Friday, March 29, 2013

Palm Oil Heads for Fourth Quarterly Loss as Demand May Weaken


March 29 (Bloomberg) -- Palm oil declined to its lowest level in almost two weeks, heading for a fourth quarterly loss, on concern that demand will slow as Europe’s debt crisis lingers, boosting inventories in producing nations.
The contract for delivery in June dropped as much as 0.8 percent to 2,392 ringgit ($775) a metric ton, the lowest most- active price since March 18, on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures traded at 2,396 ringgit at the midday break, down 1.7 percent this quarter. A fourth quarterly loss would be the worst streak since 1999.
Shipments to European Union countries by Malaysia tumbled 18 percent in the first 25 days of March to 155,870 tons from a month earlier, according to Societe Generale de Surveillance.
Total exports fell 7 percent to 1.1 million tons, it said March 25. Europe is the largest buyer of palm after India and China, U.S. Department of Agriculture data show. The region’s economy will contract for a second straight year in 2013, according to the median of analysts’ forecasts compiled by Bloomberg.
“Driving prices down is an expectation that exports from Malaysia will continue to decline,” said Arhnue Tan, vice president at Alliance Research Sdn. “That may lead to high inventory levels.”
Palm oil has tumbled 32 percent over the past year as supplies from Indonesia and Malaysia, the largest producers, expanded to a record and demand fell in Europe. Stockpiles in Malaysia reached an all-time high in December.
Refined palm oil for September delivery fell 0.7 percent to 6,252 yuan ($1,007) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month lost 1 percent to 7,958 yuan a ton.

Cyprus Averts Panic Withdrawals as Banks Open With Cash Controls


March 28 (Bloomberg) -- Cyprus averted panic withdrawals as banks opened for the first time in almost two weeks, with government controls on access to cash leading to orderly lines rather than runs on deposits.
“We expected much more people,” said Argyros Eraclides, manager of a Bank of Cyprus Plc branch in the Stavrou area of Nicosia. 

“Fortunately there are only some people who needed cash for the day, but customers reacted fantastically.We expected some people to be more aggravated.”
Banks opened at midday local time today, with lines of about 15 to 20 people waiting to enter branches in the Cypriot capital, and closed at 6 p.m. The Central Bank of Cyprus’s controls include a 300-euro ($383) daily limit on withdrawals and restrictions on transfers to accounts outside the country.

Cyprus’s lenders had been shut since March 16, when the European Union presented a proposal to force losses on all depositors in exchange for a 10 billion-euro bailout. 

That plan touched off protests and political upheaval on the island, and
was rejected by the country’s parliament. A subsequent agreement closed down Cyprus Popular Bank Pcl, the second-largest lender, and imposed larger losses on uninsured depositors.
The controls will be in force for seven days, according to a statement from the Finance Ministry. The European Commission said in a statement today the control on capital movements must remain “proportionate” and be lifted as soon as possible.
President’s Thanks
President Nicos Anastasiades thanked Cypriots for maintaining calm as banks opened, with many savers heeding the government’s call not to rush to banks and seeking to avoid potential chaos. His cabinet today approved a 25 percent reduction in his salary and a 20 percent pay cut for themselves.
“The maturity and responsibility our people have shown today in their interactions with banks relays to all a clear message of optimism and certainty for the future,” Anastasiades said in an e-mailed statement from his office in Nicosia. 

“With the stance our people have shown that not only do we want but we
can bring our country out of this difficult position.”
Security guards at banks in Nicosia were allowing about eight or nine customers in branches at any one time today, with lines forming after an initial push at the doors to get in. Many were older customers without cash-machine cards, while others were waiting to pay bills or deposit checks.
Needing Cash
“I only bought a few small items during these days to survive,” said pensioner Kyriakos Hadjisophocleos, 65, who was waiting in front of a Bank of Cyprus branch in Nicosia from 7:30 a.m. to get money to pay part of his 380-euro rent. 

“I had many coins saved up so I was using them. If the banks didn’t open
today I would have had to borrow from some friends.” 

At a branch of Russian Commercial Bank Ltd., owned by VTB Bank OJSC, there were no queues. About 10 guards surrounded the branch. One said nobody was allowed into the bank without an appointment. Yuri Soloviev, VTB’s first deputy president, said today that while some clients may take money from their Cyprus accounts, it won’t hurt the bank’s balance sheet.

