RTRS- Malaysia to cut crude palm oil export tax, scrap quotas

KUALA LUMPUR, Oct 4 (Reuters) - Malaysia will cut crude palm oil (CPO) export taxes and discontinue a tax free shipment quota for the grade from Jan 1 2013, a government minister said on Friday, as the world's No.2 producer seeks to snatch back market share from top producer Indonesia.

"The implementation of reduced export duty on CPO will also allow the refineries in Malaysia to market their products at competitive prices to the global markets," Commodities Minister Benard Dompok said in a statement.

"In tandem with reduced CPO export duty, the government will discontinue with the duty free CPO export facility beginning 1 January 2013," he said after Malaysia's cabinet met earlier in the day to discuss measures to support the palm oil sector.

Dompok did not disclose the quantum of the cut in crude palm oil export taxes from the current 23 percent duty.

RTRS- China state soy sales gets tepid response as Beijing ups prices

BEIJING, Oct 11 (Reuters) - China's regular auction of soybeans from state reserves on Thursday drew a lukewarm response with only around half of the stocks sold after the government hiked the bidding price for some stocks by 15 percent, results of the auction showed.

A total of 225,355 tonnes, or 56 percent of the total 401,193 tonnes on offer, was sold, the National Grain & Oil Trade Center said on its website. (www.grainmarket.com.cn)

China, which buys about 60 percent of globally traded soybeans, has been selling reserves to help ease tight market supplies caused by the worst drought in decades in the United States. It is expected to continue doing so well into 2013.

But the latest hike in bidding price, which together with transport and other costs works out to be similar to both domestic prices and import prices, has made reserve sales unattractive. 

A four-week slide of about 11 percent in benchmark Chicago prices Sc1 also added to the tepid response at the auction.

"There is no price advantage for state reserves anymore," said one industry analyst, who declined to be identified because he was not authorised to speak to the media.

Selling prices at the auction, where about half the stocks were from 2010 harvests, hovered between 4,324 yuan ($690) to 4,492 yuan per tonne. The base price for previous auctions was set at 3,900 yuan and the soybean stocks were from older 2008 and 2009 harvests.

Front-month Dalian futures price DSAc1 closed up nearly 1 percent at 4,745 yuan per tonne on Thursday.

Out of total volumes on auction, 187,000 tonnes were from 2010 harvests, the grainmarket website showed. Only six percent of the 2010 stock was sold at an average price of 4,492 yuan.

There were no bidders for the 85,646 tonnes of the 2010-harvested soy offered in Inner Mongolia.

Beijing could have raised the bidding price this time in a bid to deter buyers from reselling stocks to the state reserve later at a profit, a second analyst said.

China is expected to start stockpiling from the new harvest for state reserves and the market believes the government may be willing to pay 4,400 yuan per tonne to farmers.

"If the bidding price was set the same or 3,900 yuan per tonne, some buyers might resell the cheap soy back to the state later," said the second industry analyst.

RTRS- Oct 11 World grain highlights - USDA

WASHINGTON, Oct 11 (Reuters) - World grain production will total 2228.27 million tonnes in the 2012/13 crop year, down from a previous forecast of 2236.25 million, the U.S. Agriculture Department said on Thursday.

World output for 2012/13 would include 653.05 million tonnes of wheat, 1110.13 million of coarse (feed) grains and 465.10 million of rice.

Oilseeds were pegged at 457.70 million tonnes.

RTRS- India's Sept refined palm oil imports seen down 23 pct

NEW DELHI, Oct 11 (Reuters) - India's imports of refined palm oil are expected to have fallen again in September after the government hiked import costs from August to protect domestic refiners from cheap Indonesian supplies, a Reuters survey showed.

Traders forecast refined palm oil imports in September would be between 50,000 and 75,000 tonnes, with the average at 61,250 tonnes, down 23 percent from August.

They expect refined palm oil imports to hover around this figure again in October, the last month of the current marketing year, despite the start of a festival season when demand traditionally rises because of celebrations.

Imports of refined palm oil have been in decline since June, when expectations grew that India would make purchases dearer to protect its processors. The hike, which took effect from Aug. 1, was targeted at holding down growing palm oil imports.

India's refined palm oil imports rose 71.6 percent to 1.4 million tonnes in the first 10 months of the year from November 2011 after top producer Indonesia changed taxes in October 2011 to make the product cheaper and support its own refining industry.

TOTAL PALM OIL IMPORTS UP 13.9 PCT

Total palm oil imports rose 13.9 percent to 800,000 tonnes as prices of the crude eased about 17 percent in the last month in the face of huge stockpiles in Malaysia, the world's No. 2 producer, according to the average of a survey of eight traders.

