Trader's Highlight

DJI- NEW YORK, Dec 12 (Reuters) - Global shares rose and the euro jumped against the dollar on Wednesday after the Federal Reserve ramped up its monetary stimulus and said it would keep benchmark U.S. interest rates near zero until the jobless rate falls sharply.

But U.S. stocks ended little changed, giving up most of the day's gains after Fed Chairman Ben Bernanke reiterated that monetary policy won't be enough to offset damage from the "fiscal cliff."

Treasury prices fell, with 30-year bonds slumping the most, as the central bank said it would shift more of its purchases to the five-year sector in a new easing program. Expectations the move would boost the economy and support riskier assets such as stocks also hurt safe-haven government debt.

The Fed, which cut its forecasts for economic growth and inflation next year, committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September, as expected.

It will likely keep official rates near zero for as long as unemployment remains above 6.5 percent, inflation is projected to be no more than 2.5 percent one or two years ahead and inflation expectations remain contained.

"It's another round of easing. It is good for stocks and risk more generally," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "And they came out with an economic data point as a guideline. That's very important, because it helps the market anticipate an exit strategy."

 

The Dow Jones industrial average .DJI dropped 2.99 points, or 0.02 percent, to end at 13,245.45. The Standard & Poor's 500 Index .SPX gained 0.64 points, or 0.04 percent, to close at 1,428.48. The Nasdaq Composite Index .IXIC dropped 8.49 points, or 0.28 percent, to 3,013.81.

Bernanke "reiterated the fact that monetary policy has its hands tied as far as addressing the seriousness of going over the fiscal cliff," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

U.S. House of Representatives Speaker John Boehner said on Wednesday "serious differences" remain with President Barack Obama in talks to avert the steep tax hikes and budget cuts set for the new year.

The euro rose 0.5 percent to $1.3066 EUR= after hitting a session peak of $1.3096 after the Fed announcement.

The euro had jumped sharply minutes before the Fed announcement. Traders attributed the move to comments from Silvio Berlusconi, who said he would withdraw as a candidate in Italy's coming election if outgoing Prime Minister Mario Monti ran as the head of a "moderate" coalition.

The dollar fell to multi-month lows against higher-yielding currencies such as the Australian AUD= and New Zealand dollars NZD=.

Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said the scope for further dollar losses may be somewhat limited, given investor concern about the U.S. fiscal cliff, which could boost the safe-haven dollar.

"Uncertainty about the euro zone, concerns about Italy and the Japan election this weekend should also limit dollar losses," Esiner said.

The dollar rose to an eight-month high of 83.29 yen and was last up 0.8 percent at 83.18 JPY= on bets the Bank of Japan will implement more aggressive monetary easing after the election on Sunday, which is expected to yield a victory for the Liberal Democratic Party.

The new bond buying replaces the more modest "Operation Twist" program set to expire at the end of the month. The Fed will expand purchases to five-year notes from the current seven-, 10- and 30-year Treasuries.

"They are basically taking out the same amount of duration that they were in Twist, but they are buying less in the long end than they had been before," said Ira Jersey, an interest rate strategist at Credit Suisse in New York.

Oil prices rose. Brent crude futures LCOc1 gained $1.49 to settle at $109.50 a barrel. U.S. crude CLc1 rose 98 cents to settle at $86.77 a barrel.

NYMEX- NEW YORK, Dec 12 (Reuters) - U.S. crude futures rose more than 1 percent on Wednesday, boosted by Federal Reserve plans for more monetary stimulus and a fire at Motiva's Port Arthur, Texas, refinery that sent refined products futures higher.

CBOT SOYBEAN- Front-month soybean futures on the Chicago Board of Trade ended higher, lifted by firm cash soybean markets, but back months fell on prospects for large South American soybean crops, traders said.

 

• Cash values for soybeans at the U.S. Gulf export market firmed slightly amid slow farmer offerings, and some soy processors in the interior Midwest also raised basis bids.

 

• Deferred CBOT soybean contracts under pressure from beneficial rains falling over Brazil's southern grain producing states this week. The moisture should help what is expected to be a record Brazilian soybean crop - forecaster Somar.

 

• Ahead of USDA's weekly export sales report on Thursday, trade expects U.S. soybean sales of 600,000 to 850,000 tonnes, soymeal sales of 200,000 to 350,000 tonnes and soyoil sales of 15,000 to 40,000 tonnes.

• Soymeal gained against soyoil on inter-market spreads in anticipation that commodity index funds will buy soymeal and sell soyoil as part of annual rebalancing efforts in early 2013. The DJ-UBS Commodity Index announced in late October that it would add soymeal to its index and reduce its soyoil holdings for 2013.

• Grain and soy markets had little reaction after the U.S. Federal Reserve announced plans to ramp up its stimulus to the economy, although U.S. stocks rose and the euro rallied against the dollar following the news.

FCPO- SINGAPORE, Dec 12 (Reuters) - Malaysian palm oil futures dropped to a one-month low on Wednesday, as forecasts for a higher supply of rival soybean oil stoked concerns of a global vegetable oil surplus.

The bearish view of soybean oil from the U.S. Department of Agriculture (USDA), coupled with Malaysia's record high palm oil stocks in November, have put palm oil futures on track for their steepest annual loss since 2008.

"CBOT (Chicago Board of Trade) soyoil came down yesterday by about 90 points, and there were some traders who were trying to break the previous low," said a trader with a foreign commodities brokerage in Malaysia.

At the close, the benchmark February contract FCPOc3 on the Bursa Malaysia Derivatives Exchange slid 2.3 percent to 2,238 ringgit ($730) per tonne, slightly off a low at 2,229 ringgit, a level unseen since Nov. 12.

Total traded volumes stood at 35,105 lots of 25 tonnes each, higher than the usual 25,000 lots.

Traders are looking out for Malaysia's new crude palm oil export tax that will be formalised in a gazette on Dec. 17 under a new tax structure that aims to claw back market share from top producer Indonesia.

Despite higher supply of global vegetable oil, the steep discount between palm oil and soybean oil could stimulate high export demand for palm oil and send prices rising in early 2013, said Hamburg-based analysts Oil World.

 

Palm oil imports by India, the world's top vegetable oil buyer, are likely to have fallen in November from October levels, which were the highest in at least three years, as demand shrank with the start of cold weather that solidifies the oil, a Reuters survey showed.

 

In a bullish sign for palm oil, Brent crude held above $108 a barrel on Wednesday as OPEC reduced oil supply, although rising output from the United States and uncertainty about its budget for next year limited price gains.