Stocks and the euro rose, with the single currency climbing 0.5 percent to $1.2841 as of 5:51 p.m. in Athens. Bonds gained in Spain, with the 10-year yield falling three basis points, or 0.03 percentage points, to 5.05 percent.
Controlling Money
The Cyprus Parliament last week gave wide-ranging powers to the central bank governor, Panicos Demetriades, and Finance Minister Michael Sarris, who spent the last days deciding which measures to implement.
They chosen include bans on terminating time deposits and cashing checks. Customers can transfer abroad at most 5,000 euros per month from a given financial institution. Euro banknotes were supplied to Cyprus as a precaution, a spokesman for the Bundesbank in Frankfurt said today.
“People have organized their budget for the week through the ATM machines and the radio has been calling on people not to run to the banks today,” Maria Kyriacou, a Cypriot ruling-party lawmaker, told Bloomberg Television.
Cypriot banks lost 1 billion euros in deposits in February amid rising uncertainty over the country’s ability to secure abailout, European Central Bank data showed today. 

Cyprus in June became the fifth euro-area nation to request a rescue, after Greece’s debt restructuring trashed the financial health of lenders including Bank of Cyprus, the nation’s biggest lender, and Cyprus Popular.
Austerity Package
The 18 billion-euro economy is the third-smallest in the 17-nation euro area. Before the bailout, which was coupled with an austerity package, the European Commission predicted a contraction of 3.5 percent in 2013. Economists said afterward that the damage will be greater.
Moody’s Investors Service yesterday lowered the highest rating that can be assigned to a domestic debt issuer in Cyprus to Caa2, citing a growing risk that the country would exit the euro. The company said Cyprus’s Caa3 government bond rating and negative outlook remain unchanged.
Listed Greek companies reported the amounts of the deposits they held in Cypriot banks at the request of the Hellenic Capital Markets Commission. Jumbo SA, Greece’s biggest toy retailer, said it holds about 58 million euros at Bank of Cyprus and predicted sales in Cyprus would drop as much as 25 percent by the end of the current fiscal year.
Deposits at Alpha Bank SA’s Cypriot unit stood at 2.7 billion euros at the end of 2012, Chief Financial Officer Vassilios Psaltis said yesterday. Alpha, Greece’s third-largest lender and the one with the biggest presence in Cyprus, reported a 1.1 billion-euro loss for the year.
“Things will only get worse,” Antonis Evripidou, 53, a taxi driver in Nicosia, said today. He didn’t go to his bank. “This is only the start. Once the austerity measures are implemented, people will lose their jobs.”

RTRS - USDA says US corn supply tops estimates, huge crop on way


WASHINGTON, March 28 (Reuters) - U.S. corn inventories were larger than expected as of March 1, easing a near-term supply crunch ahead of a potentially record-setting crop that will be planted in coming weeks, the government said on Thursday.

In a pair of reports, the Agriculture Department said the corn stockpile halfway through the marketing year was 8 percent larger than traders expected. Meanwhile, corn plantings would be the largest since 1936 at 97.3 million acres, although roughly in line with expectations.

In Chicago, corn futures prices plummeted on the bearish data, dropping their 40 cent per bushel limit. Options values suggested a decline of another 18 cents. Soybeans  fell by nearly 4 percent and wheat by 6 percent.

U.S. corn prices have been at record highs this season following the worst drought since 1934.

"The higher prices really did more damage to demand than people wanted to believe," said Sterling Smith, futures specialist at Citigroup, referring to the corn stockpile.

Plantings of soybeans were projected to be smaller than expected at 77.126 million acres, perhaps the only bullish surprise in Thursday's highly anticipated reports.

Some 5.399 billion bushels of corn were in U.S. bins on March 1, down 10 percent from one year ago, according to USDA. The figure was well above even the highest estimate in a Reuters survey of traders and analysts conducted this week.

"The corn stocks were off the charts bearish," said Charlie Sernatinger of ABN AMRO.

Although corn and soybean stocks were larger than expected, three years of declining production have depleted supplies and leave little leeway for a bad harvest. March 1 stocks for both crops were the smallest March 1 total since 2004.

USDA showed that corn disappearance for the Dec-Feb quarter tumbled 27 percent from a year earlier. USDA chief economist Joe Glauber said the figures implied the smallest corn consumption for that period since 2002. "We're going to be looking at that," Glauber told USDA's radio service.

"Second quarter feed use must have crumbled," said Rich Nelson, research director at Allendale Inc. "The trade had too-high estimates for feed use because of the first quarter numbers. The first-quarter use was artificially high due to the early August harvest,"

Another reason for falling corn demand has been a slowdown in ethanol production, now running about 10 percent below the 13.8 billion gallon federal target for 2013.

"We've seen a bit of slowness in the ethanol production and that allowed corn stocks to grow a little bit along with the really sloppy and slow export sales," Smith said.

