RTRS - Snow and rain help inch U.S. crop belt out of drought

CHICAGO, March 15 (Reuters) - Increased rainfall and some snow are expected by the weekend and again late next week in the northern U.S. Midwest and southern portions of the region, which will add valuable soil moisture ahead of spring seedings of corn and soybeans, an agricultural meteorologist said on Friday.

The extended drought last summer, the worst in 50 years, slashed more than 25 percent of the projected bushels of corn crop per acre, cutting supplies in the United States to the current 17-year low.

"From 4 to 8 inches of snow or roughly 0.50 inch to 0.75 inch of moisture equivalent is expected in the Dakotas, Minnesota and Wisconsin," said Don Keeney, meteorologist for MDA Weather Services. "It certainly will add soil moisture."

Keeney also said warmer weather this week in the U.S. Plains hard red winter wheat region will be replaced by colder weather next week.

"Much of the crop in the far south broke dormancy this week," he said, "but I think with the colder weather next week, there won't be much emergence (break from dormancy) from central Kansas into Nebraska."

Winter snowfall and recent rains have helped add soil moisture to the drought-stricken Plains wheat and cattle-grazing region, but more rain is needed to bring soil moisture levels back to normal, Keeney and others said.

Commodity Weather Group meteorologist Joel Widenor said the weekend showers and snow would ease the drought a bit in the northwestern Midwest, and showers over the next two weeks would help in the Plains.

But "the southwestern Plains will rely on recent improvements in topsoil moisture to support spring growth of winter wheat," Widenor said.

"Early corn seeding in the Delta and Southeast will slow occasionally due to showers and intermittent cool weather over the next two weeks, but only minor interruptions are anticipated," he said.

Drought continued to retreat in many areas of the U.S. Plains as snow and rainfall replenished parched soils and gave farmers and ranchers an improved outlook for better crop and livestock conditions, according to a report issued on Thursday.

Eight U.S. states continued to suffer from the worst level of drought, dubbed "exceptional" by the Drought Monitor, a report issued by a consortium of state and federal climatologists each week. But many saw improvement.

Keeney said that as of March 9, about 2 to 4 inches (5 to 10 cm) of rain were needed in Kansas, the top producer of hard red winter wheat, to bring the state out of drought status.

That was an improvement from early February when about 4 inches to 6 inches (10 to 15 cm) of rain was needed.

Up to 8 inches (20 cm) was needed in a pocket of severe dryness in northeastern Kansas, a big corn- and grain sorghum-growing area. Similar amounts were needed in nearly the eastern third of Nebraska.

Northwest Iowa and south-central Minnesota needed from 4 to 6 inches (10 to 15 cm) to get soils back to normal moisture levels.

Near-normal soil moisture was seen in most of Missouri and all of Illinois, Wisconsin, Indiana, Ohio and Michigan.

Trader's highlight

DJI - NEW YORK, March 15 (Reuters) - U.S. stocks edged lower on Friday, weighed by a decline in JPMorgan Chase shares after the bank was hit by a one-two punch of bad news and as investors paused just below the S&P 500's record high.

The widely watched index was about 6 points away from its record closing high of 1,565.15, set in October 2007, after failing to break above that level on Thursday.

Friday's dip also meant the Dow was on track to snap its 10-day winning streak during which it racked up a series of all-time highs. Equities have rallied since the start of the year on signs of improvement in the economy and supported by the Federal Reserve's efforts to bolster the recovery.

"It seems like the market is digesting some of the rally that we have seen so far, but when we reflect on the current valuation which is 13 1/2 times earnings on a forward looking basis, it is still a comfortable level compared to around 20 in 2007 and 29-30 levels in 2000," said David Lyon, Investment Specialist, J.P. Morgan Private Bank, based in San Francisco.

JPMorgan Chase & Co was the biggest drag on the S&P 500 and one of the biggest weights on the Dow, falling 2.2 percent to $49.87.

The Federal Reserve told JPMorgan and Goldman Sachs Group Inc that they must fix flaws in how they determine capital payouts to shareholders, though the central bank still approved their plans for share buybacks and dividends.

A Senate report alleged that JPMorgan had ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in a derivatives portfolio. A former top JPMorgan official told lawmakers on Friday she was not to blame for the losses.

In contrast, Goldman shares recovered from early weakness to gain 0.3 percent to $154.58. The stock of rival Bank of America rose 3.9 percent to $12.58. The S&P financial sector index edged up 0.3 percent.

The Dow Jones industrial average was down 49.40 points, or 0.34 percent, at 14,489.74. The Standard & Poor's 500 Index was down 4.96 points, or 0.32 percent, at 1,558.27. The Nasdaq Composite Index was down 13.44 points, or 0.41 percent, at 3,245.49.

Brent and Crude Oils - NEW YORK, March 15 (Reuters) - U.S. crude oil futures settled higher on Friday, driven by strong U.S. industrial output data in the world's largest oil consumer and a weaker U.S. dollar.

The weaker dollar buffered oil prices from declining on the back of the U.S. stock market being knocked off its highs.

The dollar fell as investors opted to book profits after U.S. inflation data kept the door open for the Federal Reserve to continue its bond-buying program for the foreseeable future.

"The dollar is down a lot more in the last two days so hence the buoyancy in energy prices," said Walter Zimmermann, chief technical analyst with brokerage United ICAP in New York. "And energy prices are being insulated from stock market weakness by weakness in the dollar today."

