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

Quick Overview

• (FT) Commodity markets remained under pressure as risk appetite weakened amid concerns about the sustainability of global economic recovery
  

Quick Overview

• German factory orders fell 2.1% in October
  
  

• World Bank: The number of malnourished as a percentage of the developing world's population has also started to rise again. After falling from 20 percent in 1990-92 to just under 16 percent in 2003-05, it now stands at almost 18 percent. The U.N. Food and Agriculture Organization says a long-running decline in farm investment is the main culprit behind food shortages and estimates $44 billion in new investment is needed annually to boost agriculture in developing countries.
  
  

• NY ADL new high
  

• Indonesia may import 500,000 metric tons of white sugar starting in December to meet an expected domestic supply shortfall in 2010
  
  

• (Reuters) - Big, full-service brokerages have lost a significant chunk of business to online firms that told small investors they are better off making their own decisions

• (Bloomberg)... Coffee lowers the risk of Type 2 diabetes by increasing the body’s ability to use
  insulin to convert blood sugar to energy, previous research has shown. ...
  
  

It's a return to the Star Chamber as Europe finally tramples Magna Carta into the dust If you have a spare evening, read the Magna Carta

Quick Overview

• U.S. unemployment rate improved from 10.2% to 10.0%
  

• U.S. Factory orders rose 0.6% in October.
  

• Canada’s unemployment rate improved from 8.6% to 8.5% in November

• Cocoa futures in London rose the highest level in almost 25 years following market talk of a small crop in Ghana.

• YoY Food inflation in India rose by over 17%

• World Copper (exchanges) inventory making new high.
  

• SLV (Silver ETF) Ounces of Silver in Trust up by 2.84% in 1 week.
  

Quick Overview

• U.S. 30-year mortgages fell to new all-time low of 4.71%
  

• U.S. jobless claims were down 5,000 last week at 457,000

• The Institute of Supply Management's index of services fell from 50.6 to 48.7 in November
  

• U.S. non-farm productivity rose 4.0%
  

• U.S. labor costs fell 1.4%.
  

• EU GDP rose 0.3% in Q3
  

• Australia's retail sales rose 0.3%
  

China Grain Output May Drop 37% on Climate Change (Update1
..Research shows that for every degree warmer the atmosphere becomes the key growing period for rice to develop properly will be shortened by an average of 7-8 days and by 17 days for the winter wheat crop, Zheng said. “Yield and quality will drop accordingly,” he said.

Quick Overview

• (Bloomberg) -- The global economy will expand 4.4 percent in 2010 and 4.5 percent the following year as the world recovers from the credit crisis, Goldman Sachs Group Inc. said.
  

• ADP Employer Services said that there was a loss of 169,000 private jobs in November
  

• The Fed said today in its Beige Book business survey: economy is improving; consumer spending is moderately higher; commercial real estate is deteriorating; home sales are up; labor market is weak.
  

• The U.S. DOE said:
  Supplies of crude oil rose 2.1 million barrels to 339.9 million barrels
  Supplies of gasoline rose 4.0 million barrels
  Supplies of heating oil fell 300,000 barrels.
  Refinery use fell from 80.3% to 79.7%.
  Gasoline demand rose 0.7% YoY
  Distillate demand fell 7.7% YoY.
  

Quick Overview

• The Institute of Supply Management's index of manufacturing fell from 55.7 to 53.6 in November
  
  

• The National Association of Realtors said its index of pending home sales rose 3.7% MoM. YoY the index is up 32%.
  

• U.S. construction output rose 1.6% YoY.
  
  

• MoM U.S. retail sales rose 5.2%. YoY retail sales rose 2.6%.
  

• EU unemployment was unchanged at 9.8% in October.
  

• The Bank of Japan decided at an unscheduled policy meeting to offer up to Y10,000bn in three-month low-interest loans to commercial banks.
  

