RTRS- India soyoil hits 11-month low on weak palm oil prices, demand

MUMBAI, Oct 1 (Reuters) - Indian soyoil futures continued last week’s losing streak on Monday to hit their lowest in nearly 11 months, hammered by a sharp fall in Malaysian palm oil prices and weak demand in the local spot markets as buyers deferred purchases.

• Soybeans futures fell to a six-month low, tracking a drop in the U.S. market and as supplies from the new crop started coming into local markets. Rapeseed fell on an expected rise in production.

• The rupee INR=D2 rose on Monday. A strong rupee makes edible oil imports cheaper and at the same time trims the returns of oilmeal exporters.

• Malaysian palm oil futures FCPOc3 were down 2.79 percent at 2,475 ringgit per tonne at 0820 GMT, while U.S. soybean SX2 was down 1 percent at $15.85 per bushel.

• "In the edible oil market, things are getting worse from bad. Ideally, demand should rise due to festivals, but the continued fall in prices is prompting stockists to postpone purchases," said an Indore-based soybean processor.

"Demand will remain sluggish until we see prices stabilize at some point," he added.

• Indians will celebrate Dussehra this month and Diwali in November. Demand for edible oils usually rises during these festivals.

• The November soyoil contract NSOc2 on India's National Commodity and Derivatives Exchange was down 3.33 percent at 631.3 rupees per 10 kg, after falling to 627.8 rupees earlier in the session, the lowest for the second month contract since Nov. 12, 2011.

• India's 2012/13 edible oil imports could rise 4.2 percent to a record high, with palm oil cornering the bulk of that, a Reuters poll showed, as the world's second most populous country fails to raise output quickly enough to meet demand from a growing middle class.

 

• The November soybean contract NSBc2 was down 2.89 percent at 3,110 rupees per 100 kg, after falling to 3,099 rupees earlier in the day, while rapeseed NRSX2 fell 2.22 percent to 3,840 rupees per 100 kg.

• Soybeans arrivals have started in the top producing Madhya Pradesh state and are likely to rise significantly this month and peak in November.

• India is likely to produce 11.5 million tonnes of soybeans in 2012/13, compared with 10.5 million tonnes a year earlier, while its rapeseed output in the current year is likely to climb nearly 25 percent to 6.5 million tonnes, industry officials said.

 

• At the Indore spot market in Madhya Pradesh, soyoil plunged 35.9 rupees to 683.95 rupees per 10 kg, while soybeans dropped 167 rupees to 3,111 rupees per 100 kg. At Sri Ganganagar in Rajasthan, rapeseed fell 88 rupees to 3,950 rupees.

RTRS- Goldman Sachs expects corn to gain on soybeans, cuts soy outlook

Oct 1 (Reuters) - Investment bank Goldman Sachs said on Monday it expected corn and wheat prices to outperform soybean prices over the next few months due to bigger-than-expected U.S. soybean supplies reported by the government last week.

Goldman said in a research note to clients that it lowered its three- and six-month soybean price forecasts to $18.75 and $17.25 a bushel, respectively, from its previous outlook for $20 and $18.

The bank kept its three- and six-month corn price forecasts unchanged at $9 and $8.25, while raising its Chicago wheat price outlook. It increased its three-month wheat price forecast to $10.25 from $9.80, and its six-month forecast to $9.50 from $8.75.

"We expect corn and wheat prices to outperform soybean prices in the near term and into the October WASDE (World Agricultural Supply & Demand Estimates) release as we expect it to feature lower 2012/13 U.S. corn and global wheat production and in turn higher new-crop U.S. soybean production," Goldman said.

The U.S. Department of Agriculture on Friday reported that U.S. farmers and commercial grain firms held 169 million bushels of soybeans on Sept. 1, almost 40 million more than most traders expected. The bigger supply reflected the government's raising its U.S. 2011 soy harvest estimate by 37.5 million bushels to 3.09 billion bushels.

"Wheat prices will need to maintain a higher premium to corn prices to limit feed demand in the face of lower U.S. and global inventories," Goldman said. "In particular, another crop failure would likely push wheat prices sharply higher to limit animal feed demand in the face of inelastic human food demand."

The next USDA crop report is due Oct. 11.

Trader's Highlight

DJI- NEW YORK, Oct 1 (Reuters) - Wall Street started a new quarter with a modest rally on Monday, lifted by a surprising expansion in U.S. manufacturing in September.

After rising more than 1 percent by midday, the major U.S. stock indexes came off their highs, with the Nasdaq the hardest-hit. Market participants said Wall Street has shown signs of fatigue as stocks closed a strong third quarter on Friday.

