(FT)Shifts in commodity prices as El Niño fades
El Niño, the weather-altering Pacific warming which has hit the price of commodities from sugar to natural gas, is starting to fade and could end by June.

Quick Overview

• U.S. retail sales rose 0.5% in January and 4.7% YoY
  

• The University of Michigan's index of consumer sentiment fell from 74.4 to 73.7
  

• U.S. business sales rose 0.9% in December
  

• U.S. Inventories fell 0.2%.
  

• U.S. unemployment peaked in October and will retreat through 2011 as the economy strengthens, according to economists surveyed by Bloomberg.
  

• EU GDP rose 0.1% in Q4
  

• EU industrial production fell 1.9% in January and 4.9% YoY
  

• China is raising reserve requirements for banks from 16.0% to 16.5%.
  

• YoY India’s industrial production rose 16.8% in December
  

• The DOE said:
  Supplies of crude oil rose 2.4 million barrels to 331.4 million barrels.
  Supplies of gasoline rose 2.3 million barrels
  Supplies of heating oil rose 1.5 million barrels.
  Refinery use rose from 77.7% to 79.1%
  

• (Reuters) - India and China are resisting requests to sign up for the Copenhagen Accord for fighting global warming that risks unraveling without clear support from major emitters.
  
  
  

Quick Overview

• U.S. jobless claims fell 43,000 last week to 440,000
  

• Australia's unemployment rate improved from 5.5% to 5.3% in January.
  

• Spain’s GDP fell 0.1% in Q4 and down 3.1% YoY.
  

• (FT) The world’s largest financial groups, including JPMorgan Chase and HSBC, are rushing to relocate top officials to focus on opportunities in the fast-growing region
  

• (FT) China's leading producer of rare earth metals has been given government approval to build a strategic reserve, exacerbating concerns that Beijing is tightening its grip on the valuable minerals.
  

• (Spiegel) In a vote that American officials are calling a "setback for US-EU counter-terror cooperation," the European Parliament on Thursday voted to reject a deal allowing US terrorism investigators access to international bank transfer information. Europe, however, sees a victory for data protection.
  

Quick Overview

• (Bloomberg) -- The Federal Reserve may raise the discount rate “before long” as part of the “normalization” of Fed lending, a move that won’t signal any change in the outlook for monetary policy, Chairman Ben S. Bernanke said.
  
  
  

• U.S. Exports rose $4.6 billion in December to $142.7 billion while imports rose $8.4 billion to $182.9 billion -- widening the trade gap by $3.8bn from November, to $40.2bn in December
  
  

• The Mortgage Bankers Association's index of mortgage applications fell 1.2%
  
  

• A Communist Party directive leaked to the Chinese-language edition of the Asia Times said dollar reserves should be limited to US Treasuries or agency mortgage debt such as Freddie Mac that enjoys Washington's implicit backing.
  
  
  

• Japan’s machinery orders rose 20.1% in December.
  
  

• U.K.’s index of industrial production rose 0.5% MoM but fell 3.6% YoY.
  
  

• Canada’s exports rose C$.5 billion in December to C$32.2 billion while imports rose C$.5 billion to C$32.4 billion.
  
  

• The massacre in Ciudad Juarez at the end of January made it clear that Mexico is losing the war on drugs. Narcotics-related violence is on the rise in other Latin American cities as well. An increasing number of voices are demanding that drugs be decriminalized.
  
  

• Arab ambassador in Dubai annuls marriage after discovering his new wife is cross-eyed, has beard.

• U.S. silver imports rose 13.5% in December from the previous month, but fell 9.3% YoY

Germany backs Greek bail-out as EU creates 'economic government'
The breakthrough comes as this week's summit of EU leaders in Brussels rapidly evolves from a policy workshop into an historic gathering that may catapult the EU across the Rubicon towards fiscal federalism and a de facto debt union. The EU's top brass are seizing on the crisis to push for a radical extension of EU powers, saying Greece has exposed the deep flaws in the structure of monetary union.

Quick Overview

• (Reuters) - European governments have agreed in principle to help heavily indebted Greece, a senior German coalition source said on Tuesday, in what would be the first rescue of a euro zone member in the currency's 11-year history.
• Billionaire investor George Soros said he is confident Greece will “do whatever is necessary” to remain a member of the Euro.

• U.S. wholesale sales rose 0.8% MoM and 5.7% YoY
  
  

• The USDA estimates 2009-2010 U.S. ending stocks for:
  Corn was reduced from 1.764 to 1.719 billion bushels.
  Soybeans were reduced from 245 to 210 million bushels.
  Wheat was increased from 976 to 981 million bushels.
  Sugar was reduced from 1.140 to 1.055 million tons.
  Cotton was reduced from 4.3 to 3.3 million bales.
  
  
  
• The USDA estimates 2009-2010 world ending stocks for:
  Corn was reduced from 136 to 134 million tons.
  Soybeans were reduced from 59.8 to 59.7 million tons.
  Wheat was increased from 195.6 to 195.9 million tons.
  Cotton was increased from 51.7 to 52.1 million bales.
  
  
• The USDA estimate of the Brazil's soybean crop was raised from 65 to 66 million tons.
  
