Trader's highlight

DJI - NEW YORK, April 5 (Reuters) - U.S. stocks ended their worst week this year with losses on Friday after a weaker-than-expected jobs report undermined confidence in the economy and first-quarter earnings growth.

The jobs data, which showed employers hired at the slowest pace in nine months, was the latest in a series of disappointing economic reports.

Companies begin to report quarterly earnings next week, which is likely to be another concern for investors in light of recent economic data. Analysts' estimates for earnings growth in the first quarter have fallen since late last year, according to Thomson Reuters data.

"I think earnings season could be less than stellar again. Given market performance to date, we could see some softness in the market because we've generated some healthy returns already," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management, which has about $13 billion in assets.

Stocks had been rallying on the Fed's promise to keep providing stimulus and on mostly improving U.S. economic data. The S&P 500 is up 8.9 percent since the start of the year.

The S&P 500 was down 1 percent for the week. All but three of the S&P 500's 10 industry sectors posted declines.

The government's job report showed 88,000 jobs were added in March, less than half economists' average forecast of 200,000. The unemployment rate dipped to 7.6 percent from 7.7 percent, largely due to people dropping out of the work force.

Among recent weak data, a report Monday showed U.S. factory activity grew at the slowest rate in three months in March.

The Dow Jones industrial average was down 40.86 points, or 0.28 percent, at 14,565.25. The Standard & Poor's 500 Index was down 6.70 points, or 0.43 percent, at 1,553.28. The Nasdaq Composite Index was down 21.12 points, or 0.66 percent, at 3,203.86.

Oils - NEW YORK, April 5 (Reuters) - Brent crude fell to an eight-month low in heavy trading on Friday, going below $104 a barrel and capping off the biggest weekly drop since June as a weak U.S. jobs report fed worries about the economy of the world's largest oil consumer.

The U.S. Labor Department reported that employers added just 88,000 jobs in March, the slowest pace of hiring in nine months. The jobless rate ticked 0.1 point lower to 7.6 percent, largely due to people dropping out of the workforce.

Brent crude oil prices had the biggest weekly loss in 10 months, down more than 5 percent. They have fallen by around $15 a barrel since early February.

"But we had gone up so far, so fast without real improving data. We saw today with the jobs report translating into lower energy prices that it was not a real rally, but more of an easy-money rally."

Brent crude oil trading volumes were 49 percent higher than the 30-day moving average, with more than 950,000 lots traded.

Brent crude futures for May delivery settled at $104.12 a barrel, down $2.22 from Thursday after touching $103.62, the lowest price since August.

U.S. crude settled at $92.70 off an earlier low of $91.91 a barrel. U.S. crude has fallen by almost 5 percent this week, its biggest weekly loss since September. Its discount to Brent, however, narrowed to $11.42, the first time it has traded at less than $12 a barrel in more than nine months.

Hedge funds and other large speculators increased their bets on rising U.S. crude prices by 8,233 futures and options contracts to 246,080 as of April 2, according to a weekly report from the U.S. Commodity Futures Trading Commission.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell to a 10-month low on technical selling, fears of a potential drop in feed demand due to bird flu in China and seasonal pressure from the South American soy harvest, traders said.

 

·         Chinese authorities slaughtered more than 20,000 birds at  a poultry market in Shanghai as the human death toll from a new    strain of bird flu mounted to six, spreading concern overseas.

 

·         Nearby soybean contracts continued to lose ground to   new-crop months on spreads, a theme that continued after USDA last week reported higher-than-expected U.S. March 1 soybean  stocks.

 

·         Spot soybeans dipped to $13.54-1/2 a bushel, the lowest price on a continuous chart since June 6, before paring losses. Spot soymeal also fell to a 10-month low.

 

·         Soymeal declined along with soybeans, but soyoil closed   higher, gaining against meal on oil/meal spreads and bucking  weakness in crude oil.

·         Early planting will be delayed in the U.S. Midwest due to  cool temperatures and significant rainfall next week that will   also add valuable soil moisture, agricultural meteorologists   said.

·         Trade expects USDA to raise its U.S. 2012/13 soy ending  stocks forecast in its April 10 supply/demand report. The  average analyst estimate of U.S. soybean ending stocks was 136   million bushels, up from USDA's March forecast of 125 million.

·         For the week, soybeans fell 3 percent or 43 cents a    bushel, its second straight weekly decline. Soymeal fell   3.2 percent and soyoil fell 2.5 percent.