In other vegetable oil markets, U.S. soyoil for January delivery BOZ2 fell 0.4 percent in late Asian trade, after falling by almost 2 percent in the previous session. The most active May 2013 soybean oil contract DBYcv1 on the Dalian Commodity Exchange closed 1.8 percent lower.

REGIONAL EQUITY- BANGKOK, Dec 12 (Reuters) - Southeast Asian stocks mostly gained on Wednesday as hopes of more monetary stimulus from the U.S. Federal Reserve buoyed sentiment, with Singapore rising for a sixth session to a 16-month high and Thailand climbing to a near 17-year peak.

Singapore's Straits Times index .FTSTI finished at 3,141.57, the highest close since August, 2011. Thai SET index .SETI ended at 1,354.57, the highest close since February 1996.

Malaysia .KLSE was up 0.5 percent, extending its gains for a seventh session. Indonesia .JKSE and Vietnam .VNI both produced a third-straight gain, edging up 0.45 percent and 0.4 percent, respectively.

Across the region, investors sought value buys, including shares in consumer related and construction sectors such as Singapore's United Overseas Bank Ltd UOBH.SI and Thailand's industrial conglomerate Siam Cement Pcl SCC.BK.

Bucking the trend, the Philippine main index .PSI ended down 0.2 percent at 5,819.79 on late selling, after earlier touching an all-time high of 5,859.54.

Trader's highlight

DJI - NEW YORK, Dec 12 (Reuters) - Global shares rose and the euro jumped against the dollar on Wednesday after the Federal Reserve ramped up its monetary stimulus and said it would keep benchmark U.S. interest rates near zero until the jobless rate falls sharply.


But U.S. stocks ended little changed, giving up most of the day's gains after Fed Chairman Ben Bernanke reiterated that monetary policy won't be enough to offset damage from the "fiscal cliff."

Treasury prices fell, with 30-year bonds slumping the most, as the central bank said it would shift more of its purchases to the five-year sector in a new easing program. Expectations the move would boost the economy and support riskier assets such as stocks also hurt safe-haven government debt.

The Fed, which cut its forecasts for economic growth and inflation next year, committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September, as expected.

It will likely keep official rates near zero for as long as unemployment remains above 6.5 percent, inflation is projected to be no more than 2.5 percent one or two years ahead and inflation expectations remain contained.

"It's another round of easing. It is good for stocks and risk more generally," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "And they came out with an economic data point as a guideline. That's very important, because it helps the market anticipate an exit strategy."

The MSCI global stock index advanced 0.3 percent to 337.93. The FTSEurofirst 300 closed up 0.1 percent at 1,139.65.

The Dow Jones industrial average dropped 2.99 points, or 0.02 percent, to end at 13,245.45. The Standard & Poor's 500 Index gained 0.64 points, or 0.04 percent, to close at 1,428.48. The Nasdaq Composite Index dropped 8.49 points, or 0.28 percent, to 3,013.81.

Bernanke "reiterated the fact that monetary policy has its hands tied as far as addressing the seriousness of going over the fiscal cliff," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

U.S. House of Representatives Speaker John Boehner said on Wednesday "serious differences" remain with President Barack Obama in talks to avert the steep tax hikes and budget cuts set for the new year.

The euro rose 0.5 percent to $1.3066 after hitting a session peak of $1.3096 after the Fed announcement.

The euro had jumped sharply minutes before the Fed announcement. Traders attributed the move to comments from Silvio Berlusconi, who said he would withdraw as a candidate in Italy's coming election if outgoing Prime Minister Mario Monti ran as the head of a "moderate" coalition.

The dollar fell to multi-month lows against higher-yielding currencies such as the Australian and New Zealand dollars

Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said the scope for further dollar losses may be somewhat limited, given investor concern about the U.S. fiscal cliff, which could boost the safe-haven dollar.

"Uncertainty about the euro zone, concerns about Italy and the Japan election this weekend should also limit dollar losses," Esiner said.

The dollar rose to an eight-month high of 83.29 yen and was last up 0.8 percent at 83.18 JPY= on bets the Bank of Japan will implement more aggressive monetary easing after the election on Sunday, which is expected to yield a victory for the Liberal Democratic Party.
The benchmark 10-year U.S. Treasury note was down 14/32 in price, the yield at 1.704 percent. Thirty-year bonds dropped 1-3/32 in price to yield 2.897 percent.

The new bond buying replaces the more modest "Operation Twist" program set to expire at the end of the month. The Fed will expand purchases to five-year notes from the current seven-, 10- and 30-year Treasuries.

"They are basically taking out the same amount of duration that they were in Twist, but they are buying less in the long end than they had been before," said Ira Jersey, an interest rate strategist at Credit Suisse in New York.

Oil prices rose. Brent crude futures gained $1.49 to settle at $109.50 a barrel. U.S. crude rose 98 cents to settle at $86.77 a barrel.

Spot gold rose to $1,712 an ounce after the Fed decision bolstered bullion's inflation-hedge appeal.

NYMEX - NEW YORK, Dec 12 (Reuters) - U.S. crude futures rose more than 1 percent on Wednesday, boosted by Federal Reserve plans for more monetary stimulus and a fire at Motiva's Port Arthur, Texas, refinery that sent refined products futures higher.    


CBOT - Soyoil - Front-month soybean futures on the Chicago Board of Trade ended higher, lifted by firm cash soybean markets, but back months fell on prospects for large South American soybean crops, traders said.
- Cash values for soybeans at the U.S. Gulf export market firmed slightly amid slow farmer offerings, and some soy processors in the interior Midwest also raised basis bids.

- Deferred CBOT soybean contracts under pressure from beneficial rains falling over Brazil's southern grain producing states this week. The moisture should help what is expected to be a record Brazilian soybean crop - forecaster Somar.
- Ahead of USDA's weekly export sales report on Thursday, trade expects U.S. soybean sales of 600,000 to 850,000 tonnes, soymeal sales of 200,000 to 350,000 tonnes and soyoil sales of 15,000 to 40,000 tonnes.

- Soymeal gained against soyoil on inter-market spreads in anticipation that commodity index funds will buy soymeal and sell soyoil as part of annual rebalancing efforts in early 2013. The DJ-UBS Commodity Index announced in late October that it would add soymeal to its index and reduce its soyoil holdings for 2013.

- Grain and soy markets had little reaction after the U.S. Federal Reserve announced plans to ramp up its stimulus to the economy, although U.S. stocks rose and the euro rallied against the dollar following the news.


FCPO - SINGAPORE, Dec 12 (Reuters) - Malaysian palm oil futures dropped to a one-month low on Wednesday, as forecasts for a higher supply of rival soybean oil stoked concerns of a global vegetable oil surplus.


The bearish view of soybean oil from the U.S. Department of Agriculture (USDA), coupled with Malaysia's record high palm oil stocks in November, have put palm oil futures on track for their steepest annual loss since 2008.