• DryShips Inc., a provider of marine transportation services for drybulk cargoes, announced that its previously announced agreement to acquire 2 Panamax vessels has been terminated since no period employment could be secured in the agreed timeframe
  

• From January to October China's iron ore import rose 36.8 %. In the same phase, domestic iron ore output reached about 702.66 million tons, up 36.04 million tons.
  

• North Korea has revalued its currency by a factor of 100, causing chaos on the streets of Pyongyang.

• Private exporters reported to the USDA export sales of 116,000 MT of corn for delivery to unknown destinations during the 2010/2011 marketing year.

• (Reuters Life!) - Reviled by the public and spurned in private, bankers have been looking for solace in adultery, according to a dating website for people seeking affairs.

• (Dow Jones)--The U.S. Environmental Protection Agency said Tuesday it would delay until mid-2010 a decision on whether to increase the amount of ethanol added to ordinary gasoline, putting off a controversial ruling with consequences for farm states and the oil and automobile industries.The delay was anticipated by traders.

• BNP Paribas Fortis forecasts world sugar demand to grow by 1% in 2009 versus the average rate of 2.66% a year over the past decade

• The default rate for commercial mortgages in the US climbed to a fresh 16-year high of 3.4%

• Australia's parliament rejected sweeping carbon-trade laws aimed at cutting greenhouse gases.

• Thirteen mills in India's key sugar-producing state of Uttar Pradesh have stopped cane crushing operations due to supply shortages.
  state government official said Wednesday.

Quick Overview

• The Chicago Purchasing Managers' index rose from 54.2 to 56.1 in November
  

• Lumber is up its $10 daily limit
  

• Canada’s GDP rose 0.1% in Q3, but fell 3.2% YoY
  

• Japan’s industrial production rose 0.5% in October.
  

• EU consumer prices rose 0.6% MoM

• The USDA said:
  
• 79% of the corn crop was harvested. 21% or 2.7 bln bu of corn remain in the field; including 28% of IL, 22% of MN & NE, 60% of ND, 42% of SD, 33% of WI.
  
• 96% of the soybean crop was harvested. 133 million bushels of soybeans remain in the field.

• Australia raised interest rate by 0.25%

Bundesbank fears relapse as German banks face €90bn fresh losses
The venerable bank said in its Stability Report that the world had narrowly averted a "virtually uncontrollable" collapse in the late summer of 2008. While the credit system has partly stabilised, the underlying problems "are still far from being overcome" and money markets are not yet functioning properly.

Quick Overview

• The central bank of the United Arab Emirates says it is setting up a facility to provide banks with extra liquidity. The Central bank is expected to announce it will guarantee Dubai World debt before stock markets open on Monday.
  

• The rush by retail investors into gold has forced the US government to suspend sales of the world’s most popular bullion coin, the American Eagle, after running out of inventories for the second time since August of 08.
  

• Bloomberg reported that Europe holds $87 billion of debt from the United Arab Emirates and roughly $50 billion of that is held by British banks. The Royal Bank of Scotland is said to have the biggest exposure to Dubai World, with $2.3 billion of its debt.
  

• Freight traffic on U.S. railroads reached its highest level so far this year
  

• Japan's unemployment rate improved from 5.3% to 5.1% in October
  

• Vietnam devalued its currency by 5.4 % and lifted interest rates by 1% to try and choke off inflation.
  

• According to the China gold association, Chinas gold demand may be more than 450 metric tons this year, up from 395.6 tons in 2008, and output may climb to 310 tons, compared with 282 tons a year earlier.
  

• Iran’s government said it would build 10 new uranium enrichment sites and look into enriching uranium at higher grade inside the country.
  

• The US military could have captured or killed Osama bin Laden in 2001 if it had launched a concerted attack on his hideout in Afghanistan, according to a report from the Senate Foreign Relations Committee.

• New high for World exchange copper stocks

Updates resume Nov. 29

Quick Overview

• U.S. GDP rose 0.7% in Q3, YoY GDP fell 2.5%.
  

• The Standard and Poor Case-Shiller index of home prices rose 0.3% in September.
  