BMD CPO - SINGAPORE, April 5 (Reuters) - Malaysian palm oil futures inched lower on Friday, tracking weak soy markets, and posted a second straight weekly loss, with investors cautious ahead of key industry data due next week.

Soybean prices have eased this week after the U.S. Department of Agriculture reported larger-than-expected stockpiles and on worries that bird flu might spread in top importer China and reduce feed demand.

Palm oil tends to track soybean and soybean oil prices closely as the edible oils are close substitutes.

Market participants are awaiting official data on Malaysia's March palm inventory levels -- due on Wednesday -- to gauge the tropical oil's supply and demand fundamentals. Analysts said lower stocks may provide support for prices.

"We believe the overall data should be short-term positive to crude palm oil prices," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note to clients on Friday.

The bank is revising its March inventory forecast slightly down to 2.26 million tonnes from 2.31 million tonnes earlier after revising its production and exports estimates, Lim said.

A Reuters survey of five plantation companies showed Malaysia's palm oil stocks likely edged to a 7-month low in March at 2.35 million tonnes.

By the market close, the benchmark June contract n the Bursa Malaysia Derivatives Exchange had eased 1.5 percent to 2,356 ringgit ($771) per tonne. For the week, prices suffered a 0.9 percent loss.

Traders are also looking out for Malaysia's export data on Wednesday for the first 10 days of April, after cargo surveyors showed better exports in March than February boosted by higher shipments of refined products.

In other markets, Brent crude oil steadied close to five-month lows around $106 per barrel on Friday as bleak U.S. data and bulging inventories dimmed the outlook for fuel demand.

In vegetable oil markets, U.S. soyoil for May delivery  lost 0.1 percent in late Asian trade. The Dalian Commodities Exchange will be closed until Monday for a public holiday in China.

Regional Equities - April 5 (Reuters) - Thai stocks fell 2.6 percent on Friday as political concerns triggered a broad-based selling ahead of a three-day weekend while other Southeast Asian shares bounced off their day's lows as an ultra-loose monetary conditon in Japan bolstered outlook.

The Bank of Japan's recent announcement of an intense monetary easing was seen as bullish for risk assets. HSBC said Thailand, Malaysia, and Indonesia had been markets in emerging Asia that traditionally had the closest financial links with Japan.

"This is not just a Japan story: liquidity will pour into regional financial markets already drowning in the stuff," HSBC said in a report dated April 4.

"Thailand, Malaysia, and Indonesia are usually big recipients, but Vietnam, the Philippines, and even India, could see a lot more inflows, too," it said.

Leading gains in the region, the Ho Chi Minh Stock Exchange's VN Index climbed 1.1 percent as gains in heavyweight stocks helped to prop up the market after two days of falls. It was up 2.4 percent on the week, the best performer.

Hopes for disbursements from new funds, particularly those from Japan following intense monetary easing by Bank of Japan, also helped the market, said Lai Duc Long, a broker at Phu Hung Securities.

In Bangkok, the main SET index breached a key 1,500 level to close at 1,489.53. Trading volume fell to 67 percent of a full day average over the past 30 sessions as Thai market will be shut on Monday for Chakri day, reopening on Tuesday.

"Investors cut their risk exposures in response to more political noises these days. There are going to be many holidays in April and sentiment is generally weak," said CIMB senior analyst Teerawut Kanniphakul.

The SET fell 4.6 percent on the week, the worst performing market in Southeast Asia. It regained an early loss to rise on Thursday after an anti-graft body said it had found no irregularities in the disclosure of assets by Prime Minister Yingluck Shinawatra.

Trader's highlight

DJI - NEW YORK, April 4 (Reuters) - U.S. stocks rose on Thursday after the Bank of Japan announced aggressive, market-lifting policies to jump-start its economy, but weak U.S. jobs data capped gains.

The Dow Jones industrial average  rose 55.76 points, or 0.38 percent, to 14,606.11, the S&P 500 gained 6.28 points, or 0.4 percent, to 1,559.97 and the Nasdaq Composite  added 6.38 points, or 0.2 percent, to 3,224.98.

Oils - NEW YORK, April 4 (Reuters) - Brent crude prices hit a five-month low near $105 a barrel on Thursday as a jump in U.S. jobless claims triggered a second day of widespread selling in oil markets, but the benchmark crude pared losses late in New York as the euro strengthened.

