RTRS - INTERVIEW-Brazil soy quality rises but logistical headaches worsen

BRASILIA, Feb 26 (Reuters) - The quality of Brazilian soybeans is improving as rains that disrupted early harvest let up, the head of the national soy producer association said on Tuesday, but concerns are growing over long delays in getting beans through crowded ports.

The U.S. Department of Agriculture expects Brazil's production of soybeans to surpass that of the United States for the first time this season with 83.5 million tonnes versus 82 million, straining transport infrastructure to the limit.

Rains from early in the harvest in January slowed the flow of product from top soy-growing state Mato Grosso and many early-harvested beans are being sold at a discount due to moisture damage, Aprosoja's Glauber Silveira said.

"Mato Grosso is already starting to harvest better-quality grains now. Rains are easing," Silveira said during a guest appearance on Reuters Global Ags Forum, an online chat room for grain traders.

Brazilian weather forecaster Somar expects rains to continue this week in the key center-west region where Mato Grosso is situated, but then to shift to the south by early March.

Soy futures in Chicago for March delivery SH3 settled down 3-1/2 cents at $14.47-3/4 a bushel on Tuesday, pressured by prospects for a good South American harvest between Brazil and world No. 3 producer Argentina.

Though the weather has improved for harvesting, getting the crop to port would be a major hurdle, Silveira said. A truck shortage and clogged ports have led to queues of more than one month for ships to load even before peak harvest.

"The queues will get worse ... Costs for transport will without doubt keep rising," Silveira said, adding this burden would largely fall on trading houses. He estimated producers had forward-sold 70 percent of the crop, locking in their price.

"Producers who haven't sold yet may take a hit, though," he said, since traders facing higher costs would likely make lower offers to reduce the impact on their margins, which are being squeezed by spiking transport costs.

The soy sector says it is unable to speed this year's export flow, which is likely to be the most chaotic ever as record production is funneled through ports that have failed to expand in tandem with grains output.

New regulations this season have also restricted the hours truckers can spend behind the wheel each day, slashing road haulage capacity.

The opening of a river port in the north of the country, likely by next year, will provide some relief for next season. Critical rail and road projects costing tens of billions of dollars, however, will take several years to build.

Exacerbating the risks this year, unions representing the country's dock workers could resume strikes after mid-March unless the government modifies plans to reform port regulations, which they say could cost jobs and cut wages.

Silveira said logistics woes were eroding Brazil's edge over the United States in terms of production costs. He expected the two countries' output to be "neck and neck" and it was not yet certain Brazil would claim the rank of top producer this year.

"But I hope so!," he said.

Trader's highlight

DJI - NEW YORK, Feb 27 (Reuters) - U.S. stocks rose on Wednesday, with major indexes posting their best daily gains since early January, as Federal Reserve Chairman Ben Bernanke remained steadfast in supporting the Fed's stimulus policy and data pointed to economic improvement.

In a second day before a congressional committee, Bernanke defended the Fed's buying of bonds to keep interest rates low to boost growth. The market's jump of more than 1 percent also came on better-than-expected data on business spending plans and the housing market.

Bernanke's remarks helped the market rebound from its worst decline since November and put the S&P 500 index back above 1,500, a closely watched level that has been technical support until recently. The Dow Jones industrial average closed at a level not seen since 2007 as it again pulled within striking distance of an all-time high.

Speaking before the House Financial Services Committee, Bernanke downplayed signs of internal divisions at the Fed, saying the policy of quantitative easing, or QE, has the support of a “significant majority” of top central bank officials.

Bernanke removed a headwind from markets arising from concerns the Fed's quantitative easing might end earlier than anticipated. Doubts about the Fed's intentions had broken a seven-week streak of gains by stocks.

"The Fed continues to encourage risk-taking in markets, which is a powerful tool that makes the danger not being long stocks, not in being too long," said Tom Mangan, a money manager at James Investment Research Inc in Xenia, Ohio.

The Dow Jones industrial average was up 176.32 points, or 1.27 percent, at 14,076.45. The Standard & Poor's 500 Index was up 19.07 points, or 1.27 percent, at 1,516.01. The Nasdaq Composite Index was up 32.61 points, or 1.04 percent, at 3,162.26.

The S&P turned very slightly higher on the week, recovering from the index's biggest daily drop since November on Monday. That drop came on concerns over Italy's election, as well as over sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement on spending and taxes.