• The USDA estimate of the Argentinean soy crop was kept at 53 million tons.
  
• The USDA reduced its estimate of the 2009-2010 Florida orange crop from 135 to 129 million boxes. Juice yield was lowered from 1.60 to 1.56 gallons per box.
  
  
• The USDA raised its estimate of 2010 beef production from 25.50 to 25.65 billion pounds.
  
• The USDA reduced its estimate of 2010 pork production from 22.6 to 22.5 billion pounds.

• U.S. soyoil production is expected to increase, thanks to a recent decision by the Environmental Protection Agency that soyoil-based biodiesel will qualify for government production mandates, the U.S. Department of Agriculture said.
  
  

• Brazilian ethanol mills are reaching out to chemical companies to develop plastics and other products in a bid to diversify. The mills harvest sugar cane and crush it into sugar or ethanol, but the operators are now looking to earn new revenue by sourcing ethanol as a raw material.
  
  

• The agricultural survey group of Brazil's Census Bureau, the IBGE, on Tuesday put the upcoming 2010 coffee crop at 46.8 million 60-kilogram bags. IBGE's new data is 15% above the 2009 crop.
  
  

• National Commodities Supply Corp., or Conab, on Tuesday pegged Brazil's 2009-10 soy crop at 66.7 million metric tons. Conab's fifth crop estimate for the record-breaking 2009-10 soy crop is 16.7% above the 2008-09 crop of 57.2 million tons

• Thailand will likely produce 6.62 million metric tons of sugar this crop year, down 7.9%, Office of Cane & Sugar Board Secretary General Prasert Tapaneeyangkul said Wednesday.

• India's federal government may ask state-run trading firms to import refined white sugar and offer them a subsidy to bridge a shortfall in the local market, a government official said

Quick Overview

• (Bloomberg) -- U.S. stocks slid and the Dow Jones Industrial Average closed below 10,000 for the first time since November amid concern that deteriorating European government finances will derail the economic recovery.
  

• Data from the Chicago Mercantile Exchange show net short positions against the Euro rising from 39,500 to 43,700 contracts.
  

• YoY Japan’s bank lending fell 1.5% in January.
  

• Kingsman increased its estimate of the 2009-2010 world sugar production deficit from 8.3 to 11.9 million tons.
  

• (FT) El Niño, the weather-altering Pacific warming which has hit the price of commodities from sugar to natural gas, is starting to fade and could end by June.
  
  

Quick Overview

• U.S jobless claims were up 8,000 last week to 480,000,
  

• U.S. factory orders rose 1.0% in December,
  

• Australia's retail sales fell 0.7% in December.
  

• Lumber is up its $10 daily limit.
  

Quick Overview

• ADP Employer Services said that the US lost 22,000 jobs in January
  

• U.S. services rose from 49.8 to 50.5 in January.
  

• US mortgage applications rose 21%

• EU retail sales volume fell 0.1% MoM and 1.0% YoY.
  

• Services in the U.K. fell from 56.8 to 54.5 in January
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 2.3 million barrels to 329.0 million barrels.
  Supplies of gasoline fell 1.3 million barrels
  Supplies of heating oil rose 800,000 barrels.
  Refinery use fell from 78.5% to 77.7%.
  Gasoline demand fell 0.5% YoY
  Distillate demand fell 9.1% YoY.

• Thailand's sugar production in the crop year to Jan. 31 rose 6.8%, but lower yields are offsetting the increased amount of cane being crushed

Quick Overview

• The National Association of Realtors index of pending home sales rose 1.0% in December and 10.9% YoY
  

• YoY Producer prices in the EU fell 2.9%
  

• Debt-hit Greece should not be bailed out, one of the founders of Europe's euro currency has warned.
  

• China’s government, seeking to stem property speculation, told banks to raise interest rates on “third” mortgages and demand bigger down payments.
  

• China's Cotton Association estimated that cotton plantings will be down 5% this year.
  

• (Bloomberg) -- Raw sugar prices probably will decline from a 29-year high this year as a “huge increase” in production driven mainly by Brazil may balance the market, according to German research company F.O. Licht.

• Global sugar production will trail demand by 8 million metric tons, more than forecast, F.O. Licht said.
  

• Swiss lawmaker compares Germany's attempts to get hold of data on cross-border tax evaders to bank robbery.
  

• Cement, coal and industrial metals producers across Asia will benefit in coming years from a massive push by India to overhaul its infrastructure, a fund manager at JPMorgan Asset Management said.
  

• Copper prices are set to plunge as speculators unwind positions and global inventories expand, according to David Threlkeld, president of metals trader Resolved Inc.

• Fortis bank estimates the cocoa stock to use ratio at 35% at the end of 2010-11.

Should Germany bail out Club Med or leave the euro altogether?
Germany faces a terrible dilemma. Either Europe's paymaster agrees to underwrite a Greek bail-out and drops its vehement opposition to a de facto EU economic government, treasury, and debt union, or the euro will start to unravel, and with it Germany's strategic investment in the post-war order.

Quick Overview

• U.S. personal incomes rose 0.3% in December. YoY personal incomes fell 1.4%, the biggest decline since 1938.
  

