RTRS- Asia Oils-China's palm oil demand slows on high stocks

SINGAPORE, Sept 25 (Reuters) - China, the world's second largest edible oil buyer, will not seek more nearby shipments for palm oil despite sharp price declines recently as port stocks of edible oils remained high, traders said.

Refined palm olein, used in cooking oil, trades at around 7,150 yuan ($1,100) per tonne at the China's southern port of Guangzhou compared to above 9,500 yuan for competing soybean oil.

While the steep discount should attract more cargoes, stocks at China's ports almost double in end August from a year ago that has prompted traders to slow their orders.

Also, rising stocks in Indonesia and Malaysia, world's top palm oil producers, have made traders wait for further declines in benchmark Bursa Malaysia palm oil futures 0#FCPO: that set the tone for physical prices.

"Stocks in Malaysia could still go higher in September and October, so although current price discount is attractive, the discount may still grow steeper," said a Shanghai-based trader.

Traders and analysts said China's port stocks stood at 700,000-750,000 tonnes in August, easing from almost one million tonnes seen in May, but remaining much higher than the 450,000-500,000 tonnes seen last year.

China has enough edible oil stocks to fulfill demand for the Golden Week holiday from Sept. 30 to Oct. 7, said another vegetable oil analyst also based in Shanghai.

The stock buildup also makes it easier for China to stabilise local edible oil prices and rein in inflation, which ticked up to 2 percent in August from July's 30-month low of 1.8 percent.

A rush of orders for palm oil could begin in November and December as traders begin to stockpile for Lunar New Year in February next year, analysts said.

But some traders said a slowdown in the Chinese economy -- the world's second largest -- could limit orders. Recent data shows manufacturing in China contracted for the 11th month in a row in September, setting the stage for a seventh quarter of slowing economic growth.

"It depends on the economy of China also. If the economy picks up, they may start to import a lot more," said a regional vegetable oil trader in Singapore. ($1 = 6.3093 Chinese yuan)

RTRS- Soybean price to stay firm despite fall in last week -Oil World

HAMBURG, Sept 25 (Reuters) - Soybean futures remain fundamentally well supported in the near term after poor Brazilian, Argentine and U.S. crops despite the sharp falls seen in the last week but are likely to fall in early 2013, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“We expect prices of soybeans and soymeal to be firm in the near term,” Oil World said. “Pronounced price pressure is expected to develop in Jan./June 2013 if the anticipated large South American crops materialize.”

U.S. soybean futures reached an all-time record of $17.94-3/4 a bushel in early September, lifted by supply worries after drought ravaged U.S. crops after sharply lower harvests in South America. But prices fell sharply in the past week as U.S. farmers sold their new crop heavily to cash in on high prices, while new estimates said the drought-damaged U.S. crop was larger than feared. (Full Story) (Full Story)

Chicago soybean contracts Q0#S: for delivery up to January are sharply higher than for contracts for delivery from March, when large new South American crops will arrive on the world market, Oil World said.

“The strongly inverted price structure has promoted substantial (U.S.) selling/harvest pressure, giving the false impression of ample U.S. soybean supplies,” it said.

But quick sales of the new and smaller U.S. soybean crop will only aggravate the supply shortage looming in the U.S. in the second half of the 2012/13 season following the smaller soybean crop, it said.

“A severe supply deficit will develop on the U.S. market in 2013 primarily in soybeans and soymeal,” it said. “The U.S. is also facing an increasing supply deficit of oils and fats but - as opposed to the U.S. feed sector - vegetable oils consumers have already become accustomed to increasingly rely on imports, primarily of canola (rapeseed) and palm oil.”

Trader's Highlight

DJI-NEW YORK, Sept 25 (Reuters) - The S&P 500 suffered its worst day since June on Tuesday, pulled lower by Caterpillar Inc CAT.N after it cut its profit outlook, the latest high-profile company to warn about profit growth.

Technology shares came under pressure after a second day of weakness for Apple Inc AAPL.O, the world's most valuable public company. Shares fell 2.5 percent to $673.54 as the company sold out of its initial supply of the new iPhone, raising concerns about keeping up with demand.

Caterpillar, the heavy equipment maker, said on Monday sluggish global growth was responsible for reduced estimates. Other companies to recently cut expectations include FedEx Corp FDX.N and Norfolk Southern NSC.N.

Shares of Caterpilar were the biggest weight on the Dow for a second day and ended down 4.2 percent at $87.01. That was the stock's biggest daily percentage drop since May.

Tuesday's decline reversed earlier gains attributed to portfolio "window dressing" as the quarter ends. Stronger-than-expected figures on U.S. consumer confidence also contributed to temporary gains.

This is "a market that has rallied and climbed a wall of worry. Right now the market is getting skittish and looking for reasons for buyers to be less aggressive," said Jim Fehrenbach, head of equity distribution at Piper Jaffray in Minneapolis.

The Dow Jones industrial average .DJI was down 101.37 points, or 0.75 percent, at 13,457.55. The Standard & Poor's 500 Index .SPX was down 15.30 points, or 1.05 percent, at 1,441.59, its fourth day of losses. The Nasdaq Composite Index .IXIC was down 43.06 points, or 1.36 percent, at 3,117.73.

It was the S&P 500's biggest percentage daily loss since June 25 and the biggest for the Nasdaq since July 20.

The S&P 500 is up 2.5 percent so far in September, historically a difficult month for the market, and recently hit the highest level in nearly five-years.