SOME GUESS THAT 2012 SOYBEAN CROP WAS BIGGER
Soybean stocks of 999 million bushels were 7 percent larger than the average trade guess, and also topped even the most bearish forecast.

"The surprising March 1 soybean stocks implies the 2012 U.S. soybean crop was understated by 35 to 50 million bushels," said Terry Reilly of Futures International.

Wheat stocks, at 1.234 billion bushels, were 5 percent larger than expected.

Farmers intend to plant 97.282 million acres of corn, their most widely grown and most valuable crop, USDA said.

Plantings would be the highest since 1936, and assuming normal weather and yields would result in record-setting crop of 14.6 billion bushels, according to Reuters calculations.

Soybean plantings of 77.126 million bushels would be down fractionally from last year and 2 percent below trade expectations. A record crop of 3.4 billion bushels was still possible with normal weather and yields.

Wheat growers indicated sowings of 56.440 million acres, up 3 percent from last year and in line with expectations. Persistent drought in the central and southern Plains was expected to bring lower yields and a smaller crop than in 2012. A cold spell at the start of this week also may have damaged wheat in parts of Kansas, Oklahoma, Texas and Colorado.

The wheat crop could total 2.1 billion bushels, based on USDA projections of yields and abandonment.
Overall, farmers intend to plant roughly the same amount of land to the eight major crops as last year. Corn and soybean sowings will be little changed, while cotton loses ground to sorghum, a drought-hardy feed grain, in states like Texas.

Sorghum plantings were forecast to be up 22 percent on the year while oats acreage would expand modestly. Rice area would drop by 3 percent, USDA said.

Some analysts believe final soybean plantings will be larger than growers indicate because of cold weather as the planting season nears. At the margins farmers switch to soybeans when they feel the time is passing to plant for ideal corn yields.

Growers said they would plant 10 million acres of cotton, down 19 percent from last year. New York cotton futures rose on the outlook for a smaller crop.

With a U.S. sugar surplus looming, farmers said they would reduce plantings of sugar beets by 2 percent. A month ago, however, USDA projected a 9 percent drop in sugar beet area because of low sugar prices.

RTRS - U.S. farmers aim for record corn and soybean crops


WASHINGTON, March 28 (Reuters) - U.S. growers would harvest a record 14.6 billion bushels of corn and a record 3.4 billion bushels of soybeans, Agriculture Department data indicated on Thursday, bumper crops that would ease razor-tight supplies and likely deflate sky-high commodity prices.


Based on USDA's survey of farmers' planting intentions, Reuters calculated the likely size of the three major U.S. field crops, using USDA's projected yields and abandonment rates. 



They are:

--a record 14.6 billion bushels of corn. Growers plan to sow the largest corn area since 1936. With normal weather and yields, the crop would end three years of declining U.S. corn production and exceed the record 13.092 billion bushels from 2009.


--a record 3.4 billion bushels of soybeans, harvested from the fourth-largest plantings on record. It would exceed the 3.359 billion bushels harvested in 2009 and, like corn, reverse a three-year decline in output.



--a moderate 2.1 billion bushels of wheat. Plantings are up a projected 1 percent from 2012 but persistent drought in the U.S. Plains will reduce yields. The winter wheat crop was in poor shape from dry weather and was damaged by freezing weather early this week in southeastern Kansas, the west Oklahoma Panhandle, far northwest Texas and southeastern Colorado.



Corn stocks at the end of this marketing year on Aug. 31 are forecast to be smallest since 1996 and soybeans the smallest since 2004.



At its Outlook Forum in late February, USDA projected a fall harvest of 14.530 billion bushels of corn, 3.405 billion bushels of soybeans and 2.100 billion bushels of wheat.



USDA projects yields of 163.6 bushels an acre for corn, 44.5 bushels an acre for soybeans and 45.2 bushels an acres for wheat. It expects a wheat abandonment rate of 17 percent, slightly above average; corn and soybean abandonment would be average at 8 percent for corn and 1.2 percent for soybeans. 

Trader's highlight


DJI - NEW YORK, March 28 (Reuters) - The S&P 500 set a record closing high on Thursday, finishing a fifth consecutive month of gains to extend a four-year rally.

The S&P had hovered near its record for more than two weeks, and market action next week will help determine if this is just another stepping stone for the rally, or if a long-expected pullback is in the offing.

The benchmark S&P 500 closed its strongest quarter in a year - up 10 percent. The Dow climbed 11.3 percent and the Nasdaq gained 8.2 percent for the first three months of the year.

