RTRS- Malaysia's June palm oil stocks drop 4.9 pct-MPOB

KUALA LUMPUR, July 10 (Reuters) - Malaysia's June palm oil stocks fell 4.9 percent to 1,699,117 tonnes from a revised 1,758,684 tonnes in May, industry regulator Malaysian Palm Oil Board said on Tuesday.


June's fall exceeded market expectations that stocks in the world's No.2 palm oil producer likely dropped 2.2 percent to 1.73 million tonnes. PALM/POLL
Alerts History

• 10-Jul-2012 12:30 - MALAYSIA'S JUNE PALM OIL OUTPUT UP 6.3 PCT FROM MAY- MPOB

• 10-Jul-2012 12:30 - MALAYSIA'S JUNE END-STOCKS DOWN 4.9 PCT FROM MAY- MPOB

• 10-Jul-2012 12:30 - MALAYSIA'S JUNE PALM OIL EXPORTS UP 8.7 PCT FROM MAY- MPOB

RTRS- Malaysia's July 1-10 palm oil exports down 22.2 pct - SGS

SINGAPORE, July 10 (Reuters) - Exports of Malaysian palm oil products for July 1-10 fell 22.2 percent to 331,978 tonnes from 426,914 tonnes shipped during June 1-10, cargo surveyor Societe Generale de Surveillance said on late Tuesday.

RTRS- China June soy imports at 7-month high

BEIJING, July 10 (Reuters) - China, the world's largest soy buyer, imported 5.62 million tonnes of soybeans in June, the most since November, customs data showed, fuelled by strong demand from livestock breeders and expanded crushing capacity.

But the imports were lower than estimates by some analysts, who had expected China to match its June 2010 purchases of 6.2 million tonnes as most crushers are still trying to make up for a supply shortfall in peak consumption months August and September after drought reduced shipments from South America.

"We see a continuous increase in China's soybean imports because of strong demand and also the fact that they are facing a shortfall in domestic production," said Ker Chung Yang, analyst at Phillip Futures in Singapore.

"Improved crushing margins are another thing that is encouraging higher imports. I think the demand in China is going to remain strong, which will sustain higher imports from the United States."

The June imports were 31 percent higher on the year and up 6.4 percent from May's 5.28 million tonnes, according to figures from the General Administration of Customs of China released on Tuesday.

Rising incomes and changing diets have increased the amount of meat most Chinese consume, boosting the demand for soy, which is crushed and used in animal feed.

Chinese soy buyers had booked cargoes several months in advance, so they were unaffected by a recent spike in soy prices, official think-tank the China National Grain and Oils Information Center (CNGOIC) said. The worst drought in almost 25 years drove U.S. soy prices 0#S: to a record high on Monday.

The CNGOIC forecast soy imports in July to ease slightly to 5.5 million tonnes, taking total imports in the current marketing year to a record 58 million tonnes, an increase of 11 percent on the year.

In May, some Chinese traders had cancelled orders for Brazilian soybeans due to low domestic crushing margins, and a CNGOIC analyst said the imported amount had not picked up as much as expected. (nL4E8GO1QX)

Drought late last year cut production in Brazil and Argentina, which supply more than half of China's annual imports.

Official Customs data also showed that China, a leading edible oil consumer, imported 540,000 tonnes of vegetable oils in June, up 17.4 percent from the previous month.

RTRS- Global soybean supplies insufficient - Oil World

HAMBURG, July 10 (Reuters) - The current heatwave hitting U.S. soybeans following small South American soy crops this year may mean global soybean, soymeal and soyoil supplies will be insufficient to cover demand in coming months, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.

“The recent demand trends of soybeans and products cannot be sustained in the next five to six months,” Oil World said. “Demand rationing is inevitable due to insufficient world soybean supplies which will reduce crushings below the year ago level in July/Dec. and correspondingly cut global output of soyoil and meal.”

Soybean futures hit all-time-high levels on Monday following a three week period of hot, dry weather in U.S. grain and soybean belts. GRA/ (nC3E8GM01O)

The United States, the world’s largest soybean exporter, had been expected to take over an even larger global soybean supply role in coming months after poor soybean crops in Brazil and Argentina, the second and third largest exporters.

“The current U.S. drought could become a disaster for the global livestock industry as it follows the drought-reduced South American soybean crops harvested earlier this year,” Oil World said.

“With deteriorating production prospects for corn and by the same token for distillers dried grains (byproducts of bioethanol output), demand for alternative feedstuffs like soymeal will rise, explaining why soymeal followed on the heels of the corn price rally in the past five weeks.”

The deteriorating U.S. crop will make it more difficult for U.S. exporters to satisfy global demand for soybeans, soyoil and meal in the next six months, even if U.S. soybean stocks are reduced unusually sharply, it said.

