RTRS- Malaysia October palm oil stocks likely hit record peak

SINGAPORE, Nov 6 (Reuters) - Seasonally strong production may have driven Malaysian palm oil stocks to another record high in October, a Reuters survey of five plantation firms showed on Tuesday.

Inventory levels in the world's No.2 palm oil producer may have grown by 7.5 percent in October to 2.67 million tonnes from a previous peak of 2.48 million tonnes marked in September, according to the poll.

Output most likely stood at 1.96 million tonnes, a slight drop from September's record 2 million tonnes, although respondents said that was still strong enough to boost stocks for the fourth straight month.

Palm oil production typically peaks in September and October. P roduction in October 2011 stood at 1.91 million tonnes.

Shipments probably edged up by 12 percent to 1.69 million tonnes in October, the highest seen so far this year, largely due to a rise in European demand for the vegetable oil.

Imports of crude palm oil from top producer Indonesia were expected to reach 37,500 tonnes in August, respondents said.

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Malaysia announced last month that it would scrap a tax-free export quota and reduce export taxes for the crude grade from 2013, in a step that could make feedstock prices cheaper for refiners.

 

It has taken more than a year for the country to respond to top producer Indonesia's move in September 2011 to cut its own export taxes for refined palm oil to boost margins and lure investment.

For now, stocks in Malaysia could remain high as producers continue to face stiff competition from Indonesia, which cut its export taxes even further for November.

 

Indonesia sets its export tax every month, and its November taxes for crude palm oil and refined palm olein stood at 9 and 3 percent respectively, down from October's 13.5 and 6 percent.

Rising European demand could continue to support Malaysian exports, as steep falls in palm oil prices are making it more attractive than other vegetable oils for use in biodiesel production.

Benchmark Malaysian palm oil futures FCPOc3 fell to a near 3-year low at 2,230 ringgit ($729) per tonne on Oct. 3, and have lost almost one-fourth so far this year.

Palm oil prices are likely to rise sharply in coming months on brisk buying interest as global importers seek cheaper alternatives to more expensive products including soyoil, Hamburg-based oilseeds analysts Oil World said late last month.

RTRS- Monthly palm oil exports from Indonesia fall 2 pct m/m in Sept

JAKARTA, Nov 6 (Reuters) - Palm oil exports from Indonesia, the world's top producer, slipped 2 percent to 1.381 million tonnes in September compared to the previous month, industry data showed on Tuesday.

This year, palm oil output will be between 23 million and 25 million tonnes, with around 18 million tonnes exported.

Indonesia's top customers for the edible oil include India, China and Europe.

In January-September, exports to India totalled 4.143 million tonnes, with China shipping 2.183 million tonnes, the European Union 2.849 million tonnes and Pakistan 611,390 tonnes.

RTRS- Rains return to Brazil's main soy belt - Somar

SAO PAULO, Nov 5 (Reuters) - Steady rains are expected to fall over Brazil's center-west and northeast regions this week, forecaster Somar said on Monday, as farmers plant what is expected to be the country's largest soy crop ever.

A cold front has moved rains northward into Brazil's top soy producing state Mato Grosso after soaking the southern states of Rio Grande do Sul and Parana last month.

"Rains returned to the Northeast and the northern part of the Center-west region," Somar said in a daily report.

Parts of Mato Grosso state, which received below-average rainfall in October, received 56 mm (2.2 inches) of rain on Sunday, Somar said.

The northeast, an emerging soy and corn region, had a prolonged drought this year but it was relieved by 35 mm (1.3 inches) of rain on Sunday.

The bulk of Brazil's soybeans are planted in late October and early November, and some farmers will likely have to replant crops they sowed earlier last month when seeds germinated but shoots could wither due to lack of sufficient moisture.

But analysts are so far maintaining their forecasts for a record crop of around 81 million tonnes, which should allow Brazil to leapfrog the United States in soybean production for the first time to become the world's top grower.

