RTRS - China soy stocks to fall 20 pct amid low Q1 imports -thinktank

BEIJING, Feb 1 (Reuters) - Soy stocks at major ports in China, the world's largest buyer of the grain, may fall about a fifth by the end of March on expectations of lower imports and high production by crushers, an official think-tank said on Friday.

"Crushers along coastal areas are running at a high rate since mid-December on robust seasonal demand for soyoil and soymeal," the China National Grain and Oils Information Centre said on its web site ((www.grain.gov.cn)).

"With expected lower imports of soybeans in coming months, soy stocks at ports will start to decline."

China's soy stocks may fall to about 4 million tonnes by the end of March from roughly 5 million now, the think tank said. This figure is well below the figure of 6.2 million a year ago.

The centre also estimated China's soy imports in the first quarter of 2013 at about 11.6 million tonnes, 13 percent lower than 13.26 million in the first quarter of 2012.

Traders told Reuters that some crushers had cancelled expensive U.S. soy shipments in December in favour of supplies at ports, which were offered at a discounted price, dragging down stocks.

"Although the number is put at 5 million tonnes, lots of the stocks have been booked by those crushers which cancelled their U.S. shipments," said one trading manager with an international trading house.

Port congestion in Brazil, the second largest exporter, may delay shipment and lower imports for the first quarter are expected, the centre said. Earlier, traders told Reuters that China might shift to book more cargoes from the United States to make up for the shortfall during this period.

Most Chinese crushers will shut down operation in coming weeks due to holidays for the Lunar New Year, which falls on Feb 10 this year.

RTRS - GRAINS-U.S. prices fall with twist in Argentina weather forecast

CHICAGO, Feb 1 (Reuters) - U.S. corn and wheat futures fell on Friday and soybeans trimmed gains after reaching a six-week high as forecasts showed dry areas of major exporter Argentina are in line to receive favourable rains.

Northern crop areas of the world's No. 2 corn exporter and third largest soybean supplier are set to receive more rain than previously expected during the weekend, said Andy Karst, meteorologist for World Weather Inc. The rain "would be notable if it happened" after weeks of recent dryness, he said.

The markets retreated on the outlook after rising in earlier trading on worries about lighter-than-expected rains that fell on Thursday.

Traders are focusing on the weather because farmers in South America need to produce large crops to meet strong demand from top soybean importer China and compensate for a drought-reduced U.S. harvest last year .

Traders broadly expect large harvests in South America in the coming months, but every twist in the weather is being scrutinized amid tight global supplies.

Conditions look "a little bit wetter in the northern fringe of the corn and soybean belt," said Jim Gerlach, president of A/C Trading.

Chicago Board of Trade March March corn dipped 0.6 percent to $7.36 a bushel, while March wheat 

slid 1.8 percent to $7.65 a bushel. March soybeans  ended up 0.4 percent at $14.74-1/4 a bushel after touching a six-week high of $14.86-1/2 a bushel earlier in the session.

ARGENTINA VS. BRAZIL

With traders focused on South America, Informa Economics, a closely watched crop forecaster, cut its estimate for Argentina's soybean harvest by 6.7 percent to 54.5 million tonnes and its estimate for the corn harvest by 7.4 percent to 25 million tonnes.

However, the firm increased its estimate for Brazil's soybean harvest 6.2 percent to 70.3 million and its outlook for Brazil's corn harvest 1.3 percent to 84.0 million.

The U.S. Department of Agriculture last pegged Argentina's soybean crop at 54 million tonnes and the corn crop at 28 million tonnes. The department estimated Brazil's soybean crop at 82.5 million and its corn crop at 71 million.

The USDA will update its crop forecasts next Friday in a monthly global supply and demand report.

RTRS - Indonesian province to halt palm, mining expansion

JAKARTA, Jan 31 (Reuters) - Indonesia's province of East Kalimantan has imposed a one-year ban on forest destruction, a governor on the island of Borneo said on Thursday, citing the need to curb mining and palm oil expansion and cut back on land disputes.

The move is a potential roadblock for investors in Indonesia, who already face a thicket of overlapping regulations at the provincial and federal levels.

But Indonesia, home to the world's third-largest expanse of tropical forests, is under international pressure to curb deforestation and destruction of its carbon-rich peatlands.

It is the world's biggest exporter of thermal coal and the top producer of palm oil, with estates growing palm sprawling across 8.5 million hectares and expected to add about 200,000 hectares a year.

"We have applied this moratorium policy for new permits on forestry, mining and plantation since several weeks ago and it will last for a year," East Kalimantan governor Awang Faroek Ishak told Reuters, without giving a specific start date.

