RTRS- US sees surge in corn stocks, fewer soybeans

WASHINGTON, May 10 (Reuters) - A record U.S. corn crop this fall will end two years of nail-biting tight supplies, the government predicted on Thursday, while its forecasts for lower-than-expected global stocks of wheat and soybeans may keep food prices high.

The U.S. Agriculture Department's first estimates for this year's harvest and next year's demand showed that domestic corn stocks will surge from a near record low this year to a seven-year high by September 2013, aided by expected record yields this year as farmers sprinted to plant an early crop.

USDA had less bountiful outlooks for other supplies, with domestic soybean inventories seen falling to 145 million bushels for the 2012/13 year from 210 million this year, with a stocks-to-use ratio "at a historically low 4.4 percent."

The 145 million is slightly more than a two-week supply. Analysts had forecast 164 million bushels.

Futures prices soared 1.9 percent for new-crop soybeans, the largest gain in 5-1/2 weeks at the Chicago Board of Trade. New-crop corn, for delivery in December, fell by 1.4 percent to $5.09-3/4 a bushel, the lowest price since March 2011.

The report threatens to extend a cycle of volatile prices, with a shortage of one crop in one year giving way to a shortage of another in the next. Food prices spiked in 2008 and have remained high and volatile since then because of the razor-thin stocks and huge demand globally, especially from a hungry China.

Although soybean prices have led the complex this year, some analysts were still betting that corn -- the grain that's been in greatest deficit -- would set the longer-term tone.

"The upshot is that corn is the locomotive that pulls the grain train, and that engine is headed south," said Charlie Sernatinger, analyst with ABN AMRO.

RTRS- ARGENTINE 2011/12 SOY HARVEST SEEN AT 40.9 MLN T VS 43.1 MLN T MONTH AGO - ROSARIO GRAINS EXCHANGE

BUENOS AIRES, May 10 (Reuters) - Argentina's 2011/12 soy output was expected to fall to 40.9 million tonnes, down from last month's estimate for 43.1 million tonnes due to poor yields caused by a drought, Rosario grains exchange said on Thursday.

It also cut its outlook for 2011/12 corn production to 19.0 million tonnes from 19.8 million tonnes in April.

RTRS- Brazil raises soy crop view after aggressive cuts

SAO PAULO, May 10 (Reuters) - The soybean forecast from Brazil's agriculture ministry on Thursday bounced back by more than a million tonnes, after the government overshot in April when it slashed more than 3 million tonnes from an earlier estimate of the drought parched crop.

The ministry's crop supply agency Conab said in its eighth forecast of Brazil's grain output that the 2011/12 (September-October) soybean crop would reach 66.7 million tonnes, up 1.1 million tonnes from the agency's April estimate of 65.6 million tonnes.

The April estimate had be cut by more than 3 million tonnes from March. [ID:nL2E8FA29Q] Brazil harvested a record 75.3 million tonnes in 2010/11.

"I was fearful of this last month," said agricultural consultant Kory Melby based in Goias. "They dropped it far too fast."

Conab did not give details on why they decided to raise their forecast after dropping it sharply in past months.

Soy futures prices have firmed since December, as markets fear dwindling stocks and strong demand for the important source of protein from China could put pressure on food prices and trigger civil unrest.

Conab said Brazil should export 31.1 million tonnes of soybean, down from the 32.99 million tonnes last year.

Drought that started in November in Brazil's southern grain states, common under La Nina weather patterns, erased over 10 million tonnes from the current crop's potential, considering the expanded area planted with soy this season.

Area planted expanded 3.5 percent from last season to a record 25 million hectares (61.8 million acres), Conab said. But average yields were a dismal 2.665 tonnes a hectare, the lowest in six years.

The southern states took the brunt of the drought. No. 3 soy growing state, Rio Grande do Sul, will put out a dismal 6.5 million tonnes, down 44 percent from the record 11.6 million last season. It is one of the last major states to harvest and it is days away from finishing.

No. 2 soy state Parana harvested 10.8 million tonnes, down 30 percent from the record 15.4 million last season.

Partially offsetting the losses in the south, No. 1 soy state Mato Grosso raised output by 6 percent to a record 21.7 million tonnes and No. 4 producer Goias rose 3.4 percent to 8.5 million tonnes, Conab data showed. The two center-west states have been done harvesting for more than a month.

RTRS- China to release 2.5 mln T state soy reserves in northeast

BEIJING, May 10 (Reuters) - China, the world's top soy importer, will offer 2.5 million tonnes of soybeans to crushers from state reserves, mainly in inland provinces in the northeast, to cut government stocks before the new harvest, industry sources said on Thursday.

