RTRS-Malaysia OKs plan to cut crude palm oil export tax-govt official

KUALA LUMPUR, Oct 11 (Reuters) - Malaysia has approved a plan to cut crude palm oil (CPO) export taxes from 23 percent per tonne, a government official said on Thursday, as the world's No.2 producer tries to grab market share from top producer Indonesia.

Malaysia's cabinet will discuss the size of the cut in CPO export taxes on Friday, the commodities ministry official said. Commodities Minister Bernard Dompok has proposed for duties to be cut to 8-10 percent.

"There may or may not be a decision but the government is actively working on it. It will be a key focus of discussion for tomorrow," said the official, who declined to be named because he is not authorised to speak to the media.

The cut may boost Malaysia's crude palm oil exports and give short-term support to prices that have lost 22 percent so far this year as a slowdown in shipments has led to a rise in inventories.

Malaysia's palm oil stocks hit a record of nearly 2.5 million tonnes last month as output reached an all time high and export growth slowed considerably, piling pressure on the government to act to prop up prices.

Slower Malaysian exports were due mostly to competing Indonesian processors offering cheaper refined palm oil cargoes after Jakarta cut its own export taxes for processed grade last year to boost margins and lure investment.

RTRS- Malaysia's September palm oil stocks surge to record-MPOB

Malaysia's September palm oil stocks surged 17.4 percent to a record 2,480,994 tonnes from a revised 2,112,797 tonnes in August, industry regulator Malaysian Palm Oil Board said on Wednesday.

September's rise exceeded market expectations that stocks in the world's No.2 palm oil producer surged 16.4 percent to an all-time high of 2.46 million tonnes

RTRS- Malaysia's Sept palm stocks hit record, gov't under pressure

KUALA LUMPUR, Oct 10 (Reuters) - - Malaysia's September palm oil stocks hit record levels as production grew more than four times faster than exports, thanks to an upswing in yields, potentially weighing on prices and piling pressure on the government to change its export tax policy.

Stocks in the world's second largest palm oil producer surged 17.4 percent to an all-time high of 2.48 million tonnes, the Malaysian Palm Oil Board said on Wednesday, exceeding market forecasts, with production jumping more than 20 percent to an all-time high of 2.00 million tonnes.

Exports rose at the slower pace of 4.5 percent, to 1.50 million tonnes, as the government's efforts to boost the tax-free export quota of crude palm oil found fewer customers than expected and big buyers looked to top producer Indonesia for cheaper refined palm oil.

Indonesia has been grabbing more market share from Malaysia after it slashed its export taxes for the refined grade, raising margins for its processors, who can then offer cheaper cargoes to Asian customers such as China.

"The Malaysian government has to do something about the tax. Stocks are overflowing and demand is also seasonally slowing in places like India, where they are harvesting their domestic oilseed crop," a Malaysian trader said in reference to the world's largest palm oil buyer.

Malaysia is looking to cut its export tax of crude palm oil to 8 to 10 percent from 23 percent now, to push out more of the grade to India. The country's cabinet is expected to make that decision on Friday. (Full Story)

Since the 1980s, the Southeast Asian country has not taxed refined exports in a bid to boost its domestic processing sector.

But since last September when Jakarta tweaked its taxes, Malaysia has struggled to sell refined palm oil at competitive prices due to limited production and a duty free export quota for crude palm oil pushing up feed stock prices.

Stocks have steadily risen as Malaysia's production recovers from weak yields in the first half of this year and exports slow, weighing on prices that have lost more than a fifth so far this year.

Before the data release, benchmark December contract on the Bursa Malaysia Derivatives Exchange 0#FCPO: rose 0.7 percent to 2,456 ringgit.

RTRS- U.S. soy yields seen up 4.8 pct

CHICAGO, Oct 8 (Reuters) - The U.S. soybean crop is bigger than previously forecast due to some timely rains in September that rescued it from the drought and extreme heat it suffered through the summer, analysts said.

Farmers have been harvesting the U.S. soy crop at a record fast pace and traders expect the harvest to be from 50 to 55 percent complete as of Sunday. Harvest progress has been rapid due to early plantings and dry weather dress on the crop that pushed it to maturity.

Last week the USDA said soy harvest was 41 percent complete, up from 22 percent a week ago and well above the 19 percent five-year average.

An upcoming U.S. Department of Agriculture report was expected to show that the crop weathered the adverse conditions better than the government had initially expected.

"The key to higher yields was the late season rainfall," said Anne Frick, oilseed analyst for Jefferies Bache. "We did have improvements in condition ratings for soybeans between the time of the September survey and October survey also."

The USDA's monthly report was expected to forecast the U.S. soybean crop at 2.764 billion bushels, based on the average of estimates in a Reuters survey of 26 analysts. The average yield was seen at 37.006 bushels per acre, up 4.8 percent from a month ago.

"We have been looking at it from a worst case scenario and things may not be quite as abysmal as originally believed to be," said Nicole Thomas, analyst with McKeany-Flavell.