"CBOT (Chicago Board of Trade) soyoil came down yesterday by about 90 points, and there were some traders who were trying to break the previous low," said a trader with a foreign commodities brokerage in Malaysia.

At the close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange slid 2.3 percent to 2,238 ringgit ($730) per tonne, slightly off a low at 2,229 ringgit, a level unseen since Nov. 12.

Total traded volumes stood at 35,105 lots of 25 tonnes each, higher than the usual 25,000 lots.

Traders are looking out for Malaysia's new crude palm oil export tax that will be formalised in a gazette on Dec. 17 under a new tax structure that aims to claw back market share from top producer Indonesia.

Despite higher supply of global vegetable oil, the steep discount between palm oil and soybean oil could stimulate high export demand for palm oil and send prices rising in early 2013, said Hamburg-based analysts Oil World.

Palm oil imports by India, the world's top vegetable oil buyer, are likely to have fallen in November from October levels, which were the highest in at least three years, as demand shrank with the start of cold weather that solidifies the oil, a Reuters survey showed.

In a bullish sign for palm oil, Brent crude held above $108 a barrel on Wednesday as OPEC reduced oil supply, although rising output from the United States and uncertainty about its budget for next year limited price gains.

In other vegetable oil markets, U.S. soyoil for January delivery fell 0.4 percent in late Asian trade, after falling by almost 2 percent in the previous session. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 1.8 percent lower.


Regional Equities - BANGKOK, Dec 12 (Reuters) - Southeast Asian stocks mostly gained on Wednesday as hopes of more monetary stimulus from the U.S. Federal Reserve buoyed sentiment, with Singapore rising for a sixth session to a 16-month high and Thailand climbing to a near 17-year peak.

Singapore's Straits Times index finished at 3,141.57, the highest close since August, 2011. Thai SET index ended at 1,354.57, the highest close since February 1996.

Malaysia was up 0.5 percent, extending its gains for a seventh session. Indonesia and Vietnam both produced a third-straight gain, edging up 0.45 percent and 0.4 percent, respectively.

Across the region, investors sought value buys, including shares in consumer related and construction sectors such as Singapore's United Overseas Bank Ltd and Thailand's industrial conglomerate Siam Cement.

Bucking the trend, the Philippine main index ended down 0.2 percent at 5,819.79 on late selling, after earlier touching an all-time high of 5,859.54.

RTRS - Indonesia trade ministry: not backing palm tax change

JAKARTA, Dec 11 (Reuters) - Indonesia's trade ministry is resisting pressure from parts of the palm oil industry to change its export tax system in response to planned tax cuts by rival producer Malaysia, a junior minister said on Tuesday.

A proposed cut in crude palm oil (CPO) export taxes by number two producer Malaysia due to come in next year will make it easier for refiners or producers to ship out CPO when margins for refined palm oil are low.

Malaysia's tax move came almost a year after Indonesia, the world's top producer of the edible oil, reduced export taxes on refined palm oil to boost its processing industry.

The Indonesian Palm Oil Association (GAPKI), which represents mostly plantation firms, has called for a reduction in palm oil export taxes to provide greater parity against Malaysian competitors.

"GAPKI has been proposing that the government changes the palm oil export tax structure," Deputy Trade Minister Bayu Krisnamurthi said, adding that the proposal had not been discussed with other ministries.

"The trade ministry has suggested not changing the export tax scheme, but to invest in infrastructure such as on storage tanks and increase domestic palm oil consumption."

The Malaysian government, in a bid to entice customers, said it plans to cut export taxes for the crude grade to 8-10 percent from 23 percent early next year.

Indonesia has set its December export tax for CPO at 9 percent and 3 percent for RBD palm olein.

On the downstream and processing side of the industry, the Indonesian Vegetable Oil Association says it wants to keep things as they are to maintain consistency in the business.

Last week, Achmad Suryana, director general at the agency for food security in the Indonesian ministry of agriculture, said initial talks had started between different ministries but no decision had been made.

"A technical team has started talking about the possibilities and what is best for Indonesia," Suryana said, at a palm oil conference in Bali, adding that discussions would involve the agriculture, trade and finance ministries.

RTRS - Malaysia crude palm oil export tax seen at zero for Jan

SINGAPORE, Dec 11 (Reuters) - Malaysia will set a tax rate for the export of crude palm oil for January by using the average sales price from Nov. 10 to Dec. 9 as the reference price, a government source said, a level that analysts said could result in zero tax.

The new tax rate comes under a plan approved by the world's second-largest palm oil producer in October to cut crude palm oil (CPO) export taxes as it tries to claw back market share from top producer Indonesia.

Under the new structure, January export taxes are likely be set at zero, given that the average CPO price from Nov. 10 to Dec. 9 fell below the lowest reference price of 2,250 ringgit ($740) per tonne, Maybank Investment Bank said in a research note on Tuesday.

This would help Malaysian exporters ship as much CPO as possible to reduce a record stockpile of 2.56 million tonnes in November.

The government will announce the tax levy on the 15th of every month using Malaysian Palm Oil Board prices for reference and will formalise the January tax in a gazette set to be issued on Dec. 17, said the source, who declined to be identified because he is not authorised to speak to the media.

Malaysian exporters have been concerned that the new tax mechanism could spark a tax war with Indonesia, although the world's largest palm oil producer said it was resisting pressure to change its export tax system in response to Malaysia's planned tax cuts, a junior minister said on Tuesday.

RTRS - India's Nov palm oil imports seen down on month

NEW DELHI, Dec 11 (Reuters) - India's palm oil imports are likely to have fallen in November from October levels, which were the highest in at least three years, as demand shrank with the start of cold weather that solidifies the oil, a Reuters survey showed.

Palm oil imports by the world's top vegetable oil buyer were 840,379 tonnes in October, the last month of the 2011/12 marketing year, as importers raced to buy record stocks in Malaysia, the world's No. 2 producer of the edible oil.

Palm oil imports could have dropped 22.8 percent in November to 648,750 tonnes, the average of forecasts in a survey of eight traders showed on Tuesday.

"Palm oil imports are expected to fall with the start of the winter season and also because of higher domestic supplies of edible oils," said Sat Narain Agarwal, a Delhi-based trader.

Demand for crude palm oil (CPO) usually shrinks in winter as the tropical oil freezes at lower temperatures, while supplies of domestic cooking oil improve as the crushing season for summer harvested oilseed crops such as soybeans gathers momentum.

Traders said CPO imports were likely to have been about 580,000 tonnes last month, while refined, bleached and deodorised (RBD) palmolein imports could have been 72,500 tonnes according to the average of the survey, with a range of 50,000-100,000 tonnes.