The new closing high "is a very appropriate punctuation for a great quarter that saw a lot of last year's anxieties recede," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

"However, this could be the start to a more realistic look at the problems that still haven't gone away. Some degree of caution is probably still merited, with the problems in Cyprus probably only the beginning to what we could see in coming months."

The rally hit a wall in the last two weeks as the latest chapter in the euro-zone crisis developed, with Cyprus nearing a default and a possible exit from the euro bloc.

The S&P 500 had been in a fairly tight range, having traded within 10 points of the Oct. 9, 2007, record closing high of 1,565.15 over the previous 13 sessions.

On Thursday, the S&P 500 gained 6.34 points, or 0.41 percent, to end at a new record of 1,569.19.
The Dow industrials, which surpassed its 2007 record on March 5 and has set a series of record highs since then, ended Thursday's session at yet another nominal closing high - at 14,578.54. For the day, the Dow rose 52.38 points, or 0.36 percent.

The gains in the three first months of the year have a very bullish history. An analysis by Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, showed the S&P 500 has risen in the three first months of the year nine times in the past 30 years, and in each case, it has posted gains for the year.

Data showed the number of Americans filing new claims for unemployment benefits rose more than expected last week, but probably not enough to suggest a faltering in the labor market's recovery. Other data showed the economy expanded more in the fourth quarter than was previously estimated by the government.
The average yearly gain after such a start, the data showed, was 17.56 percent. An advance like that would leave the S&P 500 at about 1,676 at the end of this year.


Oils - NEW YORK, March 28 (Reuters) - Crude futures rose on Thursday, the last session of the first quarter, in choppy trading with stronger Wall Street equities and a weaker dollar supporting dollar-denominated oil prices.

Brent crude futures slipped nearly 1 percent in the first quarter, extending a 1 percent slide in the fourth-quarter of last year. Brent averaged just under $112 a barrel in 2012, the highest ever average annual price.

U.S. crude futures jumped 5.9 percent in the quarter after dipping 0.4 percent in the final quarter of 2012.

"Most of the complex continued to advance with WTI reviving an upside leadership role with assistance from stronger equities and weaker dollar," Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois.

Brent May crude rose 33 cents to settle at $110.02 a barrel, near its $110.10 session peak and above the 200-day moving average ($109.96).

Brent posted a second straight loss for the month, slipping 1.2 percent in March, even though it posted a week-on-week gain of 2.2 percent, snapping a string of two consecutive weekly losses.

U.S. May crude rose 65 cents to settle at $97.23 a barrel, rallying late in the session. The $97.35 session peak was the highest price since mid-February.

U.S. crude had a fourth straight week-on-week gain, up 3.7 percent, and finished March up 5.6 percent for the month.

The divergent price trends for Brent and its U.S. counterpart were evident in the diminished premium for Brent, with the spread between the two futures contracts shrinking to end at $12.79 a barrel based on settlements.

Brent's slide in the quarter and U.S. crude's robust performance reflected the difference in sentiment about the gloomy outlook for Europe and a U.S. economy showing signs of improving growth.

Revived North Sea production also helped curb Brent prices, while improving transport for crude oil from the U.S. Midwest to the Gulf Coast helped the spread between the two crude oil contracts narrow after reaching a 2013 peak of $23.45 on Feb. 8.

U.S. initial jobless claims rose more than expected last week, but have trended lower this year and other data released on Thursday showed the economy expanded more in the fourth quarter than the government had previously estimated.

A gauge of business activity in the U.S. Midwest was not supportive, with the Institute for Supply Management-Chicago business index falling in March, indicating slower growth.


CBOT Soybean - March 28 (Reuters) - Soybean futures on the Chicago Board of Trade fell 3.4 percent on Thursday, the biggest one-day drop in more than six months, after the U.S. government reported larger-than-expected March 1 soybean and corn stocks, traders said.
  • The USDA reported March 1 U.S. soybean stocks at 999 million bushels, above a range of trade estimates for 905 million to 984 million.
  • USDA also predicted U.S. soybean plantings for the 2013/14 crop year at 77.126 million acres, below market forecasts for 78.394 million.
  • CBOT May soymeal dropped to its lowest level since Feb. 15 while May soyoil hit a one-week low but was underpinned by oil/meal spreading.
  • Brazil's Tiete-Parana waterway, a grain shipping thoroughfare, was shut down after a grain barge hit an electricity pylon last week, a source at the state-managed waterways administration said Thursday. Power lines, now deactivated, were expected to be removed by April 3.
  • USDA reported export sales of U.S. soybeans in the latest week at 66,400 tonnes for 2012/13 and 607,700 tonnes for 2013/14.
  • USDA reported weekly soymeal sales at 137,200 for 2012/13 and 3,900 for 2013/14. Weekly soyoil sales totaled 12,600 tonnes, all for 2012/13.
  • The CBOT won regulatory clearance to shorten its U.S. grains trading cycle starting on April 8.
  • Argentina's financial and grains markets will remain closed until April 3 due to an extended public holiday. Brazilian markets will be closed on Friday and reopen at normal hours on Monday.
  • CBOT soybeans fell 4.7 percent for the month, their biggest slide since November, and fell 1.0 percent for the quarter, the second quarterly decline in a row.
  • Soymeal fell 6.9 percent for the month and fell 3.8 percent for the quarter. Soyoil rose 2.4 percent for the month and rose 1.7 percent for the quarter.

