UPDATE 2-Thai mills pick up soymeal as Asian buyers return - RTRS

PHUKET, Thailand, Aug 29 (Reuters) - Thai feed mills have bought up to 1 million tonnes of soymeal in recent deals, while Vietnam is in the market to cover some 200,000 tonnes, traders said, as Asian buyers resume purchases after staying away for more than two months.

Asian feed grain importers have not been active in the market since June as benchmark Chicago corn and soybean futures started climbing, fired up by a devastating drought that has scorched crops across the U.S. grain belt.

India has signed its first new-crop soymeal deal with a sale of 25,000 tonnes to Europe, three traders told Reuters on the sidelines of a regional grains conference in Phuket.

While Thai mills paid $30 to $50 a tonne premium over Chicago Board of Trade futures for South American cargoes, Indian soymeal was sold at $610 a tonne, free alongside ship.

"Initially some big players started buying soymeal in private tenders which triggered purchases by smaller mills as they didn’t want to be left behind," said one of the traders who works at an international trading company.

"The demand seems to be picking up and we expect more deals in the coming weeks."

Taiwan bought 180,000 tonnes of U.S. and South American soybeans after purchasing a similar volume last week, traders said. The Philippines booked more than 300,000 tonnes of soymeal from the United States last week, the added.

Most Thai deals have been signed in the last two weeks.

Asian buyers are likely to sign more deals with monsoon rains improving the outlook for India's soybean crop and forecasts of a record-large output in Brazil next year as all-time high prices encourage farmers to plant more.

"It is a good time to lock in some supplies now as everyone is estimating good production in India and a record-high output in Brazil," said another trader. "Any problem with these crops will add fuel to the rally."

U.S. corn futures CZ2 have climbed 52 percent since the beginning of June, while soybeans SX2 have jumped nearly 36 percent as the worst drought in 56 years curbs yields in the United States, the world's top exporter.

Wheat Wc1 has surged about 33 percent with a Black Sea drought and poor rains in Australia adding to supply woes.

VIETNAM, INDONESIA TO SEEK SOYMEAL

Vietnam is expected to book some 200,000 tonnes of soymeal for November and December arrival, while Indonesia is open for around 100,000 tonnes for the fourth quarter shipment.

"We expect Vietnam to buy Indian cargoes but it all depends on the prices," the third trader said. "Indian prices have started moving higher since the deal to ship soymeal to Europe and if it keeps going up, the demand will shift to South America," the trader said on the sidelines of the conference.

The 9th Southeast Asia-U.S. Agricultural Cooperators Conference -- organised by lobby groups the American Soybean Association International Marketing, the U.S. Grains Council and the U.S. Wheat Associates -- brings together U.S. exporters and Asian buyers.

Indian soymeal prices have risen to around $645 a tonne, free on board, compared with $690 a tonne, including cost and freight, being offered for South American cargoes.

This summer's historic drought has inflicted more damage to corn and soybean crops around the U.S. Midwest than the government is predicting, the Pro Farmer newsletter said last week after a tour of the grain belt.

It estimated U.S. corn production at 10.478 billion bushels, based on a yield of 120.25 bushels per acre. That compares with the U.S. Department of Agriculture's (USDA) latest forecast of a 10.779 billion bushel crop on a yield of 123.4 bushels per acre.

Soybean production was seen at 2.60 billion bushels on a yield of 34.8 bushels per acre. Earlier this month, the USDA pegged the soybean harvest at 2.692 billion bushels and yield at 36.1 bushels per acre.

UPDATE 1-Isaac's downpours threaten US rice, soybeans - RTRS

CHICAGO, Aug 29 (Reuters) - Torrential rain from Hurricane Isaac, 20 inches or more in some areas, threaten the soybean and rice crops in the Deep South, an agricultural meteorologist said on Wednesday.

"Soybeans are vulnerable and rice may be the most vulnerable to damage," said Andy Karst, meteorologist for World Weather Inc.

The lumbering Category 1 hurricane was lashing the Gulf Coast with wind and rain, threatening to flood towns in Mississippi and Louisiana. There were storm surges of up to 12 feet (3.7 metres) and sustained winds up to 75 miles per hour (120 kilometres per hour).

