Trader's highlight

NYMEX - SINGAPORE, Feb 18 (Reuters) - U.S. crude futures were steady on Monday after falling more than 1 percent in the previous session following an unexpected dip in U.S. industrial production. Trading volumes are likely to be lean with U.S. investors away for a public holiday.

FUNDAMENTALS

• U.S. crude for March delivery was off 12 cents at $95.74 a barrel by 0118 GMT. The contract dropped 1.5 percent on Friday.

• Brent crude edged up 22 cents to $117.88 a barrel, after posting its first weekly loss in five last week.

• U.S. industrial production unexpectedly fell in January, weighed down by weak manufacturing and mining, according to a report on Friday that was another sign of slow economic activity at the start of the year.

• Financial leaders from the world's 20 biggest economies may have promised not to devalue their currencies to help exports, but the pledge will do little to keep exchange rates stable. 

• Saudi crude exports fell for the third month running in December, but the fall in shipments was less dramatic than a drop in oil production, official data showed. 

• Syria's opposition coalition is ready to negotiate President Bashar al-Assad's exit with any member of his government who has not participated in his military crackdown on the uprising, coalition members said.

• U.S. manufacturing also got off to a tepid start as motor vehicle output tumbled in January, but a rebound in factory activity in New York state this month suggested any setback would be temporary. 

FCPO - SINGAPORE, Feb 18 (Reuters) - Malaysian palm oil futures gained on Monday, snapping three straight sessions of losses, as investors expect strong export demand seen in the first half of the month to reduce stocks.

Cargo surveyor data showed Malaysian palm oil exports rose as much as 18 percent for Feb. 1-15 from a month ago, raising hopes that stocks may ease from a record high of 2.58 million tonnes hit in January.

"Exports were quite strong for the first 15 days and production may come down again, so the market is supported because of that," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"We may also see higher exports of crude palm oil for this month before the 4.5 percent tax in March," the trader said.

Malaysia, the world's No.2 palm oil producer, said it will set its crude palm oil export tax for March at 4.5 percent, up from February's zero percent.

The benchmark May contract  on the Bursa Malaysia Derivatives Exchange had gained 1.3 percent to 2,539 ringgit ($820) per tonne by the day's close.

Total traded volumes stood at 46,985 lots of 25 tonnes each, almost double the average of 25,000 tonnes.

Technicals show mixed signals for Malaysian palm oil as it is not clear how high the current rebound could go, said Reuters market analyst Wang Tao.

While the higher export tax may hurt Malaysia's crude palm oil export demand, the local processing industry may benefit from a relatively cheaper feedstock, analysts said.

"We are neutral on the news as it will be short-term negative for Malaysia crude palm oil demand but long-term positive for Malaysia processed palm oil demand," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.

Brent crude rose slightly toward $118 a barrel on Monday, underpinned by expectations of improving global growth despite some weak U.S. data dampening prices at the end of last week. Tensions in the Middle East also lent support.

In competing vegetable oil markets, the most active September soybean oil contract on the Dalian Commodity Exchange inched down 1.2 percent in late Asian trade. Markets in China resumed trading on Monday after a week-long Lunar New Year break.

Regional Equities - BANGKOK, Feb 18 (Reuters) - Southeast Asian stock markets closed mostly higher on Monday, with the Philippines scaling a fresh peak as strong earnings lifted shopping mall developer SM Prime Holdings Inc . Thai index was bolstered by robust fourth-quarter economic numbers.

The Philippine index was up 0.67 percent at 6565.23, surpassing its last week's 6,527.99 record close. Shares in SM Prime, which exceeded its 2012 profit growth target for a second straight year, closed at a record high of 18.88 peso, up 3.2 percent. 

Bangkok's SET index ended up 0.12 percent at 1,523.29.

The market saw selective buying in consumer names such as CP All Pcl  after stronger-than-expected fourth-quarter GDP numbers which also stemmed from better-than-expected gains in private consumption.

Singapore edged up 0.15 percent at 3,288.14, led by a 1.5 percent gain in Olam International Ltd

Indonesia  ended nearly flat at 4,612.05, with coal miner Bumi Resources Tbk  among outperformers.

Vietnamese stocks ended nearly unchanged at 493.95 in low volumes as most traders are yet to return from a holiday.

Malaysian shares bucked the regional trend to fall 0.43 percent with financial shares such as RHB Capital Bhd  falling 1.4 percent.

Local retail investors and domestic institutions sold shares worth a net 23.65 million ringgit ($7.64 million) and 9.91 million ringgit ($3.20 million) respectively, countering foreign net buying on the day, the Malaysian bourse said.

FOREX - LONDON, Feb 18 (Reuters) - The euro dipped against the dollar on Monday as European Central Bank president Mario Draghi said the euro's appreciation added downside risks to inflation and reiterated there were risks to the euro zone economic outlook.

