RTRS - PREVIEW-India's Feb palm oil imports drop on duty rise

NEW DELHI, March 12 (Reuters) - India's palm oil imports are likely to have dropped in February from an all-time high the previous month, as a duty hike to curb cheap imports from Southeast Asia and higher stock levels slowed overseas purchases, a Reuters survey showed on Tuesday.

India is the world's biggest importer of vegetable oils and leading producers Indonesia and Malaysia have been vying to make their oils more attractive by varying tax levels. India has retaliated with an import duty hike of its own.

New Delhi slapped a duty of 2.5 percent on crude palm oil during the second half of January to curb imports, but refiners have demanded a further rise to protect themselves and domestic oilseed growers.

"The small duty hike with high level of stocks is expected to lower monthly palm oil imports," said Govindbhai G. Patel, a trader based in the western oilseed centre of Rajkot.

India's total stocks of edible oil may have hit a record in February at around 1.9 million tonnes, B.V. Mehta, the head of industry body the Solvent Extractors' Association (SEA), which publishes the import data, said a week ago.

Stocks are shifting from producing countries to consumers, with both India and China, the other major world buyer, taking advantage of cheap palm oil and lower import tariffs to ramp up purchases while holding down the impact on inflation.

Patel also said imports had been trimmed by expectations for a further hike in the import duty in the Feb. 28 budget and higher domestic cooking oil supplies as the rapeseed harvest rolled in. However, the budget omitted any such duty increase.

Palm oil imports are forecast to have dropped 11.1 per cent to an average of 794,000 tonnes in February, the survey of five traders showed, with about 150,000 tonnes of refined palm oil imports.

Imports of vegetable oils, including non-edible oils, fell 15.2 percent to 981,500 tonnes in February from the all-time high of around 1.2 million, mainly due to the decline in palm oil imports, the survey showed.

"Imports could be down in March to about 800,000 tonnes, due to the high level of imports during the last two months," said R.K. Singhal, an analyst based in New Delhi.

Imported refined palm oil was quoted at $860 per tonne on the country's west coast, while the delivered price for crude palm oil was $830 per tonne, narrowing the spread between the two palm variants from around $70 a tonne a month ago.

India imports 8 million to 9 million tonnes a year, or about half its total demand. Palm oil accounts for about 80 percent of imports.

As India's population grows in size and wealth, demand for cooking oils is rising. New Delhi tries to encourage local oilseed production, partly by guaranteeing minimum prices to farmers, but has had limited success.

India buys mainly palm oils from Malaysia and Indonesia and a small quantity of soyoil from Brazil and Argentina.

Soyoil and sunflower imports are also expected to have declined last month after huge imports in the previous month, for use at celebrations during the wedding season just ending.

Soyoil imports are likely to have fallen 13.6 percent to 89,000 tonnes last month, while sunflower imports could fall by 43.2 percent to 74,000 tonnes from the previous month.

The survey showed average estimated stocks at Indian ports at the end of February could go up 14 percent to 883,333 tonnes from January, largely from the higher imports. SEA's estimates include pipeline stocks.

RTRS - Brazilian problems may firm soybean price into April -Oil World

HAMBURG, March 12 (Reuters) - Soybean prices could be boosted well into April by transport problems in key exporter Brazil but could then be weakened by possible record soybean plantings in the United States, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“Soybean prices may remain firm in March and perhaps the first half of April,” Oil World said. “By that time exports from South America should be in full swing and the USDA (U.S. Department of Agriculture) planting intentions report may have confirmed the outlook for a record soybean acreage this spring, paving the way for a price setback.”

Global soybean consumers are urgently awaiting Brazilian and Argentine soy harvests in early 2013 to relieve the tight global soybean market, where the U.S. is carrying the main burden of meeting world export demand despite a drought-hit 2012 crop.

Loading delays of up to 60 days are reported at Brazilian ports as the country struggles to export huge new soybean and corn crops. This has returned soybean demand to the United States despite tight U.S. supplies which may compel U.S. soybean imports in coming months.

“Manifold logistical problems kept Brazilian soybean exports below the world market’s requirements in February and this will probably also occur in the first half of March,” Oil World said.

Soybean price weakness had been expected early in 2013 as South American harvests enter the global market and price firmness created by Brazilian transport bottlenecks could encourage more U.S. soy sowings, Oil World said.

“The severe depletion of U.S. stocks and the recent price development is signalling U.S. farmers to step up soybean plantings,” Oil World said.

U.S. end-of-season soybean stocks are forecast to fall to their lowest in nine years while the stocks-to-consumption ratio was projected at the tightest since the mid-1960s, according to USDA data.

The USDA will estimate spring plantings of U.S. corn, soybeans, wheat and other crops on March 28 and Oil World is expecting a hefty expansion of U.S. soybean sowings.

“Historically tight domestic (U.S.) supplies and the need for an extreme demand-rationing in the remainder of 2012/13 are supporting the outlook for a further expansion of U.S. soybean plantings this season, probably to an all-time high of 78-79 million acres,” it said.

This would compare to 76.1 acres harvested in the United States in 2012.

Oil World stressed the estimate is very tentative with weather and price developments in coming weeks key factors to watch.

Trader's highlight

DJI - NEW YORK, March 12 (Reuters) - The S&P 500 ended lower on Tuesday, breaking a seven-session string of gains as investors pulled back from technology and financials, but the Dow eked out the smallest of gains to finish at another all-time closing high.

The Dow also hit another lifetime intraday high, while the S&P 500 remains within reach of its all-time closing high of 1,565.15, set on Oct. 9, 2007.

