Friday, August 3, 2012

RTRS- China weekly state soy sale exceeds 0.4 mln T

BEIJING, Aug 2 (Reuters) - Crushers in China, the world’s top soy buyer, have raised their purchase of soybean from the government’s weekly cheap offers to 400,907 tonnes, the government said on Thursday.

The strong sales come as crushers seek to offset possible domestic shortages in coming months after dry weather late last year cut supplies from South America and with the United States now suffering one of its worst droughts in years.

The government sold a total of 400,907 tonnes from state reserves on Thursday, the largest volume from a single sale since late 2010 and 10,817 tonnes higher than an auction held on July 12, which was the second-largest level.

Crushers in Heilongjiang and Inner Mongolia bought the beans at an average price of 4,381 yuan per tonne, according to bidding results.

Sales since December 2010 had attracted almost no bidders until May this year, when import prices jumped as a result of the drought in South America.

RTRS- Argentina knocks down rumor of soy tax hike

BUENOS AIRES, Aug 2 (Reuters) - Grains powerhouse Argentina is not studying a possible increase in soy export taxes for now, an Economy Ministry source with direct knowledge of the situation said on Thursday, knocking down market rumors of an imminent increase.

"It's not a subject on the agenda," said the source, who asked not to be named. "It's not a possibility for now."

The South American country is the world's No. 3 soybean exporter and its top supplier of derivatives like soyoil, used in the booming biofuels sector, and meal, used in cattle feed.

"The news is bearish for the U.S. bean market. There may have been a little support yesterday because of the rumor but it was hard to define since we're in a hot weather market," a floor source at the Chicago Board of Trade said, referring to the U.S. drought that has propelled grains prices higher in recent weeks.

Chicago August soy was down nearly 2 percent near midday while September, the next contract for 2012 delivery, was down only 0.66 percent.

The levy is a constant complaint among growers who have feuded for years with President Cristina Fernandez over her policies. She was re-elected last year on promises of increasing the government's role in Latin America's third biggest economy.

An increase in export taxes would have to be approved by Congress, where Fernandez and her allies have a majority.

Argentina has seen an explosion in soybean cultivation over the past 15 years. The government already has a 35 percent tax on exports, with a lower rate for soyoil and meal.

Argentine Agriculture Deputy Minister Lorenzo Basso said late on Wednesday that the farm ministry was not developing any tax increase plans, leaving speculation open that the Economy Ministry might be planning to propose an increase on its own. (nL2E8J1IZ8)

Trading companies with major operations in Argentina include Bunge Ltd BG.N, Cargill Inc CARG.UL, Louis Dreyfus, Molinos Rio de la Plata MOL.BA and Noble Group Ltd NOBG.SI.

RTRS- INTL FC Stone sees US 2012 corn yield at 124.3 bu/acre

CHICAGO, Aug 1 (Reuters) - Commodity brokerage firm INTL FC Stone on Wednesday estimated U.S. 2012 corn production at 11.043 billion bushels, with an average yield of 124.3 bushels per acre (bpa).

The firm projected the U.S. 2012 soybean harvest at 2.730 billion bushels, with an average yield of 36.2 bpa.

The estimates are INTL FC Stone's first for the 2012 U.S. crop season and are based on a survey of the firm's customers, among other factors.

The figures compare with the U.S. Department of Agriculture's current U.S. corn production forecast of 12.970 billion bushels, with an average yield of 146.0 bpa.

Stone's soybean output figure was below USDA's soybean production forecast of 3.050 billion bushels, with an average yield of 40.5 bpa.

USDA is scheduled to release updated crop forecasts on Aug. 10, its first estimates of the season based on field surveys.

INTL FC Stone said its production figures relied on USDA's current estimates of harvested acreage.

RTRS- Light rain for US as weather system shifts

CHICAGO, Aug 2 (Reuters) - The drought-hit U.S. Midwest will be left high and dry as fresh weather updates indicate a tropical weather system now at the edge of the Caribbean Sea will not bring any moisture to the area when it makes landfall in about 10 days, an agricultural meteorologist said on Thursday.