Over the last two sessions Brent, U.S. crude and U.S. gasoline have all lost more than 4 percent, with traders citing ample supplies and concerns about demand.

Brent crude settled down 77 cents at $106.34 a barrel. That was more than a dollar above the session low of $105.29, which was the lowest level since early November.

U.S. crude oil futures settled at $93.26, down $1.19 but also more than a dollar above the day's low. U.S. gasoline futures settled down almost 2 cents at $2.90 a gallon.

Total Brent crude trading volume was 37 percent above the 30-day moving average, but was down slightly from the previous session when more than a million contracts changed hands.

Trading volume surged early in New York after data showed U.S. initial jobless claims hit a four-month high last week, indicating the labor market recovery in the world's largest oil consumer slowed in March. 

The previous session, oil slumped when the U.S. government's Energy Information Administration (EIA) report showed crude oil inventories at a 22-year high.

"Data has been disappointing all week long, and the oversupply of crude just confirmed that," said Bill Baruch, senior market strategist at iitrader.com LLC in Chicago.

CBOT Soybean - April 4 (Reuters) - Soybean futures on the Chicago Board of Trade fell to a 10-month low Thursday on technical selling and worries that bird flu in China could limit feed demand in the world's biggest soy buyer, traders said.

• China said it was mobilizing resources to combat a new strain of bird flu that has killed five people as Japan and Hong Kong stepped up vigilance against the virus and Vietnam banned imports of Chinese poultry.

• Front-month May soybeans fell to $13.61 a bushel, the lowest spot soybean price since June 6, but pared losses into the close.

• May and July soybeans lost ground to new-crop November on spreads.

• Soyoil lower in sympathy with soybeans, crude oil and palm oil.

• Strength in new-crop soybeans limited by fears that potential U.S. planting delays might prompt farmers to switch some corn acres to beans. Cold and wet weather in the Midwest will continue to slow spring fieldwork, an agricultural meteorologist said.

• USDA reported export sales of U.S. soybeans in the latest week at 392,700 for 2012/13, within a range of trade expectations, and 355,100 for 2013/14, above trade expectations.

• USDA reported weekly soymeal export sales at 92,600 for 2012/13 and 12,700 for 2013/14. For soyoil, USDA reported net cancellations of 4,600 tonnes.

• Malaysian palm oil futures inched lower, tracking weakness in competing soy markets, with many investors preferring to stay on the sidelines ahead of March stocks data due next week from the Malaysian Palm Oil Board. 

BMD CPO - KUALA LUMPUR, April 4 (Reuters) - Malaysian palm oil futures inched lower on Thursday, tracking weakness in competing soy markets, with many investors preferring to stay on the sidelines ahead of key industry data due next week.

Industry regulator Malaysian Palm Oil Board (MPOB) will release on Wednesday official figures of March's output levels and palm inventories, an important indicator that could help gauge the direction of the world's most traded edible oil.

Cargo surveyor data out earlier this week showed better exports in March than February, marking the first monthly rise in four months, boosted by higher shipments of refined products.

On Thursday, however, investors focused on soybean's fall for a second straight session. Lower soybean prices could wean away demand from palm oil.

"The external implications are bearish and that is going to put a lot of influence on the market even though the local front is supportive," said a trader with a foreign commodities brokerage in Kuala Lumpur.

By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.2 percent to 2,392 ringgit ($777) per tonne. Prices on Monday fell to 2,335 ringgit, the lowest in nearly three months.

Total traded volume stood at 23,044 lots of 25 tonnes each, thinner than the average 35,000 lots seen so far this year.

"We're waiting for next week when the MPOB figures will be announced. I'm looking at a short term range of 2,350 to 2,400 ringgit," the Kuala Lumpur trader added.

Stockpiles in Malaysia, the world's No.2 producer of the tropical oil, currently stand at 2.44 million tonnes. Investors are pinning hopes that the higher exports in March would ease stocks to at least 2.35 million tonnes, despite expectations that production levels could have risen as well.

In other markets, Brent crude oil steadied at around $107 per barrel on Thursday after its biggest fall in five months on signs of faltering economic growth and rising stocks of fuel.

In vegetable oil markets, U.S. soyoil for May delivery gained 0.2 percent in late Asian trade. The Dalian Commodities Exchange will be closed until Monday for a public holiday in China.