Its drop was limited, however, with traders still inclined to buy the currency on dips, especially against a broadly weaker yen. The Japanese currency resumed broad falls after Japan signalled it would push ahead with aggressive monetary easing, having escaped criticism from G20 countries at the weekend.

But trading volumes were thin, with U.S. markets closed for President's Day.

"Draghi's comments prompted a bit of a dip in the euro but that just provided better levels to buy the currency," said Jeremy Stretch, head of currency strategy at CIBC.

"There is still enough justification to buy the euro on dips, helped in part by the gains in euro/yen after the G20 seemingly gave the green light for countries to continue measures which weaken their currencies."

Speaking before the European Parliament, Draghi said the euro's exchange rate was not a policy target but was important for growth and stability, adding that appreciation of the euro "is a risk".

The euro has been under selling pressure in the wake of data recently revealing a deeper-than-forecast euro zone recession and on concerns about the outcome of an election in Italy at the weekend.

Trader's highlight

DJI - NEW YORK, Feb 15 (Reuters) - The S&P 500 dipped in a late decline on Friday as Wal-Mart dropped following a report of a weak start to February sales, though the index just barely extended its streak of weekly gains to seven.

"When a retailer of this size comes out with this kind of lousy news, the whole market can fall off, especially on a Friday afternoon," said Mike Shea, trader at Direct Access Partners in New York. "However, I'm not worried that this is indicative of any larger macro issue with retail."

Equities have struggled for direction recently, with major indexes moving only slightly in the past several sessions. The S&P didn't end a session with a move greater than 0.2 percent at all this week.

The benchmark index, up 6.6 percent so far this year, is facing strong technical resistance near the 1,525 level. But investors, expecting the index to advance further in the quarter, have held back from locking in profits.

"There's no news that suggests the strong underpinning for stocks isn't appropriate. We may have gotten ahead of ourselves, but there's also an absence of bad news," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Many investors are starting to look ahead to a debate in Washington over sequestration, automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. The cuts are due to kick in March 1 unless lawmakers agree to an alternative.

"This had been far enough out to not yet become an impediment for stocks, but it will start to move into the forefront and cause people to take a bit of a jaundiced eye towards the market," said Luschini, who helps oversee about $54 billion in assets.

The Dow Jones industrial average was up 11.27 points, or 0.08 percent, at 13,984.66. The Standard & Poor's 500 Index was up 0.32 points, or 0.02 percent, at 1,521.70. The Nasdaq Composite Index  was up 1.51 points, or 0.05 percent, at 3,200.17.

For the week, both the Dow and Nasdaq fell 0.1 percent while the S&P rose 0.1 percent in its seventh straight week of gains, a period during which the index rose 8.4 percent. The last such seven-week run was between December 2010 and January 2011.

The New York Federal Reserve said manufacturing in New York state expanded for the first time in seven months, while Thomson Reuters/University of Michigan's preliminary reading of consumer sentiment rose from the prior month and beat expectations.

Wall Street's gain thus far in 2013 has largely been driven by strong corporate earnings, while data indicated some weakening in economic conditions.

A surge in merger and acquisition activity, with more than $158 billion in deals announced so far in 2013, has given further support to the equity market as it points to healthy valuations and bets on the economic outlook. 

Oil service stocks declined, weighed by a 5.1 percent drop in shares of Transocean  to $56.26, after the rig contractor reported its fleet update and Deutsche Bank cut its rating on the stock to "sell." The PHLX oil service sector  lost 1.5 percent.

Slightly more stocks fell than rose on the New York Stock Exchange while about 50 percent of Nasdaq shares ended lower. About 6.69 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.48 billion shares.

NYMEX - TOKYO, Feb 15 (Reuters) - U.S. crude futures were steady above $97 a barrel on Friday, holding a slight gain from the day before on encouraging U.S. jobless data and concerns over U.S. gasoline supply.

CBOT Soybean - Soybean futures on the Chicago Board of Trade ended higher as traders covered short positions ahead of a three-day U.S. holiday weekend, traders said.

* Support stemmed from uncertainty about weather in crop areas of Argentina, where urgently needed rains were expected to fall this weekend. Two-thirds of the county's soybeans should pick up at least 0.5 inch of rain, the Commodity Weather Group said.

 

·    U.S. markets will be closed Monday for the Presidents Day federal holiday. Trade in CBOT grains on the Globex platform resumes Monday at 7 p.m. CST (0100 GMT), for trade date Tuesday.

·   Market rallied despite USDA saying private exporters  reported the cancellation of 250,000 tonnes of U.S. soybeans sold to unknown destinations for delivery in 2012/13.

 

·   Also bearish, NOPA reported the U.S. soybean crush for January at 158.195 million bushels, down from 159.899 million in December and below the average analyst estimate of 159.5 million.

·     Soyoil was pressured after NOPA put U.S. January soyoil stocks at 2.823 billion lbs, up from 2.600 billion in December and above a range of analyst estimates from 2.570 billion to 2.820 billion lbs, with an average estimate of 2.685 billion.

