RTRS-Indonesia palm export forecast lowered due to economic woes

JAKARTA, Aug 13 (Reuters) - The Indonesian Palm Oil Association (GAPKI) has lowered its estimate for palm oil exports from the world's top producer, an official said late on Monday, due to weaker demand from China and Europe.

Southeast Asia's largest economy is forecast to ship 17.59 million tonnes of palm oil in 2012, Susanto, head of marketing division at GAPKI, told reporters, versus an estimate of between 17.5-18 million tonnes earlier this year.

"Export of crude palm oil and its derivatives in 2012 is estimated to reach 17.59 million tonnes or below our previous target of 18 million tonnes," Susanto said. "One of the reasons is the European economic crisis and Chinese economic growth."

This year palm oil output from Indonesia is expected to be between 23 million and 25 million tonnes, compared with 22.5 million in 2011.

India, China and Europe are the main buyers of Indonesian palm oil, with exports totalling 8.6 million tonnes during the first six months of this year.

RTRS-UPDATE 2-U.S. soybean health improves with rain-USDA

CHICAGO, Aug 13 (Reuters) - The condition of the U.S. soybean crop improved last week, helped by recent rains that may boost harvest prospects for a crop that struggled through much of the summer due to the worst drought in five decades.

The rain also stabilized the corn crop, breaking a string of nine straight weeks where condition ratings dropped due to the scorching temperatures and dry soils, a U.S. Agriculture Department report released on Monday showed.

Ratings for both crops, however, remained at their lowest levels since 1988 and forecasts for harvest remained low even with the recent rainfall. USDA slashed its production and yield estimates for both crops in its supply/demand report released on Friday.

The government rated the U.S. soybean crop 30 percent good to excellent as of Aug. 12, up 1 percentage point from a week earlier and in line with the average of estimates in a Reuters survey of 12 analysts.

The improvement marked the first weekly uptick in soybean conditions since the government started rating this year's crop in early June.

"On the soybeans ... we perked up just a little bit," said Karl Setzer, grains analyst of MaxYield Cooperative. "The big thing is that we did not get any worse. The cooler temperatures, rainfall ... it has been a huge benefit. We could not have seen these rains come at a more perfect time in the development stage of the soybean crop."

The corn crop was rated 23 percent good to excellent, unchanged form a week earlier. Corn conditions also matched analysts' expectations.

The rain could raise harvest forecasts for soybeans, which are still in their critical yield-determining phase of development.

"The rains will help the soybeans that are filling," said Terry Basol, field agronomist with Iowa State University Extension. "The bulk of the soybeans that we have are in that seed fill stage. It is a long growth stage for soybeans."

Soybean plants reach their most critical stage of development -- called pod-setting -- about a month later than corn's reproductive pollination phase. They also can withstand drought a little better because they have a much smaller biomass than corn, and can idle their metabolic activity at night.

This year, both corn and soy plants are maturing one or two weeks earlier than usual after farmers took advantage of one of the mildest winters on record to plant seeds early and at a record pace.

Most of the corn crop has already passed through pollination and farmers were gearing up for harvest in many areas, so market watchers were not raising their harvest forecasts despite the turn to favorable weather.

"Some producers are harvesting corn already while others are finishing up final preparations to begin harvest," the Illinois field office of USDA's National Agricultural Statistics Service said in a report.

Light showers and cooler temperatures are forecast around the Midwest for the next week, said John Dee, an agricultural meteorologist for Global Weather Monitoring.

RTRS-UPDATE 1-Drought relief but no bonanza for US crops

CHICAGO, Aug 13 (Reuters) - Midday weather updates on Monday showed no change from early outlooks for light showers and cooler temperatures over the next week in the U.S. crop belt which will slow deterioration of the drought-stressed corn and soybean crops, an agricultural meteorologist said on Monday.

"Everything looks pretty much the same," said John Dee, meteorologist for Global Weather Monitoring.

Dee said showers and cooler temperatures in the Midwest would slow deterioration of corn and soybean crops but there would be no big jump in crop conditions.

A Reuters poll of 12 analysts on Monday indicated the rains over the past two weeks have helped reverse the season-long decline in U.S. soybean conditions and would stabilize corn conditions that have declined for nine straight weeks.

Dee said light rains fell over the weekend in the northern Midwest and similar rainfall was expected on Monday in Michigan, Indiana and Ohio and from late Wednesday into Friday about 85 percent of the Midwest can expect from 0.30 to 0.80 inch (0.8-2 cm) of rain.

"Temperatures will be more comfortable with highs in the 80s (degrees Fahrenheit) (27-32 degrees Celsius) in the north and the low 90s F in the south," Dee said.

Dee and other crop experts said the U.S. corn crop was already harmed beyond repair by the summer's heat but some of the late planted soy may be helped. "It will allow some of the filling or pod setting soybeans to develop but the damage has been done to the corn crop," he said.

Commodity Weather Group (CWG) said nearly one-third of the Midwest soybean crop remained under stress from lack of moisture and the soybean area stressed by drought may expand slightly over the next 10 days.