BMD CPO Futures - KUALA LUMPUR, March 28 (Reuters) - Malaysian palm oil futures fell to a more-than-one-week low on Thursday, with investors avoiding risky moves as they await key industry export data due next week.

Fears over Cyprus's bailout deal damaging the euro zone's fragile recovery roiled global financial and commodity markets, including palm, most of this week and kept investors on edge.

Palm's dismal export performance in the first 25 days of the month also upset market players and weighed on prices, which have lost more than three percent this week. Exports fell 7.5 percent over the period from March 1 to 25, from a month ago, due to a slowdown in shipments of crude palm oil.

Traders are now waiting for cargo surveyor data on exports for the full month, due next Monday, and industry regulator data on output and inventory, due in mid-April, to gauge palm's direction in the coming months.

"The market is consolidating and is still unsure -- there's no new factor currently moving this market," said a trader with a foreign commodities brokerage in Malaysia.

"Everything depends on the production in March. If production this month is lower, then you will see stocks breaking below 2 million tonnes, for sure," he added.

The benchmark June contract on the Bursa Malaysia Derivatives Exchange lost 1.5 percent to 2,411 ringgit ($779) per tonne by the close, which is also its intraday low, a level unseen since March 19.

Total traded volume stood at 43,185 lots of 25 tonnes each, higher than the average 35,000 tonnes seen so far this year.

Stockpiles in February in Malaysia, the world's No.2 producer, inched down 5 percent from January to stand at 2.44 million tonnes now. Stocks had hit a record high of 2.63 million tonnes in December as strong production and tepid global demand caused prices to tumble more than 20 percent in 2012.

Traders say total exports of palm oil products in March need to rise above 1.5 million tonnes for prices to recover, but also stressed that output of the vegetable oil would play a big role.

"It's very critical this month. If the base production is low this month, then for the next few months you'll still have a low base," the Malaysia-based trader said.

In other markets, Brent futures held above $109 a barrel on Thursday on hopes of a revival in demand growth in the world's biggest consumer, the United States, following a surprise fall in product inventories, while worries over Europe's debt problems capped gains.

In vegetable oil markets, U.S. soyoil for May delivery lost 0.4 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange closed 0.8 percent lower.


Regional Equities - BANGKOK, March 28 (Reuters) - Thai stocks snapped their three-day winning streak to fall on Thursday, as weaker-than-expected exports data weighed on broader sentiment while Indonesia rose for a third session, capping its biggest quarterly gain in 2-1/2 years.

The region saw trading volume falling short of its average over the past 30 sessions as investors stayed at the sidelines ahead of a market holiday and amid concerns about the impact of a bailout of Cyprus.

Singapore and Indonesia will be shut on Friday, reopening on Monday. Philippine stock market is closed on Thursday and Friday for the Easter holidays, resuming on April 1.

Jakarta's Composite Index (JCI) rose 0.3 percent to a record close of 4,940.98, amid hopes that the new central bank governor Agus Martowardojo would not make drastic changes to monetary policy.

The JCI index ended its January-March quarter with a 14.5 percent gain, trailing a quarterly gain of 17.8 percent of the Philippine main index

In Bangkok, late selling sent the SET index 1 percent down at 1,544.57, trimming some of a 5.5 percent gain over the past three sessions. Investors cashed in recent gains on banking shares such as Kasikornbank Pcl

"We saw foreign selling flows in morning session. It's probably because of the weaker-than-expected exports data that triggered selling by some trading portfolios," said an equities trader at Tisco Securities.

Thailand's exports fell 5.8 percent in February from a year earlier due to tepid global demand. The median forecast in a Reuters poll was for a year-on-year decline of only 0.15 percent in exports in February.

Thursday, March 28, 2013

RTRS - Indonesia keeps crude palm oil tax unchanged at 10.5 pct for April


JAKARTA, March 28 (Reuters) - Indonesia, the world's top palm oil producer, kept its export tax for crude palm oil for April unchanged at 10.5 percent, a trade ministry official said on Thursday.