"We are at a level where the market is due for a correction. Also, as we head for a new earnings season here, we should expect more volatility ahead," said Tim Ghriskey, chief investment officer of Solaris Asset management in Bedford Hills, New York.

Among stocks weighing on the Nasdaq, Apple AAPL.O, the world's most valuable publicly traded company, lost 1.2 percent to $659.39, dragging the tech-heavy index lower.

 

Besides tech, sectors associated with growth were strong. Financial stocks rose, with Goldman Sachs Group GS.N up 2.8 percent at $116.86 after the weekly Barron's said Goldman's stock could rise at least 25 percent in the next year as capital markets improve. An S&P index of financial stocks .GSPF advanced 0.5 percent.

A number of blue-chip stocks hit 52-week highs, helping the Dow outperform the broader market. Shares of General Electric GE.N rose 0.4 percent to $22.81, after rising as high as $22.99 earlier. IBM IBM.N also hit a new 52-week high at $211.75 and The Travelers Co TRV.N rose as high as $69.48 earlier in the session. IBM shares closed up 1.5 percent at $210.47. The Travelers shares gained 1.2 percent to $69.07.

The Dow Jones industrial average .DJI rose 77.98 points, or 0.58 percent, to 13,515.11 at the close. The Standard & Poor's 500 Index .SPX advanced 3.82 points, or 0.27 percent, at 1,444.49. The Nasdaq Composite Index .IXIC dipped 2.70 points, or 0.09 percent, to close at 3,113.53.

After a strong morning session, stocks trimmed earlier gains and the Nasdaq briefly turned negative as Fed Chairman Ben Bernanke defended the U.S. central bank and its ultra-loose monetary policy as it aims to reduce unemployment.

 

Stimulative measures from the Federal Reserve and the European Central Bank helped the S&P 500 finish the quarter up 5.8 percent, its best third quarter since 2010.

While his speech was more of a reiteration of the Fed's stance, some market participants said the market is getting anxious about the Fed's eventual exit plan.

"He (Bernanke) differentiates money printing and what he claims they are doing by saying money printing is a permanent source of financing for government spending, where he said what the Fed is doing is temporary," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

"Unwinding their balance sheet and normalizing the fed funds rate will be highly disruptive," he said.

 

On the economic front, U.S. manufacturing expanded in September for the first time since May as new orders and employment picked up, an Institute for Supply Management report showed. The ISM data eased concerns about the economy and offset a gloomier outlook in Asia and Europe.

The U.S. data followed surveys in the euro zone that showed manufacturing slackened in the three months to September while Asia's factories are continuing to struggle in the face of tepid demand from the United States and Europe.

 

About 6.3 billion shares changed hands on the New York Stock Exchange, Amex and Nasdaq, compared with the average daily volume of 6.38 billion.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of about 3 to 2. And although the Nasdaq ended slightly lower, the breadth was definitely positive with about seven stocks rising for every five that fell.

NYMEX-NEW YORK, Oct 1 (Reuters) - U.S. crude futures rose slightly on Monday, supported by data showing U.S. manufacturing expanded in September, shaking off three months of weakness as new orders and employment picked up.

Front-month November crude CLc1 rose 29 cents to settle at $92.48 a barrel.

CBOT SOYBEAN- Chicago Board of Trade soybean futures fell 2.5 percent as the advancing harvest of U.S. soybeans and planting of the crop in South America promised to raise supplies, traders said.

* Analysts expecting weekly U.S. Agriculture Department report on Monday afternoon to show that U.S. soybean harvest was a record 38 percent complete as of Sept. 30.

 

• USDA said weekly export inspections of soybeans were 41.699 million bushels, well above forecasts for 13 million to 16 million.

 

• Goldman Sachs said on Monday it expected corn and wheat prices to outperform soybeans during the next few months due to bigger-than-expected U.S. soybean supplies.

REGIONAL EQUITY- BANGKOK, Oct 1 (Reuters) - Southeast Asian stock markets ended mostly lower on Monday, tracking weak global equities and after a lacklustre session amid market holidays in Asia, but foreign buying pushed Malaysian shares to their highest in almost two weeks.

Malaysia's key stock index .KLSE gained 0.4 percent at 1,643.31, its highest close since Sept. 19. Foreign investors bought $15.14 million worth of shares while domestic institutions and retail investors were net sellers, the Malaysian bourse said.

The Thai SET index .SETI ended 0.07 percent higher after a choppy session. It climbed earlier to a fresh 16-year intraday high of 1,303.68. Banking stocks gained due to optimism about third-quarter earnings, with Kasikornbank KBAN.BK rising 1.1 percent.

Weak buying interest was seen in most markets as China, Hong Kong and South Korea were closed for holidays.