• U.S. Consumer spending rose 0.2%.
  

• The Institute of Supply Management's manufacturing index rose from 54.9 to 58.4
  

• U.S. Construction spending fell 1.2% MoM. YoY construction spending fell 12.4%
  

• Manufacturing in Australia rose from 48.5 to 51.0 in January
  

• Manufacturing in the U.K. rose from 54.6 to 56.7 in January.
  

• Manufacturing in the EU rose from 51.6 to 52.4 in January
  

• Russia's GDP fell 7.9% in 2009
  

• Global demand for sugar will exceed supply by 13.5 million tons this season, according to broker Czarnikow Group Ltd.
  

• (Bloomberg) -- Soybean fungi are spreading across Brazil and Argentina, the world’s second- and third-largest producers, threatening record crops.
  

• The USDA said U.S. cattle inventory fell 0.9% YoY

• Australia surprised markets with the decision to leave its rates unchanged at 3.75%.
  

• Shell plans $1.63B investment in Brazilian ethanol.

• Daily charts of interest:
  BDI, Capesize, Dollar P&F, Soy P&F, S&P Cycle, S&P Vxo Ratio, Las Vegas RE, Crude.

• Weekly charts of interest:
  World Copper stocks, NY weekly adv. Issues.

• Monthly charts of interest:
  World Markets with 6 month average above 24 month average, Chile, Argentina, Sri Lanka, RE CPI adj.
  
  
  

Updates resume Feb. 1

Quick Overview

• U.S. existing home sales fell 16.7% MoM

• The Dallas Fed regional index of manufacturing rose from 3.2 to 8.3
  

• (Bloomberg) -- Copper may rise to a record $10,000 a metric ton this year, driven by industrial demand in China and rising commodity investments to hedge inflation, said Shen Haihua, an investment manager at HFZ Capital Management Ltd.
  

• Canada’s lumber production fell 14% YoY.

• (FT) China has experienced the strongest growth in scientific research over the past three decades of any country.

• Sugar rose above 30 cents a pound in intraday trading on news that Indonesia is expecting a 530,976-metric-ton production shortfall at the end of April.
• Indonesia's state plantation company PT Perkebunan Nusantara IX has bought 46,000 metric tons of white sugar at $822/ton -- to arrive no later than April 7.

• More than half a million hectares of Philippine rice lands are threatened by an El Nino-induced dry spell, the Philippine Department of Agriculture said Tuesday. Drier-than-usual conditions have already been noted in some areas, and based on assessment by the department

Quick Overview

• Daily charts of interest: SP500, Dow Theory, Dollar Index, Russian Rubel, Brazilian Real, Euro Currency, NY ADL, NY Volume ADL, Rice.
  

• Weekly charts of interest: SOX, XAU, DJIA, Weekly Adv., London Copper,London Silver, Swiss Franc, Crude CPI adj., Sugar CPI adj., Multiplier.
  

• Jan. 23 (Bloomberg) -- General Electric Co. said improving economic conditions and reduced costs are giving it flexibility to consider using cash for acquisitions and eventually for stock buybacks and dividend increases.
  

• Now that the U.S. wheat industry appears united in supporting genetically modified crops, it's preparing for the challenge of getting foreign-market acceptance, said U.S. Wheat Associates Director of Policy Rebecca Bratter.
  

• US sugar says 50% of its remaining FL cane is badly freeze damaged.

After the Massachusetts Massacre
Can anyone picture Obama exerting such take-no-prisoners leadership to challenge those who threaten our own economic recovery and stability at a time of deep recession and war? That we can’t is a powerful indicator of why what happened in Massachusetts will not stay in Massachusetts if this White House fails to reboot.

Quick Overview

• Canada’s retail sales fell 0.3%.
  

• U.K. retail sales rose 3.6%
  

• EU industrial new orders rose 1.8% in November, but fell 2.0% YoY.
  

• The USDA said 2.13 billion pounds of beef was produced in December, up 2.5% YoY
  

• The USDA said 1.99 billion pounds of Pork was produced, down 3.3% YoY.
  

• North America's cocoa grind totaled 111,986 tons in Q4 -- down 1.5% YoY
  
  
  

Olbermann: Freedom of speech has been destroyed!

Visit msnbc.com for breaking news, world news, and news about the economy

Supreme Court Rules 5-4 Against Campaign Limitations in The Hillary The Movie Case
In a decision that could have a dramatic effect on the upcoming elections, the Supreme Court has ruled 5-4 in favor of a group of conservative filmmakers..

Quick Overview

• Obama has a new proposal that would force institutions to choose between commercial banking and proprietary trading, while seeking to limit the size of megabanks.
  

• The stock market fell amid ongoing fears about tighter monetary policy in China and uncertainty over Obama's plans to rein in risky bank activities.
  

• US jobless claims rose 36,000 to 482,000 -- more than expected.
  

• U.S. leading indicators rose1.1% in December
  

• The Philadelphia Federal Reserve's index of regional manufacturing fell from 22.5 to 15.2
  

• The UK posted a budget deficit of 15.7 billion pounds in December
  

• Canada’s wholesale sales rose 2.5% in November
  

• The World Bank increased its estimate of 2010 global growth to 2.7% from 2.0%.
  