"We will stop issuing new permits for forestry, mining and plantation business," he added. "However, companies that have got permits before the moratorium (began) can still continue their business activities as usual."

It was not clear if the ban covered land included under an existing nationwide moratorium in place since 2011.

Another reason for the 2013 ban was the 742 overlapping land cases and disputes in East Kalimantan between palm and mining companies or local communities, Faroek said.

"I am responsible for providing a conducive investment climate for investors," he added. "That's why we take this measure aimed at creating a conducive investment climate here."

East Kalimantan, recently ranked fourth among Indonesia's 33 provinces in terms of infrastructure development and quality of life, sits on about 40 percent of Indonesia's coal reserves or 8.5 billion tonnes.

Faroek, whose province produces about two-thirds of Indonesia's coal, has previously called for an output cap to promote sustainability.

REGIONAL VS CENTRAL GOVT

The East Kalimantan forest ban is a sign of the problems faced by investors in Indonesia. The central government shook up the resource sector last year with measures to tighten control by centralizing the licensing process and taxing ore exports.

Indonesia is also now deciding whether to extend a two-year ban on clearing forest that started in May 2011 and covers about a third of the country.

Provincial governments do not have the authority to issue a separate forest moratorium policy, said Tofan Mahdi, spokesman at Indonesia's largest listed plantation firm Astra Agro Lestari

"The (national) forest moratorium will end in May this year but some NGOs and government officials propose to extend the forest moratorium," Mahdi said in a text message. "Some governors see this situation and take early action to support the extension."

Palm oil companies such as Astra Agro Lestari, Sime Darby , Wilmar International , Sinar Mas  and BW Plantation , are some of the biggest in Indonesia and will contribute to the 27.5 million tonnes of production forecast for this year.

Kalimantan is the second largest contributor to Indonesia's palm oil production, with a share of 35 percent, after Sumatra, which has a 55 percent share, said Joko Supriyono, secretary general of the Indonesian Palm Oil Association.

Palm oil plantations now cover about 700,000 hectares of East Kalimantan and produce 2 million tonnes of output each year, Supriyono added. Many investors see Kalimantan as the best and easiest site for future expansion.

Provincial governor Faroek said the figure was 1 million hectares, out of permits issued covering 2.4 million.

Still, it could be several years before the effect of the ban shows up in production.

"If it goes through, the impact will come in four to five years down the road," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank. "Palm oil trees take a minimum of three years to bear fruit."

Trader's highlight

DJI - NEW YORK, Feb 1 (Reuters) - U.S. stocks rose to five-year highs on Friday, with the Dow closing above 14,000 for the first time since October 2007, after jobs and manufacturing data showed the economy's recovery remains on track.

The S&P touched its highest since December 2007 after a 5 percent gain in January, which was its best start to a year since 1997. The index is now just about 60 points away from its all-time intraday high of 1,576.09.

Employment grew modestly in January, with 157,000 jobs added. That was slightly below expectations, but Labor Department revisions showed 127,000 more jobs were created in November and December than previously reported.

Analysts attributed the market's robust showing so far this year partly to a deluge of cash flowing into equities.

Investors poured $12.7 billion into U.S.-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996, data showed on Thursday.

"There is a lot of money looking for a home, and people are finally deciding the bond market is done and moving money into equities," said Edward Simmons, managing director and partner at HighTower in Portland, Maine.

"I see the rotation (of assets) pushing the market up in the face of not-massive amounts of good news," he said. "People are overlooking the higher risk in equities."

Other reports released Friday showed the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months, U.S. consumer sentiment rose more than expected last month, while December construction spending also beat forecasts.

"All the data seems to keep pointing to a slowly, steadily improving economy," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

The Dow Jones industrial average was up 149.21 points, or 1.08 percent, at 14,009.79. The Standard & Poor's 500 Index was up 15.06 points, or 1.01 percent, at 1,513.17. The Nasdaq Composite Index was up 36.97 points, or 1.18 percent, at 3,179.10.

Of the 252 companies in the S&P 500 that have reported earnings so far, 69 percent have exceeded expectations, according to Thomson Reuters data. That is a higher proportion than over the past four quarters and above average since 1994.

Overall, S&P 500 fourth-quarter earnings are estimated to have grown 4.4 percent, according to the data, up from a 1.9 percent forecast at the start of the earnings season but well below a 9.9 percent profit growth forecast on Oct. 1.

NYMEX - SEOUL, Feb 1 (Reuters) - U.S. crude oil futures steadied on Friday, giving up early gains, after China's official factory activity gauge missed market expectations.

West Texas Intermediate crude is still on track to rise for an eighth week in a row, matching a similar winning streak in July-August 2004, after hitting four-month highs on upbeat global economic data earlier this week.