The government also kept unchanged its export tax for RBD palm olein at 4 percent for April. The tax on cocoa bean exports was kept at 5 percent.

Cypriot Banks to Open for First Time in 2 Weeks With Curbs


March 28 (Bloomberg) -- Cyprus’s banks will open their doors to customers today for the first time in almost two weeks, with new rules curbing access to cash. 

The Central Bank of Cyprus’s capital controls will include a 300-euro ($383) daily limit on withdrawals and restrictions on transfers to accounts outside the country. Banks will open at midday and close at 6 p.m. local time, Yiangos Dimitriou, head of the central bank’s audit department, said yesterday in comments broadcast on state-run CyBC television.

 “Please, let’s all be calm and be careful not to create more problems,” Dimitriou said. “It will serve no purpose for us to run to banks and try to find ways to get money. To get it where?”
Cyprus’s lenders have been closed since March 16, when the European Union presented a plan to force losses on all depositors in exchange for a 10 billion-euro bailout. 

That plan touched off protests and political upheaval in the island nation, and was rejected by the country’s parliament. A subsequent agreement shuts Cyprus Popular Bank Pcl, the nation’s No. 2 lender, and imposes larger losses on uninsured depositors. 

The controls will be in force for seven days, according to a statement from the Finance Ministry. Dimitriou had said they would be in effect for four days. Their effectiveness will be evaluated daily, he said.
Check Cashing
Parliament last week gave wide-ranging powers to the central bank governor, Panicos Demetriades, and Finance Minister Michael Sarris, who have spent the last days deciding which measures to implement.
The measures chosen include bans on terminating time deposits and cashing checks. Customers can transfer at most 5,000 euros per month from a given financial institution.
The restrictions aim to protect the country’s financial industry, while trying to uphold the principle of free movement of capital within the EU, Aliki Stylianou, a central bank spokeswoman, said yesterday before the measures were announced.
Cyprus in June became the fifth euro-area nation to request a rescue, after Greece’s debt restructuring trashed the financial health of lenders including Bank of Cyprus Plc, the nation’s biggest lender and Cyprus Popular.
Cyprus’s 18 billion-euro economy is the third-smallest in the 17-nation euro area. Before the bailout, which was coupled with an austerity package, the European Commission predicted a contraction of 3.5 percent in 2013. Economists said afterward that the damage will be greater.
Rating Ceiling
Moody’s Investors Service yesterday lowered the highest rating that can be assigned to a domestic debt issuer in Cyprus to Caa2, citing a growing risk that the country would exit the euro. The company said Cyprus’s Caa3 government bond rating and negative outlook remain unchanged.
Listed Greek companies reported the amounts of the deposits they held in Cypriots at the request of the Hellenic Capital Markets Commission. Jumbo SA, Greece’s biggest toy retailer, said it holds about 58 million euros at Bank of Cyprus and predicted sales in Cyprus would drop as much as 25 percent by the end of the current fiscal year.
The Athens Stock Exchange index dropped 4 percent to 850 yesterday and has lost 12 percent since the March 16 proposal.
The Cyprus Stock Exchange has been shut throughout the period. Deposits at Alpha Bank SA’s Cypriot unit stood at 2.7 billion euros at the end of 2012, Chief Financial Officer Vassilios Psaltis said yesterday. Alpha, Greece’s third-largest lender and the one with the biggest presence in Cyprus, reported a 1.1 billion-euro loss for the year.

Trader's highlight

DJI - NEW YORK, March 27 (Reuters) - U.S. stocks rebounded from early declines to close little changed on Wednesday, but investors were still worried about the chance of a run on Cypriot banks and its possible implications for other euro-zone lenders.

Financial shares fell on both sides of the Atlantic on concerns that depositors at banks in other euro-zone countries will withdraw large amounts of money. Investors are worried that the Cyprus bailout would become a template for solving banking crises in the region.

The S&P 500 fell 0.8 percent in morning trading, but in line with recent market behavior, investors took the drop as a buying opportunity. By the close, late buying had helped the S&P 500 cut most of the session's losses to end down less than a point.

The benchmark S&P 500 has traded within 10 points of its record closing high for 13 consecutive days, without once moving above the 1,565.15 level set Oct. 9, 2007. It is on track to post its fifth consecutive month of gains.

"Any time you have a run like we've had, market participants will look for a reason to take profits," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"But pauses in this uptrend have been short and shallow. Everybody seems to want to buy in the slightest pullback."

Cypriot banks are due to reopen on Thursday while limiting withdrawals, banning checks and curbing the use of Cypriot credit cards abroad, after being closed for almost two weeks. Uninsured deposits in Cyprus are expected to be reduced as part of the rescue deal.