The market's rally in recent months has driven the Dow up 10.3 percent for the year and lifted the S&P 500 by 8.9 percent for 2013 so far. Signs of improvement in the economy and the Federal Reserve's quantitative easing have helped to propel the advance.

"You have a little bit of buyers' exhaustion at this juncture. We've had this move that has been startlingly smooth in terms of progression of advances, both since the beginning of the year and certainly over the last six to seven trading sessions," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

"Investors are waiting for this collective correction ... for some time, and it's teasing more and more buyers out of the market."

The Dow Jones industrial average rose just 2.77 points, or 0.02 percent, to 14,450.06, another record close. Earlier, the Dow climbed to a lifetime intraday high of 14,478.80.

The Standard & Poor's 500 Index dipped 3.74 points, or 0.24 percent, to finish at 1,552.48 - about 13 points below its record closing high.

The Nasdaq Composite Index slipped 10.55 points, or 0.32 percent, to close at 3,242.32.

Brent Crude Oil - NEW YORK, March 12 (Reuters) - Brent crude oil fell on Tuesday after seesawing with the euro and the dollar, and as OPEC's trimmed forecast for U.S. and euro zone economic growth also applied pressure.

Brent April crude fell 57 cents, or 0.52 percent, to settle at $109.65 a barrel, having traded from $109.30 to $111.20.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell on technical selling and pressure from the advancing South American harvest, traders said.

 

·         Concerns eased about sales of Brazilian soybeans being  switched to U.S. origins after no new sales of old-crop U.S. soybeans were announced by USDA.

·         The soybean harvest in Brazil's top soy state Mato Grosso is 75 percent complete, according to AgRural consultancy.

·         Nearby CBOT soybean contracts lost ground to back months as traders took profits by unwinding May/July and July/November spreads.

 

·         Cash basis bids for soybeans shipped by barge to the U.S.   Gulf were steady to weaker at midday on Tuesday, although nearby  values remained at a premium to deferred bids.

 

·         Soybean prices could be elevated well into April by transport problems in key exporter Brazil but could then come under pressure from possible record U.S. soybean plantings -  oilseeds analysts Oil World. 

 

·         Wetter weather is expected in Argentina this week and a frost was possible, but it should occur south of the big soybean areas, a U.S. meteorologist said.

 

·         Analyst UkrAgroConsult said Ukraine could increase its  rapeseed harvest by about two-thirds and raise its soybean output by 17 percent in 2013.

 

·         CBOT reported five March soybean deliveries, one soymeal  delivery and one soyoil delivery.

BMD CPO - SINGAPORE, March 12 (Reuters) - Malaysian palm oil futures edged lower on Tuesday, tracking weaker overseas soybean oil markets, although a fall in palm oil stockpiles helped keep losses in check.

U.S. soybeans dropped on Tuesday after data from the U.S. Department of Agriculture showed slower export demand for the oilseed, also weighing on soybean oil markets.

U.S. soyoil for May delivery  edged down 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange fell 1.1 percent, extending losses to its lowest since July 2010.

"The palm market is weaker on the back of CBOT and Dalian soybean oil but it should be supported at 2,400 ringgit," said a trader with a foreign commodities brokerage in Malaysia.

"Production should go down further and exports should be slightly better than last month, so we expect to see further drawdown in stocks."

By Tuesday's close, the benchmark May contract on the Bursa Malaysia Derivatives Exchange had inched down 1.6 percent to 2,412 ringgit ($775) per tonne. Prices traded in a range between 2,406 and 2,442 ringgit.

Total traded volume stood at 39,868 lots of 25 tonnes each, higher than the usual 25,000 lots.

But despite short-term weakness, analysts expect prices to pick up, as palm oil stocks continue to ease on lower production and a demand recovery.

"We continue to expect crude palm oil prices to trade higher in the coming months. After the current low-yield season, palm oil closing stocks are expected to continue to trend lower on demand recovery, boosted by an abnormally high discount to soybean oil," Malaysia's Affin Investment Bank said in a research note on Tuesday.

Palm oil stocks in the world's second-largest producer of the tropical oil fell to 2.44 million tonnes in February from 2.58 million in January, industry regulator the Malaysian Palm Oil Board said on Monday.

Cargo surveyors reported growth in exports to be almost flat for the March 1-10 period from a month ago, and traders will be looking out for export data for the first half of the month, due on Friday, to further gauge the demand trend.

In other markets, Brent futures slipped below $110 a barrel on Tuesday on worries of a slowdown in demand growth in China and the United States, two of the world's biggest oil consumers, with a rise in the dollar weighing further on the market. 

Regional Equities - BANGKOK, March 12 (Reuters) - Southeast Asian stock markets ended mostly flat to weaker on Tuesday, erasing earlier gains in line with Asian equities, with Thai benchmark index retreating from a 19-year peak and the Philippine main index extending losses for a second session.

Among recent outperformers that led the declines were Malaysia's Axiata Group Bhd , Philippine Long Distance Telephone Co. and Thailand's LPN Development Pcl

Bangkok's SET index was down 0.06 percent at 1,576.68. It rose in morning trade to 1,586.41, the highest level since January 1994. The market saw a net foreign buying of $44.41 million, stock exchange data showed.

The Thai baht  hit a 28-month high against the dollar on Tuesday, fuelled by strong demand from some offshore hedge funds. As of 1029 GMT, the Thai currency was at 29.60, compared with Monday's close of 29.72.

The Philippine index fell 0.4 percent to 6,786.42, after Monday's 0.29 percent loss. Malaysia's benchmark index edged down 0.09 percent to 1,656.54 as retail and local institutions were net sellers, according to stock exchange data.