·     For the week, March soybeans  fell 28 cents or 1.9 percent, down for a second straight week. March soymeal fell 3.1 percent while March soyoil  edged up 0.4 percent, rallying from last week's nearly 3 percent decline.

FCPO - KUALA LUMPUR, Feb 15 (Reuters) - Malaysian palm oil futures fell to their lowest in more than two weeks on Friday, giving up earlier gains as investors turned cautious after the government raised its crude palm oil export tax for March.

The edible oil rose in the morning session after cargo surveyor Intertek Testing Services reported a 18.1 percent increase in Malaysian palm oil exports for the first half of February from a month ago.

Another cargo surveyor, Societe Generale de Surveillance, also reported a 13.6 percent rise in shipments for the same period.

But selling pressure emerged after the world's No.2 palm oil producer said it will set its crude palm oil export tax for March at 4.5 percent, up from February's zero percent, making the crude grade more expensive for overseas buyers.

"The export tax was more important in the traders' minds," said a dealer with a foreign commodities brokerage in Kuala Lumpur.

The benchmark April contract  on the Bursa Malaysia Derivatives Exchange closed 0.4 percent lower at 2,486 ringgit ($804) per tonne. Prices dropped as low as 2,476 ringgit, the lowest level since Jan. 30.

Total traded volumes stood at 27,269 lots of 25 tonnes each, slightly higher than the average of 25,000 tonnes.

For the week, palm oil posted a 2.9 percent loss, snapping four straight weeks of gains.

A zero-percent duty tax structure introduced by Malaysia in January and February had provided positive sentiment for investors, but forecasts of bumper soy crops in Latin America, palm's vegetable oil competitor, has weighed on the market and kept prices rangebound.

"For the past few months, high stockpiles and improving weather conditions in Brazil and Argentina have continued to weigh on prices," said Phillip Futures analyst Ker Chung Yang in Singapore.

In other markets, Brent crude eased below $118 per barrel on Friday and was heading for its first weekly loss in five after disappointing euro zone data revived concerns about the troubled region.

In competing vegetable oil markets, U.S. soyoil for March delivery inched up 0.1 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

Regional Equities - BANGKOK, Feb 15 (Reuters) - Indonesian stocks set a record high for a fifth straight session on Friday led by large caps such as PT Telekomunikasi Indonesia while others ended mixed as a revival in worries about global economic growth weighed on broader Asia.

Jakarta's Composite Index ended up 0.5 percent at 4,609.79, rising 2.6 percent on the week, making it Southeast Asia's best performer. The market received $155 million of net foreign inflows in the week to Thursday, Thomson Reuters data showed.

Philippine Composite Index shares ended the day up 0.13 percent at 6,521.64, still below a record finish of 6,527.99 hit early in the week.

Stocks in Singapore and Malaysia both ended at one-week low in light trading volumes. Singapore's Straits Times Index  edged down 0.2 percent at 3283.07 and Kuala Lumpur's Composite Index  fell 0.2 percent to 1,627.93.

The Malaysian bourse said foreign investors bought shares worth a net $27 million on the day.

Thai SET index  eased 0.3 percent to 1,521.52. It still gained 1.6 percent on the week, the region's second best, with domestic institutions leading buyers. The market posted $69 million in foreign selling in the week to Thursday, data showed.

Foreign investors have slowed new investment as they waited for the Bank of Thailand's (Monetary Policy Committee) MPC meeting to review its benchmark interest rate on Feb. 20. Most economists have expected the MPC to maintain the rate at 2.75 percent.

"Next week, the SET index movement will mainly rely on internal factors; the fourth quarter GDP, the MPC meeting and the earnings – dividend payout announcements," broker Maybank Kim Eng Securities said in a report.

RTRS - Malaysia sets March crude palm oil export tax at 4.5 percent

KUALA LUMPUR, Feb 15 (Reuters) - Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for March at 4.5 percent, up from February's zero percent, a government circular showed on Friday.

The Southeast Asian country calculated a reference price of 2,306.11 ringgit per tonne for crude palm oil for March, effectively lifting the export duty for the grade.

RTRS - Palm up on export data; investors wait for tax decision

KUALA LUMPUR, Feb 15 (Reuters) - Malaysian palm oil futures climbed on Friday on positive export data, with investors cautious ahead of the weekend and a lack of cues from overseas markets capping gains.

Prices were still headed for their first weekly loss in five weeks as investors waited for a government decision to determine the crude palm oil export tax in March, due later in the day. The current zero-percent duty has made Malaysia's products cheaper than top producer and biggest rival Indonesia.

Exports of palm oil products in the first half of February grew 18 percent from the first half of January to 673,555 tonnes, cargo surveyor data showed, boosted by strong demand from major edible oil buyers Europe, China and India.

Shipments of the crude grade doubled during the period compared to the previous month's first two weeks.

By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange rose 1.0 percent to 2,521 ringgit ($815) per tonne. Prices were rangebound between 2,503 and 2,521 ringgit.

