RTRS - Argentine soy harvest may exceed 50 million tonnes -analyst

BUENOS AIRES, March 1 (Reuters) - Argentina's 2012/13 soy harvest should reach at least 50 million tonnes, more than recent estimates by local grain exchanges, as yields in early seeded crops beat expectations, an Argentine analyst said on Friday.

The South American country is the world as No. 3 soybean supplier and its top exporter of soyoil and soymeal. A lack of rain since the start of the year has driven global prices higher, although recent showers have brought relief.

According to analyst Pablo Adreani, head of the Agripac consultancy, soy crops planted early in the season have not been as badly affected by weeks of hot, dry weather as later-planted crops due to plentiful rains last year.

"The situation is much better than last year. The early-planted beans and corn look excellent with yields that could probably reach the record," Adreani told the Reuters Ags Forum, an online chatroom for grain traders.

Drought hit Argentina's crops in the previous 2011/12 season and soy production was a weak 40.1 million tonnes. Corn output was 21 million tonnes.

Adreani said yields in Santa Fe province, one of the country's biggest grain producers, are coming in above 3.0 tonnes per hectare in early planted beans, about 15-20 percent more than during last year's harvest.

He said farmers were about to start gathering crops in the main agriculture belt, estimating that they would sell about 15 million tonnes of grain in the next 45 days.

"After that, farmers will sit on the beans and they will only sell in a drip-drop way to meet some commercial commitments," he said.

Earlier this week, Buenos Aires Grains Exchange cut its estimate for the soy harvest to 48.5 million tonnes. Rosario grains exchange expects production of 48 million tonnes.

With regard to the upcoming wheat campaign, which will begin in May, Adreani said government export curbs could cause another disappointing season by deterring farmers from planting.

Last season, growers produced 9.8 million tonnes of wheat, according to the Buenos Aires exchange.

"I don't believe Argentina could have been a reliable supplier of wheat to Brazil. There was a serious attack of fusarium (fungi), about 40 percent of the wheat was bad quality (and) could only be sold as feed wheat."

"This year (2013/14), we could see another reduction in wheat area if the government doesn't change its anti-export policy," he said.

Trader's highlight

DJI - NEW YORK, March 1 (Reuters) - U.S. stocks advanced modestly on Friday, leaving the S&P 500 with slight gains in a volatile week as strong economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected U.S. government spending cuts.

Stocks opened sharply lower for the session as Asian factories slowed and European output fell, but most of the losses evaporated after a report showed U.S. manufacturing activity expanded last month at its fastest clip in 20 months.

U.S. consumer sentiment also rose in February as Americans turned more optimistic about the job market.

With $85 billion in government budget cuts set to begin, President Barack Obama blamed Republicans for failure to reach a compromise to avert the cuts, known as sequester. But the stock market appeared to have already priced in the failure by legislators to reach an agreement.

"We were able to dig out of that hole, but not make any great strides on it either," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "We will probably be in a holding pattern pending some big development on a broader budget deal."

The Dow Jones industrial average  gained 35.17 points, or 0.25 percent, to 14,089.66 at the close. The Standard & Poor's 500 Index  added 3.52 points, or 0.23 percent, to 1,518.20. The Nasdaq Composite Index dvanced 9.55 points, or 0.30 percent, to 3,169.74.

For the week, the Dow rose 0.6 percent, the S&P 500 edged up 0.2 percent and the Nasdaq gained 0.3 percent.

The slight gains for equities came during a volatile week that saw markets decline on Monday after uncertain Italian elections, only to rebound in the next two sessions as U.S. Federal Reserve Chairman Ben Bernanke defended the central bank's stimulus measures.

The low interest rates due to the Federal Reserve's accommodative monetary policy have helped equities continue to attract investors. The Dow is less than 1 percent away from its all-time intraday high of 14,198.10. Declines have been shallow and short-lived, with investors jumping in to buy on dips.

Brent Crude Oil - NEW YORK, March 1 (Reuters) - Brent crude prices fell to a six-week low below $110 per barrel on Friday, erasing all gains so far in 2013 as political gridlock in Washington was set to trigger automatic U.S. budget cuts.

Since hitting a nine-month high of $119.20 in early February, Brent has dropped by around $9 a barrel over the last three weeks as concerns about oil demand during a sluggish economic recovery have reemerged.

In Washington on Friday, $85 billion in automatic spending cuts known as "sequestration" were about to kick in as the White House and Republicans remained at loggerheads over the federal budget, weighing on the economy of the world's largest oil consumer.

The International Monetary Fund (IMF) has warned the cuts could knock at least 0.5 percentage points off U.S. economic growth this year and weigh on the rest of the global economy.

"Despite some green shoots in the United States, the growth forecast remains mediocre, unemployment stubbornly high and economic data inconsistent," said oil brokerage PVM in a note to clients.

Crude oil exports from the Organization of the Petroleum Exporting Countries also rose in February, a Reuters survey found, marking the first monthly increase since October and further weighing on prices.

Weak growth data out of Europe and China added to fears the global economic recovery is still sputtering.

