RTRS-Oil World sees falling U.S. soybean inventories

HAMBURG, June 19 (Reuters) - Strong export demand is set to sharply reduce U.S. soybean inventories up to August while South American stocks are already being cut, Hamburg-based oilseeds analysts Oil World said on Tuesday.

Oil World has cut its forecast of U.S. Aug. 31 soybean inventories to 4.2 million tonnes from 4.6 million tonnes the analyst estimated in May and down from 5.85 million tonnes of U.S. stocks on Aug. 31, 2011.

"The global demand is now increasingly switching to the U.S., cutting U.S. stocks to bare minimum levels as of end-Aug. 2012," Oil World said. "The forthcoming huge increase in U.S. exports of soybeans and meal may become a logistical nightmare in the next 6-7 months."

Oil World forecasts that U.S. soybean exports will rise by almost 40 percent in coming months as global demand moves to the U.S. after poor soybean crops in Brazil and Argentina. [ID:nL5E8H4D99]

"Considerably smaller South American supplies and larger than expected world import requirements raised the demand for U.S. soybeans and products in May," Oil World said. "This trend is going to accelerate from June onward, resulting in significant year-on-year increases in U.S. soybean disposals."

Meanwhile, South American soybean stocks are also being run down, it said.

In South America, this year's poor crop coupled with strong export demand has cut soybean inventories sharply, Oil World estimates.

June 1 soybean stocks in the five main regional exporters Argentina, Brazil, Paraguay, Bolivia and Uruguay fell to 72.36 million tonnes from 96.09 million tonnes on June 1, 2011, it estimates. Record Chinese purchases contributed to the fall, it said.

Argentina's June 1 soybean stocks fell to 31.34 million tonnes from 40.32 million tonnes on June 1, 2011, it estimates. Brazil's stocks fell to 36.72 million tonnes from 48.90 million, it said.

RTRS-Latin America soybean sowings to expand -Oil World

HAMBURG, June 19 (Reuters) - Argentine and Brazilian farmers are likely to expand soybean plantings at the expense of grains for their 2013 crop because of higher profits from the oilseed, Hamburg-based oilseeds analysts Oil World said on Tuesday.

"Farmers in South America are getting more enthusiastic about expanding soybean cultivation, taking advantage of the comparatively lower production costs in relation to grains and favourable price prospects," Oil World said.

"Many of them have already started marketing their 2013 crops seven to nine months ahead of harvest in an effort to benefit from the current attractive prices."

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

Argentine farmers are likely to plant 19.60 million hectares of soybeans for the 2012/13 crop for harvesting in early 2013, up from 18.53 million being harvested in 2012, Oil World estimated.

Argentine farmers are likely to reduce 2012/13 wheat plantings to 3.60 million hectares from 4.63 million this season, but also raise 2012/13 corn sowings to 5.10 million hectares from 4.96 million, it said.

"Under favourable weather conditions, the Argentine soybean crop could reach a record 54.5 to 55.5 million tonnes in 2013," Oil World said.

Oil World repeated its forecast that Argentina's 2012 soybean crop will fall to or slightly below 40 million tonnes. [ID:nL5E8GT5RI] The Argentine government estimates 41.5 million tonnes. [ID:nL1E8HFIW0]

Brazilian farmers are likely to plant 26.40 million hectares of soybeans for harvesting in 2013, up from 25.04 million hectares harvested this year, Oil World said.

Brazil's farmers are likely to plant 14.40 million hectares of corn for the 2013 crop, down from 15.12 million hectares harvested this year, it said.

This year's Brazilian winter corn harvest is set to reach a record size, leading to a build-up of burdensome stocks despite high exports to China, and so reducing the attraction of the grain to farmers, it said.

Trader's Highlight

DJI- NEW YORK, June 19 (Reuters) - U.S. stocks rose on Tuesday on hopes that the Federal Reserve will agree to extend stimulus measures as the economy struggles to recover and the euro zone's debt crisis gets worse.

The S&P 500 has gained 7.2 percent from a five-month intraday low reached on June 4. On Tuesday, the benchmark index closed above its 50-day moving average of 1,346.90 for the first time in seven weeks. But the sharp gains leave the market vulnerable if the outcome of Wednesday's Fed meeting doesn't meet market expectations.