Crude oil prices are denominated in U.S. dollars and when the value of the currency sinks, prices rise to offset the weakness.

STANDOFF

Iran was still more than a year from developing a nuclear weapon, Obama said in an interview with Israeli television broadcast on Thursday, six days before his visit to Israel.

Obama appeared to send a message to Israeli Prime Minister Benjamin Netanyahu on the need for patience with Washington's Iran strategy, while also showing U.S. resolve to confront Tehran if necessary.

Worries that the standoff between the West and Iran over the Islamic Republic's nuclear program will escalate and disrupt oil supplies have kept Brent above $100 a barrel through most of 2012 and this year.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a fourth session on Friday as disappointing U.S. soybean crush data combined with pressure from the expanding South American harvest, traders said.

* The National Oilseed Processors Association reported the U.S. February soybean crush at 136.3 million bushels, below a range of trade estimates and down from 158.2 million in January.

  

• CBOT soyoil ended higher, supported by traders unwinding meal/oil spreads and by NOPA's February soyoil stocks figure of 2.790 billion lbs, a decline from 2.823 billion in January.

  

• For the week, May soybeans  SK3 fell 45 cents or 3.1 percent, the contract's biggest drop since early January. May soymeal  SMK3 fell 3.8 percent, ending a three-week climb, while May soyoil  BOK3 fell 0.8 percent, its third drop in four weeks.

• Allendale Inc survey projected U.S. 2013 soybean plantings at a record-high 78.324 million acres and corn plantings at 96.956 million acres. 

  

• Rain and some snow are expected by the weekend and again late next week in the northern U.S. Midwest, which will add valuable soil moisture ahead of spring planting. (Full Story)

  

• USDA said private exporters reported sales of 165,000 tonnes of U.S. soybeans to China for delivery in 2013/14.

  

• Malaysian palm oil futures rose on bargain-hunting after three straight sessions of losses, with traders expecting seasonally lower production and firm exports to help stocks ease further.

  

• CBOT reported no deliveries of soybeans, soymeal or soyoil.

BMD CPO - SINGAPORE, March 15 (Reuters) - Malaysian palm oil futures rose on Friday on bargain-hunting after three straight sessions of losses, with traders expecting seasonally lower production and firm exports to help stocks ease further.

Palm oil posted a loss of 1.3 percent for the week, weighed down by a weak soy market suffering from poor export demand and higher South American supply.

But market participants said they were still counting on a seasonal decline in output to help ease stocks and support prices, especially after cargo surveyor data on Friday showed firm export demand.

"We see some retracement in an oversold market," said a trader with a foreign commodities brokerage in Kuala Lumpur. "For the past few days external markets like Dalian and CBOT soybean oil were a little weak, but they have pulled back up a bit, so our market is adjusting to it."

The benchmark May contract on the Bursa Malaysia Derivatives Exchange had gained 2.2 percent to 2,415 ringgit ($774) per tonne by the market close. Prices fell to 2,360 ringgit on Thursday, the lowest level since Jan. 14.

Total traded volume stood at 35,268 lots of 25 tonnes each, higher than the usual 25,000 lots.

Exports of Malaysian palm oil products from March 1 to 15 inched up 0.2 percent to 675,210 tonnes from 673,555 tonnes shipped during Feb. 1 to 15, cargo surveyor Intertek Testing Services said on Friday.

Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for April at 4.5 percent, unchanged from March, a government circular showed on Friday.

In other markets, Brent crude oil rose above $109 a barrel on Friday as strong U.S. jobs data fuelled hopes of a better outlook for demand in the world's top oil consumer, while concerns over supply from the Middle East added support. 

In other vegetable oil markets, U.S. soyoil for May delivery inched up 0.9 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange also gained 1.4 percent.

Regional equities - BANGKOK, March 15 (Reuters) - Southeast Asian stocks were mostly higher on Friday, with Indonesia snapping three sessions of losses after the new central bank governor's view of low interest rates, and Thailand nearly touching the 1,600 mark on progress of infrastructure investment.

Jakarta's Composite Index finished up 0.7 percent at 4,819.32, trimming its loss on the week to 1.1 percent. It rallied almost 10 percent over the past six weeks, setting a record close of 4,874.50 on March 8.

Thai SET index  rose for the third session, ending up 0.7 percent at a 19-year closing high of 1,598.13. It gained almost 2 percent on the week, Southeast Asia's second best performer. Vietnam  led the region with a weekly gain of 2.3 percent.

Thai government's progress on plans for huge infrastructure investment has bolstered demand, with the cabinet set to meet next week to discuss 2 trillion baht ($67.5 billion) in spending.

Bucking the trend, Kuala Lumpur's Composite Index lost almost 1 percent to 1,627.64, the lowest close in more than two weeks. The Philippines eased 0.6 percent, extending losses for a fifth session, to 6,654.60.

Across the region, investors bought stocks with good earnings and yielding good dividends. In the Philippines, conglomerate Alliance Global Group Inc jumped 2.5 percent after it reported strong 2012 earnings.

Among bright spots, Thailand's SkyTrain operator BTS Group Holdings Pcl  jumped 3.4 percent following its plan to raise up to $2.1 billion by listing an infrastructure fund.