Poor demand from leading buyers such as China and the European Union also kept palm prices down, they said.

Currently, imported refined palm oil is quoted at about $830 a tonne on a cost and freight basis on India's west coast, while imported crude palm oil is around $780 a tonne.

India mainly buys palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil. Imports meet about half of the country's annual demand of 15 million to 16 million tonnes.

About 80 percent of India's cooking oil imports are palm oil, while soft oils such as soy and sunflower make up the rest.

Imports of soy oil fell in September as its premium to rival palm oil widened to as high as $300 a tonne. Sunflower oil imports declined as demand for fried foods eased off in the last month of the Indian summer.

Total September vegetable oil imports, including small amounts of non-edible oils, are likely to have risen by 6.6 percent to 956,625 tonnes from August, pushing up end-September stocks at Indian ports by 5.5 percent.

"Edible oil imports could be about 900,000 tonnes in October," said R. Ramamoorthy, a Hyderabad-based trader.

Industry body the Solvent Extractors' Association of India is expected to release September import data on Monday.

Trader's Highlight

DJI- NEW YORK, Oct 11 (Reuters) - The euro made its first gain in four days on Thursday after the IMF said euro zone economies should have more time to cut budget deficits, while oil prices rose on escalating tensions between Syria and Turkey.

European and U.S. shares climbed after data showed further signs of improvement in the U.S. labor market, t hough Wall Street pared its gains to end the day little changed.

The data overshadowed a downgrade of Spain's credit rating by Standard & Poor's late on Wednesday.

In the currency market, the euro EUR= was the primary beneficiary of improved sentiment. It recovered from a more than one-week low, last trading at $1.2926, up 0.4 percent.

Christine Lagarde, the IMF's managing director, said she favored giving debt-burdened Greece and Spain more time to reduce their budget deficits because cutting too far and too fast would do more harm than good.

Lagarde's comments were seen supporting stability in the euro zone. One of the key debates to come from the euro zone's debt crisis is whether the steep cuts needed to get budgets in order come at the expense of economic growth.

Spanish bond yields turned lower, erasing an earlier spike to near the critical 6.0 percent mark seen as unsustainable after Standard & Poor's cut the country's credit rating.

S&P cut Spain's rating two notches to BBB-minus, one step from junk status, warning that an intensifying recession and poor response from euro zone policymakers to the crisis had left Spain highly vulnerable.

"Investors were initially spooked by the bad news from the euro zone, but soon realized that bad news is actually good news overall due to the fact that this now speeds up the timeline for Spain to request a bailout," said Neal Gilbert, market strategist at GFT in Grand Rapids, Michigan.

Ten-year Spanish yields ES10YT=TWEB were down 5.4 basis points on the day at 5.77 percent, having hit a session high at 5.96 percent earlier.

Markets expect Spain to be the first of the euro zone's "big four" economies to require a rescue package.

The benchmark 10-year U.S. Treasury note US10YT=RR rose 2/32 higher in price, yielding 1.673 percent.

Tensions in the Middle East pushed Brent crude LCOc1 up $1.38 to $115.71 a barrel, while U.S. crude futures settled up 82 cents at $92.07 per barrel CLc1. Maintenance curbs on North Sea output also pushed prices higher.

Turkish Prime Minister Tayyip Erdogan said a Syrian passenger plane forced to land in Ankara was carrying Russian-made munitions destined for Syria's defense ministry. Grounding of the plane was another sign of Ankara's growing assertiveness over the crisis in its war-torn neighbor.

"The Syrian situation is heating up and there are fears about Turkey, a NATO member, retaliating and contagion in the region," said Bjarne Schieldrop, analyst at SEB in Oslo.

Equities initially rose after news that claims for U.S. jobless benefits fell last week to the lowest in more than four and a half years.

Still, a drop in shares of Apple Inc AAPL.O helped Wall Street cut its gains in afternoon trading.

The Dow Jones industrial average .DJI fell 18.58 points, or 0.14 percent, to 13,326.39. The Standard & Poor's 500 Index .SPX edged up 0.28 points, or 0.02 percent, at 1,432.84. The Nasdaq Composite Index .IXIC slipped 2.40 points, or 0.08 percent, to 3,049.38.

Apple fell 2 percent after a U.S. appeals court overturned a preliminary injunction on the sale of Samsung Electronics Co Ltd's 005930.KS Galaxy Nexus smartphone.

NYMEX- NEW YORK, Oct 11 (Reuters) - U.S. crude futures rose on Thursday as Middle East tensions, especially between Turkey and Syria, continued to reinforce concerns about the risk to oil supply from the region.

News of more delayed North Sea cargoes added support for Brent and U.S. crude.