Total traded volumes stood at 12,050 lots of 25 tonnes each, slightly lower than the average of 12,500 tonnes.

The export data should hold the market above 2,500 ringgit, said a trader with a foreign commodities brokerage in Malaysia, adding that there was a possibility of a small rise in the March export tax.

"The important thing is whether the tax can create demand," he said. "There could be a prompt demand from India and China -- especially from India who buys a lot of crude palm oil."

Technical analysis showed palm oil is expected to hover above a support at 2,493 ringgit per tonne for one trading session before breaking this level and falling more.

Tepid global economic conditions have slowed edible oil demand and kept stockpiles stubbornly high in Malaysia, the world's No.2 palm oil producer, with prices tumbling 23.2 percent last year.

A zero-percent duty tax structure introduced by Malaysia in January provided positive sentiment for investors, but forecasts of bumper soy crops in Latin America, palm's vegetable oil competitor, has weighed on the market and kept prices rangebound.

"For the past few months, high stockpiles and improving weather conditions in Brazil and Argentina have continued to weigh on prices," said Phillip Futures analyst Ker Chung Yang in Singapore. "But on the flip side Malaysia and Indonesia have aggressively engaged in activities to support exports."

Crude palm oil prices will continue to be rangebound between 2,200 and 2,600 ringgit as investors await further cues, he said.

Another cargo surveyor, Societe Generale de Surveillance, was to release its exports data for Feb. 1-15 later in the day.

Brent crude steadied around $118 per barrel, still heading for its first weekly loss in five after disappointing euro zone data revived concerns about the troubled region.

In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 inched down 0.1 percent in early Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

RTRS - Argentina corn output seen at 25 mln tonnes-grains exchange

BUENOS AIRES, Feb 14 (Reuters) - The Buenos Aires Grains Exchange estimated a 2012/13 corn crop of 25 million tonnes in its first forecast for Argentina's corn harvest on Thursday, and held its outlook for soy at 50 million tonnes.

Argentina is the world's No. 3 supplier of corn. The U.S. Department of Agriculture sees Argentine output of 27 million tonnes for the 2012/13 crop year.

The exchange said that if its forecast holds true, corn production will expand by 16 percent from last season's drought-battered harvest. It would also top the record output of the 2010/11 season, estimated by the government at 23.8 million tonnes.

Market hopes for an even bigger corn crop this season were tempered by dry, hot weather in January, which the exchange said reduced yield potential in crops seeded during late October, November and December. Earlier-seeded corn fared better.

It said rain was still needed in many areas, particularly in Argentina's northern regions.

"We hope that weather forecasts predicting rain in the coming days will come to pass so the stress suffered in several farming areas begins to ease," the exchange said.

Farmers have harvested 3.7 percent of the 3.68 million hectares planted with commercial-use corn this season, beating last year's pace by 2.5 percentage points, the grains exchange said in its weekly crop report.

Trader's highlight

DJI - NEW YORK, Feb 14 (Reuters) - Global equity markets fell and the euro slid against the dollar on Thursday after data showed the euro zone slipped deeper into recession in late 2012 than had been expected, but deal-making helped Wall Street close near break-even.

U.S. weekly jobless data and a $23.2 billion bid in cash by Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital for ketchup and baby food maker H.J. Heinz helped turn sentiment about Europe and trim equity losses.

The euro tumbled to a three-week low against the dollar and plunged against the yen after data on gross domestic product in the euro zone painted a dismal picture of the regional economy.

U.S. equities have struggled to break above current levels where they have hovered for almost two weeks. The benchmark S&P 500 is up more than 6 percent so far this year.

"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.

"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.

The Dow Jones industrial average closed down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index rose 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index added 1.78 points, or 0.06 percent, at 3,198.66.

"The only reason a company buys another company is because they see an upside. Even though we are at multiyear highs, this kind of activity shows that there is more room for a rally, feeding optimism to the market," said Randy Frederick, director of trading and derivatives at Charles Schwab.

Economic output in the euro zone fell by 0.6 percent in the fourth quarter, EU statistics office Eurostat said, while Germany contracted by 0.6 percent, marking its worst performance since the global financial crisis was raging in 2009.

The downturn marked the currency bloc's first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, GDP fell by 0.5 percent.

Germany is expected to rebound but the figures suggest the bloc as a whole could remain in recession in the first quarter of this year, despite a recent jump in market sentiment as fears that the currency bloc could fall apart have faded.

"The market has weakened because of the GDP numbers," said Barclays commodities analyst Miswin Mahesh. "It's been a macro sell-off this morning with the GDP numbers coming out, rather than any fundamental move in itself. Most asset classes have sold."

"The jobless claims numbers were solid, and with the European market closing, the news out of Europe is pretty much done for the day," Frederick said.

"A lot of companies, fearing about the systemic risk, have been delaying investments for a long time," said Gilles Guibout, head of euro zone equities at AXA Investment Managers, which has 554 billion euros ($739 billion) under management.