• The lineup of vessels expected to load sugar at Brazilian ports in the days ahead rose by one to 31 ships in the week ended Wednesday, Jan. 20.
• The sugar crisis deepened on Thursday after Indonesia, one of the world’s leading importers, failed to buy a single pound of the sweetener in its latest tender.
  
  

• The International Grains Council said world wheat production is expected to fall 1.7% to 674 million tons in the 2009-10
  
  

• Colombian coffee production in calendar year 2009 ended down 32% at 7.8 million 60-kilogram bags
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 400,000 barrels to 330.6 million barrels.
  Supplies of gasoline rose 3.9 million barrels
  Supplies of heating oil fell 1.1 million barrels.
  Refinery use fell from 81.3% to 78.4% last week.
  Gasoline demand fell 0.2% YoY
  Distillate demand fell 6.8% YoY.
  

Quick Overview

• U.S. housing starts fell 4.0% MoM.
  

• U.S. producer prices rose 0.2% MoM and 4.4% YoY.
  

• China is telling large banks to cut back on lending -- the uncertainty over Beijing's monetary policy is depressing stocks and commodities.

• China's GDP grew 10.7% in Q4
  
  

• Canada’s manufacturing sales rose 0.1% in November
  

• Canada’s consumer prices rose 1.3% YoY
  

• B of A lost $5.2 billion in Q4.

• Indonesia has only just enough sugar stocks to last until mid-February, the trade minister said

Quick Overview

• Canada’s index of leading indicators rose 1.5% in December.
  

• YoY U.K. consumer prices rose 2.9% in December
  

• EU construction output fell 0.6% in November and down 6.7% YoY
  

• Japan's consumer confidence fell from 39.5 to 37.6 in December.
  

• Citigroup posted a loss of $7.6 billion in Q4.
  

• Cadbury accepted a sweetened 11.5 billion pound ($19.5 billion) takeover from Kraft Foods Inc.

• India may have to buy at least 7 million tons this season, with white sugar making up about a third of the total, Macquarie Group Ltd. said in a report this month.

• The WWF says on its website that the tiger is one of the top 10 species to watch in 2010, pointing out that there may be just 3,200 of the animals left globally in the wild.

Quick Overview

• (FT)China’s soaring appetites for commodities have created some of the worst traffic jams seen at ports handling bulk cargo. Ships were queuing for an average of 27½ days to collect coal in Queensland, Australia.
  

• The Drewry Global Freight Rate Index (container shipping rates) rose 3 % YoY to November 2009.
  

• Last week’s charts of interest:
  Capsize held support and broke the downtrend.
  Supramax is making a new high for the move.
• Cocoa
• Australian Dollar
• Orange Juice
• T-Bond Rates

Quick Overview

• U.S. consumer price index rose 0.1% MoM and 2.7% YoY
  

• U.S. industrial production rose 0.6%
  

• The NY Federal Reserve's index of manufacturing rose from 4.50 to 15.92 in January
  

• YoY Consumer prices in the EU rose 1.4% in December

• The University of Michigan's consumer sentiment index rose from 72.5 to 72.8

Quick Overview

• U.S. Jobless claims rose 11,000 last week to 444,000 -- more than expected.
  

• U.S. retail sales fell 0.3% in December.
  

• US inventories rose 0.4% in November -- more than expected.
  

• Australia's unemployment rate fell from 5.7% to 5.5% in December
  

• EU industrial production rose 0.9% in November, but fell 6.4% YoY
  

• Japan’s machinery orders fell 11.3% in November -- weaker than expected.
  

• (Bloomberg) India surpassed China as the world’s biggest buyer of palm oil as rising incomes increased demand for fried and processed foods and drought reduced domestic cooking oil production, according to a processor group.

• Intel's net income totaled 40 cents a share, in the three months ended December -- beating expectations for 30 cents.

• 
  

Quick Overview

• The Fed’s Beige Book said ten Districts reported some increased activity and improvement in conditions.
  

• The Mortgage Bankers Association said its index of mortgage applications rose 14%.
  

• U.K. Manufacturing was unchanged in November and down 5.4% YoY
  

• YoY Germany's GDP fell 5.0%
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 3.7 million barrels to 331.0 million barrels.
  Supplies of gasoline rose 3.8 million barrels
  Supplies of heating oil fell 1.1 million barrels.
  Refinery use rose from 79.9% to 81.3% of capacity last week
  Gasoline rose 0.4% YoY
  Distillate demand fell 4.0% YoY
  

• India imported 343 tons of gold in 09, down from 420 tons in 08

• Germany's fourth-quarter 2009 cocoa grind rose 9.4 YoY to 95,834 tonnes, the association of German Confectionary Producers said.
  

America slides deeper into depression as Wall Street revels
Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath.

Quick Overview

• World 2009-10 coffee production is expected to fall to 123.7 million (60-kilogram) bags, the International Coffee Organization said Monday.
  

• Brazil's orange juice exporters' association, Citrus Br, said it expected the next harvest to turn out between 300 million and 315 million 40.8-kg boxes in Sao Paulo state. This year's harvest will soon finish and has been estimated at 358.4 million boxes by the state's agriculture authorities.
  