The star - GE13: It's on

PUTRAJAYA: The 13th General Election is on. Prime Minister Datuk Seri Najib Tun Razak confirmed that the King had consented to dissolution of Parliament on Wednesday.

"I met the Agong this morning and he consented to the dissolution of Parliament," Najib said during a live televised speech after teh Cabinet meeting here Wednesday.

The Electoral Commission will now meet to set dates for nomination and polling day, which will be separated by at least 11 days.

However, elections must be held within 60 days of today, that is June 2nd.

The EC has also said that it will hold all state elections simultaneously with parliamentary elections, except for Sarawak which still has three years of its mandate left after holding polls in 2011.

Sources : http://thestar.com.my/news/story.asp?file=/2013/4/3/nation/20130403114245&sec=nation

RTRS - Global palm oil demand to rise on attractive price - Oil World

HAMBURG, April 2 (Reuters) - Global palm oil demand is set to rise in coming months because of attractive prices and plentiful supplies compared to rival edible oils such as soyoil, Hamburg-based oilseeds analysts Oil World said on Tuesday.

Global Oct. 2012/Sept. 2013 palm oil imports are likely to rise to 43.19 million tonnes from 40.31 million tonnes in the same year ago period, Oil World estimated in a report.

Global Oct. 2012/Sept. 2013 imports of palmkernel oil will rise to 3.39 million tonnes from 3.05 million tonnes a year earlier, it forecast.

“Consumption fundamentals for palm and palmkernel oil will be very favourable in the second half of 2012/13 owning to the insufficient supplies of other oils and fats as well as the still unusually wide price discounts of palm oil,” Oil World said.

Crude palm oil for May/June delivery was on Tuesday quoted at $855 a tonne cif Rotterdam against about $1,100 a tonne for soyoil for delivery from crushing mills in north Europe.

Large palm stocks believed to available at the end of March means Oil World estimates global supplies of palm oil and palmkernel oil will total 42.8 million tonnes in April/September 2013, up 3.5 million tonnes on the same period last year.

China and India are likely to be among the major importers in coming months, it said.

Indonesia and Malaysia are the world’s largest palm oil exporters.

Trader's highlight

DJI - NEW YORK, April 2 (Reuters) - U.S. stocks rose on Tuesday, led by the healthcare sector after a government decision on payment rates, while factory orders data confirmed the economy is steadily improving.

The S&P 500 closed at another record high, though it fell short of breaking above its all-time intraday high of 1,576.09. The Dow also ended at another record high.

The U.S. government dropped plans to cut payments for private Medicare Advantage insurers and instead said it would allow a 3.3 percent raise. The news boosted shares of some health insurers, including Humana, which derives about two-thirds of its revenue from Medicare Advantage business.

"They didn't expect the result that they got. That will help with their bottom line," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

Strengthening U.S. data has helped stocks rally since the start of the year. On Tuesday, U.S. data showed February factory orders rose 3 percent, slightly above expectations. That follows a weak reading on U.S. manufacturing on Monday that sparked a pullback in stocks.

The S&P 500 is now up 10.1 percent since the start of the year.

For the day, the Dow Jones industrial average was up 89.16 points, or 0.61 percent, at 14,662.01. The Standard & Poor's 500 Index was up 8.08 points, or 0.52 percent, at 1,570.25. The Nasdaq Composite Index  was up 15.69 points, or 0.48 percent, at 3,254.86.

Oils - NEW YORK, April 2 (Reuters) - Brent crude oil settled lower and U.S. crude settled slightly higher on Tuesday as traders weighed concerns about demand and the possibility of a prolonged pipeline outage in the U.S. Midwest.

Brent crude oil  rose early, then reversed to fall as much as $1 a barrel, before settling down 39 cents a barrel at $110.69. The session low of $110 a barrel was below the 200-day moving average of $110.17.

U.S. crude fell in the morning, then rebounded to settle up 12 cents at $97.19.

The Brent-U.S. crude spread narrowed in choppy trading to settle at $13.50 a barrel, after widening to as much as $14.66 during the session.

Traders said the pipeline problem is likely to keep crude oil bottled up in the Midwest, depressing prices, as stockpiles of oil should build up near the delivery point of the U.S. crude oil benchmark contract in Cushing, Oklahoma.

Late on Tuesday, the American Petroleum Institute released data showing U.S. crude oil stocks rose 4.7 million barrels for the week ended March 29, higher than the 2.2 million predicted by a Reuters analyst poll.