Known as tropical depression 5, the system initially was expected to reach landfall on Aug. 11-12 near Beaumont, Texas near the Texas-Louisiana border and potentially bring rain into the drought-stricken U.S. Plains and Midwest, according to Drew Lerner, meteorologist for World Weather Inc.

It now appears the system will make land fall further south in Texas thus keeping rain from the Midwest, Lerner said.

"It won't be a tropical storm until tomorrow when it gets into the Caribbean. At 2:00 p.m. EDT (1800 GMT) it was 385 miles east of the Windward Islands," Lerner said.

Lerner and other meteorologists said little improvement in the drought-stricken U.S. Midwest is expected for the next two weeks with occasional downpours bringing relief in isolated areas. But no widespread soaking rains are expected in significant corn and soybean growing regions.

Light showers with some locally heavier amounts fell on the U.S. Midwest crop belt overnight, which will provide some relief to crops and livestock from the worst drought in a half century, Lerner and World Weather's meteorologist Andy Karst said.

"There were some one-inch rains in areas of Nebraska, Kansas and southern Minnesota, and the usual 0.10 to 0.50 inch elsewhere," Karst said.

Another buildup of heat was expected next week in the central and western Midwest, with highs in the 90s to 100 degrees Fahrenheit, which will add further stress to crops.

Weather forecasting models that meteorologists use to make their predictions were in agreement on Thursday, in contrast to some days when the European and U.S. models showed divergent patterns.

"There isn't a striking difference today. The GFS (U.S.) model has a stronger ridge of high pressure than the European model, but unlike some days they're aligned pretty well today," Karst said.

An atmospheric high pressure ridge centered over the Plains and Midwest has been blocking moisture from moving from the Gulf into the Midwest, leading to a buildup of heat and drought.

Commodity Weather Group (CWG) on Thursday said temperatures would warm into the 90s F for all but the northwestern corner of the Midwest by Friday and Saturday, with 100s F most likely in Missouri and Kansas.

The extended outlook for later next week remained near to above normal for temperatures with the severe heat retreating to mainly the Plains.

The spreading drought has been cutting into crop conditions and analysts have been slashing production prospects for corn and soybeans almost daily.

The worst U.S. drought in 56 years intensified over the past week as above-normal temperatures and scant rainfall parched corn and soybean crops across the Midwest and central Plains, a report from climate experts said on Thursday.

The drought became more severe in the southern United States as well, just a year removed from a record-breaking dry spell that ruined crops and wilted grazing pastures across Texas and Oklahoma enough to force an unprecedented northward migration of cattle.

Nearly two-thirds of the contiguous United States was under some level of drought as of July 31, more than a fifth of it classified as extreme drought or worse, according to the Drought Monitor, a weekly report compiled by U.S. climate experts.

RTRS- US Grain Exports-Soy sales at 9-month low; China cancels new-crop

Aug 2 (Reuters) - U.S. soybean export sales plunged last week to a nine-month low due to a large cancellation of new-crop purchases by top importer China, government data on Thursday showed.

Net corn export sales were in line with low trade expectations after net negative sales the previous week, capped by uncompetitive prices on the world market, while wheat sales rose 42 percent from the prior week but were within trade forecasts.

Soybean export sales in the week that ended July 26 totaled 194,000 tonnes for shipment in the current marketing year, which ends Aug. 31, and a net 52,400 tonnes for shipment in the next marketing year, according to the U.S. Department of Agriculture's weekly export sales report.

New-crop sales were dented by a net cancellation of purchases by China of 163,500 tonnes.

Combined marketing year sales were the lowest since the week of Oct. 27, 2011, and net soybean sales to China were the lowest in nearly 14 months, USDA data showed.

Net corn export sales last week totaled 178,400 tonnes for 2011/12 marketing year shipment and just 23,000 tonnes for 2012/13, USDA said. Sales were expected to be between zero and 200,000 tonnes.

Japan, the No. 1 importer of U.S. corn, was the week's top buyer with 150,900 tonnes of old-crop purchases and 45,000 tonnes of new-crop purchases.

