RTRS- Brazil's new soybean crop seen up 17.8 pct-Celeres

SAO PAULO, Aug 6 (Reuters) - Brazil's new 2012/13 soybean crop, which begins planting in September, will produce a record 78.1 million tonnes, up 17.8 percent from last year's drought-parched harvest, local analyst Celeres said in its first forecast of the season.

Celeres said area dedicated to soybeans would grow by more than 8 percent to 27.14 million hectares from last season. If confirmed, that would be one of the biggest annual increases in planted area in almost a decade.

Dry weather over the past season erased roughly 10 million tonnes from Brazil's 2011/12 soy crop, which, combined with the drought affecting the current U.S. grain crop, has driven soybean futures prices Sc1 into record territory in recent weeks.

Brazil's main grain belt is expected to pass from the drier La Nina weather conditions into a wetter El Nino scenario later this year, which typically favors planting and crop growth in South America.

Early estimates of Brazil's new soy crop are showing one of the biggest jumps in year-to-year output the country has seen in a decade. (nL1E8GVIL2)

Fertilizer, seed and other agricultural input sales have been at record levels ahead of the coming crop. Producers have given early planting indications that they will sow a massive crop, giving up corn, cotton and pasture land to plant soy.

Record high prices in the midst of the U.S. drought and a more favorable exchange rate since the weakening of the real BRBY against the dollar this year are the main drivers of the rush to plant soybeans that will be harvested in early 2013.

Celeres' forecast for an 8 percent increase in planted area over last year -- which was a record planting as well -- would mean the biggest annual expansion since 2004.

This is even more significant given that the total area planted is 5 million hectares bigger, land costs are far higher and environmental restrictions are tougher than eight years ago.

Celeres' output forecast is modest, however, compared with some market views that see the next crop at easily more than 80 million tonnes.

The local analyst put next season's yields at a conservative 2.877 tonnes per hectare. Excluding the horrid 2.640 tonnes per hectare last season due to the drought, Brazil has averaged more than 2.9 tonnes per hectare in past years and harvested a record more than 3 tonnes per hectare in 2010/11.

RTRS- Rains provide some relief to drought-stressed US crops

CHICAGO, Aug 6 (Reuters) - Rains over the weekend across most of the U.S. Midwest corn and soybean growing region, and forecasts for more rain this week, will help relieve stress on crops, an agricultural meteorologist said Monday.

"It's an improved forecast, not a perfect one," said John Dee, meteorologist for Global Weather Monitoring. "I wasn't so surprised about the amounts of rain, but the 85 percent coverage was better than expected."

The midday weather update showed little change in the expected precipitation for this week, while temperatures turned a little cooler for the U.S. Midwest and Plains, said Steve Silver, a meteorologist with Cropcast, a division of MDA EarthSat weather.

The biggest changes in the midday U.S. computer forecasting model came in the 11- to 15-day period, he said.

"It is much warmer than the earlier run, especially in the northern and central Plains and the northwestern Midwest -- and notably drier across the central and southern Plain into much of the southern and eastern Midwest," Silver said.

The worst drought in more than half a century has caused serious harm to the U.S. corn crop, reducing yield and export prospects, and is beginning to cut into soybean production prospects.

Cooler temperatures and showers came too late to help much of the corn crop, crop specialists say, but soybeans -- a later maturing crop -- will benefit from the recent rains.

From 0.20 to 0.80 inch of rain, with locally heavier amounts, fell on about 85 percent of the Midwest over the weekend. More rain was forecast for Wednesday and Thursday.

The Midwest was nearing the end of the extreme heat, while hot weather remained worrisome in the Southwest.

"A good chunk of the Midwest will get a welcome break from the heat late this week and early next week with highs in the 80s degrees Fahrenheit," Dee said. "The rains and cooler temperatures will help but not end the problem," he said.

Chicago Board of Trade corn and soybeans soared to record highs in July due to the drought-related crop reductions. Prices have been falling so far in early August.

Commodity Weather Group on Monday said the weekend rains favored about half of the Midwest, but nearly a third of the soybean growing area would remain dry.

USDA will release its weekly crop condition report later Monday afternoon. This summer's corn and soybean crops are in their worst condition since the last big U.S. drought of 1988.

Nearly two-thirds of the contiguous United States were suffering from 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.

Trader's Highlight

DJI- NEW YORK, Aug 6 (Reuters) - U.S. stocks closed at three-month highs for the second day in a row on Monday, extending last week's rally on the hope for more assistance for the troubled euro zone.

The S&P 500 rose to its highest point since early May, but pared its gains going into the close. The benchmark index also failed to breach 1,400, a level that could spur further buying if convincingly broken. The S&P 500 hasn't closed above the 1,400 level since May 2.

Sentiment in Spanish and Italian bond markets - the forefront of the three-year debt crisis - improved, with two-year Spanish yields falling to 3.42 percent on Monday, less than half of a late July high of over 7 percent. (nL6E8J6ATV)

European Central Bank President Mario Draghi has said the ECB may buy short-dated bonds to lower borrowing costs to help Europe, which has been mired in a debt disaster. European shares closed at four-month highs. (nL6E8J6BIH)

"Nothing has been fixed in Europe, but things seem to be getting better, and it seems unlikely that there will be any kind of real blow-up," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. "I'm worried I may be too bearish."

Manley said he saw the S&P 500 trading in a range between 1,250 and 1,450, "which will likely persist for a while, with continued huge volatility."