NYMEX - TOKYO, Feb 14 (Reuters) - U.S. crude futures edged up to stay above $97 a barrel on Thursday, paring a 0.5 percent decline a day earlier, helped by hopes for oil demand growth after a Reuters poll showed that the euro zone is slowly starting to emerge from recession.

CBOT Soybean- Soybean futures on the Chicago Board of Trade fell on signs of slowing U.S. export demand and improving crop weather in South America, traders said.

·         Beneficial rains expected over much of Argentina this week and this weekend should help relieve stressed crops, but more rain will be needed to ensure satisfactory crop output, the Commodity Weather Group said.

·         In Brazil, rains in the next two weeks should help soybean crops in southern areas, while a drier pattern for the northwest soy areas next week should boost harvest progress

·         USDA reported export sales of U.S. soybeans in the latest week at 235,900 tonnes (old and new crop years combined), including net cancellations of 109,100 tonnes for 2012/13 and sales of 345,000 tonnes for 2013/14. Trade expectations were for 700,000 to 1.1 million tonnes.

·         USDA reported weekly export sales of soymeal at 132,400 tonnes and soyoil sales at 16,600 tonnes, both below a range of trade expectations.

·         The Buenos Aires Grains Exchange left its outlook for Argentina's 2012/13 soybean harvest at 50 million tonnes, unchanged from its initial estimate a week ago but below USDA's current forecast for 53 million. 

·         Trade awaits monthly U.S. soybean crush data due Friday from the National Oilseed Processors Association. The average estimate for NOPA's January crush among analysts surveyed by Reuters was 159.5 million bushels. 

FCPO - KUALA LUMPUR, Feb 14 (Reuters) - Malaysian palm oil futures edged down to a two-week low on Thursday, as data showed stockpiles in the world's No.2 producer remained high and on improving weather in key soy-growing regions in South America.

Better South American weather would contribute to an expected bumper crop in Brazil, poised to overtake the United States as the No.1 soybean grower, adding pressure to the soybean market tracked by palm oil.

January's palm oil end-stocks eased off record levels and fell to 2.58 million tonnes, according to industry regulator data, but the smaller-than-expected decline triggered some selling pressure in the market.

"While good export news continues to come in, nervousness about the large South American crop (and its effect on prices), as well as the U.S. soybean market facing a seasonal slowdown are pressuring the futures market," said a trader with a local commodities brokerage in Malaysia.

"The end-stocks are still the elephant in the room. Traders could be taking the end-stocks seriously and are looking for opportunities to sell," the trader added.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged down 0.3 percent to close at 2,497 ringgit ($811) per tonne. Prices went as low as 2,490 ringgit, the lowest level since Jan. 30.

Total traded volumes stood at 20,263 lots of 25 tonnes each, slightly lower than the average of 25,000 tonnes.

Cargo surveyor data showed Malaysia's exports of palm oil products rose as much as 25 percent in the first 10 days of February on stronger demand from major buyers India, China, the United States and Europe.

Traders will be looking out for Feb. 1-15 export data on Friday to further gauge demand trend of the tropical oil.

Analysts say seasonally slowing production could see stockpiles in February easing another 4 percent on the month to 2.48 million tonnes, but inventory levels are unlikely to dip below the 2-million-tonne mark in the first quarter of 2013.

"This should keep crude palm oil prices below 3,000 ringgit per tonne in the first quarter of 2013," said Kenanga Research analyst Alan Lim in Kuala Lumpur.

India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from southeast Asia, a trade body said on Thursday, despite a hike in import duties mid-month.

Oil prices rose on Thursday as fresh tensions over Iran's nuclear programme revived global supply concerns, offsetting weaker-than-expected growth data from France and Germany.

In competing vegetable oil markets, U.S. soyoil for March delivery dropped 0.3 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

Regional Equities - BANGKOK, Feb 14 (Reuters) - Southeast Asian stock markets ended mixed on Thursday, with the Philippines coming off an intraday record as reports of a landslide hit mining shares and Indonesia closing at a record high, led by PT Bumi Resources Tbk

The Philippine main index ended 0.22 percent down at 6,513.41, hitting a peak of 6,542.51 at one point, with shares in Semirara Mining Corp dropping 8 percent following reports of a landslide at its coal mine in central Philippines.

Manila saw broad buying interest in large caps, with Manila Electric Co and Ayala Corp among the gainers. The Philippines set a record close for the fourth time this month on Wednesday as foreigners led buyers.

Manila saw net foreign buying of $160 million this month to Wednesday, trailing Indonesia's month-to-date net foreign buying of $488 million and Malaysia's $195 million.

Jakarta's Composite Index rose 0.4 percent to 4,588.67, breaching Wednesday's 4,571.57 record finish. Coal exporter Bumi surged 26.4 percent after it requested a takeover panel to expedite inquiry into the creation of parent coal miner Bumi 

The Thai stock market has lagged its peers, seeing net foreign selling of $373 million this month. The benchmark SET index climbed 0.8 percent to a fresh 18-year closing high of 1,526.74.