Net export sales of all classes of U.S. wheat totaled 520,700 tonnes last week, most of it for shipment in the current marketing year which runs through May 2013, USDA said. Traders had expected sales from 400,000 to 600,000 tonnes.



Trader's Highlight

DJI-NEW YORK, Aug 2 (Reuters) - U.S. stocks fell for a fourth day on Thursday after European Central Bank President Mario Draghi disappointed investors hoping for immediate action to contain the euro zone debt crisis.

One of Wall Street's top market makers, Knight Capital Group KCG.N, was fighting for its survival after a trading glitch that roiled markets on Wednesday wiped out $440 million of the firm's capital.

However, the market focused mostly on the ECB, though traders were also looking ahead to Friday's closely watched U.S. jobs report which could bring a volatile end to an eventful week.

Draghi said the ECB would gear up to buy Italian and Spanish bonds on the open market but would only act after euro zone governments have activated bailout funds to do the same, disappointing traders after his pledge last week to do "whatever it takes" to save the euro left many thinking action was imminent. (nL6E8J2BUX) (nL6E8J1JXK)

"Today people were looking for concrete steps and an outline of exactly what path the ECB would take to do that, and there weren't any," said Brian Gendreau, market strategist with Cetera Financial Group in Gainesville, Florida.

"Just as the market went up on the 'whatever it takes' comments it is coming down on the lack of specificity."

Markets rallied late last week in part on hopes for stimulus from the Federal Reserve but mostly as expectations grew the ECB would take action to protect the euro. Friday's jobs report could give a stronger indication whether the Fed, which has a freer hand than the ECB, will act shortly.

Data showed the number of Americans filing new claims for jobless benefits rose last week and manufacturers suffered an unexpected drop in orders in June, suggesting the economy is struggling to break out of a soft patch. (nL2E8J23AO)

The Dow Jones industrial average .DJI fell 92.18 points, or 0.71 percent, to 12,878.88. The S&P 500 Index .SPX dropped 10.14 points, or 0.74 percent, to 1,365.00. The Nasdaq Composite .IXIC lost 10.44 points, or 0.36 percent, to 2,909.77.

Major indexes fell for a fourth day running, totaling weekly losses so far of more than 1.5 percent.

Knight Capital shares fell after Wednesday's trading error forced the company to seek new funding. The stock closed down 62.8 percent at $2.58, their lowest since early October 1998. (nL2E8J27QE)

According to Thomson Reuters data, 67 percent of the 385 S&P 500 components that have reported results so far this quarter have beat earnings estimates. In the past four quarters, the average beat rate has been 68 percent.

General Motors Co GM.N posted a smaller-than-expected loss in Europe that helped the No. 1 U.S. automaker post a better-than-expected second-quarter profit. Shares slipped 2.6 percent to $19.14. (nL2E8J2263)

U.S. retailers reported stronger-than-expected sales for July but the gains were largely due to discounting and do not necessarily signal vigorous consumer spending for the rest of the year. (nL2E8J1JM5)

About 7.1 billion shares exchanged hands on the New York Stock Exchange, NYSE MKT and Nasdaq, above the year-to-date daily average of 6.75 billion.

About 8 issues fell for every 5 that rose on the NYSE and on Nasdaq the decline/advance ratio was roughly 7 to 5.

NYMEX- NEW YORK, Aug 2 (Reuters) - U.S. crude futures fell 2 percent on Thursday, pressured by reports showing a rise in jobless claims and a drop in factory activity in the United States, along with disappointment that the European Central Bank did not offer more concrete steps to boost economic growth.

CBOT SOYBEAN-Soybean futures on the Chicago Board of Trade fell for a third day on Thursday on profit-taking and signs of slowing demand for U.S. soy, traders said.

• USDA reported export sales of U.S. soybeans in the week ended July 26 at 246,400 tonnes for old and new crop years combined, the smallest combined-year total in nine months. New-crop sales were dented by a net cancellation of purchases by China of 163,500 tonnes. (nL2E8J24UP)

• USDA reported weekly U.S. soymeal sales at 270,800 tonnes (old and new crop years combined) and soyoil sales at 10,200 tonnes.