In October, India imported 768,336 tonnes of CPO and 61,544 tonnes of RBD palmolein - a record for monthly total palm oil imports in data going back to October 2009, according to the Mumbai-based Solvent Extractors' Association of India (SEA).

The SEA is expected to release its monthly import data for November later this week.

India's refined palm oil imports started a downward trend after duties were raised in August to curb cheap purchases from Indonesia, the world's top palm oil producer, which had tweaked export duties last year to promote its downstream product.

More than half of India's 16-17 million tonnes of edible oils demand is met via imports. A population that is growing at the rate of about 19 million people a year, along with an increasingly wealthy middle class, support higher demand.

About 77 percent of India's cooking oil imports are palm oils, while soft oils such as soy and sunflower make up the rest.

India imports mainly palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil.

The Reuters survey also suggested total vegetable oil imports, including non-edible oils, would fall 25.6 percent in November to 770,375 tonnes from the previous month.

Traders said monthly edible oil imports could fall for the second straight month in December as domestic supplies pick up.

Imports of soyoil and sunflower are likely to have dropped last month as their prices were higher by about $15 per tonne in comparison with October, mainly on concerns due to the slow pace of soybean planting in South America.

Soyoil imports are likely to have fallen 57.9 percent to 38,750 tonnes last month.

The survey showed average estimated stocks at Indian ports at the end of November fell by 3.2 percent to 705,000 tonnes from October.

Traders attributed the drop in imports to a slowdown in demand after Diwali, the festival of lights, when appetite for fried foods increases as families eat large meals together.

"Edible oil imports could fall to around 700,000 tonnes in December in the absence of any seasonal demand trigger in the market," Agarwal said.

RTRS - Palm prices to rise soon on strong export demand- Oil World

HAMBURG, Dec 11 (Reuters) - Global palm oil prices are likely to rise in early 2013 because of high export demand stimulated by current competitive palm prices compared to soyoil, rapeseed oil and other edible oils, Hamburg-based analysts Oil World said on Tuesday.

“We expect palm oil prices to appreciate in the next three months owing to the pick up in export demand, seasonally declining production and the resulting reduction in stocks,” Oil World said.

“Consumers will take advantage of the unusually high current price discounts of palm oil and lauric (palm derivative and coconut) oils in both the food and non-food sectors.”

Crude palm oil for January 2013 delivery was quoted at $770 a tonne cif in Rotterdam and Hamburg on Monday, far below January soyoil at 918 euros a tonne ($1,190) and rapeseed oil for February delivery at 920 euros a tonne ($1,192 ) both fob European mills.

Indonesia and Malaysia are the world’s main palm oil exporters. Soyoil prices are currently high because of poor soybean harvests in South America and the U.S. this year.

“Some countries - for example China and Pakistan - are likely to reduce imports of rapeseed and canola for domestic crushings and instead import larger quantities of competitively-priced palm oil,” Oil World said.

RTRS - Growth in global biodiesel output weakening- Oil World

HAMBURG, Dec 11 (Reuters) - Growth in global biodiesel production is starting to weaken after being strong for years, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“The growth dynamics have been lost in July/December 2012, when many important producers reduced their output of biodiesel,” Oil World said. “This is true primarily for Argentina and the United States but also to a smaller extent for Brazil and the European Union.”

Global calendar-year 2012 biodiesel production will still rise by 0.9 million tonnes on the year to 22.92 million tonnes, the firm forecast. But this rise would be down strongly from the 3.7 million tonne increase in 2011 and the average 2.9 million tonne rise in the previous five years.

Record high soybean prices this summer, due to poor U.S. and South American crops, have reduced the attractiveness of soyoil-based biodiesel, Oil World said.

Also the European Commission, in a major policy shift in September, said it planned to limit food crop-based biofuels to 5 percent of consumption after criticism that biofuel output was responsible for rising global food prices. European biofuel producers say this could devastate their business and bring an end to production of biodiesel from rapeseed in Europe.

EU 2012 biodiesel output will fall to 9.0 million tonnes from 9.13 million in 2011, ending a long period of growth, Oil World said.

U.S. 2012 biodiesel production will still rise to 3.48 million tonnes from 3.29 million tonnes in 2011, but July/December 2012 output is likely to fall by 0.36 million tonnes on the year, and the outlook for 2013 is not positive, it said.

"Given the shortage of U.S. soyoil supplies in 2012/13, it will be difficult to bring biodiesel production to the required level,” it said.

Argentina's 2012 output will rise to 2.45 million tonnes from 2.43 million in 2011, it said, but this will be down from a 0.6 million tonne increase in 2011.

“Biodiesel producers (in Argentina) are currently facing a sharp decline in export sales and a massive reduction of domestic consumption of biodiesel,” it said.

High soyoil prices following the poor 2012 soybean harvest will mean Brazil’s 2012 biodiesel output will fall to 2.29 million tonnes from 2.35 million in 2011, it said.

Brazil’s government may raise compulsory biodiesel blending levels in 2013, improving the outlook for Brazilian producers, it said.

“Future EU biodiesel policies could have a major impact on the Argentine export outlook and thus on actual biodiesel production,” Oil World said.

Trader's highlight

DJI - NEW YORK, Dec 11 (Reuters) - U.S. stocks rose on Tuesday, led by gains in technology companies, helping the S&P 500 end at its highest level since Election Day.

A 2.2 percent gain to $541.39 in Apple's stock lifted the Nasdaq, as the largest U.S. company by market value rebounded from a week in which investors took profits before a possible tax rise next year. Prior to Tuesday's trading, Apple shares had lost 25 percent from an all-time intraday high hit in September.

Stocks pared some gains by late afternoon as more news on the "fiscal cliff" negotiations emerged. U.S. Senate Majority Leader Harry Reid said it will be difficult to reach agreement resolving the cliff tax hikes and spending cuts before Christmas.

"There's been a real explosion in anxiety over this thing. Because markets have become the way they are, you've got people just stepping back," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"There's a tremendous absence of liquidity in the market," he said.

The S&P 500 had lost 5.3 percent in the seven sessions following Election Day as investors refocused on the threat posed to the economy by the fiscal cliff, a series of automatic spending cuts and tax increases. Markets have mostly recovered those losses, but volume has been thin, suggesting investors are not betting aggressively due to the uncertainty.

The Dow Jones industrial average was up 78.56 points, or 0.60 percent, at 13,248.44. The Standard & Poor's 500 Index was up 9.29 points, or 0.65 percent, at 1,427.84. The Nasdaq Composite Index was up 35.34 points, or 1.18 percent, at 3,022.30.

Volume was roughly 6.43 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of roughly 6.5 billion.