• U.S. consumer confidence rose from 48.7 to 49.5
  

• Industrial new orders in the EU rose 1.7% MoM, but fell 16.4% YoY
  

• The International Sugar Organization is predicting world sugar production will exceed consumption by 0.75 million tons in 2010-2011. The 2009-2010 production deficit is forecast at 7.2 million tons.
  
  .

Quick Overview

• Spurred by a tax credits that lured first-time buyers, U.S. existing home sales rose 10.1% in October, and 23.5% YoY
  
  

• The National Association for Business Economists said that they expect U.S. GDP to be up 2.9% in 2010, up from their previous forecast of 2.6%.
  
  

• Canada’s retail sales rose 1.0% MoM

• There seems to have been a shift in attitude , from fearing a large South American soybean crop to needing one.

• Coca-Cola, the world's largest soft-drink maker, is planning to more than double its number of bottling plants in China within a decade, the Financial Times said.
  

Quick Overview

• China's sugar imports in October rose sharply to 56,882metric tons, the General Administration of Customs said Monday. Last October, the country imported 13,911 tons of sugar. In the January-October period, sugar imports rose 42% to 1.01 million tons,Customs said.
  

• China's cotton imports in October rose 23% YoY to 118,580 metric tons, the General Administration of Customs said Monday. In the January-October period, cotton imports fell 36% to 1,196,644 tons.
  

• Manila Philippines: the usual (annual) rice shortfall is around 1.5 million tons, added to that is the typhoon damage of 850,000 tons, which means our rice imports (next year) will reach around 2.35 million tons," said NFA spokesperson Rex Estoperez
  
  

• The USDA said there were 11.134 million head of cattle on feed on November 1st, up 1.5% YoY. Placements in October rose 1%., marketing’s fell 3%.
  
  

• The USDA said there were 37.0 million pounds of frozen bellies in storage on October 31st, up 71% YoY. Frozen pork supplies totaled 520 million pounds, down 1% YoY.

• (FT)Microsoft has had discussions with News Corp over a plan that would involve the media company’s being paid to “de-index” its news websites from Google, setting the scene for a search engine battle that could offer a ray of light to the newspaper industry

Quick Overview

• Growth and recovery are expected in 2010 in most world regions, but the upturn will be modest, the OECD says.
  

• U.S. jobless claims were unchanged last week at 505,000.
  

• U.S. delinquency rate on mortgage loans rose from 9.24% to a record high 9.64% Q3. The foreclosure rate rose from 4.30% to 4.47% in Q3. That makes one in seven homeowners either late on their payments or already in foreclosure.
  

• The Conference Board's index of leading indicators rose 0.3% in October.
  

• The Philadelphia Federal Reserve's regional index of manufacturing rose from 11.5 to 16.7 in November,
  

• Canada’s wholesale sales rose 0.2% MoM, but fell10.4% YoY
  

• Canada’s leading indicators rose 0.7% in October
  

• U.K. retail sales rose 3.0% YoY.
  

• The World Gold Council said gold demand totaled 800.3 tons in Q3, up 15% QoQ , but fell 34% YoY. YoY Mine production rose 6%.
• 
  

• The U.S. dollar will remain the world's primary reserve currency for many years or decades, an International Monetary Fund official said on Thursday.

• The early start to the rainy season this year in Brazil has heightened concerns that Asian soybean rust could vex farmers more than usual. The first incident of the disease for the 2009-10 crop year was discovered Wednesday in Mato Grosso, Brazil's No. 1 soybean producing state.

• Dylan Grice at Societe General says the price at which the dollar would be fully backed by gold (as it was at the peak in the 1970s) is $6300
  
  

• The return of the resources boom was again confirmed by the news yesterday that the value of mining and energy projects under development in Australia had jumped 40% from April to October this year.
  

• (Spiegel)Global warming appears to have stalled. Climatologists are puzzled as to why average global temperatures have stopped rising over the last 10 years. Some attribute the trend to a lack of sunspots, while others explain it through ocean currents.