Sources expected the release, which will start late May, to have only a minor impact on imports because soy plants in the country's northeast use only domestic soybeans for crushing.

"The release takes place mainly in the northeast provinces, we don't expect any major impact to crushers south of the area which use imported soy," said one industry source.

The amount of soy from 2008-2010 harvests would be offered at regular auctions at prices of 3,700-3,850 yuan ($590-$610) per tonne, lower than the 4,250 yuan per tonne for imports offered at major ports in the north.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

China Jan-April soy imports up 22.3 pct on year. [ID:nL4E8GA1QA]

China soy imports graphic: http://link.reuters.com/xuh28s

China trade suite: http://link.reuters.com/fut96s

Expensive CBOT prices to boost China state soy sales [ID:nL4E8G34JK]

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Beijing last year released about the same volume of state reserves at discounted prices to some major crushers, the release triggered cancellations of a large number of imported cargoes.

"The market has been expecting this for a while. We don't think there would be any cancellations as happened last year. Crushers are still looking for cargoes and unlike last year, when they overbooked at the time," said one senior soy trader.

Crushers have been cautious and slowed down their purchases for shipment after July as current Chicago Board of Trade prices <0#S:> would give negative crushing margins, traders said.

But the prices are attractive to crushers in the northeast, where domestic soy was priced at about 4,100 yuan per tonne.

Some crushers in northern provinces of Shandong and Hebei have since late April increased purchases from the regular state reserves, although the volume was very small - 68,328 tonnes this week.[ID:nL4E8G34JK]

The sources said that because the reserve stocks were aging, the quality of the soybeans was deteriorating.

($1 = 6.3097 yuan)

RTRS- Malaysia's April palm oil stocks down 5.4 pct-MPOB

SINGAPORE, May 10 (Reuters) - - Malaysia's April palm oil stocks fell 5.4

percent to 1,848,368 tonnes from a revised 1,954,145 tonnes in March, industry

regulator Malaysian Palm Oil Board said on Thursday.

April's fall was higher than market expectations that stocks in the world's

No.2 palm oil producer likely dropped 7 percent to 1.82 million tonnes.

[PALM/POLL]

The following is a breakdown of Malaysian Palm Oil Board figures and Reuters

estimates for April:

(volumes in tonnes)

April 2012 April poll April 2011 March 2012

Output 1,272,626 1,285,000 1,306,228 1,211,257

Stocks 1,848,368 1,823,000 1,670,792 1,954,145

Exports 1,331,490 1,400,000 1,349,739 1,329,640

Imports* 40,616 100,000 n/a 27,908

* Refers to Malaysian imports of mostly Indonesian crude palm oil

RTRS- India's April refined palm oil imports seen lower

NEW DELHI, May 10 (Reuters) - India's refined palm oil imports are likely to have fallen in April from March as prices rose and buyers had built up plenty of stock, traders surveyed by Reuters said.

Compared with a year ago, however, imports of the refined product are forecast to have risen a whopping 414 percent after tax changes by exporter Indonesia made crude palm oil less attractive.

The Solvent Extractors Association of India, a Mumbai-based trade body, is set to issue vegetable oil import data on Friday at a meeting that starts at 1230 pm local time.

India, the world's largest vegetable oil importer, buys mainly palm oils from Indonesia and Malaysia, and its demand can affect prices.

Indonesia, the world's top palm oil producer, altered taxes in October 2011 to make exports of refined oil more attractive than those of crude palm oil to promote its downstream industry.

Since November, India's refined palm oil imports have risen by 78.3 percent to 821,960 tonnes through to March.

Indian refiners' calls for retaliatory action from the government to the Indonesian move, which has reined in domestic refining and put many plants on the verge of closure, have so far proved fruitless as food inflation is high. [ID:nL4E8E51LY]

Traders' forecasts for imports of refined palm oil in April ranged between 100,000 and 175,000 tonnes, with the average at 134,000 tonnes, down 28.3 percent from March.

They also said imported refined palm oils were $40-45 per tonne costlier in April than March.

"High prices dented imports of refined palm oil," said Pradip Desai, a Mumbai-based trader.

Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.4 percent to close at 3,349 ringgit ($1,093) per tonne on Thursday. The market has gained nearly 5.5 percent so far this year. [ID:nL4E8GA3YY]

Imported refined palm oil was quoted at around $1,160 per tonne on a cost and freight basis on India's west coast.

About half of India's 15 million to 16 million tonnes per year of edible oils demand is met via imports. It also buys small quantities of soyoil from Argentina and Brazil.

