RTRS-Soybean output set for record 19 mln T fall-Oil World

AMSTERDAM, Feb 28 (Reuters) - Global soybean output this year is set for a record drop of 7.2 percent, or 19 million tonnes, mainly due to bad weather conditions in key growing areas in South America, Germany-based analyst Oil World forecast on Tuesday.

"World production of soybeans is likely to plunge by (a)staggering 19 million tonnes to only 246.5 million tonnes in 2011/12, according to our current estimates - the biggest year-on-year reduction ever registered," Oil World said in a monthly report.

It said prices of soybeans were firm in February, lifting prices of other oil seeds and oil meals.

Soyoil on the European vegetable oil market [OILS/E} rose 50 euros since February 1 to 960 euros a tonne on concerns that a drought in South America has hit the crop.

Oil World said that prices were further supported by strong demand from China where imports are estimated at 28.5 million tonnes of soybeans between April and September this year, an increase of 1.8 million tonnes from the same period a year ago.

Analysts believe growing demand from China, which accounts for more than half of the soybeans traded in the world, threatens to hit global supplies and stir concern over food inflation.

"The crop failure in South America will raise the world market's dependence on U.S. supplies," Oil World said.

"We already expect some shift to occur from now on resulting in a year-on-year increase of U.S. soybean exports by 1.6 million tonnes to 10.6 million tonnes in March/August, virtually offsetting the total decline in South American exports in that period primarily from Paraguay and Brazil."

The United States is the world's largest soybean exporter, followed by Brazil and Argentina.

RTRS-UPDATE 1-Singapore's Golden Agri to almost double Indonesian palm oil refining ops

SINGAPORE, Feb 28 (Reuters) - Singaporean palm oil firm Golden Agri Resources plans to nearly double its Indonesian refining capacity to 2.6 million tonnes over the next two years as it exploits the country's lower export taxes for refined edible oils, a top official said.

With currently over half a million hectares of land and 1.4 million tonne refining capacity in Indonesia, Golden Agri is a key beneficiary of Jakarta's move in 2011 to slash export taxes, the firm's Executive Director Rafael B. Concepcion Jr said.

"This (the export tax) has clearly incentivised us to continue with our strategy to producing more downstream and more value-added products and to expand the markets internationally," Concepcion said in a company earnings briefing late on Monday.

"As we look into the 2012 results we will see the full benefits being reflected in the company results," he added.

Golden Agri's fourth quarter net profit tumbled 36 percent to $748 million from a year ago, hurt by higher fertiliser costs as well as a fall in output of palm oil products. Shares dropped 2.7 percent on Tuesday after the earnings announcement.

Golden Agri's subsidiaries include Jakarta-listed SMART TBK, which manages all of Golden Agri's oil palm plantations .

Indonesia's Widjaja family controls both the firms, which dominate the Indonesian plantation sector together with Singapore-listed competitors Indofood Agri Resources and Wilmar International.

Concepcion said the Jakarta export tax changes would bring new competitors into Indonesia, the world's top palm oil producer, although their success would depend on having planted oil palms to feed the refineries.

"But ultimately it is not only the tax differential that has to be considered by potential entrants, but their ability to access supply and to market the output not only to Indonesia but also to exports market," Concepcion said.

Malaysia's second largest palm oil firm IOI Corp said on Monday it can build a refinery in Indonesia in three years once its secures higher supply from its estates in the country. [ID:nL4E8DR53V]

Golden Agri also plans to expand its presence in China by boosting its annual crude palm oil refining capacity in the world's second largest palm oil buyer to 396,000 tonnes in the first half of the year from 380,000 tonnes.

"China is the largest market for edible oil with high population, and its economy is expected to grow at respectable rates, and we do believe that this growth story will continue," said Concepcion.

Golden Agri officials said in the results briefing that the firm will set aside $500 million for growth in 2012 with half spent on developing plantations. About $200 million will be used to develop its downstream industry.

RTRS-INTERVIEW-UPDATE 1-Indonesia palm export tax risk to Malaysia refineries

PUTRAJAYA, Malaysia Feb 28 (Reuters) - The change in palm oil export tax in the world's largest supplier, Indonesia, may hurt plans for 25 new refineries in Malaysia where processors are already suffering from weak margins, a Malaysian government minister told Reuters on Tuesday.

Indonesia last year cut export taxes on refined grades that helped its domestic processors restart their factories and offer discounts to overseas buyers.

That turned margins negative for refiners in Malaysia, the No.2 palm oil producer, and the government is looking at ways to keep investments flowing into its $20 billion sector, Commodities Minister Bernard Dompok said.

"There is that certainty of losing investors. Of course, we are very concerned about these planned investments," Dompok said in an interview ahead of the Bursa Malaysia Palm Oil Conference next week.

He said the government was looking to give the refineries "assistance in some form". Some of the proposals on the table included helping existing and new refiners with grants to promote the production of higher value palm oil products used in infant formula, ice cream and vitamin E supplements, Dompok said at his office in Malaysia's administrative capital of Putrajaya.

