Bloomberg - Europe Weighs Cyprus’s Fate After Lawmakers Reject Deal

European policy makers must weigh how far to push Cyprus after lawmakers in the Mediterranean nation rejected an unprecedented levy on bank deposits, throwing into limbo a rescue package designed to keep it in the euro.

Luxembourg Finance Minister Luc Frieden called for the 17 euro-area finance ministers to reconvene “as soon as possible” to cobble together a new package. The European Central Bank, whose Governing Council meets today in Frankfurt, will also have to decide whether to give Cyprus more time or consider cutting off liquidity to the country’s banks.

“This is not a good result -- neither for Cyprus, nor for the euro zone, and we have to look together for alternatives to the negotiated package,” Frieden said yesterday in a phone interview from Frankfurt. He called the vote “very sad news,” though said the decision by its parliament must be respected.

Cyprus’s rejection came after days of recrimination sparked by European plans to force depositors in the country to shoulder part of the bailout with their savings. Cypriot President Nicos Anastasiades returned from marathon talks on March 16 saying the alternative would be the “indescribable misery” of the ECB cutting off funding to one of its banks.

“What matters now is to undertake all necessary measures to ensure the stability of the euro zone,” Frieden said.

Read all : http://www.bloomberg.com/news/2013-03-19/europe-weighs-cyprus-s-fate-after-lawmakers-reject-bailout-deal.html

Bloomberg - Brent Oil Rebounds From Three-Month Low; Premium to WTI Widens

Brent oil rebounded from the lowest level in three months, widening its premium to West Texas Intermediate crude for the first time in four days.

Brent futures rose as much as 0.4 percent after sliding 1.9 percent yesterday, the biggest decline since November. WTI was little changed near a one-week low. Brent’s premium fell to the narrowest in almost eight months yesterday after Cyprus rejected a bank levy linked to a bailout, sparking concern Europe’s debt crisis will worsen. U.S. crude stockpiles slid by 413,000 barrels last week, according to the American Petroleum Institute. A government report today is forecast to show inventories increased for a ninth week.

“Some people are betting that we’ve got a low point here and are getting back into the market,” said Victor Shum, the managing director of IHS Consulting in Singapore. “I still expect some volatility, but what’s stopping a further slide is that enough people in the market believe that the Cyprus situation will get resolved.”

Read all : http://www.bloomberg.com/news/2013-03-19/wti-oil-trades-near-one-week-low-u-s-crude-stockpiles-decline.html

RTRS - China’s soybean stocks at undesirably low levels-Oil World

HAMBURG, March 19 (Reuters) - China’s soybean stocks are at low levels despite its recent decision to cancel soybean import orders and the country’s March imports may be below its needs, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“Chinese stocks of imported soybeans declined pronouncedly during the past three to five months and are continuing at undesirably low levels also in March and April owing to the ongoing shipment delays in South America, at least for the time being,” Oil World said.

“Combined U.S. and South American soybean shipments in March will again be below the Chinese requirements. In other words, at the moment Chinese importers cannot get what they purchased.”

Soybean prices have been falling in the last week, partly on slower demand for U.S. supplies as the huge new Brazilian crop starts to enter the global market.

But limited transport infrastructure combined with the threat of more strikes at ports have so far limited Brazil's ability to export a crop that is some 25 percent bigger than last year.

Expecting shipment delays, China, the world's top soybean consumer, cancelled at least two cargoes of Brazilian soybeans in February and likely reneged on more orders this month, traders said.

But Chinese buyers had little choice than to accept postponement of soybean shipments from Brazil in the face of transport problems, Oil World said.

“The Chinese know very well how to influence the market,” Oil World said. “They made announcements about cancellations of soybean purchases as well as of deteriorating profitability in the domestic pork industry, which may slow down soybean crushings and thus soybean import requirements.”

This contributed to a change of sentiment in soybean futures market, helping to create weakness, Oil World said.

“The Chinese situation would be more comfortable if the reduced Chinese soybean stocks could be replenished sufficiently until May, providing a hedge against any weather problems and crop risks in the United States,” Oil World said.

Brazilian exports of soybeans are increasing seasonally but latest indications suggest that in March also soybean exports from Brazil will again fall short of consumer requirements, it said.

“There is ongoing competition between exports of soybeans and corn,” it said.

In neighbouring Argentina, the soybean crop still faces weather risks, it said.

“There is the risk that this year’s Argentine crop will turn out below our latest estimate of 49.0 million tonnes,” it said.