The lack of demonstrable progress in the fiscal cliff negotiations has kept investors from making aggressive bets in recent weeks.

The Fed began a two-day policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday to replace its "Operation Twist" stimulus, which expires at the end of the year.

NYMEX - NEW YORK, Dec 11 (Reuters) - U.S. crude futures edged higher in choppy trading on Tuesday, snapping a string of five straight lower settlements, as news of OPEC production declines in November and a weaker U.S. currency provided lift for dollar-denominated oil prices.

CBOT Soyoil - Soybean futures on the Chicago Board of Trade fell as spillover pressure from a sell-off in wheat offset support from tightening U.S. soybean inventories, traders said.

·    USDA lowered its forecast of U.S. 2012/13 soybean ending stocks to 130 million bushels, in line with trade expectations and down from 140 million in November. The new figure would mark a nine-year low, if realized by the end of August 2013.

·     USDA trimmed its global soybean ending stocks forecast ton 59.93 million tonnes from 60.02 million in November. USDA left its soybean production estimates for Brazil unchanged at 81 million tonnes and Argentina unchanged at 55 million.

·     USDA confirmed export sales of 115,000 tonnes of U.S. soybeans to China for delivery in 2012/13.

·     CBOT January soybeans dipped below its 200-day moving average at $14.68 per bushel, but pared losses and settled above that mark.

·     CBOT soyoil closed lower, despite a drop in USDA's forecast of 2012/13 soyoil ending stocks, on ideas that U.S. soyoil is overpriced on the global vegoils market relative to palm oil.

·   Growth in global biodiesel production is starting to weaken after being strong for years, with profitability hit by record-high soybean prices this summer - oilseeds analysts Oil World.

·     Soymeal gained against soyoil on expectations that commodity index funds will buy soymeal as part of annual rebalancing efforts early in 2013.

·     Losses in soybeans limited by firm cash markets, with basis bids for soybeans shipped by barge to the U.S. Gulf Coast holding steady at historically high levels.

FCPO - SINGAPORE, Dec 11 (Reuters) - Malaysian palm oil futures ended lower on Tuesday, as traders priced in record stocks in the world's second-largest producer of the edible oil.

Malaysia's palm oil inventory level climbed for the fourth straight month to a record 2.56 million tonnes in November, weighing on futures that were headed for the worst annual performance since the 2008 financial crisis.

"We view the latest inventory data negatively as high stocks should keep crude palm oil prices at distressed levels of below 2,500 ringgit per tonne for an extended period well into 2013," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to close at 2,292 ringgit ($750) per tonne. Prices traded in a range of 2,283 to 2,324 ringgit.

Total traded volumes stood at 38,386 lots of 25 tonnes each, much higher than the usual 25,000 lots.

On the weather front, an absence of El Nino disrupting production could lead to even higher palm oil supplies and pile more pressure on record high stocks, while the latest export data also failed to lift investor sentiment.

Malaysian exports fell 2.8 percent for the first 10 days of December from a month ago, said cargo surveyor Intertek Testing Services. Another cargo surveyor, Societe Generale de Surveillance, reported a 0.4 percent rise for the same period.

But traders are hoping for higher shipments in the next few weeks as planters rush to finish their annual tax-free export quota that expires the end of December and as Chinese buyers stock up before the implementation of a stricter quality requirement on edible oil from next year.

In a bullish sign for palm oil, Brent crude oil rose to around $108 a barrel on Tuesday as a slightly weaker dollar and Middle East unrest supported prices, but stalled fiscal talks in the United States capped gains.

In other vegetable oil markets, U.S. soyoil for January delivery  fell 0.3 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange closed 0.1 percent lower.

Regional equities - BANGKOK, Dec 11 (Reuters) - The Philippine main index hit an all-time closing high on Tuesday led by market blue chips such as Ayala Land while Indonesia rose to a near two-week high as the central bank's upbeat economic view helped lift sentiment.

The Philippines ended up 1.3 percent at 5,831.50, pushing it up 33.4 percent in the year, Southeast Asia's best. The market rally was in line with the Philippine economy's prospects, backed by strong consumer and government spending.

Jakarta's Composite Index was up 0.4 percent at 4,317.92, led by a 0.7 percent gain in PT Astra International Tbk  a proxy of Indonesia's consumer sector.

Bank Indonesia held its benchmark rate steady at 5.75 percent on Tuesday, aiming to help keep Southeast Asia's largest economy growing at least 6 percent a year and showing it feels inflation remains at a comfortable level.

Thai SET index rose 0.5 percent, with energy firm PTT Exploration and Production Pcl  up 0.3 percent after its offering of 650 million shares was oversubscribed, raising $3 billion in the country's biggest equity sale ever.

Trader's Highlights

DJI - NEW YORK, Dec 10 (Reuters) - U.S. stocks edged higher on Monday as technology shares bounced back after recent weakness and McDonald's posted strong monthly sales.

Technology stocks were led by Hewlett-Packard Co, which climbed 2.6 percent to $14.16 on rumors that activist investor Carl Icahn is building a stake in the PC maker. The stock is down 44.5 percent for the year and ranks as the Dow's worst performer. The S&P technology index was up 0.3 percent.

Tech also was supported by Cisco Systems, which gained 2.4 percent to $19.79 after the company presented its midterm growth strategy on Friday.

McDonald's Corp gave the Dow a jolt, gaining 1.1 percent to $89.41, as its November sales were stronger than expected and showed a bounce back from a decline in October.

There was little news Monday about the negotiations over the "fiscal cliff," a series of automatic tax hikes and spending cuts that could hurt economic growth next year. Concerns that lawmakers will not broker a deal have kept a lid on optimism in the equity market.

"There is a general sense that if a deal is struck, that we could have a further advance in the market at the end of this year as well as the first part of next year," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

A breakout to the upside on a cliff deal could take the S&P 500 back up to 1,474, just off the 2012 high for the index, said Elliot Spar, Stifel Nicolaus option market strategist in Shrewsbury, New Jersey.

The benchmark S&P 500 index has yet to see a move greater than 0.5 percent in either direction on any day in December, and hasn't moved more than 1 percent either way in any session since Nov. 23. However, the market has regained most of the losses incurred post-election as investors refocused on the fiscal cliff.

U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a budget deal. A Boehner aide said Monday that talks are continuing.

The Dow Jones industrial average .DJI rose 14.75 points, or 0.11 percent, to 13,169.88 at the close. The Standard & Poor's 500 Index .SPX inched up just 0.48 of a point, or 0.03 percent, to 1,418.55. The Nasdaq Composite Index .IXIC advanced 8.92 points, or 0.30 percent, to close at 2,986.96.