Quick Overview

• U.S. consumer price index rose 0.3% MoM and fell 0.2% YoY
  

• U.S. housing starts fell 10.6% MoM.
  

• YoY Canada’s consumer prices rose 0.1% in October
  

• EU construction output fell 1.1%
  

• Australia’s leading indicators rose 0.9% in September
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 900,000 barrels to 336.8 million barrels.
  Supplies of gasoline fell 1.7 million barrels
  Supplies of heating oil rose 300,000 barrels.
  Refinery use fell from 79.9% to 79.4% of capacity
  Gasoline demand fell 0.4% YoY
  Distillate demand fell 11.4% YoY
  
  .

Quick Overview

• U.S. producer price index rose 0.3% MoM, but fell 1.9% YoY
  

• U.S. Industrial production rose 0.1% in October.
  

• YoY U.K. consumer prices rose 1.5%
  

• EU exports rose 17% MoM, but fell 19% YoY

• Rumours of findings of significant fungal contamination in the US corn crop lifts the price of other livestock feeds, including soymeal and rapeseed.
  

• Argentina’s persistent drought has caused Oil World to lower their Soy production estimate by 2 MMT, now pegging 2009/10 output at 48 MMT, 5 MMT below the USDA's estimate.

If Nothing Else, Save Farming
According to farm scientists at Cornell University, cultivating one hectare of maize in the United States requires 40 litres of petrol and 75 litres of diesel(3). The amazing productivity of modern farm labour has been purchased at the cost of a dependency on oil. Unless farmers can change the way it’s grown, a permanent oil shock would price food out of the mouths of many of the world’s people. Any responsible government would be asking urgent questions about how long we have got.

Quick Overview

• The Fed is monitoring currency markets “closely” and will conduct policy in a way that will “help ensure that the dollar is strong”, Ben Bernanke said in rare comments on the US currency.
  

• U.S. retail sales rose 1.4% in October. Excluding autos sales rose 0.2%.
  

• The New York Federal Reserve's regional index of manufacturing fell from 34.57 to 23.51 in November.
  

• Canada's existing home sales rose 41% in October
  

• Canada’s manufacturing sales rose 1.4% in September
  

• Japan's GDP rose 1.2% in Q3, but fell 4.5% YoY
  

• YoY EU consumer prices rose 0.5% in October
  

• (Bloomberg)The Philippines, the world’s biggest rice buyer, issued its third tender for 2010 supplies after storms damaged crops and the country accelerates imports to secure shipments amid surging prices.. “We have to secure our supplies ahead of everybody else,” Romeo Jimenez, director of the authority, said in a phone interview from Manila today. “India will also be importing rice. Prices will rise.”
  

• White sugar tenders for the expired December futures contract were 5,520 lots, with Louis Dreyfus taking delivery of all the contracts.
  

Mayfly May Thwart $3 Billion in Coal Mined in U.S. Mountaintops
Mountaintop mining in West Virginia, Kentucky, Virginia, Tennessee and parts of Pennsylvania and Ohio accounts for 6 percent of U.S. coal production. Half of U.S. electricity comes from burning coal.

China has now become the biggest risk to the world economy
It is fashionable to talk of America as the supplicant. That misreads the strategic balance. Washington can bring China to its knees at any time by shutting markets. There is no symmetry here. Any move by Beijing to liquidate its holdings of US Treasuries could be neutralized – in extremis – by capital controls. Well-armed sovereign states can do whatever they want.

Quick Overview

• The US trade deficit widened by $36.5bn -- to the largest amount in 10 years. The U.S. Census Bureau said that exports rose 2.9% in September to $132.0, billion while imports rose 5.8% to $168.4 billion.
  

• Plans to strip the Fed of its bank supervision powers were rebuffed by senior Obama administration officials.
  