• AccuWeather said crop losses in Florida's citrus groves could reach 10%.
  

• The Philippines may import up to 50,000 tonnes of raw sugar to rein in rising domestic prices but officials said on Monday there was enough supply to meet an increase in demand

Quick Overview

• Chinas exports rose17.7 % YoY, the first increase in 14 months, increasing the likelihood that t Beijing will restart the appreciation of the renminbi.
  

• (Bloomberg) -- Paul Krugman said he sees about a one-third chance the U.S. economy will slide into a recession during the second half of the year as fiscal and monetary stimulus fade.
  

• Hank Greenberg blamed new standards for credit-default swaps -- pushed by Goldman or Deutsche Bank AG, he said -- and subprime, housing-backed derivatives sold and then shorted by Goldman as contributing to AIG’s collapse, the newspaper reported.
  

• Soft drinks manufacturers are more and more returning to sugar given the poor health image of high fructose corn syrup.
  

• Growers of sugarcane crop in southern Louisiana could continue to suffer losses the next couple of nights as a hard freeze develops. This is not welcome news after record rainfall in the fall and December deluged the fields and set the harvest behind schedule.
  

• The Parrot, my advisor, anticipates the next S&P cycle low on Feb 1.
  

• Some notable new highs (for the move) last week:
  Coal
  London Zink, Tin, and Lead “Inventories”
  Shanghai Zink “Inventory”
  World copper “Inventories”
  Palladium, Platinum, Copper
  London: aluminum, copper, lead, tin, zinc
  Unleaded
  NY Volume advance decline line
  NY advance decline line
  Orange Juice
  Dow Industrial, Transport, Nasdaq 100, S&P 500, Nikkei.
  Argentina, Chile, Mexico.
  Sea
  Euro Dollar (Interest Rates)
  Sugar
  Rate of inflation
  
  Some notable new lows (for the move) last week:
  Vxo
  NY weekly advancing issues
  Gilts
  Commercial loans
  Slovakia
  
  
  
  
  
  
  
  
  
  

Quick Overview

• US Non-farm payroll fell 85K in December –more than expected
  

• U.S. Unemployment stays at 10%
  

• U.S. wholesale sales rose 3.3% in November -- stronger than expected.
  

• Canada’s unemployment rate unchanged at 8.5%
  

• EU unemployment up from 9.8% to 10.0%, the highest since the currency began in 1999.

• EU GDP rose 0.3% in Q3, but fell 4.3% YoY
  

• The Independent is carrying the headline “Ice Land” as Europe, China and the US braced for more snow and below-freezing overnight temperatures, tightening supplies of coal and electricity
  

• Weather.com says temperatures in central Florida will be below freezing one more time tomorrow morning.
• WXRISK.COM says: If the wind drops off overnight on the morning of the 11th is going to be a serious hard freeze across a large portion of central and southern Florida over interior sections. If the winds stay up a little bit overnight the hard freeze will be probably more like a frost.

• The Port of New Orleans bucked the worst economic slowdown in 70 years because its business of providing warehouse space for the London Metal Exchange (LME) expanded rapidly over the last two years, Reuters reported.

• Swiss court ruled that a Swiss financial regulatory order that forced UBS AG hand over account data on several hundred clients was "unlawful," opening up the possibility of clients seeking damages from Switzerland and reigniting the debate surrounding banking secrecy.

Quick Overview

• Shares of General Electric (NYSE: GE) have rallied sharply on apparently no news-- volume has spiked higher.
  

• The EPA today proposed significantly tougher smog standards after reconsidering the Bush administration's controversial 2008 regulations.
  
  
• Japan's new Finance Minister Naoto Kan favors a weaker yen.
  
  

• China raised the yield on three-month bills from 1.33% to 1.37%, the first increase in five months.
  

• MoM EU retail sales fell 0.8% and 2.1% YoY.
  
  

• Australia's retail sales rose 1.4% MoM
  
  

• Brazil's expects its coffee crop to total 46.7 million bags in 2010. The USDA estimated Brazil's 2009 coffee crop at 43.5 million bags.
  

• "We had isolated pockets across the citrus belt of damage--frozen fruit and twig and leaf damage--again, not catastrophic but we did suffer some damage," said Andrew Meadows, spokesman for Florida Citrus Mutual, the state's largest grower representative.
  Another strong cold front is expected to make its way to Florida by Friday, putting the citrus belt back in the danger zone through the weekend. Lows in the 20s and low 30s are expected to be seen Saturday night and Sunday morning.

• Winterkill Threat Through End of Week in 1/4 of Plains Wheat Belt

Quick Overview

• The Institute of Supply Managements' index of services rose from 48.7 to 50.1 in December.
  

• As of Jan 1st Russia barred poultry imports from the U.S. -- they object to the use of chlorine in processing.

• The U.S. Department of Energy said:
  Supplies of crude oil rose 1.3 million barrels last week to 327.3 million barrels.
  Supplies of gasoline rose up 3.7 million barrels
  Supplies of heating oil fell 1.3 million barrels
  Refinery use fell from 80.3% to 79.9% of capacity last week.
  Gasoline demand rose 0.3% YoY
  Distillate demand fell 1.0% YoY.
  