Trader's Highlight

DJI- NEW YORK, Feb 13 (Reuters) - U.S. stocks drifted in light volume on Wednesday, ending little changed, as investors remained cautious after the S&P 500 index briefly hit its highest intraday level since November 2007.

The S&P 500 was buoyed by General Electric GE.N after cable company Comcast Corp CMCSA.O said it will buy from GE the the part of NBCUniversal it didn't already own for $16.7 billion.

The S&P 500 is up 6.6 percent so far this year, partly due to stronger-than-expected corporate earnings and a better economic outlook. The Dow industrials is about 1 percent away from an all-time intraday high, reached in October 2007.

Volume has been weak in recent days with the S&P moving sideways around 1,520. The index is about 3 percent away from closing at a record high.

A scarcity of sellers after a consistent string of gains is a positive sign and shows the uptrend is intact, King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, said.

"Last year we had double-digit returns in the first quarter. It's fairly possible we can move higher from here," he said.

The Dow Jones industrial average .DJI fell 35.79 points or 0.26 percent, to 13,982.91, the S&P 500 .SPX gained 0.9 point or 0.06 percent, to 1,520.33 and the Nasdaq Composite .IXIC added 10.38 points or 0.33 percent, to 3,196.88.

The S&P gained 12 percent in the first three months of 2012.

According to the latest Thomson Reuters data, of the 364 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average in February last year of 6.94 billion.

On the NYSE, roughly seven issues rose for every five that fell and on Nasdaq more than six rose for every five decliners.

NYMEX- NEW YORK, Feb 13 (Reuters) - Brent crude oil prices rose slightly on Wednesday to close near $119 a barrel and remain close to a nine-month high, though gains were capped by a rise in U.S. crude oil inventories and as the International Energy Agency (IEA) trimmed its demand outlook.

The rise in inventories in the world's largest oil consumer weighed on U.S. crude oil prices, which closed lower and just above $97 a barrel, down more than $1 from the day's peak.

The U.S. Energy Information Administration said crude stocks rose by 560,000 barrels in the week ending Feb. 8, though the gain was slightly less than expected by analysts, while stockpiles of gasoline and distillates fell, according to its weekly report. EIA/S

"The underlying supply and demand fundamental picture really hasn't changed. We have a lot of oil here in the United States," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

March Brent futures LCOH3 settled 6 cents up at $118.72 a barrel, having earlier touched a session high of $119.12. The March Brent futures LCOJ3 contract expires today. The April contract finished up 13 cents at $117.88.

U.S. crude futures CLc1, which finished lower last week for the first time in nine weeks, were down 50 cents at $97.01.

After narrowing in early trade, Brent's premium over U.S. crude eventually widened to $22.11 a barrel. Brokers pointed to technical resistance at the spread's 100-day moving average around $20.68 as one reason for the reversal during Wednesday's trading.

Brent was also supported by positive economic data as a Reuters poll showed that the euro zone is slowly starting to emerge from recession.

DEMAND FORECASTS

While Brent has risen by almost $10 a barrel since the middle of January, boosted by signs of strong demand from China and Saudi output cuts, the IEA on Wednesday said that the slow pace of economic recovery would keep consumption in check.

In its monthly report, the agency trimmed its demand growth forecast for 2013 by 90,000 barrels per day. That was in contrast to both the EIA and the Organization of the Petroleum Exporting Countries (OPEC), which both raised their demand growth forecasts on Tuesday.

Prices were supported by the IEA report on Wednesday stating that Iranian oil exports will likely fall further this year as the West tightens sanctions on Tehran. Exports from Iran have already fallen to the lowest level in 30 years, the IEA said.

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade halted a five-day slide, posting a higher close on bargain-buying after the spot March contract SH3 fell to a near one-month low, traders said.

* Old-crop soybean contract gained against new-crop months on spreads, resuming last week's trend following two days of spread reversal on Monday and Tuesday.

• Expectations of a bumper South American soy harvest hung over the market, limiting gains.

• Brazil's soybean harvest is 12 percent complete, analyst Celeres said, above the five-year average of 7 percent. Sales of the 2012/13 crop reached 59 percent of the expected harvest, up 1 point from the previous week and up from 42 percent by this time a year ago, Celeres said.

• Ahead of the USDA's weekly export sales report on Thursday, analysts expect soybean sales at 700,000 to 1.1 million tonnes in the latest week.

• Analysts on average expect the National Oilseed Processors Association on Friday to show the U.S. soybean crush for January at 159.5 million bushels, potentially the largest January crush since 2010. Estimates ranged from 157.0 million to 162.3 million bushels.

FCPO- KUALA LUMPUR, Feb 13 (Reuters) - Malaysian palm oil futures fell to a two-week low on Wednesday in light trade after a long holiday weekend, with traders staying cautious as industry data showed stocks remained high despite coming off record levels.