Traders said higher imports of the refined palm oil over the average of 90,000-100,000 tonnes in 2011 would continue as long as the government did not introduce protective measures.

Trader's Highlight

DJI- NEW YORK, May 10 (Reuters) - U.S. stock index futures fell sharply on Thursday evening as JPMorgan Chase & Co stunned investors with news that its chief investment office had incurred "significant mark-to-market losses" that it said could "easily get worse."

JPMorgan's stock fell nearly 7 percent to $38.05 in after-hours trading and dragged down shares across the entire banking sector. Its executives called an extraordinary conference call with analysts at 5 p.m. EDT where Chief Executive Jamie Dimon said "egregious" mistakes had been made.

The news from JPMorgan comes at a difficult juncture for the stock market as investors wrestle with heightened concerns about Europe's debt crisis and signs are emerging that the U.S. economic recovery may be starting to slow.

S&P 500 futures fell 11.6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Nasdaq 100 futures fell 16.75 points.

If there is nothing to reassure investors between now and the start of trade on Friday the weakness in likely to spill over into the cash market.

In a positive development, euro-zone officials said the bloc's countries are prepared to keep financing Greece until the country forms a new government. [ID:nB5E8FA01P]

The Dow's modest rise broke a six-day losing streak for the blue-chip average. But the S&P 500 could not hold enough gains to close above its April low. Still, the S&P has rebounded after falling to a two-month low near 1,340 on Wednesday.

On Thursday, the Dow Jones industrial average <.DJI> rose 19.98 points, or 0.16 percent, to close at 12,855.04. The Standard & Poor's 500 Index <.SPX> added 3.41 points, or 0.25 percent, to end at 1,357.99. But the Nasdaq Composite Index <.IXIC> fell 1.07 points, or 0.04 percent, to close at 2,933.64.

The latest uncertainty surrounding Greece and the euro zone's sovereign debt crisis helped spark a drop in the S&P 500 in five of the past seven sessions, sending the benchmark index down 4 percent. While the region's difficulties persisted with the political gridlock in Greece, investors used the market's declines as a buying opportunity.

The number of Americans applying for jobless benefits fell last week, but from an upwardly revised figure from the previous week. The report follows last month's nonfarm payrolls report, which showed weak employment growth in April. [ID:nL1E8GA1I4]

Signs of softness in the U.S. economy recently have led some investors to err on the side of caution and cut back on sectors exposed to the vicissitudes of the economic cycle.

NYMEX- NEW YORK, May 10 (Reuters) - U.S. crude futures edged up on Thursday, snapping a string of six lower settlements, as supportive labor and trade data from the United States countered disappointing Chinese trade data and higher OPEC production.

Investors hoped for better demand for petroleum after news that U.S. initial jobless claims edged down last week. The data eased concerns about a deteriorating labor market, though the drop was from a revised higher level.[ID:nL1E8GA1I4]

The four-week moving average, considered a better measure of labor market trends, also fell.

A separate report showed the U.S. trade deficit widened in March. Exports hit a record high and imports rose, indicating firming underlying demand.

Brent crude slipped and U.S. crude gains were limited by the unsettled Greek political situation and weak Chinese trade data.

No. 2 oil consumer China saw its exports and imports in April grow at a far slower rate than forecast. [ID:nEAP307401]

Greek political parties engaged in a last-gasp attempt to form a government and avoid new elections on Thursday after recent elections plunged the debt-ridden country into crisis.

The deadlock prompted a stream of warnings by European leaders that Greece would be thrown out of the euro if it did not stick to the terms of the bailout.

* On the New York Mercantile Exchange, June crude rose 27 cents, or 0.28 percent, to settle at $97.08 a barrel, having traded from $96.08, below the 200-day moving average of $96.28, and reaching $97.69.

* OPEC said its production rose in April to 31.62 million barrels per day (bpd) as Iraq and Libya ramped up. OPEC in December set its official supply target at 30 million bpd. [ID:nL5E8GA5O7]

* Saudi Arabia will supply crude oil to its customers in June at the same volume as May. [ID:nL4E8GA35D]

* Iran cut its official selling prices for June-loading crude to Asia from May as it seeks to encourage Asian buyers, but raised prices to Europe where buyers have mostly retreated, trading sources said. [ID:nL4E8GA1RD]

CBOT SOYEAN- Soybean futures on the Chicago Board of Trade rose after forecasts for U.S. soybean ending stocks from the U.S. Department of Agriculture came in below trade expectations, traders said.