• The University of Michigan's consumer sentiment index fell from 70.6 to 66.0 in November,
  

• EU GDP rose 0.2% in Q3 and fell 4.3% YoY
  

• German GDP rose 0.7% in Q3
  

• France’s GDP rose 0.3% in Q3
  

• (FT) Two computer programmers from Bernard Madoff’s fraudulent investment operation were arrested on charges of falsifying Mr Madoff’s trading records to make them appear regular and above board
  

• Scientists who crashed two spacecraft into a crater on the moon said on Friday they found water in the dust they kicked up, just as they had hoped.

• News that funds manager Blackrock expects central banks to be net gold buyers in 2009 is contributing to gold's rise.

Quick Overview

• U.S. jobless claims fell 12,000 last week to 502,000, less than expected.
  

• The U.S. Treasury sold $16 billion of 30-year T-bonds at a median yield of 4.39%. The bid to cover ratio was 2.26, the lowest since May.
  

• The U.S. ran a record federal budget deficit of $176.4 billion in October up from $155.5 billion deficit a year ago.
  

• EU industrial production rose 0.2% MoM but fell 12.1% YoY.
  

• Japan’s producer prices fell 6.7% YoY
  

• Canada’s new home prices rose 0.5% MoM, but fell 2.7% YoY.
  

• YoY factory output in India rose 9.1% in September
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 1.8 million barrels to 337.7 million barrels.
  Supplies of gasoline rose 2.5 million barrels
  Supplies of heating oil rose 800,000 barrels.
  Refinery use fell from 80.6% to 79.9%
  Gasoline demand fell 1.0% YoY
  Distillate demand fell 13.8% YoY

• Russian president calls on country to refocus its economy away from energy and heavy industry towards information technology, telecommunications and space

• The Treasury secretary, in Singapore at the APEC meeting, offered fresh reassurances that the administration was committed to bolster the dollar.
  

• China's raw coal output hit 270 million tons in October, climbing to the year's second highest peak

Quick Overview

• US Treasury secretary Geithner tells reporters in Japan he believes in the need to maintain a strong dollar and that the US is determined to get its budget deficit down
  

• Japan's machinery orders rose 10.5% in September, better than expected.
  

• The UK jobless total rose to 2.46 million in the three months to September, but the increase was the smallest since May 2008.

• Australian Employers unexpectedly added 24,500 jobs

Quick Overview

• The Association of Realtors said existing home sales rose 11.4% in Q3 and up 5.9% YoY.

• China's Industrial Production rose 16.1% YoY
  

• USDA's 2009-2010 U.S. ending stocks estimate of:
  Corn was lowered from 1.672 to 1.625 billion bushels. (46 day supply)
  Soybeans were raised from 230 to 270 million bushels.
  Wheat was raised from 864 to 885 million bushels. (145 day supply)
  Sugar was raised from 836,000 to 1,016,000 tons.
  Cotton was lowered from 5.40 to 4.90 million bales.
  
  
  

• The USDA's 2009-2010 world ending stocks estimate of:
  Corn was lowered from 136 to 132 million tons. (60 day supply)
  Soybeans were raised from 55 to 57 million tons.
  Wheat was raised from 187 to 188 million tons.
  Cotton was reduced from 56 to 54 million bales.
  
  

• The USDA expects beef production to be down 3% in 2009 and down 1% in 2010.
  

• The USDA expects pork production to be down 1% in 2009 and down 3% in 2010..

• China's refined sugar production in October fell 17%. For the January-October period refined sugar output fell 13% YoY.

Quick Overview

• The IMF said the US dollar is "on the strong side".
  

• Policy makers from this weekend's G-20 meeting in Scotland assure investors that central banks are not yet ready to withdraw stimulus from the world's economy.
  

• Bloomberg said China's corn crop will be down 13% YoY
  

• Tropical Storm Ida is bringing more rain to the already-wet southeastern U.S.

• The Indian government intends to release 3 MMT of wheat to the domestic market. Is that the same 3 MMT that they were going to release two months ago?

• The Baltic Dry Index posted a sixth weekly advance as rates for smaller iron-ore transporters rose to the highest in more than a year.
  

Unnatural disaster
..the balance works out at 96 per cent navigation, 3 per cent flood protection and 1 per cent environmental restoration.