CBOT Soybean -  Soybean futures on the Chicago Board of Trade rose to a 6-1/2 week high on technical buying and uncertainty about prospects for needed rains in Argentina, traders said.

* The market pared early gains after updated forecasts showed dry crop areas of major soy exporter Argentina in line to receive favorable rains. However,concerns remain about a threat to crops. 

·         Informa Economics cut its estimate of Argentina's soybean crop to 54.5 million tonnes, from 58.4 million previously, citing dry conditions.

·         But Informa also raised its estimate of Brazil's soybean crop to 84.0 million tonnes, which the firm said was up 1.1 million from its previous forecast.

·         CBOT March soybeans ended the week up 2.3 percent, the market's fourth straight weekly rise. March soymeal   rose 2.8 percent, extending its rally to four weeks, while March   soyoil  rose 1.7 percent for its third straight increase.

·         Strength in outside markets lent support. Major worl  stock markets climbed to their highest levels in nearly two  years, helped by manufacturing and employment data indicating  the global economic recovery is on track. 

·         Soy stocks at major ports in China, the world's largest  buyer of the grain, may fall about a fifth by the end of March  on expectations of lower imports and high production by crushers, an official think-tank said. 

 FCPO - SINGAPORE, Jan 31 (Reuters) - Malaysian palm oil futures jumped on Thursday to their highest in more than three months, supported by better-than-expected exports and concerns over dry weather in key soy-producing areas in Argentina.

Dry weather is starting to threaten soybean yields in parts of Argentina's main crop belt, possibly hurting soybean oil output and turning buyers to cheaper palm oil, which is priced at a discount of more than $300.

Traders were also cheered by Malaysia's January palm oil exports that fell marginally from a month ago and showed a significant improvement from a double-digit decline earlier in the month.

"For the first half of the month exports were very bad, but in the last six days exports made a strong comeback," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"If this continues into February, we will see high exports that could help ease stocks. On top of that, external markets are also very strong."

The benchmark April contract on the Bursa Malaysia Derivatives Exchange rose 1.8 percent to close at 2,555 ringgit ($823) per tonne. Prices earlier went as high as 2,593 ringgit, a level unseen since Oct. 25.

Total traded volumes stood at 45,100 lots of 25 tonnes each, higher than the usual 25,000 lots, as investors squared their positions ahead of a Malaysian holiday on Friday.

Malaysian palm exports in January fell 7 percent from a month ago, said cargo surveyor Intertek Testing Services, while another surveyor, Societe Generale de Surveillance, put the figure at 6.4 percent.

For the month, palm prices posted a gain of 4.8 percent, mostly driven by dry weather concerns in South America that could lower global vegetable oil output. It was their second successive rise, following last month's gain of 2.9 percent.

But palm oil prices may still post a second straight year of declines in 2013 as strong output from top producers Indonesia and Malaysia overwhelm global food and fuel demand in a scenario that has already led to record stocks, a Reuters poll of 28 analysts showed on Thursday.

Brent crude hovered near $115 per barrel, not far from a more than three-month high, as the U.S. Federal Reserve's pledge to stick to its bond-buying stimulus plan and upbeat euro zone data fuelled optimism about oil demand.

In competing vegetable oil markets, U.S. soyoil for March delivery  edged down 0.2 percent in late Asian trade, as some traders booked profits from a 1.5 percent gain the previous session. The most active September soybean oil contract on the Dalian Commodity Exchange ended 1.2 percent higher, slightly lower than its a one-week high.

Regional Equities - Feb 1 (Reuters) - Southeast Asian stock markets gained on Friday, helped by banking stocks, with the Philippines and Indonesia rising to a record high while Thailand hitting a more than 18-year high ahead of a raft of major U.S. and European economic data.

The Philippine Composite Index closed 1.2 percent to its record closing high of 6,318.61 after hitting an intraday high of 6,342.72.

Indonesia , which enjoyed a foreign inflow of $75.84 million on the day, rose 0.6 percent to a new record closing peak of 4,481.63 after hitting a fresh intraday high of 4,519.46.

Investors will be looking at the economic outlook with the release of January data on factory activity across the euro area to be followed by the latest U.S. jobs report at 1330 GMT and a national report on the state of American manufacturers.

Thailand index  closed 1.7 percent firmer at 1,499.22, its highest since November, 1994, led by energy and banking shares.

Vietnam , the region's best performer so far this year, gained 0.8 percent with a 7.3 million foreign inflow, while Singapore  rose 0.3 percent to its highest since November 2010.

Malaysia , the worst performer of the region for the year, was closed for a holiday.