European surveys showed British manufacturing shrank unexpectedly in February while France's factories suffered their 12th straight monthly fall in output. Also falling was industrial activity in Spain and Italy.

In China, domestic and foreign demand slackened as the official Purchasing Managers' Index (PMI) missed expectations, coming in at 50.1, the government said on Friday. This was its lowest reading since September.

Chinese data showing factory growth cooled in February also dampened the mood on commodity markets.

"China is the main economic and oil demand growth engine of the world," said Dominick Chirichella of the Energy Management Institute in New York.

"If China's manufacturing is slowing it strongly suggests that oil consumption in China is going to also slow."

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell on Friday, ending a two-day rise as traders cited disappointing economic data from China, the world's top soybean buyer.

* Growth in Chinese factories cooled in February to a five-month low after domestic and foreign demand slackened, an official government survey showed, missing market forecasts. 

 

·         Spillover pressure from crude oil and other markets as  traders exited some commodities and bought the dollar as a  safe-haven amid concerns about imminent U.S. spending cuts and  the post-election political stalemate in Rome. 

 

·         Informa Economics raised its estimate of Brazil's 2012/13   soybean crop to 84.5 million tonnes, from 84.0 million   previously, and left its estimate of Argentine corn production  at 51.0 million tonnes, unchanged from late February but down   from its month-ago forecast of 54.5 million.

 

·         Analyst Pablo Adreani, head of the Agripac consultancy,  said Argentina's 2012/13 soy harvest should reach at least 50    million tonnes, topping recent estimates by local grain exchanges, as yields in early seeded crops beat expectations.

·         Traders shrugged off sales of 10,000 tonnes of U.S.  soybeans to China for delivery in 2013/14, reported by USDA. It  was the fourth sale of the week of soybeans to China, boosting  the total to 483,000 tonnes for the week. 

 

·         Brazil's exports of soybeans jumped in February from the  previous month as an expected record harvest started to reach ports, trade ministry data showed on Friday.

 

·         CBOT reported 1,437 March soyoil deliveries but the ADM  Investor Services house account stopped 1,317 lots, a likely sign of rising demand from the biodiesel sector.

BMD CPO - SINGAPORE, March 1 (Reuters) - Malaysian palm oil futures fell to their lowest in more than six weeks on Friday, extending losses to an eighth straight session, as weak exports continued to weigh and investors turned cautious ahead of a key industry conference next week.

Traders were concerned Malaysia's palm exports, which one cargo surveyor said fell 9.1 percent in February, would decline further as a zero-percent export tax for the crude grade rises to 4.5 percent this month.

Focus is also shifting to Bursa Malaysia's annual palm oil conference next week, where leading industry analysts including Dorab Mistry and James Fry will present their price outlooks.

"The market is waiting for Dorab Mistry's forecast next week, which is likely to be bearish," said Alan Lim Seong Chun, a research analyst at Malaysia's Kenanga Investment Bank.

"February exports were weaker than the expected 3 percent decline. Besides that, soybean oil overnight also declined about 1 percent so that also pressured the palm oil market."

The benchmark May contract on the Bursa Malaysia Derivatives Exchange slid 1.3 percent to close at 2,368 ringgit ($766) per tonne, a level last seen on Jan. 14.

For the week, the edible oil posted a 6.6 percent loss, the worst since mid-November, tracking losses in the soybean oil market as improving South American weather boosts the supply outlook for soybeans.

Industry players are also keeping an eye on slowing palm oil output in Malaysia, the world's No.2 producer.

Less production could help ease inventory levels, which stood at 2.58 million tonnes in January, although slowing exports could mean the reduction in stocks will be slight.

In other markets, Brent crude slipped to a six-week low below $111 a barrel on Friday, weighed down by growth worries as political gridlock raised the prospect of massive U.S. government spending cuts.

In competing vegetable oil markets, U.S. soyoil for May delivery fell 0.3 in late Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange closed 0.7 percent lower.

Regional Equities - BANGKOK, March 1 (Reuters) - Most Southeast Asian stock markets retreated on Friday, joining those in broader Asia and global markets, with Philippine shares falling from an all-time high hit a day earlier and selling in big-caps such as PTTEP  wiping out early gains in Thai stocks.

Concerns over the economic fallout from possible U.S. spending cuts and Italy's political stalemate weighed on global sentiment. The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.19 percent.

The Philippine Composite Index  fell 1.2 percent to 6,642.27, after having hit a record close of 6,721.45 on Thursday.

Among leading decliners, shares in Energy Development Corp  plunged 11.4 percent after the company announced the shutdown of one of its power-generating facilities due to technical problems.

The Thai benchmark SET index  slid 0.13 percent to 1539.60, trimming Thursday's 1.6 percent gain. Market players sold recent large-cap gainers such as PTT Exploration and Production Pcl , which fell 1.9 percent.

Stocks in Singapore  and Malaysia  ended nearly flat. Indonesia , bucking the trend, rose 0.3 percent to a new record close of 4,811.61, led by a 1.9 percent gain in PT Astra International  thanks to strong 2012 results.