Bloomberg - Palm Gains to One-Month High as Slow Output to Cap Inventories

Palm oil advanced to the highest level in more than a month on speculation that stockpiles in Malaysia, the world’s second-largest producer, will remain below 2 million tons for a second month as output growth slows.

The contract for July delivery climbed as much as 1 percent to 2,341 ringgit ($780) a metric ton on the Bursa Malaysia Derivatives, the highest price for the most-active futures since April 12, before trading at 2,323 ringgit by 12:02 p.m. in Kuala Lumpur. Futures gained 3 percent last week.

Reserves fell 11 percent to 1.93 million tons in April, the lowest level since June, according to the Malaysian Palm Oil Board. That was less than the median estimate of 2.06 million tons in a Bloomberg survey. Output climbed 3.1 percent to 1.37 million, while exports dropped 5.6 percent to 1.45 million tons, the board said May 10.

“We expect the slower output growth to sustain in the current month and this will help keep stocks at around 1.92 million tons at the end of May,” said Ivy Ng, an analyst at CIMB Investment Bank Bhd. Demand from importers should pick up before the Muslim fasting month of Ramadan, starting in July this year, she wrote in a report dated May 11.

Consumption usually increases during Ramadan, boosting purchases from the Middle East to South Asia including India, the world’s biggest buyer.

Exports from Malaysia plunged 17 percent to 380,047 tons in the first 10 days of this month, surveyor Intertek said May 10. Shipments dropped 18 percent to 377,193 tons from the same period in April, according to Societe Generale de Surveillance.

Stockpiles at major ports in China, the second-biggest importer, climbed last week to a record 1.35 million tons, up about 50,000 tons from a week earlier, the China National Grain and Oils Information Center said in a report e-mailed today.

Refined palm oil for September delivery was little changed at 6,128 yuan ($997) a ton on the Dalian Commodity Exchange, while soybean oil fell 0.4 percent to 7,498 yuan. On the Chicago Board of Trade, soybeans for July gained 0.2 percent to $14.015 a bushel. Soybean oil rose 0.2 percent to 49.32 cents a pound.

RTRS - PREVIEW-Malaysia April palm oil stocks likely hit 9-mth low

SINGAPORE, May 10 (Reuters) - Malaysia's end-April stocks of palm oil fell to their lowest in nine months, breaking below a key psychological threshold in a move that could spur additional buying and support prices.

Inventories in the world's second-largest producer of the edible oil dropped 11.3 percent in April to 1.93 million tonnes in the steepest fall since Jan 2011. The decline outpaced a fall of 10.9 percent in March.

The April stocks figures far exceeded expectations of a drop of 6.1 percent to 2.04 million tonnes, and the fall below 2 million could draw buyers when the market re-opens later.

"The market expects stocks to fall, but not below the two-million-tonne mark. This is a positive surprise and we can expect prices to gain further later," said a trader with a Malaysian commodities brokerage.

By the midday break, the benchmark futures were up 1 percent at 2,310 ringgit per tonne. Leading analyst Dorab Mistry had forecast prices could rise to 2,400 to 2,700 ringgit by the end of May as weaker output sped a fall in stockpiles.

Production edged up 3.1 percent to 1.37 million tonnes in April, but the yield recovery missed expectations of 1.39 million. Exports fell just 5.6 percent to 1.45 million tonnes from a month ago, less than a forecast of 9 percent.

RTRS - India's April palm oil imports down, refiners use stocks

NEW DELHI, May 10 (Reuters) - India's palm oil imports fell for a third straight month in April as refiners in the world's biggest buyer used stockpiles and processed the new rapeseed harvest, a Reuters survey showed.

India's overseas purchases of palm oil hit an all-time high in January as leading producers Indonesia and Malaysia made their exports attractive by varying tax levels. But imports fell in February and March as India slapped a duty on crude palm oil.

Palm oil imports are expected to drop 16.4 percent from a month ago to an average of 592,142 tonnes in April, the survey of seven traders showed, including 220,000 tonnes of refined palm oil shipments, up 60 percent from the previous month.

Refined palm oil imports rose as the spread with the crude variant narrowed to $15-20 in April as against $30-35 in March. Imported refined palm oil is currently quoted at $830 per tonne on the country's west coast, while the delivered price for crude palm oil is $820 per tonne.

Imports of vegetable oils, including non-edible oils, fell 15.1 percent to 761,428 tonnes in April, led by the drop in palm oil imports, the survey showed.

"High level of palm oil stocks acted as a disincentive for monthly imports," said Sat Narain Agarwal, a Delhi-based trader.

The country's total edible oil stocks at the start of April stood close to the previous month's record level of 2.12 million tonnes, or nearly 45 days of consumption against the usual stock of about a month, according to the Mumbai-based trade body Solvent Extractors' Association.

The survey showed average estimated stocks at Indian ports at the end of April fell 3.45 percent to 700,000 tonnes from March, confirming the use of old stocks by refiners. SEA's stock figures include those in transit from ports.

India, the world's biggest importer of vegetable oils, buys mainly palm oils from Malaysia, Indonesia and a small quantity of soyoil from Brazil, Argentina.

India imports about 60 percent of its cooking oil demand of 17 million tonnes, with palm oil's share at about 80 percent. In 2011/12, India imported 10 million tonnes of cooking oil.

Trade bodies have been asking for an increase in the duty on refined palm oil to safeguard the interests of local oilseed growers and refiners. But last month the government said it was not in favour of any rise in the duty for edible oils.

India's food inflation eased to 8.73 percent in March.

For the half year to April, India's vegetable imports are expected to jump 15 percent to 5.4 million tonnes from a year ago, indicating that the imports are on track to surpass last year's record purchases. India's vegetable oil year runs from November to October.