Argentina harvested 39.9 million tonnes of soybeans in early 2012. The Argentine government currently forecasts a 2013 crop of 51 million to 52 million tonnes. 

Trader's highlight

DJI - NEW YORK, March 19 (Reuters) - The S&P 500 fell for a third day on Tuesday but pared losses late in the day after the parliament of Cyprus rejected a proposed tax on bank deposits.

The proposed tax on savings in banks had been a condition of a European bailout. When the Cypriot parliament rejected the tax, the decision eased worries that savers will begin withdrawing funds. At the same time, it left efforts to rescue the country - the latest casualty of the euro-zone debt crisis - up in the air.

"Regardless of the vote in Cyprus, we still have the problem. No one knows: 'What is the Cypriot financial restructuring going to look like?'" sad Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

Banks in Cyprus will remain closed until Thursday.

The S&P 500's retreat followed a long streak of gains where the index came close to hitting its all-time closing high set in 2007. The S&P 500 is still on track to post its best quarter in a year. The benchmark S&P 500 is up 8.4 percent for the year, while the Dow is up 10.3 percent.

The Dow Jones industrial average edged up 3.76 points, or 0.03 percent, to close at 14,455.82.

The Standard & Poor's 500 Index  fell 3.76 points, or 0.24 percent, to finish at 1,548.34. The Nasdaq Composite Index slipped 8.50 points, or 0.26 percent, to close at 3,229.10.

European bank shares extended Monday's decline, with the sector's index down 2.1 percent on Tuesday.

"Whether the deposit levy occurs or not, the fact that it was agreed to by the EU means that claims on private property are not out of bounds, which pretty much says that nothing is out of bounds," said Fred Copper, senior portfolio manager, international equity, at Boston-based Columbia Management, in reference to the banking crisis in Cyprus.

U.S. economic data added to upbeat views on the housing sector. Housing starts data showed that groundbreaking to build new U.S. homes climbed in February and new permits for construction rose to their highest since 2008, in a sign the U.S. housing market's recovery was building momentum.

Brent and Crude Oil - NEW YORK, March 19 (Reuters) - Brent crude oil fell 2 percent to a three-month low under $108 a barrel on Tuesday as uncertainty over a bailout for Cyprus raised concern about the euro zone debt crisis and its impact on energy demand.

Cypriot lawmakers overwhelmingly rejected a deeply unpopular tax on bank deposits on Tuesday, throwing into doubt an international bailout for the troubled euro zone member, needed to avert default and a banking collapse.

The tax proposal, announced over the weekend as a condition of the bailout, has renewed investor concern about the euro zone's ability to tackle its debt crisis, causing stock markets and oil prices to fall this week. Gold and other safe haven assets rose.

"The situation in Cyprus, although small, goes to show that the problems in the EU are far from over and it will exacerbate declining demand," said Natixis analyst Abhishek Deshpande in London.

Brent crude for May delivery touched a three-month low of $107.25 and settled down $2.06, or 1.88 percent, at $107.45 a barrel.

U.S. crude for April delivery settled down $1.58 at $92.16 a barrel.

The spread between the two leading global oil benchmarks, Brent and West Texas Intermediate (U.S. crude) contracted to $14.61 at one point during Tuesday's trading, the narrowest level since mid-January

The U.S. dollar firmed by 0.3 percent against a basket of foreign currencies. A stronger greenback can help to weaken oil since the dollar-denominated commodity becomes more costly for holders of other currencies.

The result of the vote in Cyprus could also affect oil if it causes a swing in exchange rates, said Tony Machacek, an oil futures broker at Jefferies Bache in London.

"If the euro makes a dramatic move, it will influence oil," he said.

The single currency was down by 0.6 percent against the dollar and traded below $1.29 for the first time since December.

CBOT Soybean - March 19 (Reuters) - Soybean futures on the Chicago Board of Trade fell for a sixth straight session on Tuesday, erasing early gains on long liquidation ahead of a key U.S. government report next week and pressure from the ongoing Brazilian soy harvest, traders said.

• May soybeans hit a one-month low at $14.03.

• Spread activity was mixed, with May soybeans gaining against July while July lost premium against new-crop November. Traders said July gained against November until roughly the last half-hour of trading, during which the premium for July fell by 10 cents.

• Traders have been liquidating long positions and unwinding bull-spreads ahead of USDA's March 28 reports on U.S. quarterly stocks and 2013 prospective plantings.

