Monday, July 30, 2012

RTRS- Malaysia to boost tax free palm oil quota by 2 mln T -govt sources

July 30 (Reuters) - Malaysia will increase shipping quotas for tax free crude palm oil by up to 2 million tonnes this year to help planters cope with higher output in the next few months, government sources said, as the world's No.2 supplier struggles to maintain its export momentum.

"We are doing this on a case-by-case basis for local firms since production is starting to rise in the second half of this year and exports are a bit slow," said one government official who declined to be named due to the sensitivity of the issue.

"It is a stock management effort. This is in an interim response to Indonesia at the moment. We are still formulating a comprehensive response," the source added.

The move will lift Malaysia's total duty free CPO export quota to 5 million tonnes this year and comes after top importer India this month raised base import prices of refined palm oil in a move that encourages more crude palm oil shipments.

Both Malaysia and India are responding to last year's move by top palm oil producer Indonesia to slash export taxes of refined palm oil -- used as a cooking oil -- and spur its own processing industry.

Malaysia says Jakarta's export tax cut has eaten into its own refined palm oil shipments and hurts its processors -- a concern similar to that voiced by India, which has spent billions to build the factories of its edible oil manufacturing sector.

Trader's Highlight

DJI- NEW YORK, July 27 (Reuters) - U.S. stocks surged on Friday, driving the S&P 500 to its highest level since May 4 as hopes increased that the Federal Reserve and the European Central Bank may provide further stimulus.

The Dow Jones industrial average .DJI shot up 187.95 points, or 1.46 percent, to end unofficially at 13,075.88. The Standard & Poor's 500 Index .SPX gained 25.96 points, or 1.91 percent, to finish unofficially at 1,385.98. The Nasdaq Composite Index .IXIC climbed 64.84 points, or 2.24 percent, to close unofficially at 2,958.09.

For the week, the Dow rose 2 percent, the S&P 500 gained 1.7 percent and the Nasdaq advanced 1.1 percent.

NYMEX- NEW YORK, July 27 (Reuters) - U.S. crude futures ended higher for the fourth straight session Friday as data showing a slower U.S. growth rate in the second quarter raised further hopes that the Federal Reserve would adopt more monetary easing policies to bolster the economy.

CBOT SOYBEAN- Chicago Board of Trade soybean futures were higher as the U.S. drought worsens,
leading to cuts in soy conditions and forecasts for lower U.S. soy output this year.

* Informa Economics cut its estimate for 2012 corn yield to 134.0 bushels from the previous 142.5 and trimmed soy yield to 38.5 from the previous 40.0. (Full Story)

Crops in the northern and eastern U.S. Midwest will benefit from showers and cooler temperatures over the next week but heat and drought will continue to punish crops in the southwest, an agricultural meteorologist said on Friday. "There will be additional rain in the eastern Midwest today and showers in the northwest tomorrow and Sunday," said Don Keeney, meteorologist for MDA EarthSat Weather. Malaysian crude palm oil bounced up on Friday from a five-week low hit the previous day after the European Central Bank pledged to protect the euro zone in comments that helped risk assets. August is above all key moving averages. The nine-day RSI is at 61.
 
FCPO- SINGAPORE, July 27 (Reuters) - Malaysian crude palm oil bounced up on Friday from a five-week low hit the previous day after the European Central Bank pledged to protect the euro zone in comments that helped risk assets.

The broader financial markets rose after ECB President Mario Draghi said the bank would do whatever was necessary to protect the euro zone from collapse, raising expectations it will move quickly to tackle sky rocketing borrowing costs in countries such as Spain. (Full Story)

Benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange closed 1.6 percent higher at 2,927 ringgit ($926) per tonne. Prices had touched 2,880 ringgit on Thursday, the lowest level since June 18.

But palm oil still posted a 3.8 percent weekly loss, the worst performance since mid-June, as forecasts for rain in the U.S. Midwest relieved some fears of tightening global oilseed supplies.

Favourable weather for soybeans could lead to a higher supply of soybean oil and draw demand away from palm oil.

"The selling was a bit overdone yesterday, so we see a little bit of recovering today," said a trader with a foreign commodities brokerage in Malaysia. "Optimism over Europe may not last for long as the sovereign debt issue remains unsolved."

Traded volume stood at 32,356 lots of 25 tonnes each, higher than the usual 25,000 lots on short-covering activities ahead of the weekend.

Market players are looking out for palm oil export data for July due next Tuesday for consumption trends after earlier numbers showed signs of slowing demand.

Malaysia's palm oil exports fell 14.3 percent and 18.6 percent over the July 1-25 period, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance respectively. PALM/ITS PALM/SGS

But slowing exports coupled with better production expected in Malaysia this month could boost palm oil stock levels and ease some pressure off tightening global oilseed supplies.

A tighter supply outlook on persistent drought in the U.S. Midwest has pushed soybean oil prices to record highs, fuelling worries of food inflation in top edible oil buyers India and China.

Shares of the world's largest palm oil firm Wilmar International Ltd WLIL.SI fell as much as 6.4 percent to their lowest in more than 3 years on Friday, on market talk that China had asked edible oil suppliers to keep prices stable, traders said. (Full Story)

REGIONAL EQUITY- BANGKOK, July 27 (Reuters) - Southeast Asian stock markets mostly rose on Friday with large caps and banking stocks leading Indonesian and Philippine shares to a one-week closing high.

Jakarta's Composite Index .JKSE closed up 1.98 percent, eking out 0.07 percent gains for the week, while the Philippine index .PSI ended up 1.3 percent, posting a modest 0.17 percent weekly gain.

Thailand's main SET index .SETI edged up 0.4 percent, regaining some lost ground from Thursday's drop of 1.3 percent. Thai stocks fared worst in the region with losses for the week at 2.5 percent, the biggest in ten weeks.