• EU industrial new orders fell 1.6% MoM and down 14.1% YoY.
  

• Services in the U.K. rose from 56.6 to 56.8 in December.
  

• YoY Brazil’s ethanol exports in December fell to 124.3 million liters from 348.5 million liters.
  

• Brazil’s soybean exports fell to 203,100 metric tons in December 2009 from 750,400 tons in December 2008
  

• The NYSE Volume advance decline appears to follow the NYSE advance decline to new high.
  

• The Nikkei is making a new high for the move.
  

• Unleaded Gas is making a new high for the move.
  

• DB Commodity Index is making a new high for the move.
  

• Platinum is following Palladium to new highs.
  

• (FT) The US slapped additional duties of 43 to 289 per cent on imports of more than $300m worth of a steel product from China, the US Commerce Department said
  

• (WJ) China took over the mantle of the world's top merchandise exporter from Germany in 2009.
  

• Rain has freed some areas of Argentina from drought, but left others with "severe flooding", Oil World says, warning of a disease threat in Brazil -- the crop is jeopardized by the Asian rust fungus which has spread at an alarming rate..

• Informa Economics raised its estimated 2009 corn production in China and Argentina. The firm pegged China's corn crop at 160 million metric tons, up 5 million tons from its December estimate. Argentina's 2009 production was pegged at 15.5 million metric tons, up 2.5 million tons from the previous month.

• New high for Euro Dollar (Interest rates)

Quick Overview

• U.S. factory orders rose 1.1% in November, better than expected.
  

• The National Association of Realtors said pending home sales fell 16% in November, but up 15.5% YoY
  

• Temperatures in central Florida dipped below 30 degrees this morning and forecasters expect one more cold morning on Saturday -- OJ closed limit up

• YoY Consumer prices in the Euro area rose 0.9% in December
  

• New home sales in Australia rose 0.3% in November.
  

• Indonesia's plan to buy 500,000 metric tons of sugar for delivery between Jan. 1 and April 15 failed Tuesday because there were too few offers, traders said. There are also expectations for strong demand from Russia, a leading importer of raws, and the United States.
  

• Mexico’s corn imports will jump 28% in 2009-10 because of a drought which "created huge problems" for farmers, US officials say.
  
  
  The coal price at Qinghuangdao Port rose for four consecutive months, and set a new record high over the past year, meanwhile, coal inventory fell 29.4% from early December, approaching the alarm point of 5 mln tons again. (Beijing faced the coldest weather in half a century)
  

• Britain shivers during what could be its coldest winter in a century.
  

• Integrating Skype in High-definition TVs from LG and Panasonic will enable users to conduct free live video chats from their couches.
  
  

Global bear rally will deflate as Japan leads world in sovereign bond crisis
By mid to late 2010, we will have lanced the biggest boils of the global system.

Quick Overview

• The Institute of Supply Management index of U.S. manufacturing rose from 53.6 to 55.9 in December -- better than expected, and the highest level in more than three years.
  

• (FT)The US public pension system faces a higher-than-expected shortfall of more than $2,000bn
  

• U.S. Construction spending fell 0.6% from October's pace. In the first eleven months of 2009, construction spending is down 12.7% YoY.
  

• Chinas manufacturing index rose from 55.7 to 56.1 in December, the highest in five years.
  

• Australia’s manufacturing index fell from 51.2 to 48.5 in December.
  

• Weather forecasters say that temperatures in central Florida have a chance to go below freezing on four out of five nights this week.
  

• Maersk hired a warship to protec the Brigit Maersk tanker from pirates.
  

Quick Overview

• (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist and Columbia University professor, said economists are among those at fault for the financial crisis, which exposed “major flaws” in prevailing ideas. The now-flawed premises include the ideas that economic participants behave rationally and that financial markets are competitive and efficient, Stiglitz said.
  

• (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the central bank’s low interest rates didn’t cause the past decade’s housing bubble and that better regulation would have been more effective in limiting the boom.

• The S&P rose 23.5% in 09, the biggest yearly gain since 2003. Since the March lows, the S&P rose about 65%.
  

• China appears to have overtaken India as the number one private gold buyer in 09.
  

• Corn world ending stocks are projected near 4 decade lows at 17% of usage. This despite a record U.S. yield in 2009/10
  

• The cocoa market is heading into its fourth consecutive year of shortfalls – the longest run of shortages since 1965-69 -- This may rekindle the cocoa fat substitute argument.
  

• Czarnikow recently forecast the 2009-10 sugar deficit at 13.5m tonnes, following a deficit of 15.8m tonnes in 2008-09 -- Brazilian Ethanol is becoming less competitive.
  

• In spite of the Dollar's rally since December, the doomsayers are still out in force.
  

• Bad weather has driven orange juice 90% higher last year. The per capita OJ consumption is 1/20th of bottled water and soft drinks.
  

• Companies such as Morgan Stanley and Goldman Sachs will now have to put up the same amount of capital to hedge against their own business risks as they would to hedge against risks for their customers. The CFTC’s regulations aim to ensure that firms have the financial backing for the risks they are taking in the market -- It’s about time!!
  

