RTRS - Malaysia sets March crude palm oil export tax at 4.5 percent

KUALA LUMPUR, Feb 15 (Reuters) - Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for March at 4.5 percent, up from February's zero percent, a government circular showed on Friday.

The Southeast Asian country calculated a reference price of 2,306.11 ringgit per tonne for crude palm oil for March, effectively lifting the export duty for the grade.

RTRS - Palm up on export data; investors wait for tax decision

KUALA LUMPUR, Feb 15 (Reuters) - Malaysian palm oil futures climbed on Friday on positive export data, with investors cautious ahead of the weekend and a lack of cues from overseas markets capping gains.

Prices were still headed for their first weekly loss in five weeks as investors waited for a government decision to determine the crude palm oil export tax in March, due later in the day. The current zero-percent duty has made Malaysia's products cheaper than top producer and biggest rival Indonesia.

Exports of palm oil products in the first half of February grew 18 percent from the first half of January to 673,555 tonnes, cargo surveyor data showed, boosted by strong demand from major edible oil buyers Europe, China and India.

Shipments of the crude grade doubled during the period compared to the previous month's first two weeks.

By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange rose 1.0 percent to 2,521 ringgit ($815) per tonne. Prices were rangebound between 2,503 and 2,521 ringgit.

Total traded volumes stood at 12,050 lots of 25 tonnes each, slightly lower than the average of 12,500 tonnes.

The export data should hold the market above 2,500 ringgit, said a trader with a foreign commodities brokerage in Malaysia, adding that there was a possibility of a small rise in the March export tax.

"The important thing is whether the tax can create demand," he said. "There could be a prompt demand from India and China -- especially from India who buys a lot of crude palm oil."

Technical analysis showed palm oil is expected to hover above a support at 2,493 ringgit per tonne for one trading session before breaking this level and falling more.

Tepid global economic conditions have slowed edible oil demand and kept stockpiles stubbornly high in Malaysia, the world's No.2 palm oil producer, with prices tumbling 23.2 percent last year.

A zero-percent duty tax structure introduced by Malaysia in January provided positive sentiment for investors, but forecasts of bumper soy crops in Latin America, palm's vegetable oil competitor, has weighed on the market and kept prices rangebound.

"For the past few months, high stockpiles and improving weather conditions in Brazil and Argentina have continued to weigh on prices," said Phillip Futures analyst Ker Chung Yang in Singapore. "But on the flip side Malaysia and Indonesia have aggressively engaged in activities to support exports."

Crude palm oil prices will continue to be rangebound between 2,200 and 2,600 ringgit as investors await further cues, he said.

Another cargo surveyor, Societe Generale de Surveillance, was to release its exports data for Feb. 1-15 later in the day.

Brent crude steadied around $118 per barrel, still heading for its first weekly loss in five after disappointing euro zone data revived concerns about the troubled region.

In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 inched down 0.1 percent in early Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

RTRS - Argentina corn output seen at 25 mln tonnes-grains exchange

BUENOS AIRES, Feb 14 (Reuters) - The Buenos Aires Grains Exchange estimated a 2012/13 corn crop of 25 million tonnes in its first forecast for Argentina's corn harvest on Thursday, and held its outlook for soy at 50 million tonnes.

Argentina is the world's No. 3 supplier of corn. The U.S. Department of Agriculture sees Argentine output of 27 million tonnes for the 2012/13 crop year.

The exchange said that if its forecast holds true, corn production will expand by 16 percent from last season's drought-battered harvest. It would also top the record output of the 2010/11 season, estimated by the government at 23.8 million tonnes.

Market hopes for an even bigger corn crop this season were tempered by dry, hot weather in January, which the exchange said reduced yield potential in crops seeded during late October, November and December. Earlier-seeded corn fared better.

It said rain was still needed in many areas, particularly in Argentina's northern regions.

"We hope that weather forecasts predicting rain in the coming days will come to pass so the stress suffered in several farming areas begins to ease," the exchange said.

Farmers have harvested 3.7 percent of the 3.68 million hectares planted with commercial-use corn this season, beating last year's pace by 2.5 percentage points, the grains exchange said in its weekly crop report.

Trader's highlight

DJI - NEW YORK, Feb 14 (Reuters) - Global equity markets fell and the euro slid against the dollar on Thursday after data showed the euro zone slipped deeper into recession in late 2012 than had been expected, but deal-making helped Wall Street close near break-even.

U.S. weekly jobless data and a $23.2 billion bid in cash by Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital for ketchup and baby food maker H.J. Heinz helped turn sentiment about Europe and trim equity losses.

The euro tumbled to a three-week low against the dollar and plunged against the yen after data on gross domestic product in the euro zone painted a dismal picture of the regional economy.

U.S. equities have struggled to break above current levels where they have hovered for almost two weeks. The benchmark S&P 500 is up more than 6 percent so far this year.

"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.

"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.

The Dow Jones industrial average closed down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index rose 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index added 1.78 points, or 0.06 percent, at 3,198.66.

"The only reason a company buys another company is because they see an upside. Even though we are at multiyear highs, this kind of activity shows that there is more room for a rally, feeding optimism to the market," said Randy Frederick, director of trading and derivatives at Charles Schwab.

Economic output in the euro zone fell by 0.6 percent in the fourth quarter, EU statistics office Eurostat said, while Germany contracted by 0.6 percent, marking its worst performance since the global financial crisis was raging in 2009.

The downturn marked the currency bloc's first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, GDP fell by 0.5 percent.

Germany is expected to rebound but the figures suggest the bloc as a whole could remain in recession in the first quarter of this year, despite a recent jump in market sentiment as fears that the currency bloc could fall apart have faded.

