RTRS - India soyoil drops on supply, weak palm oil

MUMBAI, Dec 19 (Reuters) - Indian soyoil futures eased on Wednesday on rising supplies and a drop in palm oil prices overseas, while oilseeds rose on good exports demand for oilmeal.

• At 0818 GMT, Malaysian palm oil futures were down 0.94 percent at 2,320 ringgit per tonne, while U.S. soybeans had eased 0.14 percent to $14.64 per bushel.
• India meets more than half of its edible oil requirement through imports, which largely constitute palm oil.
• The January soybean contract on India's National Commodity and Derivatives Exchange was up 0.22 percent at 3,370.5 rupees per 100 kg.
• "The downside in palm oil prices pulled down soyoil. Local fundamentals are supporting. Edible oil demand is likely to stay firm due to the winter season," said Badruddin Khan, associate vice-president of research at Indiabulls Commodities Ltd.
• India's soymeal exports surged more than 10-fold in November from a month ago on fresh supplies and strong demand from France and Japan.
• The January soyoil contract fell 0.29 percent to 703.2 rupees per 10 kg, while the January rapeseed contract jumped 2.31 percent to 4,244 rupees per 100 kg.
• Indian farmers have cultivated rapeseed on 6.36 million hectares as of Dec. 14, compared with 6.16 million hectares during the same period last year.
• At the Indore spot market in Madhya Pradesh, soyoil fell 5.3 rupees to 720.95 rupees per 10 kg, while soybeans eased 20 rupees to 3,353 rupees per 100 kg. At Sri Ganganagar in Rajasthan, rapeseed jumped 48 rupees to 4,275 rupees.

RTRS - U.S. soybeans fall as China cancels deals; wheat firms

CHICAGO, Dec 18 (Reuters) - U.S. soybean futures dropped 2 percent on Tuesday, their biggest daily decline in more than a month, due to China's decision to cancel a purchase of 300,000 tonnes of U.S. supplies, traders said.

Corn prices also fell, dragged lower by the weakness in soybeans and low demand from end users on the domestic and export front.

Wheat bucked the overall weakness in the grains complex, climbing for only the second time in eight sessions as a round of short covering hit the market when prices for the benchmark Chicago Board of Trade March contract  equaled a 5-1/2 month low.

A tender for supplies from Egypt, the world's top buyer of wheat, added support to the wheat market.

The U.S. Agriculture Department said the soybean cancellations also included 120,000 tonnes of supplies sold to unknown destinations in addition to the 300,000 tonne deal that China, the world's top buyer of soybeans, scuttled.

China's move suggested that demand for U.S. soybeans might be slowing down from its robust pace of the past few months, especially with harvest of the South American crop starting soon.

"I am a little surprised but let's look at it in the bigger scope," said Mark Schultz. "I was even more surprised that they bought as much as they did earlier. It is still a big number, even with the cancellations. We are a little bit surprised just because of where the price of beans are still at in China."

CBOT January soybean futures  settled down 30-1/4 cents at $14.66 a bushel. Prices fell through key technical support points at the contract's 50-day and 200-day moving averages during the session. It was the front-month soybean contract's biggest drop in percentage terms since falling 2.1 percent on Nov. 15.

CBOT March corn  was 4 cents lower at $7.20 a bushel. CBOT March wheat gained 3-1/4 cents to $8.11-1/4 a bushel, settling above its 200-day moving average after hovering near that key technical level for much of the session.

Egypt's main wheat-buying agency, the General Authority for Supply Commodities (GASC), set a tender on Tuesday to buy an unspecified amount of wheat from global suppliers for shipment Feb. 11-20. As part of the tender, GASC is seeking cargoes of 55,000 to 60,000 tonnes of different kinds of wheat, including two different classes of U.S. supplies.

Two major winter storms systems are set to sweep through much of the U.S. Plains and Midwest over the next two weeks leaving welcome soil moisture, said Don Keeney, agricultural meteorologist for MDA EarthSat Weather.

Snowfall ranging from 2 to 4 inches could be expected accompanied by some rain in this week's storm and an even bigger storm is expected next week

"The six- to 10-day outlook is even more intense with 12.00 to 18.00 inches of snow in eastern Nebraska, Kansas and the northern Midwest," Keeney said.

January milling wheat in Paris  was off 1.25 euros or 0.5 percent at 256.50 euros, with a firmer euro against the dollar adding to downward pressure. 

One European trader said there was a growing belief that prices in Paris were not reflecting the good export outlook with Russia and Ukraine out of the market and "now there is a growing belief that poor harvest weather will also compel Argentina to cut back on exports, too."

SOY SETBACK

Soybeans fell despite concerns over production shortfalls in South America, with further unfavorable weather forecast.

Widespread rainfall moved across Argentina over the weekend causing another slowdown in crop seedings and the rain is expected to continue through Wednesday, Global Weather Monitoring said.

Analysts remain concerned the window in which soybeans must be planted to avoid yield losses is closing, further tightening global stocks.

Estimates for the country's 2012/13 soy harvest, which should start in March, vary wildly. Government officials have said they expect a crop of 55 million tonnes or more while worst-case private estimates reach down to 45 million tonnes.

Trader's hightlight

DJI - NEW YORK, Dec 18 (Reuters) - Global stocks advanced to their highest levels since September on Tuesday on signs of compromise in U.S. talks to stop automatic tax hikes and spending cuts that could hurt the economy next year.