* Soymeal posted the biggest advances in the soy complex, gaining relative to soyoil on meal/oil spreads.

* USDA lowered its forecast of U.S. 2011/12 soybean ending stocks to 210 million bushels, down from 250 million in April and below the average trade estimate of 210 million.

* USDA projected 2012/13 U.S. soybean ending stocks at 145 million bushels, below the average trade estimate of 164 million bushels.

* USDA cut its forecast of 2011/12 soybean production in Brazil to 65 million tonnes, from 66 million in April, and cut its estimate for Argentina's crop to 42.5 million tonnes, from 45 million in April.

* The Rosario grains exchange lowered its estimate of Argentina's 2011/12 soybean crop to 40.9 million tonnes, from 43.1 million last month, due to drought. [ID:nE6E7NC01Z]

* However, Brazil's agriculture ministry raised its projection for the country's soy crop to 66.7 million tonnes, from an April estimate of 65.6 million. [ID:nL1E8GA136]

* USDA reported export sales of U.S. soybeans in the latest week at 1.827 million tonnes (old and new crop years combined), above trade expectations for 1.2 million to 1.4 million tonnes.

* USDA reported weekly export sales of U.S. soymeal at 235,500 tonnes, above trade expectations, and weekly soyoil sales at 30,100 tonnes, below expectations.

* China will offer 2.5 million tonnes of soybeans to crushers from state reserves, mainly in inland provinces in the northeast, to cut government stocks before the new harvest, industry sources said. [ID:nL4E8GA7J5]

FCPO- SINGAPORE, May 10 (Reuters) - Malaysian palm oil futures edged up on Thursday, as traders bet on lower palm oil stocks, although gains were capped by lingering euro zone fears and slower exports of the edible oil this month.

The market, which has gained nearly 5.5 percent so far this year, drew support from an industry report that showed palm oil stocks in No.2 producer Malaysia fell to a one-year low.

But trading was volatile this week after polls in France and Greece threatened to put euro zone bailout programme at risk, while the latest Chinese trade data showed signs that the world's No.2 economy could be slowing down. [ID:nEAP307401]

There could be some price declines in the days to come after cargo surveyor Societe Generale de Surveillance reported a 14.2 percent drop in May 1-10 Malaysian palm oil exports compared to a month ago, suggesting the slowing economy may be curbing demand.

"The market is looking at the MPOB (Malaysian Palm Oil Board) report today, market is a little bit positive on that," said a trader with a foreign commodities brokerage in Malaysia.

"Because of external factors such as emerging issues in Europe, the market has been very uncertain. The USDA (U.S. Department of Agriculture) report will add to the volatility too, market should be trading in the 3,300-3,400 ringgit range for the next two days."

Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.4 percent to close at 3,349 ringgit ($1,093) per tonne.

Traded volumes stood at 27,230 lots of 25 tonnes each, higher than the usual 25,000 lots as volumes picked up after the midday break.

Malaysia's April palm oil stocks fell 5.4 percent to 1.85 million tonnes from a month ago, said industry regulator Malaysian Palm Oil Board after the midday break. [ID:nL4E8GA2VA]

While that puts stock level slightly higher than the expected 1.82 million tonnes, it is still at a one-year low and likely to push palm oil prices higher. [PALM/POLL]

Malaysian palm oil exports for May 1-10 fell by 6 percent compared to a month ago, said another cargo surveyor Intertek Testing Services, reflecting lower demand from major food buyer China and India.

Market players are watching the monthly planting report for soybeans that will be issued by the U.S. Department of Agriculture later on Thursday. A smaller soybean crop for crushing into competing soybean oil will support palm oil prices.

Singapore's Wilmar International Ltd , the world's largest listed palm oil firm, posted a surprise 34 percent drop in quarterly earnings on Thursday, hurt by losses at its largely China-based oilseeds and grains business. [ID:nL4E8G9ABV]

REGIONAL EQUITY-BANGKOK, May 10 (Reuters) - Thai shares fell to three-week lows while Philippine stocks hit their lowest in almost two weeks on Thursday, led down by index heavyweights amid concerns over debt problems in Europe.

Most other Southeast Asian stock markets recouped early losses.

Thailand's main SET index <.SETI> fell 1.38 percent, extending its loss for a second day to 1,190.65, the lowest close since April 23. The Philippine index <.PSI> ended down 0.4 percent at 5,192.10, the lowest close since April 30.

Indonesia saw outflows for three consecutive sessions to Wednesday for a combined $129 million and Thailand posted $76 million in outflows on Wednesday, after taking in $62 million in inflows in past two sessions, Thomson Reuters data showed.