The index had climbed 6.3 percent for the year before pulling back on concerns about Fed policy and inconclusive elections in Italy, which rekindled fears of a new euro zone debt crisis.

"While the rally remains intact and there are reasons to be long-term bullish here, there are also reasons to not be surprised if we get a correction," said Mangan, who helps oversee $3.7 billion.

Brent Crude Oil - Feb 27 (Reuters) - Brent crude oil futures for April delivery fell 84 cents to settle at $111.87 a barrel, as investors weighed expectations that the Federal Reserve's stimulus program will be maintained against the sixth straight weekly rise in U.S. crude oil stockpiles.

NYMEX - SINGAPORE, Feb 27 (Reuters) - U.S. crude futures edged towards $93 a barrel on Wednesday after Federal Reserve Chairman Ben Bernanke eased fears of an early retreat by the Fed from its economic stimulus, although worries about Italy's inconclusive election should cap gains.

CBOT Soybean - Soybean futures on the Chicago Board of Trade rose, halting a three-day slide, lifted by export demand for dwindling supplies of U.S. soybeans and worries about Brazilian harvest delays, traders said.

* USDA said private exporters reported sales of 120,000 tonnes of U.S. soybeans to unknown destinations for delivery in the current marketing year and another 120,000 tonnes to China for delivery in 2013/14. 

·         Concerns are growing over long delays in getting newly   harvested Brazilian soybeans through crowded ports, the head of the national soy producer association said on Tuesday.

·         Further support from strong cash markets and expectations   of no deliveries of soybeans, soymeal or corn on first noticeday for CBOT March futures on Thursday. Soyoil deliveries were   estimated at 1,000 to 4,000 contracts. 

 

·         Basis bids for soybeans shipped by barge to the U.S. Gulf Coast were steady to slightly lower early on Wednesday, but persistent export demand gave the market underlying support.

·         United Grain Corp locked out union workers at its Port of Vancouver grain export terminal in the U.S. Pacific Northwest after an investigation unearthed evidence that a union leader  sabotaged equipment there, a spokesman for the grain company said.

·         Soyoil ends higher despite spillover weakness from  Malaysian palm oil futures, which fell to a near six-week low.

 

·         Wall Street rallied for a second day as Federal Reserve Chairman Ben Bernanke reaffirmed his strong support for the Fed's stimulus efforts.

BMD CPO - KUALA LUMPUR, Feb 27 (Reuters) - Malaysian palm oil futures inched down on Wednesday to a near six-week low, stretching losses into a sixth straight session with investors remaining cautious that uncertain overseas markets could weigh on demand for the tropical oil.

Prices had crept up 0.7 percent by the midday break as traders retraced from liquidations earlier in the week, but dropped later to as low as 2,395 ringgit per tonne.

Market players are now watching Italy's 6.5 billion euro auction of new 5- and 10-year bonds which kicked off at 1000 GMT for further trading cues.

"There was some retracement in the market earlier but it could not sustain itself because there was no fresh news at those levels, so prices have come under more selling pressure," said a trader with a local commodities brokerage in Malaysia.

The benchmark May contract  on the Bursa Malaysia Derivatives Exchange fell 0.4 percent to 2,410 ringgit ($777) per tonne by the day's close. Prices traded in a tight range between 2,395 and 2,443 ringgit.

Total traded volume stood at 34,090 lots of 25 tonnes each, higher than the usual 25,000 lots.

Palm oil production in Malaysia, the world's No.2 producer, has slowed from its seasonal peak in September. At the same time stronger-then-expected exports of Malaysian palm oil products -- the cheapest in the world -- are widely expected to help ease inventory levels that are still high.

"With a rising export trend and falling production rate, we see a good chance the stockpile levels in February could come down," said Phillip Futures analyst Ker Chung Yang in Singapore. He expects end-stocks in February to fall to 2.2 million tonnes from 2.58 million now.

But the uncertainty in Europe has hampered any sustained rally in palm, as investors fret over political gridlock in Italy which they fear could reignite the euro zone financial crisis and weaken global markets.

"The inconclusive Italy scenario is worrying for the market, not only for palm oil but the commodities and equities markets as well. It's a timely reminder for global investors that the European crisis is not over yet," added Ker.

