RTRS-Brazil soy crop seen down at 66.7 mln T -AgRural

SAO PAULO, March 26 (Reuters) - Brazil's 2011/12 soybean crop is seen falling to 66.7 million tonnes from 68 million tonnes forecast in February as the effects of drought in the southern producer states takes its toll, crop forecasters AgRural said on Monday.

Drought this season over the South American grain crop in Brazil, Argentina and Paraguay, which together produce over half the world's soy trade, has raised concers of falling stocks of the world's most important source of protien.

Yields have been falling consistently in all Brazil's large growing states, with the exception of the No. 4 producer Goias that got excellent rains this year. Sharp declines were registered in the states of Parana and Rio Grande do Sul, the No. 2 and No. 3 soy growers.

The drought that began in November has been particularly acute in those southern states.

Expected average Brazilian yields have fallen to 44.9 60-kg bags per hectare from 45.7 bags/ha in February, the forecasters said. Yields reached a record 51.9 bags/ha last season.

Area planted reached a record 24.82 million hectares this season.

Harvest has passed the halfway point with 61 percent of the crop collected, up from 55 percent the week earlier. The No. 1 soybean state Mato Grosso is nearly the end of harvest already with 93 percent of its crop collected, AgRural said.

RTRS-UPDATE 1-US soy seen above $14 on lower Latam output-Mielke

BEIJING, March 26 (Reuters) - Lower South American soy production this year due to severe drought is likely to push up Chicago Board of Trade soy futures <0#S:> to more than $14 per bushel soon, top oilseed analyst Thomas Mielke said.

Worries over a lower production in Brazil and Argentina, the world's top and third largest producers respectively, have already pushed up CBOT prices about 13 percent this year with the May contract trading at $13.75 per bushel on Monday.[GRA/]

"We have seen a small correction last week and I think the technical correction is over," Mielke, head of Hamburg-based research house Oil World, told a conference in Beijing on Monday.

"I expect prices of soybeans to reach $14 (a bushel) quite soon and probably rally towards $14-$15 or above sometime in the next 4 to 8 weeks, depending on South American harvest progress and harvest result."

The research house last week cut its forecast of Brazil's 2012 soybean crop to 66.5 million tonnes, compared with 75.3 million tonnes in 2011 because of drought and crop fungus. It also reduced its forecast of Argentina's 2012 crop to 46.5 million tonnes, down from 49.2 million tonnes in 2011.

Oil World is likely to cut the Brazilian soy output estimate further by 1-2 million tonnes, said Mielke.

China, the world's top soy importer, has already stepped up imports from the United States over the past weeks to try to source enough to meet rising demand and expanded capacity.

"China has been an active buy er over the past few weeks , " he said.

China, which imports about 60 percent of global soybean s , has booked about 29 million tonnes, or 25 percent, more in the first half of the year, ac cording to estimates from its of ficial think-tank, the China National Grain and Oils Information Center (CNGOIC).

Trader's Highlight

DJI- NEW YORK, March 26 (Reuters) - The S&P 500 rebounded from its worst week so far this year to retake a four-year high on Monday after Federal Reserve Chairman Ben Bernanke signaled supportive monetary policy will remain even though the job picture has begun to improve.

The three major U.S. stock indexes climbed 1 percent or more and all 10 S&P 500 sectors advanced. Gains were led by S&P technology shares, with that sector's index <.GSPT> up 1.7 percent, and the S&P health care sector index <.GSPA> also up 1.7 percent. Shares of International Business Machines , up 1.1 percent at $207.77, gave the Dow its biggest boost.

Bernanke's comments came as investors try to gauge how much longer a nearly six-month rally in stocks will last and reinforced the view that further quantitative easing, or QE3, from the Fed may be possible.

The Dow Jones industrial average <.DJI> shot up 160.90 points, or 1.23 percent, to 13,241.63 at the close. The Standard & Poor's 500 Index <.SPX> gained 19.40 points, or 1.39 percent, to 1,416.51. The Nasdaq Composite Index <.IXIC> climbed 54.65
points, or 1.78 percent, to 3,122.57.

NYMEX- NEW YORK, March 26 (Reuters) - U.S. crude futures edged up on Monday as comments from Federal Reserve Chairman Ben Bernanke reinforced expectations that interest rates will be kept low and as strong gasoline futures provided lift to the oil complex.

Bernanke said the U.S. economy needs to grow more quickly to bring the unemployment rate down further, defending the central bank's policy of very low interest rates.

While he gave no indication the Fed intended to start on a third round of bond purchases, Bernanke also made clear the central bank is in no rush to reverse course after responding aggressively to a deep recession.

Bernanke's comments weighed on the dollar by reinforcing hopes for more quantitative easing and lessening expectations that interest rates might be raised any time soon.

Ahead of weekly reports on U.S. oil inventories, crude stocks were expected to have risen last week, a Reuters survey of analysts showed on Monday.

On the New York Mercantile Exchange, May crude rose 16 cents, or 0.15 percent, to settle at $107.03 a barrel, having traded from $106.19 to $107.32.

CBOT SOYBEANS- Soybean futures on the Chicago Board of Trade hit a six-month high on renewed worries about the size of South America's soy harvest, although the market pared gains by the close, traders said.

Front-month soybeans reached $13.88-1/2 per bushel, the highest spot soybean price since mid-September 2011. Spot soyoil also touched a six-month high and spot soymeal hit a near seven-month high.

FCPO- SINGAPORE, March 26 (Reuters) - Malaysian palm oil futures extended gains to a one-year high on Monday as strong exports data and drought woes in soy-producing South America boosted investor sentiment.

Agriculture markets, including palm oil, are set to face choppy trade ahead of the U.S. prospective plantings report due on Friday, which will gauge output of soybeans that is usually crushed into competing soybean oil.

Palm oil has gained 8.9 percent since the start of 2012 on Asian demand chasing sluggish production, limited soyoil supplies flowing from South America although now any prospect of higher U.S. soy harvests may rein in gains.

The market got a further boost after leading industry analyst Thomas Mielke said later in the day that soy prices would hit above $14 a bushel in the next four to eight weeks as the severe drought hits the crops in Brazil and Argentina.

Benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange settled up 1.0 percent at 3,459 ringgit ($1,123) per tonne after going as high as 3,479 ringgit, a level unseen since last March.

Traded volumes stood at 23,949 lots of 25 tonnes each, slightly lower than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, March 26 (Reuters) - Most Southeast Asian stock markets fell on Monday in moderate volume as a decline in new U.S. home sales added to concerns about slowing global growth, weighing on shares of resources and materials firms.

Foreigners remained buyers, however, offering regional bourses some support.

Malaysia saw net foreign inflows of 233.58 million ringgit ($75.9 million), Indonesia $26.7 million and the Philippines $12.2 million, though all three markets ended the day lower.

Singapore gave up early gains after HSBC removed blue-chip Singapore Telecommunications Ltd from its top 10 Asian stocks equity portfolio, as it cut its rating for Singapore to underweight from overweight.

Casino operator Genting Singapore PLC fell 2 percent, leading the overall index down.

Analysts in Singapore expect the market to further consolidate until catalysts come from improved economic indicators from the U.S. in the near future.