"The market has weakened because of the GDP numbers," said Barclays commodities analyst Miswin Mahesh. "It's been a macro sell-off this morning with the GDP numbers coming out, rather than any fundamental move in itself. Most asset classes have sold."

"The jobless claims numbers were solid, and with the European market closing, the news out of Europe is pretty much done for the day," Frederick said.

"A lot of companies, fearing about the systemic risk, have been delaying investments for a long time," said Gilles Guibout, head of euro zone equities at AXA Investment Managers, which has 554 billion euros ($739 billion) under management.

NYMEX - TOKYO, Feb 14 (Reuters) - U.S. crude futures edged up to stay above $97 a barrel on Thursday, paring a 0.5 percent decline a day earlier, helped by hopes for oil demand growth after a Reuters poll showed that the euro zone is slowly starting to emerge from recession.

CBOT Soybean- Soybean futures on the Chicago Board of Trade fell on signs of slowing U.S. export demand and improving crop weather in South America, traders said.

·         Beneficial rains expected over much of Argentina this week and this weekend should help relieve stressed crops, but more rain will be needed to ensure satisfactory crop output, the Commodity Weather Group said.

·         In Brazil, rains in the next two weeks should help soybean crops in southern areas, while a drier pattern for the northwest soy areas next week should boost harvest progress

·         USDA reported export sales of U.S. soybeans in the latest week at 235,900 tonnes (old and new crop years combined), including net cancellations of 109,100 tonnes for 2012/13 and sales of 345,000 tonnes for 2013/14. Trade expectations were for 700,000 to 1.1 million tonnes.

·         USDA reported weekly export sales of soymeal at 132,400 tonnes and soyoil sales at 16,600 tonnes, both below a range of trade expectations.

·         The Buenos Aires Grains Exchange left its outlook for Argentina's 2012/13 soybean harvest at 50 million tonnes, unchanged from its initial estimate a week ago but below USDA's current forecast for 53 million. 

·         Trade awaits monthly U.S. soybean crush data due Friday from the National Oilseed Processors Association. The average estimate for NOPA's January crush among analysts surveyed by Reuters was 159.5 million bushels. 

FCPO - KUALA LUMPUR, Feb 14 (Reuters) - Malaysian palm oil futures edged down to a two-week low on Thursday, as data showed stockpiles in the world's No.2 producer remained high and on improving weather in key soy-growing regions in South America.

Better South American weather would contribute to an expected bumper crop in Brazil, poised to overtake the United States as the No.1 soybean grower, adding pressure to the soybean market tracked by palm oil.

January's palm oil end-stocks eased off record levels and fell to 2.58 million tonnes, according to industry regulator data, but the smaller-than-expected decline triggered some selling pressure in the market.

"While good export news continues to come in, nervousness about the large South American crop (and its effect on prices), as well as the U.S. soybean market facing a seasonal slowdown are pressuring the futures market," said a trader with a local commodities brokerage in Malaysia.

"The end-stocks are still the elephant in the room. Traders could be taking the end-stocks seriously and are looking for opportunities to sell," the trader added.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged down 0.3 percent to close at 2,497 ringgit ($811) per tonne. Prices went as low as 2,490 ringgit, the lowest level since Jan. 30.

Total traded volumes stood at 20,263 lots of 25 tonnes each, slightly lower than the average of 25,000 tonnes.

Cargo surveyor data showed Malaysia's exports of palm oil products rose as much as 25 percent in the first 10 days of February on stronger demand from major buyers India, China, the United States and Europe.

Traders will be looking out for Feb. 1-15 export data on Friday to further gauge demand trend of the tropical oil.

Analysts say seasonally slowing production could see stockpiles in February easing another 4 percent on the month to 2.48 million tonnes, but inventory levels are unlikely to dip below the 2-million-tonne mark in the first quarter of 2013.

"This should keep crude palm oil prices below 3,000 ringgit per tonne in the first quarter of 2013," said Kenanga Research analyst Alan Lim in Kuala Lumpur.

India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from southeast Asia, a trade body said on Thursday, despite a hike in import duties mid-month.

Oil prices rose on Thursday as fresh tensions over Iran's nuclear programme revived global supply concerns, offsetting weaker-than-expected growth data from France and Germany.

In competing vegetable oil markets, U.S. soyoil for March delivery dropped 0.3 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

Regional Equities - BANGKOK, Feb 14 (Reuters) - Southeast Asian stock markets ended mixed on Thursday, with the Philippines coming off an intraday record as reports of a landslide hit mining shares and Indonesia closing at a record high, led by PT Bumi Resources Tbk

The Philippine main index ended 0.22 percent down at 6,513.41, hitting a peak of 6,542.51 at one point, with shares in Semirara Mining Corp dropping 8 percent following reports of a landslide at its coal mine in central Philippines.

Manila saw broad buying interest in large caps, with Manila Electric Co and Ayala Corp among the gainers. The Philippines set a record close for the fourth time this month on Wednesday as foreigners led buyers.

Manila saw net foreign buying of $160 million this month to Wednesday, trailing Indonesia's month-to-date net foreign buying of $488 million and Malaysia's $195 million.

Jakarta's Composite Index rose 0.4 percent to 4,588.67, breaching Wednesday's 4,571.57 record finish. Coal exporter Bumi surged 26.4 percent after it requested a takeover panel to expedite inquiry into the creation of parent coal miner Bumi 

The Thai stock market has lagged its peers, seeing net foreign selling of $373 million this month. The benchmark SET index climbed 0.8 percent to a fresh 18-year closing high of 1,526.74.