"Imports in May could be 800,000-850,000 tonnes as overall stocks continue to be higher," said Govindbhai G. Patel, a trader based in the western oilseed centre of Rajkot.

Monthly soyoil imports are expected to rise 29.2 percent as some delayed cargoes from South America should arrive, while sunflower imports may have fallen by 20.4 percent with the start of summer which cuts appetite for fried foods.

Trader's highlight

DJI - NEW YORK, May 10 (Reuters) - The Dow and S&P 500 ended at record highs on Friday, and stocks posted a third consecutive week of gains as a rise in Google and other technology shares offset a slide in energy stocks.

Stocks have risen on the Federal Reserve's accommodative monetary stance and some encouraging corporate earnings, but analysts said momentum could wane without further positive signs.

"I think it's going to hard to maintain these levels in the short term," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management, which has about $13 billion in assets.

"There are not a lot of positive catalysts to keep it going," she said, noting that spending cuts by the federal government could pressure the economy in the near term.

Oil prices tumbled as the U.S. dollar hit a 4 1/2-year high against the yen and the dollar index was on track for its strongest week against other major currencies in 10 months. A strong dollar makes commodities priced in the greenback, such as gold and oil, more expensive for foreign investors, pressuring shares of energy and basic materials companies.

The Dow Jones industrial average  was up 35.87 points, or 0.24 percent, at 15,118.49. The Standard & Poor's 500 Index  was up 7.03 points, or 0.43 percent, at 1,633.70. The Nasdaq Composite Index was up 27.41 points, or 0.80 percent, at 3,436.58.

The S&P 500 is up 14.6 percent for the year. For the week, the Dow rose 1 percent, the S&P 500 1.2 percent and the Nasdaq 1.7 percent.

CBOT Soybean -  May 10 (Reuters) - Benchmark July soybean futures on the Chicago Board of Trade  fell 0.7 percent on Friday, halting a three-day rally, after the U.S. government forecast that U.S. soybean stocks would more than double in 2013/14, traders said.

• USDA projected U.S. 2013/14 soybean ending stocks at 265 million bushels, more than double the 125 million in 2012/13.

• In its first official outlook for the new crop year, USDA pegged U.S. 2013/14 soybean production at a record-large 3.390 billion bushels based on an average trend-line yield of 44.5 bushels per acre.

• Front-month May soybeans and May soymeal , which expire next week, continued to gain against back months on spreads, supported by scarce U.S. old-crop soybean supplies and firm cash markets.

• Soyoil gained against soymeal on oil/meal spreads after USDA lowered its forecast of U.S. 2012/13 soyoil ending stocks while leaving its soymeal stocks forecast unchanged.

• Drier weather this weekend into early next week will boost U.S. corn plantings that have fallen to the slowest pace in nearly three decades. But more showers are expected next weekend.

• For the week, July soybeans rose 0.8 percent, their second straight rise. July soymeal rose 0.1 percent and July soyoil fell 0.1 percent.

Oils - NEW YORK May 10 (Reuters) - Brent and U.S. crude oil ended slightly down on Friday, after trading sharply lower for much of the session, rebounding as the U.S. dollar weakened and on late news reports that more oil would flow through BP Plc's  Whiting, Indiana, refinery.

Earlier in the day, the euro had dropped to a one-month low against the dollar on expectations that the U.S. Federal Reserve would cut back on it monetary easing program.

But the dollar weakened toward the end of the day. The U.S. dollar index eased to 83.151 after reaching an earlier high of 83.438.

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

"The dollar has given back a fairly decent portion of its gains," said Brian LaRose, technical analyst with United-ICAP in Jersey City.

Brent crude oil  settled 56 cents lower at $103.91 per barrel after trading as low as $101.56.

U.S. crude oil futures  ended the day 35 cents lower at $96.04 per barrel after trading more than $3 lower at $93.37.

BMD CPO - KUALA LUMPUR, May 10 (Reuters) - Malaysian palm oil futures climbed to their highest in two weeks on Friday as stocks eased below the key 2-million-tonne mark in the world's No.2 producer, but gains were capped by a surprise fall in exports in the first ten days of May.

Stocks data from industry regulator the Malaysian Palm Oil Board showed inventory levels at the end of April down 11.3 percent to 1.93 million tonnes against the previous month's 2.17 million tonnes.

The decline exceeded expectations of a fall to 2.04 million tonnes, in a Reuters poll.

But exports of palm oil products for May 1-10 slid 16.7 percent to 380,047 tonnes compared to the same period in April, as smaller shipments of the crude and refined grade weighed. Demand from Europe and China was also sluggish.

Another cargo surveyor Societe Generale de Surveillance reported a steeper 18.4 percent drop late on Friday. 

"Traders were reacting to stocks falling below 2 million tonnes, so we see a strong market today. But lower exports for the first 10 days may erase some gains," said a trader with a foreign commodities brokerage in Kuala Lumpur.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange rose as high as 2,334 ringgit per tonne, a level last seen on April 26. It closed at 2,320 ringgit ($777), up 1.4 percent.

Positive investor sentiment helped palm post a 3 percent weekly gain, its biggest in seven.

Total traded volumes stood at 29,844 lots of 25 tonnes each, slightly lower than the average 35,000 lots.

Prices dipped to a near 5-month low on Monday after the ringgit  surged against the dollar following the ruling coalition's win in Malaysia's general elections. It later rose on bargain hunting and expectations of a drop in inventories.

In other markets, Brent crude oil slid below $104 a barrel on Friday as rising supplies and doubts over China's economy outweighed stronger signs of a U.S. recovery.

In vegetable oil markets, U.S. soyoil for July delivery was almost flat in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange rose 2.1 percent.