RTRS- Argentina soy, corn sowing resumes under sunny skies

BUENOS AIRES, Nov 5 (Reuters) - Farmers in grains powerhouse Argentina have jump-started corn and soy planting in recent days, bolstering harvest expectations thanks to a sunny streak that has improved conditions after months of flooding.

"Planting has begun again, except for the lowest lying areas that are still too soggy," said Tomas Parenti, an agronomist at the Rosario grains exchange.

This is good news for consumer nations that are counting on Argentina - the world's No. 2 corn exporter and No. 3 soybean supplier - to help replenish food stocks depleted by dry crop weather in Russia, the United States and Australia.

Argentine growers hope to step in with ample harvests despite the violent rainstorms that started in August and turned prime Pampas farmlands into unplantable mush. Delays in seeding have already prompted some analysts to cut output projections.

Now it looks as though the weather may give Pampas soy and corn another chance. Sun over the last two weeks in northern Buenos Aires, Santa Fe, Entre Rios and Cordoba provinces has firmed topsoils enough to allow seeding machines get back to work.

"Growers are advancing significantly with corn and soy planting," said German Heinzenknecht, a meteorologist at consultant Clima Campo.

"We'll be OK in the central farm belt at least until Thursday, when new showers will arrive from the south," he added. "Southern Buenos Aires could get hit hard but rainfall in northern Buenos Aires and the rest of the central farm belt should not be excessive."

The U.S. Department of Agriculture expects Argentina to harvest 55 million tonnes of soy and 28 million tonnes of corn in the 2012/13 crop year. But analysts had already started warning of losses - estimated at 20 percent for corn and 10 percent for soy - related to planting delays caused by floods.

The unusually wet weather has affected 190 million hectares (about 469 million acres) of wheat area, Parenti said.

About 3.7 million hectares of wheat were planted in Argentina this season and the Rosario exchange expects 2012/13 output of 10 million tonnes, down from 13 million tonnes last season.

This year's wheat planting was also reduced by farmers shifting to other crops to avoid export curbs that the government slaps on wheat and corn.

As 2012/13 corn and soy are still being planted, Parenti said it was too early to project flood-related losses for those crops.

Supply from Argentina is of key interest to exporters such as Bunge Ltd BG.N and Noble Group Ltd NOBG.SI that operate huge grains terminals along the Parana River, which offers access to the busy shipping lanes of the South Atlantic.

The United Nations predicts world food demand will double by 2050, and South America is expected to provide most of the increase in grain production between now and then.

Shortages caused by bad U.S., Russian and Australian crop weather have squeezed Chicago soybean prices 26 percent higher this year. Corn prices are up 13 percent and wheat 29 percent.

Argentine farmers have planted 40 percent of the 3.4 million hectares estimated for commercial-use corn this season, lagging last year's tempo by 16.8 percentage points, the Buenos Aires Grains Exchange said late last week.

 

Some 3.6 percent of the 19.7 million hectares expected to be dedicated to soybeans in the 2012/13 crop year have been seeded, lagging 2011/12 by 9 percentage points, the exchange said.

Trader's Highlight

NEW YORK, Nov 5 (Reuters) - U.S. stocks advanced modestly on Monday in light trading in one of the year's quietest sessions on the day before the U.S. presidential election.

Whatever the outcome of the race between incumbent President Barack Obama and Republican challenger Mitt Romney, the election's resolution will finally end the uncertainty that has kept the market stagnant for the past few weeks.

“No one’s going to make big bets today,” said Perry Piazza, director of investment strategy at Contango Capital Advisors in San Francisco.

Just 5.16 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT on Monday, below this year's average daily volume of 6.5 billion.

"[The market] has been directionless over the last few weeks because of what fiscal and tax policy looks like next year. You could argue that just having the uncertainty behind us could lead to a bit of a relief rally," Piazza said.

The Nasdaq was the strongest of the three major U.S. stock indexes, helped by a rally in Apple Inc, the most valuable publicly traded U.S. company. Apple's stock rose 1.4 percent to close at $584.62. The stock has fallen 17 percent from its closing high of $705.07 on Sept. 21.