In other markets, oil traded near $113 a barrel, edging up from a one-month low, as world powers ended two days of talks with Iran over its nuclear work with no sign of a breakthrough.

In competing vegetable oil markets, U.S. soyoil for May delivery rose 0.1 percent in early Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange inched down 0.9 percent.

Regional Equties - BANGKOK, Feb 27 (Reuters) - Indonesia's benchmark stock index rallied to a record closing high on Wednesday thanks to solid gains in large market caps such as PT Telekomunikasi Indonesia  and as upbeat Standard & Poor's report lifted appetite for banking shares.

Jakarta's Composite Index  rose 1.14 percent, the biggest gain in more than five weeks, to 4,716.42, above Monday's record close of 4,696.11. Shares in Telkom Indonesia, the most actively traded by turnover, jumped 3.1 percent.

Banking shares were in favour, led by a 2.9 percent gain in Bank Rakyat Indonesia, with Standard & Poor's expecting Indonesian banks to maintain strong profitability, high loan growth, and sound capitalisation this year.

Others in the region came off day's highs, with late selling sending Thai stocks to two-week lows. The Philippines  edged down 0.22 percent to 6,616.27, extending its loss for a second session after Monday's record close of 6,721.33.

The region saw mixed foreign flows on the day. According to traders, Indonesia saw inflows of 813 billion rupiah ($83.75 million) on the day while the Malaysian bourse reported foreign buying of 125 million ringgit ($40.30 million).

The Thai stock market saw foreign selling of 204 million baht ($6.84 million), stock exchange data showed.

Chang Chiou Yi, a regional strategist at CIMB-GK Research, has an 'overweight' rating on Indonesia and Thailand.

"Both markets have embarked on an investment upcycle. Stable politics have helped business decision and there remain structural positives such as the rising income base, property demand and upcountry spending demand," Chang said.

RTRS - Palm oil demand to rise on competitive price- Oil World

HAMBURG, Feb 26 (Reuters) - Palm oil’s competitive price against other vegetable oils means palm is likely to win more sales in coming months in markets including India, Europe, China and even the United States, Oil World said on Tuesday.

“The preconditions for the demand of palm oil and its sister product palmkernel oil are unusually favourable for the remainder of this season, given waning competition from other vegetable oils,” Hamburg-based oilseeds analysts Oil World said.

Malaysian fob export prices for refined, bleached and deodorised palm oil were around $270 a tonne cheaper than Argentine soyoil export prices in the past week, Oil World said.

This is down from $330 in December but still makes palm oil attractive compared with seed-based edible oils such as soyoil, rapeseed oil and sunflower oil, it said.

Global October 2012/September 2013 palm oil imports are likely to rise to 42.7 million tonnes from 40.2 million tonnes in the same period a year previously, Oil World estimates.

Among major buyers is likely to be India, which may raise palm and palmkernel oil demand this season by 0.7 million tonnes, Oil World said.

The European Union is likely to cut seed oil consumption by 0.3-0.4 million tonnes this season and raise consumption of palm oil and palmkernel oil by roughly 0.5 million tonnes, it said.

“In China, the consumption of palm oil and palmkernel oil may show a relatively moderate increase of 0.3-0.4 million tonnes this season given the country’s strong focus on oilseed imports and crushings to satisfy its (animal feed) protein requirements,” it said.

The United States may also raise palm oil imports by 0.1 million tonnes, especially for biodiesel, but this may depend on U.S. rules about sustainable palm oil production, it said.

RTRS - EU to raise soymeal imports in coming months- Oil World

HAMBURG, Feb 26 (Reuters) - The European Union is likely to raise soymeal imports in coming months as animal feed makers hope the new South American soybean crops in early 2013 will depress prices, Hamburg-based oilseeds analysts Oil World said on Tuesday.

The EU will import 17.50 million tonnes of soymeal between January and September, up from 16.21 million in the same period a year ago, Oil World estimates.

EU animal feed producers cut soymeal imports last year in the face of high prices following drought damage to soybean harvests in several regions and the depressed state of Europe’s livestock farming, Oil World said.

EU feed makers have low soymeal supply cover for the 2013 summer months and are expected to start raising imports from April as supplies from large harvests in Argentina and Brazil come on to the global market, it said.

Yet the large number of consumers waiting to buy low price soymeal as South American supplies enter the market may push prices up, Oil World warned.