Malaysia has 51 refineries with a combined yearly capacity of 22.9 million tonnes. It plans new capacity of 9.6 million tonnes.

The 25 new refineries are in various planning and construction phases in Malaysia's Borneo island states of Sabah and Sarawak, Dompok said.

One key investor has already shifted some of its focus to Indonesia.

Trader's Highlight

DJI- NEW YORK, Feb 28 (Reuters) - The Dow closed above 13,000 for the first time since May 2008 on Tuesday and the S&P 500 also hit a milestone, as buoyant U.S.
consumer confidence data and a sharp drop in oil prices nudged the nearly five-month rally forward.

The S&P 500 closed above 1,370, its May 2011 intraday high, a move that could invite momentum buying as money managers chase performance, though low volumes lately have
raised concerns about the rally's longevity.

The Dow Jones industrial average <.DJI> gained 23.61 points, or 0.18 percent, to close at 13,005.12. The Standard & Poor's 500 Index <.SPX> rose 4.59 points, or 0.34 percent, to end at 1,372.18. The Nasdaq Composite Index <.IXIC> climbed 20.60
points, or 0.69 percent, to finish at 2,986.76.

NYMEX- Feb 28 (Reuters) - U.S. crude oil futures ended lower for a second day on Tuesday, pressured by weak durable goods data that trumped an upbeat report on consumer confidence, and technical signals showing the market correction from near $110 a barrel has not completed.

Investors extended a profit-taking binge, with crude and refined product futures having hit overbought conditions in recent sessions. A warning over the weekend by G20 officials on the risks to global growth amid high oil prices triggered a
sell-off that began on Monday.

Forecasts in a Reuters poll ahead of weekly inventory data showing that U.S. crude and gasoline inventories rose last week also weighed on crude futures. Gasoline and heating oil futures ended sharply lower, also extending losses for a second day, on liquidations ahead of the expiration on Wednesday of their front-month March contracts.

For the moment, worries about Iranian oil supply disruptions
were in the background as the Islamic Republic's foreign minister, in a U.N.-sponsored Conference on Disarmament in Geneva, called for more talks with the U.N. nuclear watchdog and condemned production of atomic weapons as a "great sin"

The United States has imposed sanctions against Iran and a European Union ban on Iranian oil will take effect on July 1. Both aim to make Iran back down from its nuclear program that is suspected to have military objectives. Iran has denied this, but the tensions spawned by its belligerence has elevated oil prices.

A U.S. government report on the global oil markets due from the EIA on Wednesday could help determine how tough the Obama administration will be enforcing sanctions against Iran and provide information in needs to combat rising oil prices.

On the New York Mercantile Exchange, crude for Aprildelivery settled at $106.55 a barrel, down $2.01, or 1.85 percent, after trading between $106.30 and $108.79.

CBOT SOYBEANS- Soybean futures on the Chicago Board of Trade advanced for a seventh straight session, reaching a five-month high on expectations that shrinking supplies in South America will boost U.S. exports, especially to top buyer China.

Global soybean output this year is set for a record drop of 7.2 percent, or 19 million tonnes, mainly due to bad weather conditions in key growing areas in South America - Oil World.

Cash basis bids for soybeans shipped by barge to the U.S. Gulf Coast were steady to firm, supported by good export demand and the need by some short-bought exporters for nearby supplies, traders said.

The March and May contracts settled above all key moving averages, and the nine-day RSI for most-active May rose to 86, from 83 ahead of the open, moving farther into the technically overbought range of 70 to 100.

Traders expect zero to 300 soybean deliveries on Wednesday, which is first notice day for March futures contracts. Traders expects zero to 300 soymeal deliveries and
2,000 to 4,000 soyoil.

FCPO- SINGAPORE, Feb 28 (Reuters) - Malaysian crude palm oil futures touched a new eight-and-a-half month high on Tuesday, buoyed by improving demand prospects, but gains were limited as investors worried about the risks to global growth from high oil prices.

Malaysian export numbers on Monday pointed to strengthening demand, helping to lift palm oil prices which have gained 7 percent so far this month.

"Exports were quite weak last month. Overall demand is higher this month and it should be positive for prices," said James Ratnam, an analyst with TA Securities in Malaysia.

"Recently the U.S. Department of Agriculture revised soybean stocks downwards. So all these things coming together and they are pushing prices up."

Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.4 percent to close at 3,295 ringgit ($1,095) per tonne. It touched an intraday high of
3,321 ringgit, highest since June 9 last year.

Traded volumes stood at 25,613 lots of 25 tonnes each, higher than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, Feb 28 (Reuters) - Indonesian stocks climbed more than 1 percent on Tuesday while most other Southeast Asian stock markets moved higher amid selective buying of beaten-down big caps though investors remained cautious about the impact of high oil prices.

Consumer and banking stocks that had led recent losses in such as Indonesia's PT Astra International, Thailand's Kasikornbank Pcl and Philippine Metropolitan Bank and Trust Co, recouped some lost ground.