• Light showers with some locally heavier amounts fell on the U.S. Midwest crop belt overnight, providing some relief from the worst drought in a half century, meteorologists said.

• But updated midday forecasts indicated a tropical weather system now at the edge of the Caribbean Sea will not bring any moisture to the area when it makes landfall in about 10 days. (nL2E8J24RL)

• Argentina is not studying a possible increase in soy export taxes for now, an Economy Ministry source with direct knowledge of the situation said, knocking down market rumors of an imminent increase. (nL2E8J29LO)

• Market underpinned by concerns about the size of the U.S. soy crop. Brokerage INTL FC Stone late Wednesday projected 2012 U.S. soybean production at 2.730 billion bushels, with an average yield of 36.2 bushels per acre. (nC3E8GM02B)

• Crushers in top global soy buyer China raised their purchase of soybean from the government’s weekly cheap offers to 400,907 tonnes, the government said on Thursday. (nL4E8J23JM)

• CBOT reported no deliveries of soybeans or soymeal deliveries against August contracts. Soyoil deliveries totaled 2,445 contracts, with no strong commercial stoppers.

FCPO- SINGAPORE, Aug 2 (Reuters) - Malaysian crude palm oil ended flat after touching its lowest in the week on Thursday as wet weather forecast in the U.S. Midwest brought relief to drought-hit soy crop, easing some concerns of tighter oilseed supplies.

Investors were also left disappointed after the U.S. Federal Reserve stopped short of signalling fresh monetary stimulus, and are now looking ahead to the European Central Bank meeting later in the day for major policy action. MKTS/GLOB

"The market is pretty much disappointed that so far there's no promise coming from the Fed," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.

"Also, we have been talking about the U.S. dry weather for so long. The weather effect is no longer a bull factor for oilseeds but when the weather changes it becomes a bear factor."

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange ended one ringgit higher at 2,946 ringgit ($944) per tonne, supported by last-minute buying. Prices earlier touched a low at 2,905 ringgit, a level last seen on July 27.

Traded volumes stood at 23,869 lots of 25 tonnes each, slightly lower than the usual 25,000 lots.

A better chance of rain was expected late this week in portions of the drought-stricken U.S. Midwest, bringing some relief to the struggling soybean crops, an agricultural meteorologist said on Wednesday. (nL2E8J1276)

Market players have been pricing in the damage done by the relentless drought on soybean crops in the United States that squeezed soybean oil supply.

A drop in soybean oil supply could shift more vegetable oil demand to the cheaper palm oil.

Traders are looking out for July stock figures in No.2 producer Malaysia, which could climb on slowing exports and better production.

Malaysian palm oil exports fell by 15 percent and 19 percent in July from a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance respectively. PALM/ITS PALM/SGS

While the U.S crop scares appear to be receding, traders are eyeing El Nino's dry weather pattern which could return to Southeast Asia by end of this year and hurt production for top exporters Indonesia and Malaysia.

REGIONAL EQUITY- Aug 2 (Reuters) - Most Southeast Asian stock markets ended weaker on Thursday with Singapore falling from a near one-year high after the U.S. Federal Reserve stopped short of signaling fresh stimulus measures, disappointing investors.

Investors were also cautious ahead of a European Central Bank meeting which is expected to discuss policy actions, including resuming its bond-buying programme, to help drive down borrowing costs for Italy and Spain, which have soared to levels considered unsustainable for their economies.

Jakarta's Composite Index .JKSE fell 0.9 percent despite a foreign inflow of $16.6 million, Singapore's Straits Times Index .FTSTI lost 0.5 percent from its highest close since Aug. 4 last year, and the Philippines .PSI edged down 0.1 percent.

Bucking the trend, Malaysia .KLSE added 0.1 percent with a net foreign buying of $11.59 million, while Vietnam .VNI, the region's smallest bourse, added 0.9 percent.

Thailand .SETI was closed for a national holiday