Quick Overview

• US jobs data out worse than expected, with nonfarm payrolls up by 190,000 against expectations of 175,000 and unemployment rising from 9.8% last month to 10.2% now
  

• U.S. wholesale sales rose 0.7% MoM while inventories fell 0.9%.
  

• Canada’s unemployment rate rose from 8.4% to 8.6% in October
  

• The Reserve Bank of Australia estimates GDP will be up 1.75% in 2009 and up 3.25% in 2010.

• The US ag attachee cut to 13.2m tonnes the forecast for Chinas sugar output, representing a 9% cut on their initial estimate, and a 1.2% fall YoY.

Quick Overview

• U.S. jobless claims fell 20,000 to 512,000, less than expected.
  

• YoY U.S. non-farm productivity rose 9.5% in Q3
  

• YoY U.S labor costs fell 3.6% in Q3
  

• The EU kept its interest rate unchanged at 1.0%
  

• EU retail sales fell 0.4% MoM and 2.5% YoY.
  

• Brazil's expects soybean production of 63 million tons in 2009-2010
  

• England kept its interest rate unchanged at 0.50%.
  
  

It is Japan we should be worrying about, not America
Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised "a real risk that Japan could end up in a major default".

Quick Overview

• The Federal Reserve took small steps in the direction of a more hawkish stance on rates, tweaking its guidance on future policy for the first time since March.

• The ADP employment report showed that 203,000 private sector jobs were lost in October. Although this was more than the 190,000 forecast, investors welcomed the fact it represented the smallest number since July 2008.
  

• The Institute of Supply Management's index of services fell from 50.9 to 50.6 in October
  

• The Mortgage Bankers Association said its index of mortgage applications rose 8%
  

• The World Bank expects GDP in China to be up 8.4% in 2009 and up 8.7% in 2010
  

• Services in the U.K. rose from 55.3 to 56.9 in October
  

• Services in the Euro zone rose from 52.3 to 52.6 in October
  

• Australia's retail sales fell 0.2% in September.
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 4.0 million barrels.
  Supplies of gasoline fell 300,000 barrels
  Supplies of heating oil supplies fell 1.1 million barrels.
  Refinery use fell from 81.8% to 80.6%
  Gasoline demand was unchanged YoY
  Distillate demand fell 14.8% YoY.

• Gold prices extended their record breaking run, pushing towards $1,100

• Ore demand pushes freight costs higher

• Informa estimates the US corn crop at 13.064 billion bushels with a yield of 164.8 bushels per acre
  Informa estimates the US bean crop at 3.333 billion bushels with a bpa of 42.4.
  The last USDA estimate, in Oct, was 13.018 billion corn with a 164.2 bpa and 3.250 billion beans with a 42.4 bpa.
  Last month, Informa estimated the corn crop at 13.127 with a 164.7 bpa and the bean crop at 3.250 billion with a 44 bpa.

• (Bloomberg) -- Rice futures in Chicago rose to the highest price in almost 10 months on mounting concern that Indian inventories will trail demand, forcing the world’s second-largest producer to import grain.
  Output in India has declined because of adverse weather, and the government plans to buy 26 million metric tons of the grain from farmers this year to bolster domestic stockpiles and avoid food shortages, said Dennis DeLaughter, a rice farmer and the owner of Progressive Farm Marketing in Edna, Texas.
  “The government is trying to make sure they don’t have a panic on their hands, so they’re moving rice into the market early to avoid having a run on supplies,” DeLaughter said.
  

Quick Overview

• The Federal Reserve begins its two-day meeting today and is expected to keep the federal funds rate unchanged.
  

• U.S. Factory orders rose 0.9% in September, better than expected.
  

• Australia increased its interest rate from 3.25% to 3.50%, as expected.
  

• Gold has hit an all-time high of USD 1,085 after it was announced that India's central bank had bought 200 MT of the stuff from the IMF in deal worth USD6.7 billion. This appears to confirm that central banks are comfortable entering the market to hold gold at over USD 1,000/oz.