The Dow Jones industrial average fell 33.49 points or 0.23 percent, to 14,526.16 at the close. The S&P 500 lost just 0.92 of a point, or 0.06 percent, to finish at 1,562.85. The Nasdaq Composite added 4.04 points or 0.12 percent, to close at 3,256.52.


Oils - NEW YORK, March 27 (Reuters) - Crude oil prices rose on Wednesday in choppy trading as U.S. heating oil rallied on falling distillate inventories, while rising crude oil stockpiles in the United States and the stronger dollar limited gains.

News of fire alarms going off at Imperial Oil Ltd's site of its 121,000 barrel per day refinery near Sarnia, Ontario, sparked U.S. crude to turn higher in the hour ahead of settlement. Imperial later said the refinery was unaffected by the fire. 

Earlier, U.S. crude had declined, widening its discount to Brent a day after the spread between the two crude futures contracts had narrowed to the smallest since July.

Supporting Brent prices was news that South Korea has postponed an oil tax decision by three months, according to sources with knowledge of the matter, a move that could boost demand for North Sea crudes.

Under a free trade agreement with the European Union, South Korean refiners could import North Sea crudes tax-free. The refiners would then process the crude into products for export and claim a tax rebate.

Brent May crude rose 33 cents to settle at $109.69 a barrel, after reaching $109.98, testing resistance near its 200-day moving average of $109.90. The session low was $108.85.

Brent prices were on track to post a decline of more than 1 percent for the first quarter 2013 and for the month.

U.S. May crude rose 24 cents to settle at $96.58 a barrel, having traded from $95.58 to $96.84, which was the highest intraday price in five weeks.

U.S. crude futures were on pace to finish the first quarter with a 5 percent gain and up nearly 5 percent for the month.

Helping limit crude oil price gains, the dollar index strengthened as the euro fell to a four-month low versus the U.S. currency on concerns about a weak Italian bond auction and worries over Cyprus' rescue deal.

"The externals have been a negative for oil prices with the euro falling to its lowest level since mid-November of 2012," said Dominick Chirichella of Energy Management Institute.

"The market is still uneasy about the type of deal that was done for Cyprus."

U.S. heating oil futures rose 1.8 percent, or 3.41 cents to settle at $2.9154 a gallon after the government's weekly inventory report showed distillate stocks fell 4.51 million barrels last week, much more than the 800,000-barrel drop analysts expected.

The Energy Information Administration (EIA) said U.S. crude inventories rose 3.26 million barrels, above the forecast for an increase of 700,000 barrels in a Reuters survey of analysts.

Gasoline stocks fell 1.6 million barrels, the EIA said, more than the expected drop of 1.0 million barrels, but U.S. gasoline futures managed only a 0.49 cent gain to settle at $3.1155 a gallon.

Crude oil stocks at the Cushing, Oklahoma, storage hub rose 439,000 barrels to 49.47 million, the EIA said.
Brent's premium to U.S. crude reached $13.94 a barrel, then the spread narrowed back to end at $13.11 based on contract settlements.

On Tuesday, the premium fell as low as $12.52 during the session, the lowest since July 2012 and in retreat after pushing to the 2013 peak of $23.45 on Feb. 8.

"One of the reasons why (U.S.) crude has been rallying versus Brent was because of the trend of supplies falling at Cushing, but this build in Cushing is weighing now," said Phil Flynn, an analyst at Price Futures Group in Chicago.

Despite the bearish implications of rising U.S. crude oil supply, upbeat data in recent months has boosted confidence in the recovery of the world's top economy and No. 1 oil consumer.

Crude prices on either side of the Atlantic rose more than 1 percent on Tuesday after strong U.S. economic reports fed optimism about the economy and energy demand.


CBOT Soybean - Chicago Board of Trade soybean futures were higher on positioning and bull-spreading ahead of the release at 11:00 am CDT (1600 GMT) on Thursday of the U.S. Department of Agriculture's (USDA) March plantings and quarterly stocks reports, traders said.
 
·         An average of analysts' estimates pegged 2013 U.S. soybean    plantings at a record large 78.394 million acres and up from    77.198 million last year. U.S. farmers may plant   a record large soy area due to high prices caused by last year's   drought.

·         An average of analysts' estimates pegged the U.S. soybean stocks on March 1, 2013 at 935 million bushels, below the 1.374  million on March 1 last year.  Soybean stocks are seen falling, with soy supplies forecast to hit their lowest level in nine years. 
 