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade rose 1.7 percent, the biggest daily gain in two weeks, after the U.S. government raised its estimate of U.S. soybean production but left the stocks-to-use ratio at a near 50-year low.

* Gains pared late due in part to scattered hedge-related selling, traders said.

• USDA raised its estimate of the U.S. soybean yield to 37.8 bushels per acre, up from 35.3 in September, and raised production to 2.860 billion bushels, from 2.634 previously. Both figures were slightly above trade estimates.

• USDA also raised its forecast of U.S. 2012/13 soybean ending stocks to 130 million bushels, from 115 million in September, but the stocks-to-use ratio, a gauge of supply tightness, rose to only 4.4 percent, the lowest since 1965/66.

• China's regular auction of soybeans from state reserves Thursday drew a lukewarm response with only 225,355 tonnes sold, roughly half of what was offered, after the government hiked the bidding price for some stocks by 15 percent.

• Malaysian palm futures rose to their highest in more than a week as a government plan to cut an export tax on crude palm oil offset record stockpiles and weak exports.

• Rains this weekend will likely slow the U.S. Midwest soybean harvest but conditions should turn drier beginning Monday, a forecaster said.

FCPO- SINGAPORE, Oct 11 (Reuters) - Malaysian palm futures rose on Thursday to their highest in more than a week, as a government plan to cut an export tax on crude palm oil offset record stockpiles and weak exports, while traders took positions ahead of a key U.S. report on demand and supply.

Malaysia has approved a plan to slash export taxes from the current level of 23 percent per tonne and will discuss the size of the cut on Friday, a government source said.

The move could boost Malaysia's crude exports and help ease stockpiles from a record of 2.48 million tonnes in September.

"We believe that most of the negative news from the high inventory level has been priced in as crude palm oil prices are currently at a high discount of $350 per tonne against soybean oil," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, in a note.

The benchmark December contract FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 2.7 percent to close at 2,523 ringgit ($822) per tonne, just off an earlier high of 2,525 ringgit, a level last seen on Oct. 1.

Total traded volumes stood at 41,253 lots of 25 tonnes each, far higher than the usual 25,000 lots.

Technicals showed palm oil faces resistance at 2,503 ringgit per tonne, a break above which will open the way towards 2,588 ringgit, according to Reuters market analyst Wang Tao.

Traders are taking positions ahead of the October supply and demand report by the U.S. Department of Agriculture due at 1230 GMT, which is likely to show a larger U.S. soybean crop than initially expected.

A bigger crop of soybeans to be crushed into soybean oil could shift demand away from palm oil.

Palm oil stocks hit an all-time high in September, thanks to record production, but prices are heading for their first weekly gain after three weeks of losses, further suggesting the sharp rise in inventory may already have been factored in.

"The worst may be over, with palm oil production starting on a seasonal downcycle, which should ease the high stockpile," Alvin Tai, an analyst with Malaysia's OSK Investment Bank, said in a research note.

"We note that Q4 tends to be the best quarter for both the palm oil price and plantation stocks."

In a bullish sign for palm oil, Brent crude oil headed on Thursday for its highest close in a month, lifted by escalating tension between Syria and Turkey, maintenance in the North Sea and a supply crunch in oil products. O/R

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 was up 1.4 percent. The most active January 2013 soybean oil contract DBYcv1 on the Dalian Commodity Exchange closed 0.2 percent higher.

REGIONAL EQUITY- BANGKOK, Oct 11 (Reuters) - Stocks in Malaysia, the Philippines and Vietnam slipped in light trade on Thursday, led by blue-chip stocks such as Axiata Group Bhd AXIA.KL and SM Investments Corp SM.PS, as investors, wary of weak global economy, trimmed risks.

Singapore recouped earlier losses, helped by late buying in beaten-down large caps, with the benchmark Straits Times Index .FTSTI ending down 0.04 percent, sliding to a one-month low at one point after three straight sessions of declines.

Among actively traded, DBS Group Holdings DBSM.SI edged up 0.2 percent after falling 2.4 percent in the last three sessions. Some bargain hunting emerged amid expectations of good quarterly results by Southeast Asian companies.

In Bangkok, energy shares outperformed thanks to strong third quarter (July-September) earnings forecasts, with energy explorer PTT Exploration and Production Pcl PTTE.BK up 1.3 percent while the broader SET index .SETI up 0.4 percent.

Morgan Stanley expects upbeat third-quarter earnings across Southeast Asian markets. The brokerage expects MSCI Thailand .MITH00000PTH to see the strongest year-on-year earnings growth at 34.6 percent, driven mostly by energy and financial companies, followed by Malaysia at 19.3 percent.

Concerns about high valuations have weighed on the region, with investors hunting risk shifting to markets that are exposed to global growth, encouraged by central banks pumping in liquidity.