News out of Italy kept sentiment in check as Prime Minister Mario Monti said he would resign after the approval of the 2013 budget. The move added to uncertainty about progress being made to tackle the euro zone's debt problem and drove Italy's borrowing costs higher.

U.S.-listed shares of Nexen jumped 13.8 percent to $26.77 and the stock was the second-most actively traded on the New York Stock Exchange. On Friday, Canada approved a $15.1 billion bid by CNOOC Ltd for energy company Nexen.

The S&P materials index gained 0.7 percent and led the S&P 500's sector index gains as shares of mining companies rose in sync with copper and gold prices. Shares of Freeport-McMoRan gained 1.1 percent to $32.04.

Volume was roughly 5.3 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of roughly 6.5 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 17 to 13, while on the Nasdaq, seven stocks rose for every five that fell.

NYMEX - NEW YORK, Dec 10 (Reuters) - U.S. crude futures edged lower on Monday, pressured by warm temperatures and robust domestic inventories, retreating after supportive economic data from China had pushed oil prices higher.

CBOT Soybean - Soybean futures on the Chicago Board of Trade settled higher after a seesaw session as traders adjusted positions one day ahead of a monthly supply/demand report from the U.S. Department of Agriculture.

- Gains limited by long liquidation and prospects for a large Brazilian soybean crop amid forecasts for beneficial rains this week

- The benchmark January soybean contract dipped below its 200-day moving average at $14.67-1/4 a bushel but settled above it.

- Trade expects USDA on Tuesday to trim its forecast of U.S. 2012/13 soybean ending stocks to 130 million bushels, from 140 million in November.

- USDA on Monday reported export inspections of U.S. soybeans in the latest week at 46.632 million bushels, toward the low end of a range of estimates for 46 million to 51 million.

- Forward sales of Brazilian soybeans from the 2012/13 crop advanced slightly to 51 percent of the expected harvest, up from 50 percent a week earlier and 42 percent a year ago, analyst Celeres said.

- China, the world's largest soy buyer, imported 4.16 million tonnes of soybeans in November, up 3.2 percent from October, Chinese customs data showed. Imports of vegetable oils in November were 920,000 tonnes, up 2.2 percent from the previous month.

FCPO - KUALA LUMPUR, Dec 10 (Reuters) - Malaysian palm oil futures inched up on Monday as slower-than-expected growth in stocks last month and firm export demand in the first ten days of December lifted sentiment.

Traders are expecting stronger export demand in the days to come, potentially cutting into record stocks notched in November and supporting benchmark palm oil futures.

This decline marks the worst annual performance for palm oil futures since the financial crisis in 2008 although traders said this provides a massive buying opportunity for the edible oil that trades at a $350 discount to competing Argentine soyoil.

"We could see an upward swing in prices this week. The market will be pricing in more positive sentiment," said a trader with a foreign commodities brokerage in Kuala Lumpur.

Benchmark February contract on the Bursa Malaysia Derivatives Exchange settled up 0.7 percent to 2,313 ringgit ($760) per tonne. Total traded volumes rose to 35,330 lots of 25 tonnes each, higher than the usual 25,000 lots.

Data from the Malaysian Palm Oil Board showed that November's inventory level rose 2.3 percent to a record 2.56 million tonnes from the previous month. Stocks grew at a weaker than expected pace, giving support to prices during afternoon trade.

Firm exports also gave support. Cargo surveyor Societe Generale de Surveillance said Malaysian exports for Dec 1-10 rose 0.4 percent to 516,841 tonnes from 514,798 tonnes shipped during Nov 1-10.

Investors are banking on higher shipments in the next few weeks as planters rush to finish their annual tax free export quota allocation of 3.5 million tonnes which expires end of December.

Brent crude oil rose above $107 a barrel on Monday, snapping five straight days of losses after Chinese data showed the world's biggest energy consumer was rebounding after a slowdown.

In palm oil's competing markets, U.S. soyoil for January delivery fell 0.3 percent. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange ended almost flat.

Regional Equities - Dec 10 (Reuters) - Singapore shares edged up to their highest in 16 months on Monday while most other Southeast Asian stocks also ended higher on optimism over the rising factory output growth in China and falling unemployment rate in the United States.

However, concern over a fresh bout of euro zone uncertainty after a decision by Italian prime minister to resign capped the gains.

Singapore edged up 0.2 percent to its highest since Aug. 4, 2011, while Malaysia rose 0.9 percent to a four-week high, with a $11.14 million net foreign inflow.

Indonesia added 0.3 percent to its highest close since Nov. 27, led by finance shares. Bank Central Asia Tbk PT gained 4 percent despite the broad market seeing a net foreign selling of $24.9 million.

Vietnam ended 0.8 percent higher, while the Philippines, bucked the trend to fall 0.6 percent.

Trader's highlight

DJI - NEW YORK, Dec 7 (Reuters) - The Dow and the S&P 500 advanced modestly on Friday, though another sell-off in Apple depressed technology shares and kept the Nasdaq negative, overshadowing a sharply better-than-expected jobs report.

Trading was light, continuing the week's trend of slight moves and anemic volume. The S&P 500 ended up a mere 0.1 percent for the week, following several volatile sessions that repeatedly pushed it in and out of positive territory. The benchmark index is just 3.8 percent below the 2012 intraday high of 1,474.51 reached in mid-September.

Equities opened higher after the non-farm payrolls report, which showed 146,000 jobs added in November, far more than had been expected, while the U.S. unemployment rate dropped to 7.7 percent. A sour reading on consumer sentiment caused an erosion of those gains, though markets rebounded going into the close.

The Thomson Reuters/University of Michigan's consumer sentiment index for early December fell to its lowest level since August. Sentiment fell on growing concerns over the "fiscal cliff" debates in Washington, which have been a major factor preventing broader moves as well.

"We're not as concerned as we were a few months ago because of improvement like you can see in the employment number, but there's such a wild card over the cliff," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio. "There are such concerns about what could happen that markets will be overhung until a resolution is more certain."

One of the biggest drags on the Nasdaq was Apple which fell 2.6 percent to $533.25, extending its losses for the week to 8.9 percent. This was the worst week for the stock since May 2010, and with the losses, the stock of the largest U.S. company by market value is now down 24.4 percent from an all-time intraday high reached in late September.

The Dow Jones industrial average gained 81.09 points, or 0.62 percent, to 13,155.13 at the close. The Standard & Poor's 500 Index  rose 4.13 points, or 0.29 percent, to 1,418.07. The Nasdaq Composite Index slipped 11.23 points, or 0.38 percent, to close at 2,978.04.