• An official at China’s Sunrise Group said the firm will cancel almost 2 million tonnes of Brazilian soybeans because shipments have been delayed due to port congestion in the South American nation.

• However, Hamburg-based analyst Oil World reported that China’s soybean stocks are at low levels and the country’s March imports may be below its needs.

• Argentine exports of soyoil-based biodiesel are falling because of trade friction with the European Union, and Argentina is instead exporting more soyoil - Oil World.

• Below-normal temperatures and wetter weather are expected in the U.S. crop belt over at least the next two weeks, which may slow early spring fieldwork and corn plantings - meteorologist.

ARGENTINA Soybean - BUENOS AIRES, March 19 (Reuters) - Argentina's closing soy prices and trends on Tuesday:

• In the main grains market of Rosario, soy closed unchanged at 1,610 ($316) per tonne after a volatile day's trade by U.S. soy futures that stripped the local market of its usual direction.

• Soybean futures on the Chicago Board of Trade fell for a sixth straight session on Tuesday, erasing early gains on long liquidation ahead of a key U.S. government report next week and pressure from the ongoing Brazilian soy harvest, traders said.

• Rosario soy for delivery in May, which is quoted in U.S. dollars, also closed stable at $320 per tonne.

• Argentina's 2013/14 wheat crop should be bigger than the previous season's as high prices and forecasts for ideal weather counter-balance uncertainty over government export curbs, farmers and analysts said. 

BMD CPO  - SINGAPORE, March 19 (Reuters) - Malaysian palm oil futures rebounded on Tuesday on bargain-hunting a day after a radical Cyprus bailout proposal had prompted declines, although gains were capped as uncertainty remained ahead of a vote on the plan.

Cyprus was set to reject a divisive tax on bank deposits in a vote on Tuesday, pushing the island closer to a debt default and banking collapse. The proposal announced over the weekend triggered declines in the global commodities and financial markets on Monday.

Palm oil traders were also looking ahead to Malaysia's March 1-20 export data on Wednesday for better indication of export demand after nearly flat growth in shipments for the first half of the month.

"Market players are hoping for higher exports to help ease stocks further," said a trader with a foreign commodities brokerage in Malaysia. The country's palm inventory level fell to 2.44 million tonnes in February from January's 2.58 million tonnes on seasonally slower production.

By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 1.3 percent to 2,417 ringgit ($777) per tonne. Prices traded in a range between 2,397 to 2,426 ringgit.

Total traded volume stood at 31,142 lots of 25 tonnes each, higher than the usual 25,000 lots.

Palm oil futures also drew some support from stronger soybean and soybean oil prices, after the oilseed edged higher on supply concerns from South America.

Palm oil tracks soybean oil prices closely as they are typically used as substitutes for one another.

In other markets, Brent crude fell below $109 a barrel on Tuesday as uncertainty over the Cyprus bailout plan revived concerns about the euro zone debt crisis, although a rosier economic outlook in the United States capped losses.

In other vegetable oil markets, U.S. soyoil for May delivery gained 0.1 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange also gained 0.8 percent.

Regional Equities - March 19 (Reuters) - Thailand and Philippine stocks fell on Tuesday led by banks as uncertainty over a bailout for Cyprus aimed at preventing a debt default and banking collapse hit sentiment, but others edged up helped by a decision to give Cyprus more flexibility.

Thailand , the region's best performer this year, fell 1.5 percent to its lowest since March 8, with a 2.7 percent loss in Siam Commercial Bank PCL dragging the overall index. Kasikornbank PCL and Bangkok Bank PCL also lost more than 1.7 percent each.

Thailand saw a net foreign outflow of $32.83 million with a broad-based selling in overbought small caps such as Italian Thai Development Pcl , which dropped 8.7 percent after a combined 32 percent gain over the past seven sessions.

Citibank said in research note there would be significant consequences ranging from bank default to capital flight if Cyprus' banks did not get the bailout from emergency liquidity assistance (ELA).

The Philippines lost 1.7 percent, led by financials, to a more than six-week low, falling for a seventh straight session. It has lost 6.4 percent since hitting an all-time high of 6,867.10 on March 11.

Euro zone confidence was partially restored by a news on Monday that the Eurogroup decided to give Cyprus more flexibility over a bank levy which is part of the bailout conditions, after a teleconference of euro zone finance ministers.

That helped others to recover from the previous session's steep falls, with Malaysia and Vietnam gaining 0.3 percent each, while Indonesia and Singapore  gained 0.4 percent each.