RTRS - China cancels 600,000 T US soy, adds pressure on prices

BEIJING/SINGAPORE, Nov 16 (Reuters) - Chinese importers have canceled orders for about 600,000 tonnes of U.S. soybeans, an official think-tank said on Friday, as weak domestic demand and a recent drop in prices made these purchases unprofitable.

The cancellation of cargoes by China, the world's top buyer, will weigh on Chicago futures which have already dropped more than 20 percent since hitting a record high of $17.94-3/4 a bushel on Sept. 5.

The China National Grain and Oils Information Center (CNGOIC) did not say when the orders, equivalent to 10 cargoes, were canceled but said they were for delivery in December and January, indicating that they had been booked long before the recent drop in prices.

"Crush margins in China are under pressure. Prices have come down significantly from the highs and beans that were bought when prices were $2 or $3 (per bushel) higher may not work in the current product price environment," said Anne Frick, oilseeds analyst with Jefferies Bache.

"There probably was some component of insurance buying in case of problems in South America, but weather is looking a little more favorable for the South American crop," she said.

EXPENSIVE BEANS, NEGATIVE MARGINS

The increase in import prices has contributed to the losses of the soybean crushing industry, which is also grappling with overcapacity and a decline in domestic demand for products such as soyoil and soymeal.

"Crushers are running at a heavy loss while domestic demand for soyoil and meal remains sluggish, and this situation may not improve later," the CNGOIC said in report

Beijing's stockpiling of domestic soybeans and a poor harvest have pushed up prices of local soybeans, forcing some crushers in the northeast to close down their plants for more than 15 days a month.

Chinese processors are trying to get out of the import deals as they had bought before prices started declining, traders said.

The CNGOIC report estimated China's 2012 soy imports at a record high of 58 million tonnes, a 10 percent increase from a year ago. December and November imports were expected to rise to a higher-than-expected 10 million tonnes, the CNGOIC said.

Trader's Highlight

DJI - NEW YORK, Nov 16 (Reuters) - U.S. stock markets ended higher on Friday on hopes that politicians would find common ground to steer clear of the "fiscal cliff" that would hurt the U.S. economy, while escalating tensions in the Middle East boosted oil prices.

But shares on major markets still posted a second consecutive weekly loss as the collective worry about the U.S. government's fiscal problems and weak global economic growth weighed on sentiment.

Investors have been concerned that if no deal were reached to modify automatic spending cuts and tax hikes, the U.S. economy could slip into recession. The S&P 500 has dropped about 4 percent over the past two weeks, in part due to these worries.

NYMEX - NEW YORK, Nov 16 (Reuters) - Expiring U.S. December crude futures rose on Friday as the escalating conflict between Israel and Palestinians in Gaza reinforced concerns about supply in the Middle East and as a Gulf of Mexico energy platform fire also helped boost prices.

CBOT SOYBEAN - U.S. soybean futures dropped 1.3 percent to a five-month low after the world's top importer of the oilseed canceled deals to import some U.S. supplies, traders said.

* For the week, the benchmark Chicago Board of Trade January soybean futures contract dropped 4.7 percent, its third straight week of declines.

• During the past three weeks, soybean prices have shed 11.4 percent.
• Chinese importers canceled orders for about 600,000 tonnes of U.S. soybeans due to weak domestic demand and recent price declines, the China National Grain and Oils Information Center said.
• The U.S. Agriculture Department said on Friday morning that weekly export sales of soybeans were 585,200 tonnes, topping forecasts for 250,000 to 550,000 tonnes and up from 191,900 tonnes a week ago. 

FCPO - SINGAPORE, Nov 16 (Reuters) - Malaysian palm oil futures slipped on Friday, despite posting a weekly gain of close to 5 percent, as traders booked profits from a large increase in the previous session, and slowing exports squeezed prices.

"The market came down a bit as there was some profit-taking," a trader with a foreign commodities brokerage in Malaysia said, adding that prices seemed to be trading in a broad range of 2,300 to 2,500 ringgit. "Exports were also down and that could be another reason."

Exports of Malaysian palm oil products for Nov. 1 to 15 fell 0.1 percent to 769,087 tonnes from 769,534 tonnes for the Oct. 1-15 period, cargo surveyor Intertek Testing Services said on Friday.

That came as a disappointment after exports rose as much as 22 percent for the Nov. 1-10 period from a month ago, although some traders traced the slowdown to a slew of holidays this week.

Market players are also closely monitoring a French proposal of a fourfold tax increase on palm oil in food, which stirred opposition from foodmakers and industry groups in top producers Indonesia and Malaysia.

Regional Equties - Nov 15 (Reuters) - Thai stocks recovered from a seven-week low on Friday while other major Southeast Asian stock markets ended weaker-to-flat as global economic concerns led by the U.S. 'fiscal cliff' and the eurozone debt crisis weighed on the region's risky assets.