Once the election is over, the market will turn to the "fiscal cliff," the $600 billion worth of tax hikes and spending cuts that could hit the economy hard in 2013 unless Congress comes to an agreement that will soften the blow.

"I guess, academically, you could convince yourself a president doesn’t generally doesn’t have that much influence over the economy near-term, but the fact remains, they could impact the market," said Jack Ablin, chief investment officer of Harris Private Bank in Chicago.

A budget crisis in the United States could hamper growth around the world. On Sunday, economic leaders pressed the United States to avert the fiscal cliff in the interest of avoiding a large-scale economic slowdown.

Another drag on trading volume was the residual impact of Hurricane Sandy, which has left about 30,000 to 40,000 Americans homeless. The superstorm wreaked havoc on infrastructure and housing in the Northeast.

"I think Sandy is still affecting volume a little bit," Piazza said. "Folks we deal with in New York seem to be back at work now, but they were out most of the week last week, and still have other things on their minds."

The Dow Jones industrial average advanced 19.28 points, or 0.15 percent, to end at 13,112.44. The Standard & Poor's 500 Index rose 3.06 points, or 0.22 percent, to 1,417.26. The Nasdaq Composite Index gained 17.53 points, or 0.59 percent, to close at 2,999.66.

The CBOE Volatility Index or VIX, Wall Street's favorite barometer of investor anxiety, rose 4.72 percent - a relatively big move compared with the S&P 500 - to end Monday's session at 18.42.

"It's just a few people taking positions ahead of the election, to protect themselves against a pullback," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. "I think this will go on tomorrow as well," adding that he believes the market will be flat while the VIX is likely to show "a bigger move, as it's just the nature of hedging ahead of big news like the election."

The PHLX semiconductor index rose 1.6 percent and bolstered the Nasdaq.

An index of housing-related shares gained 1.8 percent.

In the energy sector, the S&P energy index gained 0.7 percent following a gain in crude oil futures prices and third-quarter earnings from two major energy companies.

Transocean Ltd, which operates the world's largest offshore oil drilling fleet, gained 5.6 percent to $48.64, a day after the company reported a higher-than-expected adjusted profit for the third quarter. 

Shares of Southern Co, the second-largest U.S. power company, fell 2.5 percent to $44.62 after Southern posted third-quarter earnings.

The S&P utilities index, down 1.66 percent, was the worst performing of the 10 major S&P 500 sectors a week after superstorm Sandy hit New York City and surrounding areas.

Shares of Time Warner Cable, the second-largest U.S. cable operator, lost 6.4 percent to $91.93 after the company reported a quarterly profit that missed estimates as it lost more video subscribers than expected. 

BioMarin Pharmaceutical Inc surged 31.2 percent to $49.07 after the company said a late-stage trial of its experimental drug for a rare genetic disorder could improve patients' walking ability when the medicine is administered weekly. The rally in BioMarin's stock helped drive the Nasdaq biotech index up 1.7 percent. 

Despite the light volume on Monday, the market's breadth was positive. Advancers slightly outnumbered decliners on the New York Stock Exchange by a ratio of 15 to 14. On the Nasdaq, about three stocks rose for every two that fell.

NEW YORK, Nov 5 (Reuters) - U.S. crude futures rose on Monday, after falling to their lowest since July, and extended gains to more than $1 post-settlement as gasoline futures rallied while the storm-ravaged East Coast continued to grapple with the aftermath of Hurricane Sandy.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell to a 2-1/2 week low on long liquidation and improving weather forecasts for crops in South America, traders said.

* Additional pressure stemmed from expectations that USDA will raise its forecast of the 2012 U.S. soybean harvest when it releases its next monthly supply/demand reports on Friday.