A month ago, USDA pegged the soybean crop at 2.634 billion bushels, based on an average yield of 35.3 bushels per acre.

Harvested acreage was seen falling to 74.579 million from the September forecast of 74.6 million.

Based on the harvested acreage estimates, farmers were expected to abandon 1.501 million acres that they seeded in the spring, the largest amount since 2000.

The USDA will release its October crop production and supply/demand reports at 7:30 a.m. CDT (1230 GMT) on Thursday.

Improved harvest forecasts boosted the outlook for ending stocks. Analysts predicted the report would show 2012/13 U.S. soybean ending stocks at 134 million bushels, a 19 million bushel gain from September's outlook.

World ending stocks were seen at 53.301 million tonnes, up from 53.100 million in September. Good weather for seeding in South American helped raise the estimate for world ending stocks.

Despite the improvement, the U.S. soybean crop was still expected to be the smallest since five years ago, when farmers harvested 2.677 billion bushels of the oilseed. Domestic ending stocks were still on track to be the lowest since 2004.

Since 1969, USDA has raised its soybean yield forecast in its October report nine times after cutting it in its September outlook, as is expected this year. In eight of those nine years, the government's October yield view has topped the initial August estimate. This year, USDA's August estimate of soybean yield was 36.1 bushels per acre.

Some analysts were wary of the call for improved yields as many growers missed the late season rains, or found that their crop was too mature to benefit from the extra moisture.

"For every producer I found to have better than expected yields, I found another to have worse than expected yields," Mike Zuzolo, president of Global Commodity Analytics & Consulting in Lafayette, Indiana.

Trader's Highlight

DJI- NEW YORK, Oct 10 (Reuters) - Global shares fell for a third day on Wednesday as corporate warnings of slower growth underscored concerns about a sluggish world economy, while oil prices slipped despite worries about the security of Middle East crude supplies.

Weak risk sentiment hurt equity markets after warnings from the International Monetary Fund, the World Bank and U.S. multinationals about the lackluster world economic outlook.

"I think the poor earnings for the third quarter are baked into the market. If that were the only issue I think there would be limited downside," said William Delwiche, investment strategist at Robert W. Baird & Co in Milwaukee.

"But what matters now is the outlook for the fourth quarter and 2013. So far it seems to be one of more caution, and if that trend continues that could be a headwind for stocks."

The Dow Jones industrial average .DJI closed down 128.56 points, or 0.95 percent, at 13,344.97. The Standard & Poor's 500 Index .SPX fell 8.92 points, or 0.62 percent, at 1,432.56. The Nasdaq Composite Index .IXIC slid 13.24 points, or 0.43 percent, at 3,051.78.

Ebbing growth in China, the world's No. 2 economy, is expected to rein in corporate earnings in the third quarter and dent profit forecasts as the Asian nation feels the pinch of the debt crisis in the euro zone, a key trading partner.

The World Bank cut its growth forecast for East Asia this week on concern China's slowdown could last longer than expected.

On Tuesday, the International Monetary Fund said a deepening euro zone debt crisis threatened the global economy.

The euro rebounded after falling to its lowest in more than a week against the dollar, pressured by uncertainty about whether Spain will apply for a bailout, widely considered the next step forward for Europe.

The euro EUR= was up 0.12 percent at $1.2899 after touching 1.2884. The U.S. dollar index .DXY was down 0.08 percent at 79.891.

European Union leaders are scheduled to meet at the end of next week. Euro zone finance ministers delivered a united defense of Spain at a meeting this week, saying the country did not need a bailout, at least for now.

"We are in a holding pattern," said John Doyle, currency strategist at Tempus Consulting in Washington. "What we're going to look for ... if there's any news coming out of Spain and possible decision on a full bailout or not."

Brent oil edged down in choppy trading, and U.S. crude turned lower after an early rally tested resistance at recent price peaks as concerns about the security of Middle East supplies amid escalating tensions over Syria partially offset fears that slowing world growth will curb demand.

Shelling along the Turkey-Syria border, hostility between Iran and the West and an impending Israeli election have reinforced fears of potential threats to Mideast oil supplies.

Turkey's military chief of staff said his troops would respond with greater force if bombardments from Syria kept hitting Turkish territory.

Brent crude LCOc1 fell 17 cents to settle at $114.33 a barrel. U.S. crude oil futures CLc1 settled down $1.14 at $91.25 a barrel.

U.S. Treasuries prices rose, after a sale of 10-year notes, on underlying worries about the global economy and a squeeze on short positions.

While bonds sold off earlier as traders prepared for the $21 billion auction, part of this week's $66 billion in coupon-bearing offerings, Treasuries rebounded after the sale.

"There was some short covering, and that helped give the auction a pretty solid bid," said Kim Rupert, managing director of global fixed income analysis at Action Economics LLC in San Francisco.