Trader's highlight

DJI - NEW YORK, Feb 26 (Reuters) - U.S. stocks rebounded from their worst decline since November on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus and sales of new homes hit a 4 1/2-year high.

The S&P 500 had climbed 6 percent for the year and came within reach of all-time highs before the minutes from the Fed's January meeting were released last Wednesday. Since then, the benchmark S&P 500 has fallen 1 percent.

Bernanke, in testimony on Tuesday before the Senate Banking Committee, strongly defended the Fed's bond-buying stimulus program and quieted rumblings that the central bank may pull back from its stimulative policy measures, which were sparked by the release of the Fed minutes last week.

Bernanke's comments helped ease investors' concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority, posing the threat of prolonged instability and financial crisis in Europe, and sending the S&P 500 to its worst decline since Nov. 7 in Monday's session.

Bernanke "certainly said everything the market needed to feel in order to get comfortable again," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"The fear is we were going to see a rollover, and the first shot over the bow was what we saw out of Italy yesterday with the elections," Kenny said. "When it came to U.S. markets, we saw some of that bleeding stop because our focus shifted from the Italian political circus to Ben Bernanke."

Economic reports that showed strength in housing and consumer confidence also supported stocks. U.S. home prices rose more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in 4-1/2 years in January.

However, the central bank chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the economic recovery.

The Dow Jones industrial average gained 115.96 points, or 0.84 percent, to 13,900.13 at the close. The Standard & Poor's 500 Index rose 9.09 points, or 0.61 percent, to 1,496.94. The Nasdaq Composite Index  advanced 13.40 points, or 0.43 percent, to close at 3,129.65.

Despite the bounce, the S&P 500 was unable to move back above 1,500, a closely watched level that was technical support until recently, but could now serve as a resistance point.

The CBOE Volatility Index  or the VIX, a barometer of investor anxiety, dropped 11.2 percent, a day after surging 34 percent, its biggest percentage jump since Aug. 18, 2011.

The uncertainty caused by the Italian elections continued to weigh on stocks in Europe. The FTSEurofirst-300 index of top European shares closed down 1.4 percent. The benchmark Italian index tumbled 4.9 percent.

Brent Crude Oil - NEW YORK, Feb 26 (Reuters) - Brent crude oil futures fell $1.73, or 1.51 percent, to settle at $112.71 a barrel on Tuesday as inconclusive Italian election results revived investor concerns about instability in the euro zone and threatened the outlook for fuel demand.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a third day on pressure from the expanding Brazilian soybean harvest and market participants exiting long soybean/short corn spreads, traders said.

* Unconfirmed talk that China may sell 1 million to 2.5 million tonnes soybeans out of reserves to ease supplies until Brazilian shipments arrive.

 

·         Soymeal futures closed higher while soyoil sank for a  fifth day, with March soyoil briefly dropping below 49  cents per lb, its lowest level since Dec. 31.

 

·         The European Union is likely to raise soymeal imports in  coming months as supplies from large harvests in Argentina and  Brazil come on to the global market - analysts Oil World.

 

·         Palm oil’s competitive price against other vegetable oils   means palm is likely to win more sales in coming months in  markets including India, Europe, China and even the United  States - Oil World. 

 

·         Germany’s 2013 rapeseed crop is likely to rise to 5.3   million tonnes from 5.0 million tonnes in 2012, the German Farm Cooperatives Association said.

BMD CPO - KUALA LUMPUR, Feb 26 (Reuters) - Malaysian palm oil futures slipped on Tuesday to their lowest in more than five weeks, as weak overseas vegetable oil markets kept investors on edge, although upbeat export data and slowing production helped limit losses.

China and U.S. soy markets, which are tracked by palm, remained weak after suffering steep falls on Monday and as better weather in the U.S. Midwest and South America improved the prospects for supply.

But stronger-than-expected exports in the first 25 days of February, buoyed by increased shipments of Malaysian palm oil products to Europe and India, kept prices from tumbling further.

"The market is a little oversold at the current juncture after a slew of negative news from pundits and analysts," said a trader with a local commodities brokerage in Malaysia.

"The external market 'grains' are a major contributor to the current low prices. We anticipate demand to pick up very soon, and prices to recover once the selling pressure subside."

The USDA outlook numbers, with projections of a record soybean crop at 3.4 billion bushels, are bearish, he added. "This certainly spells trouble for palm oil in the second quarter of 2013."