At Cushing, stocks were down 287,000 barrels. But traders said they may well rise in next week's data after the Pegasus pipeline spill. Gasoline stocks decreased 5 million barrels while distillate stocks fell 1.85 million barrels, both larger declines than anticipated.

CBOT Soybean - Nearby soybean futures on the Chicago Board of Trade ended higher Tuesday on bargain buying after sliding to a near three-month low on fund selling and larger-than-expected U.S. stockpiles, traders said.

·         Trade was choppy. Front-month soybeans fell to  $13.86 a bushel, the lowest spot price since Jan. 7, before rallying.

 

·         Soymeal posted the biggest gains in the complex, gaining  against soyoil on meal/oil spreading. Strength in soymeal helped lift nearby soybean contracts.

 

·         Deferred soybean contracts were pressured by ideas of  increased U.S. plantings this spring as soybean prices gain  relative to corn, and as cool weather and forecasts for rain  threaten to delay fieldwork in the Midwest.

·         The worst of the delays in Brazilian soybean exports due  to transport bottlenecks are probably over and the country's shipments are likely to increase in coming weeks, Hamburg-based  oilseeds analysts Oil World said. 

 

·         Global palm oil demand is set to rise in coming months  because of attractive prices and plentiful supplies compared to  rival oils such as soyoil - Oil World.

 

·         South Korea's Major Feedmill Group and Feed Leaders'  Committee bought 110,000 tonnes of soymeal, all likely to be sourced from South America in separate deals, European traders said.

BMD CPO Futures - SINGAPORE, April 2 (Reuters) - Malaysian palm oil futures rebounded on Tuesday on bargain hunting after the edible oil fell to nearly a three-month low the previous day, while expectations that firm exports could help ease stocks further also provided support.

Palm oil fell to its lowest since Jan. 11 on Monday after the U.S. Department of Agriculture reported a larger-than-expected soybean stockpile, burnishing prospects that soybean oil supply could erode demand for palm oil.

But traders took comfort from rising palm oil exports that could help trim inventories in Malaysia, the world's second largest palm producer, where stocks stood at 2.44 million tonnes at the end of February.

"Today we see a technical bounce from an oversold market," said a dealer with a foreign commodities brokerage in Malaysia. "Slightly better export figures may improve expectation of lower stocks, but we need to watch out because the export rise could be due to more working days in March, compared to February."

By the market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 1.9 percent to 2,382 ringgit ($772) per tonne. Prices fee as low as 2,335 ringgit on Monday, the lowest in almost three months.

Total traded volume stood at 34,406 lots of 25 tonnes each, a tad lower than the average 35,000 lots seen so far this year.

Malaysia's exports of palm oil products inched up 2.8 percent in March to 1.36 million tonnes from a month ago, cargo surveyor Intertek Testing Services said on Monday, marking the first monthly rise in four months.

Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 5.5 percent increase to 1.37 million tonnes. Firm exports raised hopes that palm oil stocks may have eased at a faster pace in March.

Official data on palm oil stocks, output and exports from the Malaysian Palm Oil Board, the industry regulator, will be released on April 10.

In other markets, Brent crude edged above $111 a barrel on Tuesday as prospects of stronger appetite in Asia countered concerns over the pace of economic recovery in top consumer the United States.

In vegetable oil markets, U.S. soyoil for May delivery  gained 0.4 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange also inched up 0.2 percent.

Regional Equities - BANGKOK, April 2 (Reuters) - Malaysian stocks climbed 1.04 percent on Tuesday, outperforming other Southeast Asian stocks, amid expectations of a likely removal of political overhang, while Philippine shares fell for a second day as investors booked profits after the recent rally in large caps.

Kuala Lumpur's Composite Index  closed at 1,685, the highest since January 15, with trading volumes more than double the 30-day average. It was among Asia's worst performers this year as election-related risks worried domestic investors.

Banks were among actively traded stocks, with Malayan Banking Bhd up 1.2 percent and CIMB Group Holdings Bhd  up 0.9 percent.

Nomura Equity Research upgraded Malaysia banks to 'overweight', citing their underperformance compared with other banks in the Southeast Asian region and a likely removal of political overhang post the upcoming elections.

Malaysian Prime Minister Najib Razak announced bonuses for the 40,000 employees of national oil firm Petronas, signalling a long wait for a general election is nearly over as he seeks last-minute support from the middle class.