Parts of central Illinois, Missouri, Nebraska, western Iowa, southern Wisconsin, southwestern Minnesota and southern South Dakota will be most prone to stress, CWG said.

Also, nearly half of the Delta in the lower Mississippi crop region remains unfavorably dry for late growth in dryland areas, but rains were expected to expand from late this week into late August and will ease moisture deficits, according to CWG.

Trader's Highlight

DJI- NEW YORK, Aug 13 (Reuters) - World stock markets eased on Monday after weak Japanese economic data added to the latest reports showing a slowing global economy, while the euro rose as investors exited bearish bets against the common currency.

European shares posted their worst day in more than a week and U.S. stocks snuffed a six-day rally for the S&P 500 after Japan reported its gross domestic product expanded just 0.3 percent in the second quarter.

Japan's growth was half the expected rate, raising doubts about the global economy while highlighting the impact of Europe's debt crisis on world demand.

In another sign of potential slowing demand, Chinese customs data showed output of refined copper dropped 6.8 percent in July from record high production the previous month. Chinese copper consumption is considered an economic bellwether.

The Dow Jones industrial average .DJI closed down 38.52 points, or 0.29 percent, at 13,169.43. The Standard & Poor's 500 Index .SPX fell 1.76 points, or 0.13 percent, to 1,404.11. The Nasdaq Composite Index .IXIC rose 1.66 points, or 0.05 percent, to 3,022.52.

NYMEX- NEW YORK, Aug 13 (Reuters) - U.S. crude oil futures dipped for a second straight session on Monday after data showing weaker second quarter economic growth in Japan stoked global demand worries and outweighed geopolitical risks related to Middle East tensions.

CBOT SOYBEAN- Most-active November soybean futures SX2 on the Chicago Board of Trade fell more than 2 percent, halting a three-day rally as improving weather in the U.S. Midwest brightened crop prospects and helped trigger fund long liquidation, traders said.

Weather forecasts called for light showers and cooler temperatures over the next week in the U.S. crop belt, which will slow deterioration of the drought-stressed corn and soybean crops - meteorologist.

Analysts surveyed by Reuters expected the USDA later on Monday to rate 30 percent of the U.S. soybean crop in good-to-excellent condition, up 1 percentage point from the previous week, following much-needed rains.

Ahead of monthly data due on Tuesday from the National Association of Oilseed Processors, the average estimate for the July U.S. soy crush was 132.5 million bushels, compared with 134.156 million in June.

The supplement to the U.S. CFTC's weekly report on commitments of traders showed large speculators cut their net long position in CBOT soybeans by more than 15,000 contracts in the week ended Aug. 7, to a net 188,985 contracts.

FCPO- SINGAPORE, Aug 13 (Reuters) - Malaysian crude palm oil futures tumbled to a near ten-month low on Monday, mirroring losses in grains and oilseed markets where traders booked profits from a U.S. drought-driven rally and as rising local stocks weighed on sentiment.

The monthly supply and demand report by the U.S. Department of Agriculture (USDA) forecast a lower soybean output on late Friday, which is slightly bullish for palm oil, but traders said the downgrade had been factored in.

The market continued to price in improving production and a lacklustre demand that pushed Malaysia's palm oil inventory level to a five-month high of nearly two million tonnes in July.

"Global vegetable oils are better supplied than global oilseeds and we therefore expect prices to underperform. The price discount of Bursa palm oil to CBOT soyoil averaged a large $223 a tonne in July and did not spark strong export demand," Rabobank analysts said in a note to clients.

"As a result, we expect this spread to continue to move wider as bullish sentiment remains in CBOT prices with the worst drought in more 50 years continuing to hamper U.S. soybean production," they added.

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange dropped nearly 2 percent to 2,825 Malaysian ringtgit -- a level unseen since Oct 20. last year. The contract later settled down 0.4 percent to 2,871 ringgit.

Palm oil ended the previous week with a 1.2 percent loss, the fifth consecutive week that the edible oil is in the red.

Total traded volumes stood at 29,649 lots of 25 tonnes each, just slightly lower than the usual 30,000 lots.

REGIONAL EQUITY- Aug 13 (Reuters) - Southeast Asian stock markets mostly edged up on Monday on hopes that weaker economic outlook could spur stimulus measures around the world, but concerns over sluggish growth capped the gains with Jakarta underperforming the region.

The growth concerns trimmed the day's trading volumes as investors stayed on the sidelines for directions from July U.S. retail sales and consumer prices, along with the euro zone's second quarter gross domestic product reading, which are expected to be released on Tuesday.

Singapore's Straits Times Index .FTSTI ended 0.35 percent firmer, the Philippine index .PSI gained 0.16 percent, and Vietnam .VNI, the region's best performer for this year ended 0.14 percent stronger.

Malaysia .KLSE added 0.1 percent to finish at a near record high.

Bucking the trend, Jakarta's Composite Index .JKSE fell 0.9 percent led by financials with a 1.2 percent fall in Bank Mandiri Persero Tbk BMRI.JK and 2.6 percent loss in Bank Negara Indonesia Persero Tbk BBNI.JK.