• 12/27/09 China announced new regulations to increase the use of renewable energy such as wind and hydropower by forcing electricity grid operators to prioritize their use, in an effort by the world's top greenhouse-gas emitter to reduce its reliance on coal. The amendment will force state-owned electric grid companies, which are responsible for distributing electricity from power plants, to buy all the electricity generated from renewable sources even when it is more expensive and more complicated to use than electricity from coal-fired plants -- Coal is not impressed.
  

• After falling a record 92% last year, the Baltic Dry Index posted its best-ever annual advance since it started in 1985. The index advanced 288% in 1999, exceeding its previous record of 174% in 2003.
  

• Last Friday, China and the 10-country Association of South East Asian Nations launched the final stage of the world’s biggest regional trade agreement, measured by population.
  

• As of Jan 1st Ireland has a new law, which passed in July, means that blasphemy in Ireland is now a crime punishable with a fine of up to €25,000. It defines blasphemy as "publishing or uttering matter that is grossly abusive or insulting in relation to matters sacred by any religion, thereby intentionally causing outrage among a substantial number of adherents of that religion".
  

• A year-end plea for $900000 yielded $2.4 million for the Lake Forest mega-church led by Rick Warren.
  
  

Happy Holidays!
(Updates resume Jan. 3)

Scramble for the Atmosphere (Monbiot)
..the barrister Polly Higgins laid out a different approach. Her declaration of planetary rights invests ecosystems with similar legal safeguards to those won by humans after the second world war(2). It changes the legal relationship between humans, the atmosphere and the biosphere from ownership to stewardship. It creates a global framework for negotiation which gives nation states less discretion to dispose of ecosystems and the people who depend on them.

Quick Overview

• Japan kept interests rate unchanged at 0.1%.
  
  

• Canada's wholesale sales rose 0.3% in October
  
  

• Global cocoa production for 2009-10 is expected to fall 63,000 tons short of demand, which would be the fourth consecutive year of deficits and wider than a previous forecast of 56,000 tons, BNP Paribas said.

Quick Overview

• US attempts to break the deadlock at the UN conference in Copenhagen by backing an offer from developed countries to provide poorer nations with $100bn per year by 2020 to fight climate change
  

• Standard and Poor's cut Greece's credit rating from A- to BBB+.
  

• YoY Canada’s consumer prices rose 1.0%
  

• U.K.'s retail sales fell 0.3% in November.
  

• U.S. jobless claims rose 7,000 last week to 480,000.
  

• As of last week 2009-2010 U.S. export inspections of:
  Corn are up 5% YoY.
  Soybeans are up 40% YoY.
  Wheat improved from down 31% to down 30% YoY.
  Cotton is down 37% YoY.
  

• India's sugar production in the first two months of the marketing year that began Oct. 1 fell 9.6% YoY due to lower recovery from cane.

Quick Overview

• The Fed left interest rates unchanged and said that it expects economic conditions to warrant “exceptionally low” rates for an “extended” period.
  
  
• The EU Wednesday settled its remaining antitrust issues with Microsoft.
  
  

• The U.S. Federal Trade Commission sued Intel for illegally using its dominant market position for a decade “to stifle competition and strengthen its monopoly.”
  
  

• MoM U.S. housing starts rose 8.9%. YoY November housing starts were down 7.3%.
  
  

• MoM the U.S. consumer price index rose 0.4% in November, 1.8% YoY
  

• Australia's GDP rose 0.5% YoY
  

• Canada manufacturing sales rose 2.0% in October
  

• EU consumer prices rose 1.0% YoY
  

• Japan's tertiary index rose 0.5%
  

• Norway raised its interest rate to 1.75%
  

• U.K. Unemployment rose to 7.9% from 7.8%
  

• Brazil harvested 39.5 million bags of coffee this year, up from a September estimate of 39.0 million bags
  

• Brazil estimates 2009-2010 production of 34.6 million tons of sugar and 25.8 billion liters of ethanol from 612 million tons of cane.
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 3.7 million barrels to 332.4 million barrels.
  Supplies of gasoline rose 900,000 barrels
  Supplies of heating oil fell 2.3 million barrels.
  Refinery use fell from 81.1% to 80.0%
  Gasoline demand rose 1.0% YoY
  Distillate demand fell 6.6% YoY

• India's production of monsoon-sown rice may total 71.65 million metric tons, up from 69.45 million tons estimated last month, the farm ministry said.

• Cocoa’s trading at the highest level in 32 years amid concerns that the market will experience a supply shortfall for a fourth successive season in 2009-10.

Regulators Resist Volcker Wandering Warning of Too-Big-to-Fail
(Bloomberg) -- Paul A. Volcker visited nine cities in five countries in the past eight weeks to warn that bankers and regulators “have not come anywhere close to responding with necessary vigor” to the worst economic crisis in 70 years.
.. He told executives there that the changes they’ve proposed are “like a dimple.”

Quick Overview

• YoY U.S. producer prices rose 2.4% in November
  

• The Federal Reserve Bank of New York’s general economic index fell to 2.6 from 23.5 in November
  

• The Federal Reserve meets today and is expected to keep the federal funds rate unchanged at 0.125%.