U.S. House Speaker John Boehner said that talks this week with President Barack Obama produced no progress, and he renewed his demand that the president provide a new offer to avert the series of tax increases and spending cuts that are likely to hurt economic demand in 2013.

NYMEX - NEW YORK, Dec 7 (Reuters) - U.S. crude futures slipped on Friday in choppy trading as Europe's economic problems and uncertainty about budget wrangling in the United States put pressure on crude futures after a brief rally on a supportive U.S. jobs report.

CBOT Soybean oil- Dec 7 (Reuters) - Soybean futures on the Chicago Board of Trade fell 1.3 percent on Friday as traders booked profits after a four-day rally and ahead of a monthly U.S. government cropb report next week, traders said.

 

·     January soybeans rose to a one-month top, and then retreated and settled below the previous day's low. Such a reversal can signal the end of an upward price trend.

·    Losses accelerated late in the session after January soybeans fell below the previous day's low of $14.73-1/4, with about 15 minutes left to trade.

·    Despite the day's setback, soybeans ended the week up 2.2 percent, their third straight weekly advance.

·     Soymeal ended the week up 1.8 percent and soyoil rose 2.9 percent. It was the third straight weekly rise for each product.

·    Improving crop weather for South American adds pressure. The Commodity Weather Group said rains expected in southern Brazil over the next week are expected to ease moisture concerns for corn and soybean development.

·    Additional pressure stemmed from a surprisingly strong American jobs report for November that pointed to gatheringn momentum in the economy - a factor that lifted the U.S. dollar and dulled demand for risky assets including commodities.

·     Market shrugged at USDA's confirmation that exporters soldn 115,000 tonnes of U.S. soybeans to China for delivery in 2012/13.

·     Trade expects USDA to lower its forecasts of U.S. and global 2012/13 soybean ending stocks in its monthly supply/demand reports next week.

FCPO - KUALA LUMPUR, Dec 7 (Reuters) - Malaysian palm oil futures closed flat on Friday, but notched their biggest weekly loss in almost a month amid an uncertain outlook where record high stocks are weighing on prices at the same time as expectations are rising for a pick up in demand.

Palm oil futures have fallen almost 28 percent so far this year on record stocks and concerns that the euro zone debt crisis would reining in global growth.

"Palm oil is stuck," said a trader with a commodities brokerage in Kuala Lumpur. "It is undervalued as biodiesel demand has kicked in because of the high margins, but it also cannot go higher because of high stocks."

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled up 0.04 percent to 2,296 ringgit ($750) per tonne in see-saw trade. The contract recorded a decline of about 3 percent for the week, its third straight weekly loss and the steepest fall since Nov. 11.

Total traded volumes stood at 34,886 lots of 25 tonnes each, compared to the usual 25,000 lots.

Malaysian palm oil stocks probably hit a record 2.58 million tonnes in November, a Reuters survey showed ahead of official data on Monday, helping the tropical oil widen its discount to competing Argentine soyoil to $360 per tonne.

The discount remains unsustainable and will narrow as more demand shifts to palm oil in the next few months, especially with wet weather delaying soy plantings and curbing yields in the world's biggest soyoil exporter Argentina.

Traders are watching for cargo surveyor data on Malaysia's Dec. 1-10 palm oil exports on Monday to confirm strong demand as No.2 edible oil buyer China stocks up before stricter quality controls on the refined grades come into effect on Jan. 1.

In addition, export data may be even stronger as Malaysian planters scramble to exhaust an annual tax-free export quota totalling 3.5 million tonnes that is set to expire at the end of December.

Malaysia's Commodities Ministry will hold a briefing for refiners on Monday to get feedback on the government's plan to cut crude palm oil export taxes and completely dismantle the tax free export quota for the grade, traders said.

Some planters are asking for the quota to continue until stocks fall below 2 million tonnes.

Brent crude steadied above $107 per barrel on Friday, but prices were headed for their biggest weekly loss in more than a month on worries about the euro zone economy and a looming fiscal crisis in the U.S., the world's top oil consumer.

In palm oil's competing markets, U.S. soyoil for December delivery dged up 0.2 percent in Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange ended almost flat.

Regional equities - Dec 7 (Reuters) - The Philippines stock market hit an all-time high on Friday, while others ended mixed as investors waited for directions from U.S. non-farm payrolls data due later in the day.

The Philippines the region's best performer this year, gained 0.5 percent to close at a record peak of 5,794.20, after it hit a fresh intraday all-time high of 5,797.93, led by 2.4 percent gain in conglomerate SM Investments Corp.

Singapore gained 0.9 percent to a two-month high, led by banks with a 2.2 percent rise in United Overseas Bank Ltd , while Malaysia edged up 0.1 percent to a two-week closing high, led by consumer stocks.

Bucking the trend, Thailand fell 0.4 percent, with energy shares dragging the overall index as top oil firm PTT Pcl and PTT Exploration and Production Pcl  lost 0.6 percent and 1.6 percent, respectively.

Vietnam ended 0.5 percent lower, while Indonesia ended a tad weaker with a 0.04 percent fall with a $48 million net foreign outflow.

Trader's highlight

DJI - NEW YORK, Dec 5 (Reuters) - A volatile trading session ended with U.S. stocks mostly higher on Wednesday, even as Apple, the most valuable company in the United States, suffered its worst day of losses in almost four years.

In a strange occurrence, Apple accounted for the entirety of the Nasdaq 100's  fall of 1.1 percent, while the Dow industrials - which do not include Apple as a component - enjoyed the best day since Nov. 28.

With the drop, Apple shed nearly $35 billion in market capitalization, its biggest one-day market-cap loss ever. The company's market value, or market capitalization, now stands at $506.85 billion.

"Today's move is because of index weightings, with the Nasdaq down because of Apple's decline," said Rex Macey, chief investment officer of Wilmington Trust in Atlanta. "The S&P is up because Apple isn't as big a weight in that index, and the Dow is up even more because it isn't there at all."

The broad market seesawed, with the S&P 500 dropping into negative territory before it rebounded off the 1,400 level, seen as a key support point over the past two weeks. Investors cited comments from President Barack Obama suggesting a potential near-term resolution to the "fiscal cliff" wrangling in Washington as a catalyst for the rebound.

The Dow Jones industrial average  rose 82.71 points, or 0.64 percent, to 13,034.49 at the close. The Standard & Poor's 500 Index gained 2.23 points, or 0.16 percent, to 1,409.28. But the Nasdaq Composite Index fell 22.99 points, or 0.77 percent, to end at 2,973.70.

Apple, the largest U.S. company by market capitalization and a big weight in both the S&P 500 and the Nasdaq, fell 6.4 percent to $538.79. Apple is down more than 20 percent from an all-time high reached in late September, putting the stock into bear market territory.