Data from the Malaysian Palm Oil Board, released during the afternoon break, showed that end-stocks in Malaysia, the world's No. 2 producer, had inched down 1.9 percent to 2.58 million tonnes in January, missing expectations of a deeper fall.

Cargo surveyor Intertek Testing Services said Malaysia's shipments had surged 18 percent to 440,830 tonnes in the first 10 days of February from a month ago, but traders said export volumes still needed to rise to "decent" levels.

"Exports in the last five days of January showed an average of 50,000 tonnes shipped per day, which is good. We were expecting that to carry on in February, but obviously that is not the case," said a trader with a foreign commodities brokerage in Malaysia.

"It will need to pick up in the coming days of February. We are at very high stocks here, so if that picks up then things will look a bit more rosy."

Another cargo surveyor Societe Generale de Surveillance reported a steeper 25.1 percent increase to 429,070 tonnes for the same period.

The benchmark April contract FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to close at 2,504 ringgit ($810) per tonne, also its intraday low - a level unseen since Jan. 30.

Total traded volumes were thin at 18,873 lots of 25 tonnes each, compared with the average 25,000 tonnes, with many investors still on holiday.

Financial markets in Malaysia were closed on Monday and Tuesday for the Lunar New Year holidays while markets in China, the world's No. 2 edible oil importer, remain closed for the rest of the week.

Technical analysis showed palm oil may drop to 2,510 ringgit per tonne as a correction from the Jan. 31 high of 2,593 ringgit has not finished, said Reuters market analyst Wang Tao.

Brent crude steadied on Wednesday, holding just below a nine-month high near $119 per barrel on forecasts for faster-than-expected growth in global oil demand this year, although easing tensions in Iran kept a lid on prices.

In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 fell 0.5 percent in late Asian trade. The Dalian Commodity Exchange will resume trading on Monday.

REGIONAL EQUITY- BANGKOK, Feb 13 (Reuters) - Southeast Asian markets rose to new highs on Wednesday amid selective buying in the reporting season, with Singapore Telecommunications STEL.SI lifting the city-state's share market and Ayala Land Inc ALI.PS leading a rally in the Philippines.

The region broadly saw light trading volume as major markets in Asia such as China, Taiwan and Hong Kong remain closed for the Lunar New Year holiday.

Singapore's Straits Times Index .FTSTI ended up 0.9 percent at 3,301.04, the highest close since November 2010. SingTel ended up 0.8 percent, gaining as much as 1.4 percent at one point, ahead of its third quarter earnings on Thursday.

The Philippine index .PSI rose 1.1 percent to 6,527.99, marking an all-time closing high for the fourth time this month. Developer Ayala Land jumped 4.6 percent after it reported a 27 percent rise in 2012 profit to a record level.

Jakarta's Composite Index .JKSE was up 0.5 percent at 4,571.57, also a record high. Malaysia's index .KLSE rose 0.5 percent to a week high of 1,631.16, with foreigners buying shares worth a net $65.84 million, stock exchange data showed.

Bangkok's SET index .SETI climbed 1.7 percent to 1,514.11, the highest close in more than 18 years. It was among the overbought markets in the region, with a 14-day relative strength index (RSI) at 73.57 at the close. A level higher than 70 indicates an overbought market.

Trader's highlight

DJI - NEW YORK, Feb 7 (Reuters) - U.S. stocks declined on Thursday, taking a step back from their recent advance, prompted by comments by the ECB president on the euro and Europe's outlook.

The euro currency dropped against the safe-haven dollar and yen, spurring a retreat from risky assets such as stocks, after European Central Bank President Mario Draghi said the exchange rate was important to growth and price stability. Investors took that as a sign the bank is concerned about the euro's advance and its effect on the region's economy.

Growth sectors were among the weakest performers on the S&P 500: the S&P 500 materials index  was down 0.6 percent while the S&P energy index was down 0.5 percent. Housing stocks also declined, with a housing sector index off 1.4 percent.

Despite the day's decline and weakness earlier this week, the stock market has been in an almost uninterrupted up trend for most of the year, with the S&P 500 up 5.8 percent so far for 2013.

Many analysts say some weakness at this point is no surprise.

"Given the amount the market moved in January, having a little bit of a pullback and some consolidation where the market goes sideways for a little while, we think would be a healthy sign," said Eric Marshall, director of research at Hodges Capital Management in Dallas.

Top U.S. retailers reported strong January sales after offering compelling merchandise that drew in shoppers facing a hit to their take-home pay from higher payroll taxes.

The Dow Jones industrial average was down 42.47 points, or 0.30 percent, at 13,944.05. The Standard & Poor's 500 Index was down 2.73 points, or 0.18 percent, at 1,509.39. The Nasdaq Composite Index was down 3.34 points, or 0.11 percent, at 3,165.13.