Foreign investors bought a net 428.15 million ringgit ($138.39 million) in Malaysian stocks, the bourse data showed, extending buying in April to a second straight session and after buying shares worth $2.9 billion in the first quarter.

Philippine index  fell 1.3 percent to 6,748.43.

After a rangebound session, Singapore's Straits Times Index edged up 0.3 percent while Thai SET index ended nearly unchanged. Jakarta's Composite Index rose 0.4 percent to a new record close of 4,957.25.

Vietnam's benchmark Ho Chi Minh Stock Exchange VN Index rose for the third consecutive day, up 0.7 percent as domestic and foreign funds bought blue chips on solid earnings and in hopes of lower lending rates. 

Bloomberg - Raw-Material Bull Market Fading as Supply Expands: Commodities

At a time when U.S. equities are trading near a record and the dollar is having its best start in three years, commodities will finish this quarter little changed from where they were at the end of 2012.

The Standard & Poor’s GSCI gauge of 24 raw materials will be at 644 at the end of June, 1.4 percent lower than now, according to the median of nine investor and analyst predictions compiled by Bloomberg. The index rose 1 percent this year, the worst start since 2009. Gains in arabica coffee, silver and nickel will be offset by declines in cotton, crude and natural gas, analyst forecasts show. Investors had $132 billion tracking commodity indexes at the end of February, Barclays Plc estimates.

Full article : http://www.bloomberg.com/news/2013-04-01/raw-material-bull-market-fading-as-supply-expands-commodities.html

RTRS - Goldman lowers price forecasts for corn, soy, wheat

CHICAGO, April 1 (Reuters) - Investment bank Goldman Sachs said it lowered its price forecasts for corn, soybeans and wheat, citing larger-than-expected U.S. March 1 grain stocks data issued last week by the U.S. Department of Agriculture.

In a note to clients, Goldman said it lowered its three-month price forecast for Chicago Board of Trade corn futures to $6.50 per bushel from $7.50 previously.

Goldman's changes came after USDA on Thursday reported U.S. March 1 corn stocks at nearly 5.4 million bushels, far above the average trade estimate of about 5 million bushels.

"For corn, this release implies very weak feed/residual demand, although livestock data suggests that 2012 corn production may have been underestimated," Goldman said.

"Although we expect U.S. corn grind for ethanol to increase in coming months, today’s data and continued weak net exports imply that U.S. 2012/13 corn ending stocks will remain at a comfortable 900 (million bushels) level," the bank said.

The bank also lowered its six- and 12-month price forecasts for corn to $5.25 from $6, citing the higher old-crop stocks, expectations for large U.S. 2013/14 corn acreage and "normalizing weather across the Midwest."

For CBOT soybeans, Goldman lowered its three-month price forecast to $13.50 a bushel from $14. The bank cut its six- and 12-month soy price forecasts to $12.50 from $13.

USDA last week reported March 1 U.S. soybean stocks at 999 million bushels, topping a range of trade estimates for 905 million to 984 million.

"The larger soybean stocks ... imply that the 2012/13 U.S. crop was likely larger," Goldman said. "These higher soybean supplies will ease the transition to the large South American export program, likely ensuring that U.S. soybean inventories remain manageably low," it said.

Goldman made the biggest cuts in its price outlooks for CBOT wheat, cutting its three-month forecast to $6.50 from $7.80 and its six- and 12-month forecasts to $6.25 from $7.80.

USDA reported March 1 wheat stocks at 1.234 billion bushels, at the high end of trade expectations.

"The higher stocks point to weak feed demand last quarter. We expect wheat to continue trading near parity with corn," Goldman said.

Trader's highlight

DJI - NEW YORK, April 1 (Reuters) - U.S. stocks fell on Monday in one of the lightest volume days of the year, pulling back after the S&P 500's record closing high last week and after weaker-than-expected U.S. manufacturing data.

Data showed U.S. factory activity grew at the slowest rate in three months in March, suggesting the economy lost some momentum at the end of the first quarter.

Recent data that has pointed to a strengthening U.S. economy has helped push stocks to record highs on both the Dow and S&P 500. The S&P 500 ended March with a record closing high and posted its best quarterly performance in a year, while the Dow broke into new record territory in early March.