Banking shares were led higher by a 6.3 percent jump in Citigroup to $36.46 after the company said it would cut 4 percent of its workforce. The S&P financial sector index climbed 1.3 percent, and Bank of America hit a 52-week high of $10.55 before pulling back slightly. The stock, a Dow component, ended at $10.46, up 5.7 percent for the day.

Cyclical sectors, which are tied to the pace of economic growth, rallied on optimism about progress on a solution to avoid the fiscal cliff. An S&P index of industrial stocks rose 1.1 percent, buoyed by Caterpillar Inc up 2.2 percent at $86.05, while an S&P index of energy shares climbed 0.7 percent. The Dow Jones Transportation Average gained 0.9 percent, with CSX Corp jumping 2.7 percent to $20.16

Still, Apple struggled throughout the session. Market participants cited a host of reasons for the drop in the iPad maker's stock, including a consultant's report about the company losing share in the tablet market and reports that margin requirements had been raised by at least one clearing firm, as well as year-end tax selling ahead of a possible rise in capital-gains tax rates next year. 

On the Washington front, Obama told the Business Roundtable, a group of chief executives, on Wednesday that a fiscal cliff deal was possible "in about a week" if Republicans acknowledged the need to raise taxes on the wealthiest Americans.

Equities have struggled to gain ground recently because of concerns over the fiscal cliff - a series of mandatory spending cuts and tax increases effective in early January that could push the U.S. economy into recession next year. Recently equities have moved on any whiffs of sentiment from Washington in headlines about negotiations.

"Obama's comments generated a lot of optimism, but to the extent the market believes them, that's how much we're setting ourselves up for a decline if that deadline passes with no progress," said Macey, who helps oversee about $20 billion in assets.

In an interview on CNBC after the market closed, U.S. Treasury Secretary Tim Geithner said that uncertainty over the fiscal cliff was standing in the way of stronger economic growth, and that there was no prospect for an agreement if tax rates didn't rise on the wealthiest taxpayers.

NYMEX - NEW YORK, Dec 5 (Reuters) - U.S. crude futures fell on Wednesday as disappointing economic data from the euro zone and the United States raised concerns about demand for oil, while rising inventories pushed gasoline futures nearly 2 percent lower.

U.S. crude oil inventories fell sharply last week, a report from the U.S. Energy Information Administration said on Wednesday, much more than expected, while gasoline and distillate stockpiles rose more than expected.

CBOT Soybean - Soybean futures on the Chicago Board of Trade hit a near one-month peak and settled higher for a third straight session on a mix of technical buying and talk of renewed export demand from China, traders said.

·                January soyoil  rose above its 50-day moving average and set a one-month high at 51.04 cents per lb, before settling at 51.00 cents. January soymeal  set a near one-month top.

·                Traders cited unconfirmed talk that China may have bought up to six cargoes of U.S. soybeans off the Pacific Northwest this week.

·                Continued support from worries about excessively wet weather in crop areas of Argentina, which has slowed corn and soybean planting. Commodity Weather Group said forecasts looked wetter for the middle of next week, and more showers were likely in the 11- to 15-day period.

·                Paraguay's Senate approved a bill on Tuesday that would impose a 10 percent tax on soybean exports, despite objections from farmers in the world's No. 4 supplier of the oilseed.

·                U.S. cash soy markets remain firm, propped up by strong crush margins. Cash bids for soybeans shipped by barge to the U.S. Gulf Coast firmed early Wednesday on exporter demand and slow barge movement due to low water on the Mississippi River.

·                Background support from Statistics Canada reporting Canadian canola production at 13.3 million tonnes, down 8.9 percent from a year ago and below an average of trade estimates.

FCPO - KUALA LUMPUR, Dec 5 (Reuters) - Malaysian palm oil futures slipped 0.3 percent on Wednesday as expectations of record stocks in November weighed on sentiment, although traders are looking at higher exports and slowing output this month.

Traders are counting on demand to kick in as forward palm oil futures are at a discount to the 3-month benchmark on high stocks. A Reuters survey showed palm oil stocks in November probably grew 2.8 percent to a record 2.58 million tonnes.

More orders are expected from China, the world's No.2 edible oil buyer, before the government imposes stricter quality rules on palm oil cargoes from Jan. 2013.

Higher exports could support palm oil futures that have lost nearly 28 percent this year in their worst annual performance since the 2008 financial crisis.

"The market dropped a little on stocks, the bottom is nearing. We can't be going any lower as exports are going higher in December and production will come off," said a trader with a foreign commodities brokerage.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled down 0.3 percent at 2,287 ringgit ($750) per tonne after treading higher in the morning session. The previous day, the contract fell to 2,279, its lowest since Nov. 12.

Total traded volumes rose to 37,113 lots of 25 tonnes each, compared to the usual 25,000 lots.

Reuters market analyst Wang Tao kept a bearish target of 2,200 ringgit per tonne as there was no indication on a possible bullish reversal on this trend.

Malaysian crude palm oil shipments are expected to rise in the next few weeks as planters rush to exhaust their annual tax-free export quota allocation totalling 3.5 million tonnes and which is set to expire at the end of December.

While this may support prices, for now, palm oil is treading lower compared to other commodity markets.

Brent crude edged above $110 a barrel on Wednesday, after two sessions of losses, as investors switched their focus from the United States fiscal crisis to hopes that growth in top energy consumer China to pick up sooner than expected.

In palm oil's competing markets, U.S. soyoil for December delivery edged up 0.5 percent as traders grew concerned that unfriendly crop weather would cut global soy supplies.

The most active May 2013 soybean oil contract on the Dalian Commodity Exchange also rose 0.7 percent.

Regional Equities - Dec 5 (Reuters) - Southeast Asian stock markets mostly ended higher on Wednesday, led by banks on strong volumes on hopes China would maintain its fine-tuning of policies next year to ensure stable economic growth.

However, the optimism was slightly offset by concerns over U.S. lawmakers' ability to break a budget impasse before year-end to avert a possible economic slump.

Singapore added 0.5 percent, led by banking stocks with 1.9 percent rise in United Overseas Bank Ltd and 0.8 percent gain in DBS Group Holdings Ltd

Indonesia  despite suffering a $57.7 million foreign outflow, added 0.4 percent, recovering from a two-month low, due to strong local buying. Bank Central Asia Tbk PT  gained 0.57 percent, while Bank Mandiri Persero Tbk PT  rose 0.61 percent.

Malaysia  added 0.4 percent with $21.23 million net foreign inflow and Vietnam rose 0.9 percent to a near three-week high.

The Philippines , the region's best performer this year, bucked the trend with snapping a seven-session gaining streak and fell 0.3 percent from its record high.