"People are anticipating some type of response from the Fed tomorrow, and are buying or covering shorts in anticipation of that," said Paul Zemsky, head of asset allocation at ING Investment Management in New York. "There's a risk the market gets disappointed."

The Dow Jones industrial average <.DJI> gained 95.51 points, or 0.75 percent, to 12,837.33 at the close. The Standard & Poor's 500 Index <.SPX> advanced 13.20 points, or 0.98 percent, to 1,357.98. The Nasdaq Composite Index <.IXIC> rose 34.43 points, or 1.19 percent, to close at 2,929.76.

NYMEX- NEW YORK, June 19 (Reuters) - U.S. crude futures rebounded on Tuesday as investors bet that Federal Reserve policymakers, who are holding a two-day meeting, will agree to provide further stimulus to the sluggish economy and that inventory data will show a drawdown in crude stocks.

Hopes that Greece will shortly form a coalition government and renegotiate its bailout package with lenders added to positive sentiment.

News that Iran hoped for a new round of talks with world powers over its nuclear program after its latest negotiations were deadlocked had helped pull prices lower, traders said.

Euro zone worries persisted after a German government official said that there was no discussion at the G20 summit in Mexico this week about using Europe's rescue funds to buy up the bonds of stricken members of the euro zone.

On the New York Mercantile Exchange, crude for July delivery settled at $84.03 a barrel, up 76 cents, or 0.91 percent, after trading between $82.28 and $84.41.

 

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade surged to a one-month high on Tuesday on fresh export business and worries about stressful crop weather threatening yields in the U.S. Midwest, traders said.

Front-month soybeans were up 3.7 percent by the end of pit trading at 1:15 p.m. CDT (1815 GMT), the biggest daily rise in eight months. The contract reached an intraday peak of $14.51-1/2 per bushel, the highest spot soy price since May 10.

November soybeans "gapped" higher on the open -- the contract's low was above the previous day's high -- in a bullish show of strength in the market, analysts said.

Additional support was from declining crop ratings. USDA said 56 percent of the U.S. soybean crop was rated in good to excellent condition as of Sunday, a drop from 60 percent the previous week.

Private analyst Oil World cut its forecast of U.S. Aug. 31 soybean inventories to 4.2 million tonnes, from 4.6 million in May, and down from 5.85 million on Aug. 31, 2011. The firm cited strong export demand due to poor crops in Brazil and Argentina.

FCPO- SINGAPORE, June 19 (Reuters) - Malaysian palm oil futures closed higher on Tuesday on expectations of increased demand due to concerns that dry U.S. weather could damage the soybean crop, tightening global edible oil supply.

A victory by pro-bailout parties in the Greek polls over the weekend had sent palm oil futures to close just below the 2,900-ringgit mark on Monday.

But as optimism has faded in broader financial markets, dry weather has come into focus as the U.S. Department of Agriculture (USDA) said unfavourable weather had damaged soybean crop quality.

"Prices should remain positive with the Greeks behind us. Dry weather in the U.S. Midwest also supports a bullish stance," said a trader with a local commodities brokerage in Malaysia.

Benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange gained 1.7 percent to close at 2,948 ringgit ($934) per tonne, after rising as high as 2,959 ringgit.

Traded volumes stood at 39,877 lots of 25 tonnes each, much higher than the usual 25,000 lots.

REGIONAL EQUITY- June 19 (Reuters) - Southeast Asian stock markets gained on Tuesday with Malaysia hitting a two-month high, but renewed concerns over the euro zone trimmed volumes.

Malaysia <.KLSE> gained 0.8 percent with a $13.28 million in foreign inflows, while Singapore <.FTSTI> and Thailand <.SETI> added 0.6 percent and 0.8 percent respectively, while the Philippines <.PSI> rose 0.6 percent.

Optimism over a possible solution to Greece's debt crisis eroded as concerns over Spain's borrowing cost hit investor appetite for risky assets.

"Markets are still likely to remain choppy for a while," said Chang Chiou Yi, a regional strategist at CIMB-GK Research. Indonesia <.JKSE> ended 0.5 percent firmer despite $5.2 million net in foreign selling.

"I think the policy risk concerns on Indonesia is overplayed," she said. "The market is domestically driven with solid earnings growth and should hold up well. Even in global growth weakness, the Indonesian market has its own demand support."