The benchmark 10-year U.S. Treasury note US10YT=RR was up 8/32 in price to yield 1.6854 percent.

NYMEX- NEW YORK, Oct 10 (Reuters) - U.S. crude futures fell on Wednesday, in volatile trading, on concerns about slowing economic growth that also hit Wall Street, after oil prices were lifted early by ongoing tensions in the Middle East.

 

CBOT SOYBEAN-  Soybean futures on the Chicago Board of Trade fell to a one-week low Wednesday as traders adjusted positions a day ahead of monthly U.S. government crop data that is expected to show a bigger U.S. soybean crop than last month.

* Additional pressure stemmed from forecasts for welcome moisture in Brazil. A cold front is heading toward central Brazil, likely bringing heavier rains to the country's soy belt as farmers plant what is expected to be a record-large crop, local forecaster Somar said.

• Technical selling accelerated after the benchmark November soybean contract SX2 fell below its 100-day moving average near $15.41 per bushel.

• USDA late Tuesday said 37 percent of the U.S. soybean crop was rated in good to excellent condition, up from 35 percent a week earlier. US/SOY USDA said the U.S. soybean harvest was 58 percent complete, slightly behind trade expectations but well ahead of normal.

• Market shrugged off news from USDA that private exporters reported sales of 120,000 tonnes of U.S. soybeans to China for delivery in 2012/13. 

• Ahead of USDA's October supply/demand reports on Thursday, the average estimate for U.S. soybean production among anaysts surveyed by Reuters was 2.764 billion bushels, up from USDA's September figure of 2.634 billion. The the average analyst yield estimate was 37.006 bushels per acre, up from USDA's September figure of 35.3.

• CBOT reported no soymeal deliveries and 550 soyoil deliveries against October futures. The October soymeal and soyoil contracts expire on Friday.

• Malaysian palm oil futures 0#FCPO: crept to their highest level in more than a week, tracking other vegetable oil markets, although gains were limited by record stockpiles.

FCPO- SINGAPORE, Oct 10 (Reuters) - Malaysian palm oil futures edged up on Wednesday to their highest in more than a week, tracking other vegetable oil markets, although gains were limited by record stockpiles.

Malaysia's palm oil stocks in September surged 17.4 percent from a month ago to a record 2.48 million tonnes on strong production, the Malaysian Palm Oil Board said after the midday break.

The rise in stocks exceeded market expectations of 2.46 million tonnes, paring gains that had earlier sent futures to an intraday high at 2,483 ringgit, a level last seen on Oct. 1. PALM/POLL

Prices fell to a near 3-year low last week but have since been recovering steadily on bargain-hunting and prospects of a cut in export tax by the Malaysian government.

"The market is still rangebound, trading between 2,400 and 2,500 ringgit," said a trader with a foreign commodities brokerage in Malaysia. "Prices were supported as U.S. soybean oil was up last night and Dalian soybean oil was also up a bit."

The benchmark December contract FCPOc3 on the Bursa Malaysia Derivatives Exchange had edged up 0.8 percent to close at 2,457 ringgit ($800) per tonne.

Total traded volumes stood at 45,198 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Malaysia's palm oil exports for Oct. 1-10 fell 1 percent to 448,624 tonnes from a month ago, cargo surveyor Intertek Testing Services said on Wednesday.

Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 8.7 percent decline for the same period, but traders say shipments could pick up later in the month.

Technical analysis showed palm oil was expected to end its current rebound around a resistance at 2,503 ringgit per tonne, and fall towards 2,230 ringgit, said Reuters market analyst Wang Tao.

In a bullish sign for palm oil, Brent crude oil rose above $114 a barrel as worries over the security of Middle East supplies outweighed increasing evidence of slowing global economic growth.

Palm oil prices were also supported by gains in other vegetable oil markets.

By 1010 GMT, U.S. soyoil for December delivery BOZ2 was up 0.4 percent. The most active January 2013 soybean oil contract DBYcv1 on the Dalian Commodity Exchange ended the day 0.7 percent higher.

REGIONAL EQUITY- BANGKOK, Oct 10 (Reuters) - Singapore shares fell to a near one-month low while most other Southeast Asian stocks also ended lower on Wednesday as flagging global economic growth triggered selling in blue-chip stocks, including Keppel Corp KPLM.SI and Bank Rakyat BBRI.JK.

Singapore's Straits Times Index .FTSTI, which traded in the negative territory through the day, finished down 1.1 percent at the lowest close since Sept. 13. Oil rig builder Keppel Corp led among battered large-cap stocks, sliding 1.4 percent.

Thai benchmark SET index .SETI ended down 0.2 percent, erasing earlier gains. Jakarta's Composite Index .JKSE were nearly unchanged at the close, after falling almost 1 percent earlier in the day.

Malaysian shares eased 0.24 percent to the lowest close in one week, with foreign investors selling shares worth 70 million ringgit ($22.80 million) while local institutions led net buyers, stock exchange data showed.