U.S. Sept. 2012/February 2013 soybean exports are likely to surge to 32.0 million tonnes from 24.49 million tonnes in the same year-ago period, it said. Brazil’s soybean exports in this time are likely to fall to 4.40 million tonnes from 10.02 million tonnes and Argentina’s to 0.54 million tonnes from 3.72 million tonnes, Oil World forecasts.

But total global Sept. 2012/February 2013 soybean exports are still likely to fall by 1.5 million tonnes on the year to 41.43 million tonnes despite larger U.S. shipments, it said.

“This will require demand rationing or at least demand postponing in the importing countries including China,” it said. “It remains to be seen to what extent China switches part of the import demand from soybeans to canola (rapeseed).”

There is potential for large Chinese rapeseed/canola purchases at current prices which are attractive compared to soybeans, it said.

RTRS- US crops to struggle with drought through summer -forecaster

CHICAGO, July 10 (Reuters) - The drought decimating the corn crop in the United States will persist in August in the northern and western Midwest at a time when soybeans go through the critical yield-setting phase, the Commodity Weather Group said on Tuesday.

"I think there is a good chance that there will be some areas that will be will be continuing to struggle with drought, Joel Widenor, agricultural meteorologist for Commodity Weather Group, said on Tuesday.

The dry soils in key production areas such as Iowa and Nebraska will cut into what had originally been expected to be a bumper harvest of both crops.

"This will continue to limit late season showers for filling corn/soybeans," Commodity Weather Group said in a report titled Intermediate Seasonal Outlook.

Corn and soybean prices have soared during the past month amid worries that the worst drought in nearly 25 years will lead to smaller-than-expected production and spur another wave of inflation in food prices. Since the start of June Chicago Board of Trade corn futures have risen 37 percent while soybeans have rallied 24 percent.

The forecaster cited the further development of the El Nino weather pattern, warming of the surface water in the eastern and central Pacific Ocean, as a reason for confidence in the outlook.

Wetter weather was expected in the Ohio Valley, southern U.S. Plains and Deep South during August. But that moisture will provide little help to developing crops in those areas because the plants will be more mature than is usual following an early planting.

"August showers will be less influential than normal on final yields," the note said.

The pattern is expected to continue in September, with dry weather persisting in areas west of the Mississippi River while the eastern growing areas receiving more rain.

The record fast planting of both corn and soybeans this spring had raised hopes of large harvests easing the strain on the global supply chain.

But a heat wave and crippling drought descended over the region in June, bringing crop conditions to their lowest levels since 1988.

Trader's Highlight

DJI- NEW YORK, July 10 (Reuters) - U.S. stocks fell for a fourth day on Tuesday as more pessimism from U.S. companies compounded worries the sluggish world economy is taking a toll on U.S. profit growth.

A sales warning from engine maker Cummins Inc CMI.N came on top of earlier weak forecasts from chipmakers Applied Materials Inc AMAT.O and Advanced Micro Devices AMD.N, causing the market to extend losses in afternoon trading. (nL2E8IA8QB)

The news sent the S&P 500 down for a fourth consecutive day, the index's longest downward streak since May when it fell for six straight days.

Shares of industrials .GSPI fell the most at 1.6 percent. Cummins was among the biggest losers, declining 8.9 percent to $86.91.

"The selloff really started with Cummins," said Ryan Detrick, technical analyst at Schaeffer's Investment Research, in Cincinnati. It was "basically reiterating the concerns that we've had going into earnings, like how the European issues are really starting to have an impact on the U.S."

Recent data showing slower growth in Europe, China and the United States has weighed on the stock market, while U.S. companies have warned about overseas weakness and a stronger dollar hurting companies that rely heavily on exports.

The S&P 500 ended at technical support, which is seen in the 1,340-1,345 range, according to Robert Sluymer, analyst at RBC Capital Markets in New York. The 50-day moving average at 1,337 is also eyed as support where clusters of buying would be expected.

The Dow Jones industrial average .DJI was down 83.17 points, or 0.65 percent, at 12,653.12. The Standard & Poor's 500 Index .SPX was down 10.99 points, or 0.81 percent, at 1,341.47. The Nasdaq Composite Index .IXIC was down 29.44 points, or 1.00 percent, at 2,902.33.

Bank stocks also declined, with the euro EUR= hitting a two-year low against the dollar amid uncertainty about progress in tackling the euro zone crisis. The KBW Bank index .BKX fell 0.9 percent.

Cummins cut its full-year sales forecast, citing weakness overseas and a stronger dollar.

NYMEX-NEW YORK, July 10 (Reuters) - U.S. crude oil futures ended more than 2 percent lower on Tuesday as fears of tightening North Sea supplies dissipated after Norway's government ordered an end to an oil workers' strike and China's crude oil imports fell in June.