With confidence rising that lawmakers would avert the "fiscal cliff," investors shifted funds to stocks and the euro and pulled away from assets traditionally viewed as safe harbors like bonds, gold and the U.S. dollar. The euro hit a 7-1/2 month high against the greenback while gold fell almost 2 percent to its lowest since August.

Wall Street rallied on strong volume, capping off the S&P 500's best two-day run in a month, on confidence that a deal would be struck in Washington to avoid painful spending cuts and tax hikes.

Banking, energy and technology - sectors that would benefit during economic expansion - led gains as investors were confident that lawmakers will come to an agreement to avoid the end-of-year deadline.

"The view is that the economy is getting better, and that is always good for energy demand," said Shawn Hackett, president at Hackett Financial Advisors in Boynton Beach, Florida.

Hackett said the United States would avoid "whatever the 'cliff' means" for the economy, allowing investors to focus on growth.

President Barack Obama's most recent offer to Republicans in the ongoing budget talks makes concessions on taxes and social programs spending. House Speaker John Boehner said the offer is "not there yet," though he remains hopeful about an agreement. Senate Democrats, however, have expressed concern about cuts to Social Security.

The Dow Jones industrial average closed up 115.57 points, or 0.87 percent, at 13,350.96. The Standard & Poor's 500 Index was up 16.43 points, or 1.15 percent, at 1,446.79. The Nasdaq Composite Index  was up 43.93 points, or 1.46 percent, at 3,054.53.

NYMEX - TOKYO, Dec 18 (Reuters) - U.S. crude futures rose for a third day on Tuesday on hopes that Washington could be edging closer to a deal to avert the so-called fiscal cliff, which threatens to push the world's biggest oil user into recession and dent energy demand.

CBOT Soyoil - Chicago Board of Trade soybean futures posted double-digit losses after USDA announced cancellations of sales of U.S. soy to China and to an unknown destination, traders said.

* Private exporters reported the cancellation of 300,000 tonnes of U.S. soybeans sold to China and a further 120,000 tonnes sold to unknown destinations. At the same time, exporters reported sales of 110,000 tonnes of U.S. soybeans to unknown destination.

 

·         Oilseeds analyst Oil World said it cut its forecast of the 2013 soybean harvest in Argentina by 1 million tonnes because of unfavorable weather disrupting sowings, but has retained its previous forecast of Brazil's crop.

·         Two major winter storm systems are set to sweep through much of the central United States over the next two weeksleaving welcome soil moisture and providing some relief from theworst drought in over 50 years, an agricultural meteorologist said on Tuesday.

·         Soybean spot basis bids were mostly steady at processors, elevators and ethanol plants around the U.S. Midwest on Tuesday, supported by lower futures and light county offerings, cash dealers said.   

 

·         Key support for the January contract is at its 200-day moving average of $14.72-3/4 and key resistance is at its 50-day moving average of $14.85-1/4. The nine-day relative strength index is at 48.

FCPO - SINGAPORE, Dec 18 (Reuters) - Malaysian palm oil futures edged lower in rangebound trading on Tuesday, hurt by a slowdown in exports at a time when inventory levels remain at record highs.

Cargo surveyors reported a slight drop in Malaysian palm oil exports for Dec. 1-15 from a month ago, leaving traders to hope for slowing production to bring down stock levels that hit 2.56 million tonnes in November.

Palm oil futures have shed more than a quarter of their value since the start of the year, set for their biggest annual drop since 2008, although analysts say prices should recover in 2013 as stocks begin to ease.

"For next year, we see a rebound in crude palm oil prices back to 2,750 ringgit per tonne from the current weak position, with signs only expected to start kicking in when inventories are back to optimal levels," Malaysia's Public Investment Bank said in a research note.

"Although production levels are back to normal, demand from the major consuming countries remains uncertain due to the slowdown in economic activity and tightening measures on imports of vegetable oils."

China, the world's second largest edible oil buyer, will impose stricter quality measures on edible oil imports from Jan. 1 onwards.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange dropped 0.4 percent to close at 2,341 ringgit ($766) per tonne. Prices traded in a tight range between 2,332 and 2,355 ringgit.

Total traded volumes stood at 30,911 lots of 25 tonnes each, higher than the usual 25,000 lots.

Traders are hoping for Malaysia's crude palm oil export tax, set at zero percent for January, to spur shipments of the grade and bring down record stocks.

In a bullish sign for palm oil, Brent crude rose above $108 a barrel on Tuesday as the outlook for demand improved on signs of progress in U.S. talks to resolve a budget crisis that threatens to dip the world's top oil consumer into recession again.

In other vegetable oil markets, U.S. soyoil for January delivery  was almost flat in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange edged up 0.1 percent.

Regional Equties - BANGKOK, Dec 18 (Reuters) - Malaysian shares climbed to seven-week highs on Tuesday with telecoms stocks such as Axiata Group Bhd led a broad rally while Philippine stocks reversed early loss as investors bought laggard large caps such as SM Investments Corp

Malaysian index finished up 0.7 percent after two sessions of losses, led by a 3.4 percent gain in Axiata Group and a 1.4 percent rise in DiGi.Com considered by market players as oversold due to their high valuations.

Philippine index closed up 0.23 percent, ending four straight sessions of falls but below last week's record finish of 5,831.50.

Concerns over potential intervention to stem strength in regional currencies kept market investors cautious across the board, brokers said.

Thai benchmark SET index was up 0.3 percent at 1,362.94, a new closing high in almost 17 years. Singapore's Straits Times Index ended 0.06 percent lower after scaling a 16-month closing high of 3158.70 on Monday.