·         Rains are expected across most of Brazil next week which  will cause some delays in soybean harvest and the rains also  will reach much of Argentina early next week, aiding double-drop soybean prospects, according to Commodity Weather Group.
 
·         Malaysian palm oil future inched up on Wednesday on   expectations that lower production may ease stocks further, but  worries over the euro zone curbed appetite for risk.

·         Palm oil on the European vegetable oils market rose in a   mild technical rebound on Wednesday following recent losses on   disappointing export numbers, supported by hopes that reduced production could still lead to lower Malaysian palm oil stocks.
 
·         ICE Canada canola futures were generally following the   CBOT soy complex ahead of Thursday's USDA quarterly stocks and plantings report but tight supplies in the cash market also were  underpinning canola futures. 
 
·         Cash soybean spot basis bids were higher at processors and river terminals around the U.S. Midwest on Wednesday amid good   demand and tight supplies, dealers said. 
 
·         Estimates ahead of the release at 7:30 a.m. CDT (1230 GMT)    of USDA's weekly export sales report totaled zero to 475,000 tonnes of old-crop U.S. soybeans and 150,000 to 400,000 tonnes   of new-crop soybeans. 
 
·         Key chart support for the May contract is at its 200-day  moving average of $14.44-1/2 per bushel. The nine-day relative strength index is at 56.


BMD CPO - SINGAPORE, March 27 (Reuters) - Malaysian palm oil futures inched up on Wednesday on expectations that lower production may ease stocks further, but worries over the euro zone curbed appetite for risk.

Losses in palm oil early in the week may also have lured some buyers back into the market. The tropical oil has lost around 1.8 percent so far this week, weighed down by weaker export demand and uncertainty surrounding Cyprus's bailout deal.

"Yes, exports were lower (for the first 25 days), but we expect them to pick up for the full month. Stocks could dip to 2.35 million tonnes or lower," said a trader with a foreign commodities brokerage in Malaysia.

By the market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 0.4 percent to 2,447 ringgit ($789) per tonne. Prices traded in a tight range 2,430 to 2,467 ringgit.

Total traded volume stood at 34,133 lots of 25 tonnes each, higher than the usual 25,000 lots.

But traders are still counting on a recovery in demand to support prices after a surprise drop in shipments for the first 25 days of March as major buyer India bought less of the crude grade. Cargo surveyors will release export data for the full month on Monday.

Overseas investors also stayed on the sidelines ahead of a planting intentions report on soybeans by the U.S. Department of Agriculture on Thursday.

In other markets, Brent crude held above $109 a barrel late on Wednesday in Asia as robust U.S. data which brightened the outlook for demand from the world's biggest oil consumer outweighed worries over the euro zone.

In other vegetable oil markets, U.S. soyoil for May delivery gained 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange closed 0.6 percent higher.


Regional Equities - BANGKOK, March 27 (Reuters) - The main Philippine index scaled a record high on Wednesday after Fitch Ratings upgraded the country's sovereign rating to investment grade and the Indonesian index closed at an all-time high after the appointment of a new central bank governor.

Other Southeast Asian stock markets crawled higher, joining those in broader Asia, comforted by positive U.S. data.

Philippines was an outperformer on the day, ending up 2.7 percent at 6,847.47, as investors increased positions in large caps after the country won an investment grade credit rating for the first time.

"It's something that was already expected by the stock market but I think investors will welcome it and that will push the main index to 7,000 possibly next week," said Jose Vistan, head of research at AB Capital Securities.

Shares in SM Investments Corp, the biggest company by market value, jumped 5.3 percent while Philippine Long Distance Telephone Co. , the second biggest, climbed 4.2 percent.

Vistan expects the market to rally further despite concerns over its high valuation. It traded at 20.77 times the price-to-earnings multiple, higher than regional peers, according to Thomson Reuters data.

The Philippine stock market will be closed on Thursday and Friday for the Easter holidays. Trading will resume on Monday.

Jakarta's Composite Index , the second best performer on the day, ended 1.8 percent higher at 4928.10, surpassing its previous record close of 4,874.49 set on March 8.

Investors bought large caps such as Bank Mandiri  which gained 4.2 percent after parliament approved Finance Minister Agus Martowardojo's proposed switch to become the next head of the central bank. 

The Thai SET index  rose 1.1 percent to a 1-week high of 1,560.87 as investors bought shares in companies expected to report strong quarterly results but some small and mid-cap stocks were hit by a tightening in trading rules.

Nomura Equity Research maintained a year-end target 1,600 for the SET index.

"2013 marks the beginning of a seven-year government spending on infrastructure. This, we believe, will likely keep the economy and earnings for domestic sectors buoyant over the next few years," Nomura said in a note.