 

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell in aprofit-taking setback from Monday's all-time high, as tradersadjusted positions a day ahead of the U.S. Department ofAgriculture's monthly supply/demand reports, traders said.

* Soymeal and soyoil followed soybeans lower.

* Trade expects USDA's July 11 supply/demand report to showa slight decline in U.S. 2011/12 soybean ending stocks butlittle change in 2012/13 ending stocks. What USDA does with its 2012 U.S. soy yield forecast will be key. (nL2E8I6ESK)

* CBOT said it would raise margin requirements on CBOT soybeans and soymeal futures effective after Tuesday's close, a move that prompted some liquidation of positions, traders said.

• News that federal regulators accused Iowa-based broker PFGBest of misappropriating more than $200 million in customer funds may have triggered additional liquidation, traders said. (nL2E8IA0WB)

• Market underpinned by worries about dry U.S. weather. Drought will persist in August in the northern and western Midwest at a time when soybeans go through the critical yield-setting phase - Commodity Weather Group. (nL2E8IA6H0)

• USDA rated 40 percent of the U.S. soybean crop in good to excellent condition as of July 8, down from 45 percent a week earlier. US/SOY Soybean ratings have fallen for five straight weeks.

• The heat and drought affecting U.S. soybeans following small South American soy crops this year may mean global soybean, soymeal and soyoil supplies will be insufficient to cover demand in coming months - Oil World. (nL6E8I98A7)

• China, the world's largest soy buyer, imported 5.62 million tonnes of soybeans in June, the most since November, customs data showed, fueled by strong demand from livestock breeders and expanded crushing capacity. (nL3E8IA1VT)

FCPO- SINGAPORE, July 10 (Reuters) - Malaysian crude palm oil futures slipped on Tuesday as weak exports signalled consumers might have stocked up well ahead of the Muslim holy month of Ramadan, although losses were capped by dry U.S. weather potentially hurting soy output.

Malaysian palm oil exports for the first 10 days of July slipped 13.5 percent from a month ago, said cargo surveyor Intertek Testing Services, going against expectations that strong Asian demand will push exports higher. PALM/ITS

But some in the market are holding out for the Asian festival season in July, starting with Ramadan where fasting in the day is followed by elaborate feasts at night. China and India also celebrate key holidays in September through to November.

Strong Asian demand last month saw Malaysian palm oil stocks fall to a 14-month low, government data showed on Tuesday.

"The market's down on exports today. The numbers were not so good and they surprised everybody," said a trader with a foreign commodities brokerage in Malaysia. "But the U.S. dry weather still plays a part on Malaysian palm oil, that's why there's no sharp retracement downwards."

The benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange slipped 0.7 percent to close at 3,130 ringgit ($986) per tonne.

Traded volumes stood at 27,643 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

Technicals were bearish with Reuters market analyst Wang Tao saying palm oil will drop to 3,051 ringgit, as a rebound from the June 14 low of 2,838 ringgit was completed. (nL3E8IA1E4)

China's orders of vegetable oils in June were up 17.4 percent from a month ago, according to government data, a bright spot in overall weakness in imports and signalling some restocking may be in the works. (nL3E8IA02R)

Strong demand from China in the next few months could eat into Malaysian stocks that fell 4.9 percent to 1.7 million tonnes. (nK7E8EU00Y)

Lower stocks, and the persistent drought in the U.S. Midwest which has damaged soy crops and limited global oilseed supply, could provide support for futures prices.

Traders were also cautious after Japan's weather bureau said on Tuesday there is a strong possibility the El Nino weather pattern, which is often linked to droughts in Southeast Asia and could hurt palm oil output, will emerge this summer. (nL3E8IA1US)

REGIONAL EQUITY- BANGKOK, July 10 (Reuters) - Most Southeast Asian stock markets climbed in light volume on Tuesday, with Singapore and Thai stocks advancing more than 1 percent as concerns about euro zone debt problems eased following a bailout for beleaguered Spanish banks.

Singapore's Straits Times Index .FTSTI finished up 1.2 percent, regaining some lost ground from Monday. The Thai SET index .SETI ended up 1.5 percent, rebounding from the previous two sessions.

Malaysia's main index .KLSE and Jakarta's Composite Index .JKSE posted modest gains of 0.3 percent and 0.6 percent, respectively. The Philippine index .PSI fell 0.5 percent while the Vietnam stock market .VNI was down 0.7 percent.

Trading volume in the region was relatively low following fresh data from China that pointed to flagging domestic demand in the world's No. 2 economy. Imports into China rose 6.3 percent in June from a year ago, less than half the projected increase in a Reuters poll. (nL3E8IA02R)