Though the earnings season is winding down, results continue to boost growth estimates for the fourth quarter. According to Thomson Reuters data through Thursday morning, of 317 companies in the S&P 500 that have reported earnings, 69 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Economic data was mixed. Initial jobless claims dipped last week, with the four-week moving average falling to its lowest level since March 2008, signaling the economy continues to recover slowly.

A separate report said fourth-quarter productivity registered its biggest drop in nearly two years, while unit labor costs jumped 4.5 percent, more than economists expected. 

Roughly 6.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

NYMEX - SINGAPORE Feb 7 (Reuters) - U.S. crude steadied near $97 per barrel on Thursday as investors took a breather after the past few weeks of gains, ahead of a European Central Bank meeting later in the day and China's trade numbers due on Friday.

CBOT Soybean -  Nearby soybean futures on the Chicago Board of Trade edged lower on Thursday as spillover weakness from corn and positioning ahead of a monthly U.S. government crop report offset support from strong weekly soybean export sales, traders said. 

·         Market pressured by expectations of a massive Brazilian soy harvest. Brazil's government supply agency, Conab, raised  its estimate of the country's soybean crop to a record 83.4  million tonnes, from 82.7 million in January. 

·         Argentina's 2012/13 soy harvest is seen at 50 million  tonnes, below some initial expectations due to dry weather, the Buenos Aires Grains Exchange said in its first output forecast. The figure is below USDA's current Argentina forecast of 54 million tonnes.

·         USDA reported export sales of U.S. soybeans in the latest week at 1.667 million tonnes, above a range of trade estimates for 900,000 to 1.3 million. The figure included 896,100 tonnes of old-crop sales, also above expectations.

·         USDA reported weekly soymeal sales at 196,300 tonnes, above estimates for 75,000 to 175,000, and soyoil sales a  25,600 tonnes, within expectations for 10,000 to 30,000 tonnes.

·         Trade expects USDA to lower its forecast of U.S. 2012/13 soybean ending stocks in a monthly supply/demand report due out Friday. 

SINGAPORE, Feb 7 (Reuters) - Malaysian palm oil futures edged up on Thursday, as investors expect a marginal drop in January stocks, although cautious sentiment ahead of the upcoming long holiday capped gains.

Lower production is likely to have helped Malaysian palm oil stocks ease in January from a record high in the previous month, a Reuters survey of five plantation companies showed on Thursday.

Inventory levels most likely dropped 2.9 percent to 2.55 million tonnes in January from December's all-time high, the first decline since last June, according to the survey.

Stronger export demand seen in the last week of January may have helped cut stocks and the trend could persist, given palm oil's attractive discount to soybean oil and as worries eased over China's stricter quality regulation.

"Stocks are expected to drop, due to exports picking up towards end-January," said a dealer with a foreign commodities brokerage in Malaysia.

At the close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had gained 0.2 percent to 2,552 ringgit ($826) per tonne. Prices were rangebound between 2,530 and 2,567 ringgit.

Total traded volumes stood at 30,443 lots of 25 tonnes each, higher than the average 25,000 tonnes.

The Malaysian financial markets will be closed next Monday and Tuesday for the Lunar New Year holiday. Industry regulator the Malaysian Palm Oil Board will release January inventory and output data after the market resumes trading on Wednesday.

Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will issue export data for Feb. 1-10 also on Wednesday.

The market will be looking for trading direction from Friday's U.S. Department of Agriculture monthly supply and demand reports, which may be bullish for palm oil due to tighter soybean stocks.

In other markets, oil rose above $117 a barrel on Thursday as traders awaited word from the European Central Bank that could confirm speculation the region's troubled economy was turning a corner.

In competing vegetable oil markets, U.S. soyoil for March delivery eased 0.5 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange hit a one-week low.

Regional Equities - BANGKOK, Feb 7 (Reuters) - Most Southeast Asian stock markets eked out slim gains on Thursday as investors awaited the European Central Bank's policy meeting due later in the day, with Thai stocks recouping most early losses, led by gains in Advanced Info Service.

Bangkok's SET index closed at 1,499.81, down 0.04 percent, rebounding from its day low of 1,482.64. Telecommunications company Advanced Info Service Pcl rose 3 percent after it reported a 131 percent increase in quarterly earnings and set a higher-than-expected dividend.

UBS Investment Research told a press briefing the strength of domestic consumption remained supportive to Thai stock market, with its end-year SET index target set at 1,530 and energy, real estate and telecoms among its 'overweight' lists.

"Consumer credit as a percentage of household income stands at 47 percent; we believe 60 percent could be reached by 2015/16, at which point the Bank of Thailand could reign in credit," the broker said in a report.

Weak earnings weighed on broader market in Singapore, with the Straits Times Index  down 0.45 percent at 3261.77, weighed by a fall in CapitaMalls Asia Ltd  shares, following weak quarterly earnings.

Foreign investors sold Thai shares worth a net 3.04 billion baht ($102.15 million) and offloaded a net 33.07 million ringgit ($10.67 million) worth of Malaysian shares, stock exchange data showed.