For the quarter,the S&P is up 5.8 percent so far, with gains largely tied to the latest moves by the European Central Bank and the U.S. Federal Reserve to stimulate their economies.

San Francisco Fed President John Williams said on Monday he expected the central bank to expand its bond-buying program next year to more aggressively combat the unemployment rate, but Philadelphia Fed President Charles Plosser countered on Tuesday saying that the latest monetary stimulus will not do much to boost economic growth or lower unemployment.

Economic data from the Conference Board showed U.S. consumer confidence jumped to its highest in seven months in September.

Two separate reports showed home prices rose for another month in July, though the gains were not as strong as the previous month.

Volume was roughly 6.75 billion shares traded on the New York Stock Exchange, the Nasdaq and the Amex, compared with the year-to-date average daily closing volume of 6.54 billion.

Decliners outnumbered advancers on the NYSE by about 11 to 4 , and on the Nasdaq by about 2 to 1.

NYMEX- NEW YORK, Sept 25 (Reuters) - U.S. crude futures fell on Tuesday for a second straight session as concerns about slowing economic growth and rising U.S. crude inventories countered fears about potential supply disruptions in the Middle East.

 

CBOT SOYBEAN-Soybean futures on the Chicago Board of Trade ended higher on bargain buying, one day after the spot contract Sc1 fell to an 11-week low on a continuous price chart, traders said.

* However, trade was choppy and soybean futures fell at times on seasonal pressure from the expanding U.S. harvest.

• The U.S. Department of Agriculture late Monday said the U.S. soybean harvest was 22 percent complete, well ahead of the five-year average of 8 percent. US/SOY

• The nine-day relative strength index for CBOT November soybeans SX2 stood at 31, nearing the technically oversold range of 0 to 30.

• Soymeal futures closed higher while soyoil closed lower, losing ground to soymeal on meal/oil spreading.

• Traders have begun positioning ahead of USDA's quarterly stocks report on Friday. The average estimate for U.S. Sept. 1 soybean stocks among 17 analysts surveyed by Reuters was 131 million bushels, nearly unchanged from USDA's latest monthly forecast of 130 million.

• Soybean futures remain fundamentally well supported in the near term after poor Brazilian, Argentine and U.S. crops despite the sharp falls seen in the last week, but are likely to fall in early 2013 - analysts Oil World.

• Basis bids for soybeans shipped by barge to the U.S. Gulf Coast were mostly steady early Tuesday, underpinned by moderate export demand and a slowdown in farmer selling as futures prices declined, traders said.

FCPO- KUALA LUMPUR, Sept 25 (Reuters) - Malaysian palm oil futures recovered on Tuesday after hitting a two-year low the day before, lifted by bargain hunting and a strong outlook for demand, going by positive export data.

Data from cargo surveyor Intertek Testing Services (ITS) showed exports of palm oil rose 8 percent in the first 25 days of September, boosting hopes for strong demand after a recent global sell-off in commodity markets. PALM/ITS

"ITS showed an 8 percent increase, it looks to be a little bit more subdued, given the strong pace at the start of the month, but it's still showing a decent recovery," said StanChart analyst Abah Ofon.

Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 11 percent increase in exports for the same period. PALM/SGS

At the close, the benchmark December contract FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 0.9 percent to close at 2,669 ringgit ($870) per tonne.

Palm oil prices on Monday tumbled to 2,577 ringgit -- a level unseen since September 2010 -- as rising stocks and bearish views by industry analysts at a vegetable oil conference in India dragged on the market.

Total traded volumes on Tuesday stood at 41,793 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Analysts expect palm oil prices in the next few weeks to be lifted by falling yields and a pickup in demand as the market recovers from a seasonally low month in September.

"If productivity falls, which I believe it will, then that, as well, is going to be supportive of the complex," said Ofon, who pegged prices at 3,250 ringgit in the fourth quarter of 2012 and 3,500 ringgit for the first quarter of next year.

"We expect that, as, heading into Q1, the market is really going to spike. There's a lot of things that are happening to suggest that any downside in palm prices is going to be short lived," he added.

In a bullish sign for palm oil, oil rose above $110 a barrel on Tuesday as escalating tension over Iran offset plentiful supplies and concern over the health of the global economy. O/R

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 fell 0.2 percent as record pace of U.S. harvest weighed on sentiment in late Asian trading hours.

The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed 0.2 percent higher.

REGIONAL EQUITY- BANGKOK, Sept 25 (Reuters) - Southeast Asian stock markets were flat-to-higher on Tuesday after rangebound trade as markets remained wary of the euro zone's debt problems, particularly for Sp a in, with late selling pulling Singapore to end near its day's low.

Jakarta's Composite Index .JKSE edged up 0.6 percent after Monday's 1 percent drop to around a one-week low. Coal miner Bumi Resources BUMI.JK rose 1.5 percent, after plunging 19 percent in the previous session on concerns over financial investigation. (Full Story)

The broader Thai SET index .SETI eked out a 0.24 percent gain, led higher by tourism-related shares, with Airport operator Airports of Thailand AOT.BK climbing 2 percent on strong prospect of earnings.

Malaysia .KLSE was up 0.4 percent, with foreign investors buying shares worth a net 16.8 million ringgit ($5.47 million) while domestic institutions sold a net 38.9 million ringgit ($12.67 million), stock exchange data showed.