The storm's rain is currently moving across the lush crop region of the U.S. Deep South, known as the Delta, but is forecast to reach crops in the central Midwest later this week and weekend.

A large amount soybeans, cotton, and rice are grown in the south, while in corn and soybeans are more common in the Midwest.

The Louisiana soybean harvest was 18 percent complete, Mississippi's 9 percent and Arkansas' 8 percent, USDA crop reports said on Monday.

All three states are receiving extremely heavy rain from the slow moving storm, which is forecast to become a tropical depression as it moves northward into the weekend.

Many cash soybean buyers in the south and in parts of the Midwest raised bids due to the slowed harvest and the potential loss of production.

Most of America's rice is produced where the eye of the hurricane is passing.

U.S. rice was 27 percent harvested as of Monday and most of the remainder had headed meaning it was nearly ready for harvest and susceptible to damage from flooding.

Don Keeney, meteorologist for MDA EarthSat Weather, told the Reuters Ag Forum early on Wednesday that he expected rice paddies in Louisiana to be damaged.

Keeney also expected substantial harvest delays in the Delta over the next three days and in the Midwest by the weekend.

"Just about all of the Delta will be affected from the storm but the biggest rains will cover Arkansas, Louisiana and southwestern Mississippi, covering about 75 percent of the Delta," Keeney said.

"The main issue in the Midwest will be the heavy rains."

Lighter rainfall, from 0.25 inch to 1.00 inch, can be expected by the weekend into early next week in far northern areas of the U.S. Midwest, meteorologists said.

U.S. harvests had already been slowed by showers this past week and rain from Hurricane Isaac should prevent any significant progress this week, especially in the central Midwest and Deep South.

The U.S. Department of Agriculture said on Monday that 6 percent of the U.S. corn crop had been harvested. It said 26 percent of it was mature, with most of that in the U.S. South and in the path of Isaac's torrential rainfall.

The USDA said 8 percent of the soybean crop was dropping leaves, or mature, and rice harvest was 27 percent complete. On the cotton, 24 percent of the crop's bolls were open and ready for harvest.

RTRS- Indonesia sets crude palm export tax at 13.5 pct for Sept

JAKARTA, Aug 29 (Reuters) - Indonesia, the world's top palm oil producer, will cut its export tax for crude palm oil to 13.5 percent for September, down from 15 percent in August and keep its tax on cocoa beans at 5 percent for September, a trade ministry official said on Wednesday.

The government will also lower the export tax for RBD palm olein to 6 percent in September, versus 7 percent in August.

Trader's Highlight

DJI- NEW YORK, Aug 29 (Reuters) - U.S. stocks edged higher on Wednesday in the lightest trading of the year as investors waited for a key speech by Federal Reserve Chairman Ben Bernanke on Friday.

Daily volume this week has been very low, even for a seasonally slow period, with the market recording three of the four lowest volume full sessions of 2012. The low volume reflected investors' reluctance to place big bets before Bernanke's speech.

What little excitement there was came from data showing pending home sales rose 2.4 percent in July, a bigger gain than expected, according to the National Association of Realtors. (Full Story) An index of housing shares .HGX was up 0.5 percent.

"We're seeing consistently good numbers out of the housing market. It's hard to get too negative on the U.S. economy with the housing market doing better than expected," said Paul Zemsky, chief investment officer of Multi-Asset Strategies at ING Investment Management in New York.

"I think the U.S. is doing pretty well today, given what the rest of the world has done," he said. The Shanghai Composite index .SSEC hit its lowest close since February 2009, while the S&P 500 is trading near a four-year high.

Bernanke addresses a conference of central bankers in Jackson Hole, Wyoming, and could announce new measures to boost growth. He is expected to stoke expectations for a third round of quantitative easing, though he may not detail the timing of the Fed's action. (Full Story)

Volume traded on the New York Stock Exchange, the Nasdaq and the Amex, was 4.41 billion shares compared with the previous low on Monday of 4.46 billion. The year-to-date average is about 6.6 billion.