• Beneficial rains were forecast for Brazil's center-west and northeast regions this week, bolstering prospects for a record-large soybean crop, forecaster Somar said. Parts of top soy state Mato Grosso received 2.2 inches (56 mm) of rain on Sunday, after below-average rainfall in October. 
• Brazil will probably harvest a record 79.02 million tonnes of soybeans in 2012/13, local crop analyst Celeres said on Monday, holding its forecast from a month earlier as planting picks up. Celeres said farmers had planted 37 percent of the crop, up from 27 percent a week ago but down from 48 percent a year ago. 
• In Argentina, producers have jump-started corn and soy planting in recent days as a sunny streak has improved conditions after months of flooding.
• CBOT reported 601 deliveries against November futures, with JP Morgan customer accounts issuing 459 and Newedge USA customer stoping 402.
• Trade expects USDA in its weekly crop progress report later on Monday to show the U.S. soybean harvest at was 92 percent complete last week, compared with 87 percent the previous week. 

SINGAPORE, Nov 5 (Reuters) - Malaysian palm oil futures tumbled to their lowest in more than three weeks on Monday, as traders continued to worry over large stockpiles in the world's No.2 producer of the tropical oil.

Traders and analysts expected inventories in Malaysia to reach a fresh record high in October on strong production. Weakness in other vegetable oil markets also weighed on palm oil prices.

"The market's dragged down by soybean oil and soybeans, and local sentiment is also not good," said a trader with a foreign commodities brokerage in Malaysia.

"The question for oilseeds, especially palm oil, is basically Malaysia's end-stocks figures for October. Exports may be good, but end-stocks are not coming down. The question is how much, and we are looking at 2.5 million or 2.6 million tonnes."

The benchmark January contract on the Bursa Malaysia Derivatives Exchange lost 3.4 percent to close at 2,411 ringgit ($788) per tonne. Prices earlier fell to an intraday low at 2,381 ringgit, weakest since Oct. 12.

Total traded volumes stood at 44,480 lots of 25 tonnes each, much higher than the usual 25,000 lots, as traders rushed to liquidate their positions.

Concerns remained that strong exports of 1.6 million tonnes in October would do little to counter healthy production that may swell stockpiles.

Industry regulator the Malaysian Palm Oil Board (MPOB) releases data on October inventory levels on Nov. 12.

"We expect the upcoming MPOB data to be uninspiring, as inventory is poised to increase further, to another record high of 2.65 million tonnes," Alan Lim Seong Chun, a research analyst with Malaysia's Kenanga Investment Bank, said in a note on Monday.

"However, the high inventory should have already been reflected in the very high discount of crude palm oil against soybean oil, at more than $250 per tonne."

The steep discount between palm and soybean oil could trigger higher purchases from India, the world's biggest vegetable oil importer, and top analyst Dorab Mistry called for the country to impose an import duty of 10 percent on crude palm oil to protect its farmers.

In related markets, Brent prices slipped to around $105 a barrel on Monday, weighed down by a strong dollar and demand destruction after Superstorm Sandy, while investors remained cautious ahead of the U.S. presidential election. 

In other vegetable oil markets, U.S. soyoil for December delivery slipped 0.8 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 3 percent lower.

BANGKOK, Nov 5 (Reuters) - Southeast Asian stock markets ended mostly lower-to-flat on Monday amid weakness elsewhere in Asia, with Indonesia and Malaysia hitting multi-week lows while Thailand pared earlier gains to end nearly flat.

Jakarta's Composite Index was down 0.8 percent at 4,302.93, the lowest since Oct. 11 and a retreat from a record close of 4,364.59 hit on Oct. 30. Malaysia's main index edged down 0.13 percent to 1654.04, the lowest since Oct. 16.

Malaysia hit a peak of 1,675.69 on Nov. 1.

Among decliners, Indonesia's biggest firm by value Astra International dropped 1.9 percent and Malaysia's telecoms firm Axiata Group was down 0.3 percent.

The region saw light trading volume amid caution in broader Asia as investors shied away from risk ahead of the closely fought U.S. presidential election.