The benchmark May contract on the Bursa Malaysia Derivatives Exchange had dipped to 2,411 ringgit per tonne, the lowest since Jan. 21, before closing at 2,417 ringgit ($779), a fall of 2.2 percent.

Total traded volume stood at 35,620 lots of 25 tonnes each, higher than the average 25,000 lots.

Investors are pinning hopes on healthy exports alongside seasonally slowing production to ease the current stockpile of 2.58 million tonnes in Malaysia, the world's No.2 producer.

"At the end of the month we might see an 18 percent drop in production. And with this kind of exports, we will definitely see a drawdown in the stocks," said a trader who deals with a foreign commodities brokerage.

Oil fell below $114 a barrel on Tuesday, hit by doubts over demand growth as a potential political vacuum in Italy revived concern over instability in the debt-plagued euro zone. 

In competing vegetable oil markets, the U.S. soyoil for May delivery fell 1.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange slipped 1.5 percent.

Regional Equities - BANGKOK, Feb 26 (Reuters) - Southeast Asian stock markets fell on Tuesday on profit-booking in recent gainers such as PT Bank Mandiri Persero Tbk  and Ayala Land Inc after Italy's inconclusive election fuelled concerns of a resurgent euro zone debt crisis.

Jakarta's Composite Index  lost 0.7 percent to 4,663.03 with Bank Mandiri fell 0.5 percent after Monday's 2.1 percent gain on strong results.

The Philippines  slid 1.4 percent to 6,630.67 as large cap Ayala Land declined 3.5 percent.

Indonesia and the Philippines both hit record closes on Monday, making them among overbought markets, with the 14-day relative strength index ending at 72.4 and 70.2, respectively, on Tuesday. The level of 70 or above indicates a market is overbought.

Singapore's Straits Times Index fell 1.1 percent to a one-month low of 3,254.26 on heavy volume of 3.3 times a monthly average, led by a 6.6 percent drop in shares of Global Logistic Properties Ltd .

The Ho Chi Minh Stock Exchange's VN Index dropped 3.9 percent, its biggest one day loss since August.

Malaysia's main index eased 0.2 percent to 1,624.18, with retail and domestic institution selling shares worth $14.8 million and $26.7 million, respectively, countering foreign buying on the day, stock exchange data showed.

Thai SET index  finished down 0.6 percent at 1,530.32. Top energy firm PTT Pcl  fell 1.4 percent after it reported a weaker-than-expected net profit for the fourth quarter.

More than 70 stocks were trading at high valuations, about 40 times price to earnings multiple, Thai stock exchange president Charamporn Jotikasthira said.

Palm Slumps to Four-Week Low as Global Oilseed Harvests Expand

Bloomberg - Palm oil dropped to the lowest level in four weeks as global production of palm and soybeans is set to climb this year on increased acreage.

Palm oil will probably decline this year after Asian producers boosted acreage and global oilseed supplies rose, said Dorab Mistry, a Godrej International Ltd. director who has traded the commodity for more than 30 years. The expansion of estates will increase output, while bad weather that disrupted soybean supplies in 2012 will prompt farmers to ramp up harvests, said Mistry. Soybean oil also fell for a fifth day.

Full article : http://www.bloomberg.com/news/2013-02-26/palm-slumps-to-four-week-low-as-global-oilseed-harvests-expand.html

Palm Oil Outlook Seen Bearish by Mistry on Oilseed Supplies

Bloomberg - Palm oil probably will fall this year after Asian producers boosted acreage and global oilseed supplies rose, said Dorab Mistry, a Godrej International Ltd. director who has traded the commodity for more than 30 years.

Full article : http://www.bloomberg.com/news/2013-02-25/palm-oil-outlook-seen-bearish-by-mistry-as-oilseed-supply-jumps.html

RTRS - Weekend rains in Argentina seen averting crop losses

BUENOS AIRES, Feb 25 (Reuters) - Rains in the last few days in Argentina's main crop belt arrived just in time to avert serious damage to soy and corn crops after weeks of dry weather in the world's No. 3 exporter, a meteorologist said on Monday.

Scant rainfall from early January until the middle of last week pushed global grains prices higher on supply concerns and spurred analysts to trim their production estimates. Many crops are passing through yield-defining growth stages.