"It was very difficult for the S&P 500 technically to break through that high level and to even close there, so it doesn't surprise me that today is a down day," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California. "I think there's a lot of resistance at the 1,565 level."

With the strong start to the year, many investors have been anticipating a pullback. Uncertainty over the economic future of Cyprus has weighed on stocks in recent sessions. European markets were closed on Monday for a holiday.

The benchmark S&P index remains below its record intraday high of 1,576.09. Moves may be limited this week in the absence of major catalysts before the closely watched U.S. monthly payrolls report on Friday.

The Dow Jones industrial average was down 5.69 points, or 0.04 percent, at 14,572.85. The Standard & Poor's 500 Index was down 7.02 points, or 0.45 percent, at 1,562.17. The Nasdaq Composite Index was down 28.35 points, or 0.87 percent, at 3,239.17.

Volume was second-lowest of the year, with roughly 5.16 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT. That compares with the 2012 average daily closing volume of about 6.45 billion. Decliners outpaced advancers on the NYSE by nearly 7 to 3 and on the Nasdaq by nearly 3 to 1.

Oils - NEW YORK, April 1 (Reuters) - Brent crude rose above $111 a barrel in choppy trading on Monday as Saudi Arabia predicted robust demand from Asia, while U.S. crude prices fell as a pipeline leak in Arkansas threatened to increase the glut of oil in the U.S. Midwest.

The shut pipeline compounds expectations of a 2.3 million- barrel rise in crude oil stocks in the United States last week, a provisional poll of analysts and traders by Reuters showed.

"It’s kind of a landlocked situation," said Thomas Mooney, president of Southeast Energy, Inc. "They’re making more crude in the Midwest than they can use."

Rising U.S. production, imports from Canada, and limited pipeline flows from the Midwest to the Gulf Coast have weighed on U.S. crude prices relative to seaborne benchmark Brent, causing the prices of the two main oil contracts to diverge.

After dipping in early trade, Brent crude for May delivery  recovered, rising $1.06 to settle at $111.08 a barrel and closing above the 200-day moving average of $110.06, a key technical indicator watched by traders.

The spread between the Brent and U.S. crude contracts moved back above $14 a barrel after slipping to $12.32 in early trade, the narrowest spread since July.

SAUDI EXPORTS

Demand for Saudi crude is likely to rise over the next few months, Saudi oil minister Ali Al-Naimi said on Monday, signaling that the world's largest oil exporter sees a recovery in its biggest export market, Asia.

"The data came in below market expectations, which could indicate that oil demand growth may not expand quite as quickly," said Carl Larry, president of Oil Outlooks and Opinion, based in Houston.

"But China's still growing, and that continues to be an underlying support factor long term for the market. Whether they are at 6 percent or 7 percent, they are growing."

Saudi Arabia, OPEC's leading producer and holder of the world's only significant spare output capacity, cut its output by around 700,000 bpd over the last two months of 2012, helping drive a rise in crude prices from early December to February.

Disappointing economic data from Asia and the United States kept Brent's price gains in check during Monday's session.

China's official purchasing managers index (PMI) came in at 50.9, the highest in 11 months, but economists expected bigger recovery from February's five-month low. 

CBOT Soybean - Spot soybean futures on the Chicago Board of Trade fell to a near three-month low on followthrough selling from last week's bearish U.S. grain and soy stocks report, traders said.

 

·         Goldman Sachs lowered its three-month price forecast for CBOT soybeans to $13.50 from $14, and its six- and 12-month  forecasts to $12.50 from $13, citing larger-than-expected U.S. March 1 grain stocks data. Goldman also cut price forecasts for corn and wheat.

 

·         Additional pressure from weakness in other commoditie  such as copper after surveys showed U.S. and Chinese  manufacturing in March expanded less than economists had   expected.

·         Soyoil ended nearly flat, gaining against soymeal on   oil/meal spreading. Firming cash values for soyoil amid a  slowing U.S. crush pace and increased demand for biodiesel supported soyoil, while cash demand for soymeal is slowing.

 

·         Basis bids for soybeans shipped by barge to the U.S. Gulf were steady to higher on Monday on a seasonal slowdown in old-crop export demand and weaker futures prices.   

·         USDA reported export inspections of U.S. soybeans in the  latest week at 16.3 million bushels, within a range of trade expectations for 12 million to 19 million bushels.

