PRECIOUS-Gold holds near 11-month high on Spain caution
SINGAPORE, Oct 3 (Reuters) - Gold held near an 11-month high on Wednesday, as uncertainty over Spain's bailout plan kept investors on their toes while they wait for a key U.S. job market report to shed light on the effectiveness of the latest stimulus measures.
"The real challenges will again drive the market," said Jeremy Friesen, a commodity strategist at Societe Generale in Hong Kong.

Gold Market Recap Report (CME)
The gold market waffled around both sides of unchanged today but eventually the market righted the ship and clawed back into positive ground. As suggested in the mid day coverage, gold at times this morning seemed to fall in the face of better than expected US data but it should be noted that gold was quickly able to recover after the impact of the ISM report. Gold was probably held back slightly today by weakness in the Euro, Canadian and energy prices. Some bulls suggest that the resiliency in gold today was largely the result of looming ECB and BOE meetings. Perhaps gold drafted some lift off news that ECB gold holdings rose in a quarterly report. Another issue that might have provided some lift in gold prices today were headlines that the South African Mineworkers Union and the Chamber of mines agreed to re-open wage negotiations for the gold mining sector.

20121004 1219 Soy Oil & Palm Oil Related News.

Soybeans Advance as 16% Slump From Record Attracts Importers (Bloomberg)
Soybeans gained as a 16 percent slide from last month’s record to a three-month low yesterday probably attracted importers on concern the worst U.S. drought in half a century will cut its reserves to the lowest level in nine years. The November-delivery contract rose as much as 0.5 percent to $15.3925 a bushel on the Chicago Board of Trade and was at $15.36 at 9:22 a.m. Singapore time. Futures, that surged to an all-time high of $17.89 a bushel on Sept. 4, dropped yesterday to $15.04, the lowest price since July 5. Taiwan is seeking to buy as much as 180,000 metric tons of soybeans from the U.S. or Brazil at a tender today, buyer Taichung Group said yesterday. U.S. exporters sold 21,000 tons of soybean oil to China, the Department of Agriculture said yesterday, after reporting sales of 180,000 tons of soybeans on Sept. 28 and 110,000 tons of the oilseed on Sept. 27.
“Any fall in prices usually does bring out some opportunistic buyers,” Michael Creed, an agribusiness economist at National Australia Bank Ltd., said by phone from Melbourne today. “Any news out of China tends to be closely watched.” Inventories of soybeans in the U.S., the largest grower last year, were estimated to drop to 3.13 million tons by August 2013, the smallest since 2004, according to the USDA outlook on Sept. 12. Corn for December delivery declined 0.3 percent to $7.545 a bushel, while wheat for delivery in the same month fell 0.3 percent to $8.70 a bushel. U.S. production of ethanol, which can be made from corn, fell 3 percent last week to 785,000 barrels a day, the least since the Energy Department began publishing weekly data in 2010.

Pro Farmer: After The Bell Soybean Recap (CME)
Soybean futures finished well off session lows but could only muster a mixed close. Soybean futures settled 1 cent lower to as much as 13 cents higher in far-deferred contracts. Meal and soyoil futures mildly favored the upside on the close. After facing active followthrough selling early, soybean futures staged a late-morning rally amid ideas the downside has been overdone.

Soybean Complex Market Recap (CME)
November Soybeans finished up 1 at 1531 1/2, 12 1/4 off the high and 27 1/2 up from the low. January Soybeans closed down 1 1/4 at 1532. This was 25 3/4 up from the low and 11 1/2 off the high. December Soymeal closed up 1.5 at 464.4. This was 9.3 up from the low and 3.9 off the high. December Soybean Oil finished up 0.04 at 50.73, 0.32 off the high and 0.67 up from the low. November soybeans were on their way to test $15.00 in early trade today but managed to find support late in the session to close in positive territory. Bullish traders suggested yields might be better than expected but pointed to the staggering export demand pace as reason for prices to move higher. A closely followed trade house released their revised US average soybean yield and production estimates after the close yesterday. The average soybean yield was reported at 38.2 bushels per acre vs. 36.7 in September. Production rose to 2.849 billion bushels vs. 2.739 previously. The USDA in September had yield at 35.3 and production at 2.634 billion bushels. Most in the trade expect demand to be revised higher if soybean yields rise on next week's USDA report. This could offset some of the bearish enthusiasm in the long term. China remains on holiday this week but it was reported this morning that 21,000 tonnes of US Soybean Oil was sold to China overnight for 2012/13 delivery. This offered a brief period of support for soybean oil futures. Outside markets limited price gains as the US Dollar traded higher and crude fell by 4%.

Argentina's Aug soy crushing falls 6.8 pct yr/yr on drought (Reuters)
Argentina's soy crushing activity fell 6.8 percent in August to 2.81 million tonnes from a year ago due in part to lower supplies caused by last season's drought, the Agriculture Ministry said in its latest report.

EDIBLES: Malaysian palm oil futures rebounded from their lowest in nearly three years as investors looked for bargains, although traders said the recovery could be short-lived as fundamentals remain weak. (Reuters)

20121003 1839 FCPO EOD Daily Chart Study.

FCPO closed : 2351, changed : +96 points, volume : lower. 

Bollinger band reading : pullback correction downside biased. 

MACD Histogram : turned upward, seller taking profit. 

Support : 2350, 2300, 2250, 2230 level.

Resistance : 2400, 2450, 2490, 2520 level.

Comment :

FCPO closed higher having technical rebound with lesser volume transacted. Soy oil currently trading weaker after overnight closed recorded nearly 1% loss while crude oil price trading lower. 

Price pullback higher as seller profit taking activities kicks in after plunging down to 3 years low triggered long liquidation. While slower global demand, higher palm oil inventories level concerns, better soybean crops fundamental factors remains. 

Chart wise, FCPO daily chart study suggesting a pullback correction downside biased market development. 

When to buy : buy at support or weakness with quick cut loss and profit target.

When to sell : sell at resistant or strength with quick cut loss and profit target.

20121003 1835 FKLI EOD Daily Chart Study.

FKLI closed : 1649.5 changed : -6.5 points, volume : higher.

Bollinger band reading : pullback correction little upside biased. 

MACD Histogram : turned downward, buyer reduce exposure. 

Support : 1645, 1640, 1627, 1623 level.

Resistance : 1651, 1657, 1660, 1670 level.

Comment :

FKLI closed recorded loss with better volume changed hand on par with cash market that closed marginally  lower. Overnight U.S. market closed mixed and today Asia markets ended mostly lower while European markets currently trading in negative territory. 

Slower China services industries expansion data reported and uncertainty over Spanish bailout issue send world markets trading lower. 

FKLI daily chart study suggesting a pullback correction little upside biased market development after market tested new high today.

When to buy : buy at support or weakness with quick cut loss and profit target.

When to sell : sell at resistance or strength with quick cut loss and profit target.