"From last Friday until now, there has been some decent rain, especially in the main agricultural belt. That means the damage has been limited and moisture levels have been restored," said Eduardo Sierra, a climate adviser to the Buenos Aires Grains Exchange.

"This should consolidate production expectations," he added.

The grains exchange expects soy and corn output of 50 million tonnes and 25 million tonnes, respectively. The U.S. Department of Agriculture sees production at 53 million tonnes and 27 million tonnes.

According to the latest weather report by the Rosario grains exchange, between 5 millimeters and 25 millimeters of rain fell across the country's main grains-producing region during the weekend alone.

Argentina's most-productive farming area straddles northern Buenos Aires and southern Santa Fe, Cordoba and Entre Rios.

"This week we're going to see some more rain and that means we're virtually safe to say 'we've made it,'" Sierra said.

The agriculture ministry said last week that showers had helped revive wilting soybean crops but that many were still in urgent need of rain.

Global soy prices rose slightly on Monday after falling to extend a sharp drop on Friday, pressured by rains in Argentina, which is also the world's biggest supplier of soymeal and soyoil.

Trader's highlight

DJI - NEW YORK, Feb 25 (Reuters) - U.S. stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy.

The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since Nov.7, and drove the S&P down to its lowest close since Jan. 18. The CBOE Volatility Index  or VIX, Wall Street's favorite barometer of fear, surged 34 percent, its biggest jump since Aug. 18, 2011.

Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since Feb. 4.

Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region.

The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.

"Europe hasn’t gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

"If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."

Earlier polls pointing to a center-left victory boosted stocks in Milan and other European markets, and also helped lift the S&P 500 to a session high of 1,525.84 on optimism that Italy would continue down its austerity path.

The Dow Jones industrial average dropped 216.40 points, or 1.55 percent, to 13,784.17 at the close. The Standard & Poor's 500 Index lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index fell 45.57 points, or 1.44 percent, to 3,116.25.

U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted. 

Brent Crude Oil - NEW YORK, Feb 25 (Reuters) - Brent crude futures edged up on Monday, supported by data showing strong demand for imported crude in China in January, but uncertainty about Italy's election pulled oil off its early peak.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a second straight session, pressured by the expanding harvest of a likely record-large crop in Brazil and welcome rains in Argentina, traders said.

* Additional pressure stemmed from long liquidation following last week's 3-1/2 month high.

·         However, the market pared losses toward the close, helping   March soybeans   to settle nearly 13 cents above its  intraday low of $14.38-1/2.

·         Brazil's 2013/14 soybean harvest was 28 percent complete  as of Friday, up from 19 percent a week earlier, analyst Celeres said.

 

·         Weekend rains in Argentina's main crop belt arrived just  in time to avert serious damage to soy and corn crops after   weeks of dry weather, said Eduardo Sierra, a climate adviser to  the Buenos Aires Grains Exchange.

 

·         Argentina's Rosario grains exchange lowered its estimate of the country's 2012/13 soybean harvest to 48 million tonnes,   down almost 10 percent from a month ago due to a long dry spell. 

 

·         USDA said private exporters reported sales of 120,000 tonnes of U.S. soybeans to China for 2013/14 delivery.

·         USDA reported export inspections of U.S. soybeans in the   latest week at 27.284 million bushels, below trade estimates for  35 million to 45 million.

·         The CBOT spot March soybean contract retreated below  its 50-, 100- and 200-day moving averages but held above chart  support at its 50-day average near $14.38.

 

·         Basis bids for soybeans shipped by barge to the U.S. Gulf  Coast drifted lower early on Monday following a flood of recent sales by farmers, traders said. 

BMD CPO  - SINGAPORE, Feb 25 (Reuters) - Malaysian palm oil futures slid to their lowest in nearly a month on Monday, tracking steep falls in other vegetable oil markets, although better-than-expected export numbers helped rein in losses.

The most active U.S. soyoil contract for May delivery  was down 0.7 percent in late Asian trade after losing almost 2 percent on Friday, weighed down by weak soybean prices due to improved prospects for South American supply.

Investors were also reacting to falls in China's most active September soyoil contract , which tumbled more than 3 percent to its lowest since mid-November, hurt by concerns over demand growth after a slip in the country's manufacturing output index. By 1011 GMT prices had slid by 3.2 percent.