• (FT) China has banned individuals from registering internet domain names and launched a review of millions of existing personal websites in the toughest government censorship drive so far on the internet

• Czarnikow in late November forecast a 2009/10 global sugar deficit of 13.5 million tonnes, versus a deficit of 15.8 million tonnes in 2008/09.
• The China Sugar Association has estimated that sugar output for the 2009-10 crop year, starting Oct. 1, will fall to 12 million tons from the previous year's 12.43 million tons.
  

Quick Overview

• White House advisor Lawrence Summers expects the economy to start adding new jobs in the spring of 2010.
  

• Industrial production in the EU fell 0.7% in October and down 10.2% YoY

• YoY Chinas M2 money supply rose 29.7%
  

• Employment in the EU fell 0 .5% in Q3 and down 2.0% YoY
  

• Sugar crushing in Brazil's centre-south cane hub in the second half of November totalled 25.4 million tonnes, down 16 % YoY, according to the Sugar Cane Industry Association, Unica. The fall was due to the impact of persistent wet weather.
• Brazil said its sugar production in 2009-10 was likely to drop to 34m tonnes, down from an official forecast of 36.7m tonnes in September.

• Cocoa traders are concerned about production shortfalls in Ivory Coast and Ghana, which account for 56% of the world’s cocoa output.
  
  
  

• Goldmans top man said the firm wasn't just trying to make money; it was doing "God's work." No kidding!

Greece defies Europe as EMU crisis turns deadly serious
Mr Papandreou has good reason to throw the gauntlet at Europe's feet. Greece is being told to adopt an IMF-style austerity package, without the devaluation so central to IMF plans. The prescription is ruinous and patently self-defeating. Public debt is already 113pc of GDP. The Commission says it will reach 125pc by late 2010. It may top 140pc by 2012.

Quick Overview

• U.S. retail sales rose 1.3% in November.
  

• The University of Michigan's consumer sentiment index rose from 67.4 to 73.4
  

• YOY India’s industrial production rose 10.3%
  

• YoY U.K. producer prices rose 2.9%.

Quick Overview

• U.S. Jobless claims rose 17,000 to 474,000.
  
  

• The USDA's 2009-2010 U.S. ending stocks estimate of:
  Corn was raised from 1.625 to 1.675 billion bushels.
  Some 12% of the crop is still sitting in the snow!
  Soybeans were reduced from 270 to 255 million bushels.
  Wheat was raised from 885 to 900 million bushels.
  Sugar was kept at 1.016 million tons.
  Cotton was lowered from 4.90 to 4.50 million bales.
  
  

• The USDA's 2009-2010 world ending stocks estimate of:
  Corn was kept at 132 million tons.
  Soybeans were kept at 57 million tons.
  Wheat was raised from 188 to 191 million tons.
  Cotton was lowered from 54 to 52 million tons.
  

• OJ was lowered from 136 to 135 million boxes.

• Unica pegged Brazil's center-south sugarcane crush at 538.2 million tons for the 2009-10 crop compared to its previous estimate of 529.5 million tons

• Uttar Pradesh is asking the central government to lift its restriction on raw sugar from Brazil amid severe shortages and rising prices.

• YoY China’s factory output rose 19.2 %

Nuremberg Revisited: Obama Administration Files To Dismiss Case Against John Yoo
If successful in this case, the Obama Administration will succeed in returning the world to the rules leading to the war crimes at Nuremberg. Quite a legacy for the world’s newest Nobel Peace Prize winner.

Quick Overview

• (Bloomberg) China, the world’s largest steel consumer, will impose provisional duties on some U.S. and Russian imports following anti-dumping and subsidy investigations, escalating a trade spat started in September.

• The U.S. Mortgage Bankers Association said that its index of mortgage applications rose 8.5% last week
  

• U.S. wholesales rose 1.2% in October
  

• U.S. Inventories rose 0.3%.
  

• Japan’s GDP rose 0.3% in the third quarter, but fell5.1% YoY
• 
  

• Greece's new socialist government promised Wednesday to step up efforts to reduce the growing deficit after a ratings agency downgraded the country's debt rating.

• London bankers reacted with fury to UK government plans to levy a 50% super tax on banks’ bonus payouts.
  

• Spain has its credit outlook cut to negative from stable by the ratings agency Standard & Poor's, rattling European markets.

• MoM Japanese core machinery orders fell 4.5% in October

• Australian employers added 31,200 workers in November
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 3.8 million barrels to 336.1 million barrels
  Supplies of gasoline rose 2.2 million barrels
  Supplies of heating oil supplies fell 700,000 barrels.
  Refinery use rose from 79.7% to 81.1% of capacity
  Gasoline demand rose 1.2% YoY
  Distillate demand fell 8.3% YoY
  

• Sugar output in Brazil’s Center South is estimated at 28.9 million metric tons, down from November’s projection of 29.3 million tons.
  

• With roughly 12% of the U.S. corn crop still in the field, some are concerned that crop could lodge, or fall down, due to the snow and winds approaching 50 miles per hour.

No update today