BMD CPO - SINGAPORE, April 1 (Reuters) - Malaysian palm oil futures slipped to their lowest in nearly three months on Monday as larger-than-expected U.S. soybean stockpiles continued to weigh on markets, although losses were capped by a marginal increase in exports.

Malaysia's palm oil shipments for March edged up 2.8 percent to 1.36 million tonnes compared to a month ago, driven by higher exports of refined products, cargo surveyor Intertek Testing Services said on Monday.

Another cargo surveyor Societe Generale de Surveillance reported a 5.5 percent increase to 1.37 million tonnes for the month.

But the market continued to feel the weight of the larger-than-expected soybean stocks reported by the U.S. Department of Agriculture (USDA). Plentiful soybeans for crushing into oil may divert some demand away from competing palm oil.

"It looks like the USDA's bearish stock level is still leading palm," said a Singapore-based trader with a global commodities house. "A marginal increase in exports is not enough to counter the bearishness ... I think we will have to see how low the production cycle is going to be in order to have some supportive news."

By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had lost 1.8 percent to 2,336 ringgit ($756) per tonne. Prices earlier fell to 2,335 ringgit, a level last seen on Jan. 11.

Total traded volume stood at 31,364 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year.

A slight increase in exports and seasonal slowdown in production could trigger a further decline in Malaysia's palm oil stockpiles in March. Official data on inventory levels will be released next week.

In other markets, Brent crude eased to under $110 a barrel on Monday after Chinese manufacturing data missed market expectations, signalling possibly slower demand growth in the world's second-largest oil consumer. 

In vegetable oil markets, U.S. soyoil for May delivery lost 1.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange edged 1.4 percent lower.

Regional Equities - BANGKOK, April 1 (Reuters) - Southeast Asian stock markets ended mostly lower on Monday with Indonesia and the Philippines coming off record highs amid subdued trading in the region as some Asian markets were still closed for Easter holidays.

After a choppy session, Jakarta's Composite Index finished down 0.07 percent at 4,937.57, erasing earlier gain from an intraday record high of 4,953.39. The Philippine index eased 0.12 percent to 6,839.59.

Philippine shares ended the first quarter at a record high of 6,847.47 after the country won its first-ever investment grade rating from Fitch Ratings, which analysts said could possibly attract more capital inflows.

Fitch also revised Support Rating Floors of eight Philippine banks after the sovereign upgrade. 

Investors and analysts said any boost to local bonds, stocks or the peso is likely to be mild for now.

Thailand's SET index  fell 0.7 percent to 1,549.55, the worst performer on the day, led by PTT Pcl . Energy stocks were broadly weak as global oil prices eased after Chinese manufacturing data missed expectations. 

Bucking the trend, the Ho Chi Minh Stock Exchange's VN Index jumped 3 percent to 505.81 as investors bought blue chips on solid earnings in the first quarter. 

Palm Oil Heads for Fourth Quarterly Loss as Demand May Weaken

March 29 (Bloomberg) -- Palm oil declined to its lowest level in almost two weeks, heading for a fourth quarterly loss, on concern that demand will slow as Europe’s debt crisis lingers, boosting inventories in producing nations.

The contract for delivery in June dropped as much as 0.8 percent to 2,392 ringgit ($775) a metric ton, the lowest most- active price since March 18, on the Malaysia Derivatives Exchange in Kuala Lumpur. Futures traded at 2,396 ringgit at the midday break, down 1.7 percent this quarter. A fourth quarterly loss would be the worst streak since 1999.

Shipments to European Union countries by Malaysia tumbled 18 percent in the first 25 days of March to 155,870 tons from a month earlier, according to Societe Generale de Surveillance.

Total exports fell 7 percent to 1.1 million tons, it said March 25. Europe is the largest buyer of palm after India and China, U.S. Department of Agriculture data show. The region’s economy will contract for a second straight year in 2013, according to the median of analysts’ forecasts compiled by Bloomberg.

“Driving prices down is an expectation that exports from Malaysia will continue to decline,” said Arhnue Tan, vice president at Alliance Research Sdn. “That may lead to high inventory levels.”

Palm oil has tumbled 32 percent over the past year as supplies from Indonesia and Malaysia, the largest producers, expanded to a record and demand fell in Europe. Stockpiles in Malaysia reached an all-time high in December.

Refined palm oil for September delivery fell 0.7 percent to 6,252 yuan ($1,007) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month lost 1 percent to 7,958 yuan a ton.