"The market is tracking the U.S. and Dalian soybean oil markets. All these are external factors," said a trader with a foreign commodities brokerage in Kuala Lumpur.

The benchmark May contract  on the Bursa Malaysia Derivatives Exchange had eased 2.5 percent to 2,471 ringgit ($797) per tonne by Monday's close, but were off an earlier low of 2,461 ringgit, the lowest level since Jan. 29.

Total traded volume stood at 37,569 lots of 25 tonnes each, higher than the usual 25,000 lots, as traders rushed to liquidate positions.

Investor sentiment picked up, however, after cargo surveyor Intertek Testing Services reported a 4.6 percent increase in Malaysian palm oil exports to 1,153,852 tonnes for the Feb. 1-25 period from a month ago.

Another cargo surveyor, Societe Generale de Surveillance, reported exports in the same period picked up 2.7 percent, buoyed by higher shipments to Europe and India.

"The numbers were slightly better than expected and will probably stay at this pace towards the end of the month on a last-minute push to ship out tax-free crude palm oil," said a dealer with a foreign commodities brokerage in Malaysia.

Malaysia, the world's No.2 producer of the edible oil, will raise February's zero percent export tax to 4.5 percent in March after keeping it unchanged for two months.

Traders are counting on improving palm oil exports and seasonally slowing output in the world's No. 2 producer of the edible oil to help ease stockpiles that stood at 2.58 million tonnes in January.

In other markets, Brent crude wiped out early losses to trade above $114 per barrel on Monday as a firmer euro supported prices, although worries that a retreat in China's manufacturing activity would dent demand from the world's top energy consumer capped gains.

Regional Equties - BANGKOK, Feb 25 (Reuters) - Southeast Asian stock markets rose on Monday as investors bought shares in companies such as Genting Singapore Plc  and PT Bank Mandiri Persero Tbk  that showed strong quarterly results with rosier earnings prospects.

Singapore's Straits Times Index  closed 0.02 percent higher at 3288.76, with Genting among the top performers. It rose 1.9 percent, adding on Friday's 3.7 percent rise after the casino operator's results came above market estimates

Jakarta's Composite Index  gained nearly 1 percent to 4696.11, a record close, with shares in Bank Mandiri up 2.1 percent. For earnings report, click

The Philippine main index  hit a record finish of 6,721.33, up 0.8 percent. Malaysia's benchmark index ended near a one-week high of 1,627.35, up 0.3 percent and Vietnam  rose 1.3 percent to 483.69.

The Thai stock market  was shut for a market holiday, and reopens on Tuesday.

The region for the most part saw light trading volume as concerns over the pace of the global economic recovery weighed.

The MSCI's broadest index of Asia-Pacific shares outside Japan  was up 0.16 percent by 0930 GMT.

FOREX - NEW YORK, Feb 25 (Reuters) - The euro fell to a more than six-week low against the dollar on Monday, while the yen soared broadly as worries about political gridlock in Italy spurred investors to seek refuge in the U.S. and Japanese currencies.

With more than two-thirds of the vote counted, the projections suggested the centre left could have a slim lead in the race for the lower house of parliament. But no party or likely coalition appeared to be able to form a majority in the upper house or Senate.

A deadlocked parliament could threaten Italy's economic reforms and reignite the euro zone debt crisis. Optimism the worst of the region's crisis was over benefited the euro earlier this year.

The yen, at one point, soared more than 3 percent against the euro and 2 percent against the dollar. Steep losses in the yen in recent months on bets of further monetary easing in Japan have made it vulnerable to sharp reversals.

"Considering the substantial short yen positioning, I don't think it's completely surprising to see the move," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. "If you look at what's been moving, the largest move is really euro/yen."

Bloomberg - China’s Slower Manufacturing Casts Shadow Over Recovery: Economy

China’s manufacturing is expanding at the slowest pace in four months, a private survey showed, underscoring the headwinds faced by policy makers in the world’s second-biggest economy.

The preliminary reading of a Purchasing Managers’ Index was 50.4 in February, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 52.3 final reading for January and the 52.2 median estimate of 11 analysts surveyed by Bloomberg News. A number above 50 indicates expansion.

By Bloomberg News - Feb 25, 2013 2:17 PM GMT+0800

Source : http://www.bloomberg.com/news/2013-02-25/china-s-manufacturing-may-expand-at-slower-pace-hsbc-pmi-shows.html