Wall Street rallied on Friday with the S&P 500 marking its fourth straight week of gains on a strong U.S. jobs report and renewed hope that European authorities would act to contain the euro zone's debt crisis through ECB purchases of Italian and Spanish bonds.

Meanwhile, a group of investors will rescue embattled market maker Knight Capital Group Inc KCG.N in a $400 million deal that keeps the company in business, Knight said on Monday. But it comes at a huge cost to investors. The stock fell 24.2 percent to $3.07. (nL2E8J60KK) (nL2E8J52HY)

The Dow Jones industrial average .DJI rose 21.34 points, or 0.16 percent, to 13,117.51 at the close. The Standard & Poor's 500 Index .SPX gained 3.24 points, or 0.23 percent, to 1,394.23. The Nasdaq Composite Index .IXIC advanced 22.01 points, or 0.74 percent, to end at 2,989.91.

Of the 411 companies in the S&P 500 that have reported second-quarter earnings through Monday morning, 67.4 percent have reported earnings above analysts' expectations, near the four-quarter average of 68 percent, according to Thomson Reuters data.

About 60 percent of stocks traded on the New York Stock Exchange closed higher while on the Nasdaq, 59 percent of stocks closed higher.

Volume was light, with about 5.33 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 7.84 billion.

NYMEX- NEW YORK, Aug 6 (Reuters) - U.S. crude oil futures ended higher on Monday for a second straight session, lifted by stronger equities and turmoil in the Middle East which raised the geopolitical risk premium.

 

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell nearly 3 percent and most-active November SX2 hit a one-week low as improved weather conditions in the U.S. Midwest boosted yield prospects, traders said.

* Rains over the weekend across most of the U.S. Midwest and forecasts for more rain this week will help relieve stress on drought-hit crops, an agricultural meteorologist said. (nL2E8J6108)

• Benchmark November soybeans SX2 unofficially closed below its 20-day moving average for the first time since June 5.

• CBOT soymeal and soyoil followed soybeans to close lower, but soyoil gained against soymeal on oil/meal spreading.

• Analytics firm Celeres projected Brazil's 2012/13 soybean crop at 78.1 million tonnes, on plantings of a record 27 million hectares. (nL2E8J674S)

• Traders expected USDA in its weekly crop progress report later on Monday to report U.S. soybean ratings at 28 percent good to excellent, down 1 percentage point from the previous week. (nC3E8H101X)

• USDA confirmed sales of 106,000 tonnes of U.S. soybeans to China for 2012/13 delivery. (nW1E8I200A)

• USDA reported export inspections of U.S. soybeans in the latest week at 12.720 million bushels, within trade expectations for 12 million to 16 million.

• CBOT reported no soybean or soymeal deliveries against August futures, while soyoil deliveries totaled 1,296 contracts.

FCPO- SINGAPORE, Aug 6 (Reuters) - Malaysian crude palm oil ended flat on Monday as expectations of higher stocks in No.2 producer Malaysia erased higher risk appetite on better-than-expected U.S. jobs data.

Investor optimism also grew on talks of more stimulus measures by European Central Bank to tackle the region's crisis but caution remained as traders eye stocks data by industry regulator Malaysian Palm Oil Board (MPOB) due later this week.

"In the near term, the upcoming MPOB’s July inventory data could swell above the psychological range of 2 million tonnes," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, in a note.

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange ended flat at 2,918 ringgit ($940) per tonne. Palm oil posted a 0.3 percent loss last week, its fourth straight weekly loss.

Traded volumes stood at 21,893 lots of 25 tonnes each, thinner than the usual 25,000 lots.

Technicals look bearish with Reuters market analyst Wang Tao saying palm oil will fall to 2,880 ringgit as a downtrend from 3,161 ringgit has resumed. (nL4E8J60FU)

Market players are waiting for fresh trading cues from a key supply-demand report from the U.S. Department of Agriculture later this week that will quantify soy crop damage from the worst drought in 56 years. GRA/

A lower quality of soybean crop contributing to a drop in soybean oil supply could shift more vegetable oil demand to the cheaper palm oil.

Weather concerns closer to Southeast Asia are also in focus as El Nino's dry weather pattern could return by end of the year and hurt production for top palm oil producers Indonesia and Malaysia.

Malaysian palm oil exports in July suffered a double-digit fall from a month ago, reflecting slowing demand from top food buyers China and India, according to cargo surveyor data. PALM/ITS PALM/SGS

Oil retreated from last week's gains, easing towards $108 a barrel on Monday as investors took profits and awaited more clues on the health of the global economy and the outlook for oil demand. O/R

REGIONAL EQUITY- Aug 6 (Reuters) - Most Southeast Asian stock market gained on Monday with Singapore hitting a one-year high as investors bought into the region's risky assets after stronger-than-expected U.S. jobs data and emerging optimism for European action on the debt crisis.

Singapore's Straits Times Index .FTSTI ended 0.7 percent firmer to its highest since Aug. 4, last year, led by financials, with DBS Group Holdings Ltd DBSM.SI and Oversea-Chinese Banking Corporation Ltd OCBC.SI gaining more than 1 percent each.

Thailand .SETI and Malaysia .KLSE gained 0.9 percent and 0.3 percent respectively in strong volumes, close to their three-week highs.

Indonesia .JKSE edged up 0.1 percent and Vietnam .VNI, the region's smallest bourse, rose 1.2 percent.