Shares of customer reviews website Yelp Inc YELP.N jumped 22.5 percent to $22.37 in a bit of a surprise for investors as it was the day insiders were free to sell their holdings. (Full Story)

The Dow Jones industrial average .DJI inched up 4.49 points, or 0.03 percent, to 13,107.48. The Standard & Poor's 500 Index .SPX rose 1.19 points, or 0.08 percent, to 1,410.49. The Nasdaq Composite Index .IXIC gained 4.04 points, or 0.13 percent, to 3,081.19.

NYMEX- NEW YORK, Aug 29 (Reuters) - U.S. crude futures fell on Wednesday on expectations that damage from Hurricane Isaac to Gulf of Mexico oil production will be limited and in reaction to data showing that crude oil stocks rose sharply last week in the United States.

U.S. crude oil inventories rose 3.78 million barrels to 364.52 million in the week to Aug. 24, the U.S. Energy Information Administration said on Wednesday, against expectations stocks would fall 1.5 million barrels.

CBOT SOYBEAN- Aug 29 (Reuters) - Soybean futures on the Chicago Board of Trade rose 1.8 percent on Wednesday, their biggest rise in a week, on concerns about rain from Hurricane Isaac slowing the soy harvest in the U.S. Mississippi River Delta region, traders said.

• Technical buying and spillover strength from a 3 percent surge in CBOT wheat lent support.

• Torrential rains from Hurricane Isaac, with accumulations of 20 inches or more in some areas, threaten the soybean and rice crops in the Deep South, an agricultural meteorologist said.

• Thai feed mills have bought up to 1 million tonnes of soymeal in recent deals, while Vietnam is in the market to cover some 200,000 tonnes, traders said, as Asian buyers resume purchases after staying away for more than two months.

• A record-setting rally in grains is unlikely to dent demand from Southeast Asia with strong growth in Indonesia, the region’s biggest economy, and rising poultry exports from Thailand driving consumption, a U.S. soybean industry official said.

• Soybeans rose despite weaker cash basis bids for soybeans at the U.S. Gulf. The CIF soy basis was steady to weak on limited spot demand and as shippers shut down operations as Isaac made landfall near New Orleans.

FCPO- SINGAPORE, Aug 29 (Reuters) - Malaysian crude palm oil futures slipped to the lowest in nearly a fortnight, as traders booked profits with market focus shifting to rising stocks level in the world's second-largest producer.

Palm oil posted two straight weeks of gains as the worst drought in 56 years ravaged soybean crops in the U.S. Midwest, limiting soybean oil supply and raising demand prospects of the cheaper palm oil.

But prices have retreated by more than 2 percent this week, as market players eyed a build-up in Malaysian palm oil stocks on higher production in August.

"At the moment we still see prices heading towards no-man's land, although my view is that it's more on the bearish side rather than a bullish front," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.

"Stocks are going to rise but the level I'm looking at is around 2.1-2.15 million tonnes."

At closing, the benchmark November 2012 contract FCPOc3 on the Bursa Malaysia Derivatives Exchange fell nearly 1 percent to 3,000 ringgit ($961) per tonne. Prices earlier hit 2,978 ringgit, the lowest level since Aug. 17.

Total traded volume stood at 40,158 lots of 25 tonnes each, much higher than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, Aug 29 (Reuters) - Shares in Thailand and Indonesia fell to three-week lows on Wednesday amid a broad sell-off in large cap stocks while Singapore and Malaysia ended nearly flat as investors cut back on risk ahead of a speech by the U.S. Federal Reserve chairman.

The main Thai index .SETI close down 1.05 percent at 1,220.16, the lowest close since Aug. 10. Jakarta's Composite Index .JKSE slipped 1.2 percent to 4,093.17, the lowest close since Aug. 8.

Bucking the trend, Vietnamese shares snapped a two-day losing streak after Standard & Poor's said the problem at a Vietnamese bank was not contagious.

The Ho Chi Minh Stock Exchange's VN Index .VNI gained 1.9 percent, regaining some of the 3.5 percent loss of the previous two sessions. It suffered 7.9 percent drop last week as the arrests of Asia Commercial Bank's ACB.HN top executives worried investors of spreading banking risks.