Trader's highlight

DJI - NEW YORK, Feb 4 (Reuters) - U.S. stocks fell on Monday after a disappointing report on factory orders, retreating from gains in the prior session that left the S&P 500 at a five-year high and the Dow above 14,000.

The gains on Friday left the benchmark S&P 500 roughly 60 points away from its all-time intraday high of 1,576.09 while the Dow's march above 14,000 was the highest for the index since October 2007.

The benchmark S&P index is up 5.5 percent for the year, with nearly half of the gains coming in the session after U.S. legislators successfully sidestepped temporarily the "fiscal cliff" of automatic tax increases and spending cuts, which threatened to derail the economic recovery.

"We should get a pullback. Markets have been on a tear and they have been on a tear for good, sound economic and earnings-driven reasons," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

Data from the Commerce Department showed overall factory orders rose 1.8 percent during the month, below the median forecast of 2.2 percent by analysts polled by Reuters, in a possible sign companies may be losing faith in the economy's recovery over concerns about deficit reduction measures that could slow the economy.

Economic data has pointed to a modest U.S. recovery, but the data has not been strong enough to upset investor expectations the Federal Reserve will continue its stimulus policy that has buoyed stocks.

"We are right on that razor’s edge, so to speak, where there is not enough robust profile in the economic data to suggest the Fed needs to change policy, but at the same time people are aware that there is a shelf life on this policy and as we continue to sit on that fence, the markets move higher," said Kenny.

The Dow Jones industrial average  dropped 100.00 points, or 0.71 percent, to 13,909.79. The Standard & Poor's 500 Index  lost 9.35 points, or 0.62 percent, to 1,503.82. The Nasdaq Composite Index  declined 15.13 points, or 0.48 percent, to 3,163.97.

According to Thomson Reuters data, of the 256 companies in the S&P 500 that have reported earnings through Monday morning, 68.4 percent have reported earnings above analyst expectations compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.

S&P 500 fourth-quarter earnings are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast on Oct. 1.

NYMEX - LONDON, Feb 4 (Reuters) - U.S. crude oil futures fell more than $1 per barrel on Monday as the oil market consolidated after eight weeks of rapid rises fueled by signs of faster global economic growth.

U.S. crude futures for March dropped to a low of $96.73, down $1.04, but then recovered slightly to trade around $96.85 by 1213 GMT. The contract has risen for eight consecutive weeks, the longest such winning streak since July-August 2004.

CBOT Soybean - Soybean futures on the Chicago Board of Trade rose 1 percent and set a seven-week high Monday on worries about dry weather in Argentina and a strong U.S. export pace, traders said.

·         Soy complex pared gains as Wall Street sagged after  disappointing report on factory orders, retreating from a rally  on Friday that drove the Dow to close above 14,000 points for the first time since October 2007. 

·         Weekend showers in crop areas of Argentina were lighter than expected and dry weather this week will allow moisture shortages to quickly increase, MDA EarthSat Weather said.

·         USDA reported weekly export inspections of U.S. soybeans at 53.892 million tonnes, well above a range of trade estimates for 35 million to 45 million.

·         USDA said private exporters reported sales of 116,000 tonnes of U.S. soybeans to China, with half for delivery in  2012/13 and half for 2013/14 delivery. 

·         Brazilian consultancy AgRural lowered its forecast for the  country's soybean production to 81.2 million tonnes, down from its previous figure of 82.2 million, citing irregular rains in some growing areas.

·         Analyst Celeres lowered its estimate of Brazil's soybean crop to 80.1 million tonnes, down from its January forecast of 80.84 million. 

·         Large speculators expanded their net long position in CBOT soybeans in the week ended Jan. 29 and trimmed their net short in CBOT soyoil, weekly data from the U.S. CFTC showed. 

FCPO - SINGAPORE, Feb 4 (Reuters) - Malaysian palm oil futures edged up on Monday and posted a fourth straight session of gains, tracking higher soybeans and soybean oil on persistent concerns over dry weather in Argentina.

U.S. soybeans were trading near a six-week high despite scattered showers in Argentina in recent weeks that have brought some relief to thirsty 2012/13 soybean crops, as many areas are still suffering parched conditions, the Argentine agriculture ministry said.

Lower soybean and soybean oil production could shift some demand to the cheaper palm oil, which in turn may help ease record stocks for the tropical oil.

"It's the South American weather that is serving as the pull factor," said a dealer with a foreign commodities brokerage in Kuala Lumpur.

"Locally, with a continuous wide discount in cash crude palm oil to futures, sentiment is still cautious as traders await the expected high stocks for January."

At the close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged up 0.3 percent to 2,564 ringgit ($831) per tonne. Prices hit a 3-month high of 2,593 ringgit on Thursday.

Total traded volumes stood at 32,005 lots of 25 tonnes each, higher than the average 25,000 tonnes. 

Traders are shifting their focus to Malaysia's palm oil stocks for January, hoping that slowing production and better-than-expected exports will bring down record stocks of 2.63 million tonnes recorded for December.

Malaysian palm exports in January fell 7 percent from a month ago, said cargo surveyor Intertek Testing Services, while another surveyor, Societe Generale de Surveillance, reported a 6.4 percent fall. 

That represented an improvement from the double-digit decline seen in the first 20 days of January, as worries eased over China's stricter regulation on edible oil imports after the first cargo from Malaysia was discharged.

Brent crude oil consolidated above $116 per barrel on Monday, not far off 4-1/2-month highs, on signs of improving economic growth in the United States and China and concern over geopolitical tension in the Middle East.

Other vegetable oil markets also advanced on Argentine weather concerns. U.S. soyoil for March delivery  gained 0.7 percent in late Asian trade. The most active September soybean oil contract  on the Dalian Commodity Exchange closed 0.8 percent higher, near a three-month high.

Regional Equties - BANGKOK, Feb 4 (Reuters) - Southeast Asian stock markets mostly gained on Monday amid positive global sentiment, with selective buying in banks and large caps sending the Philippine and Indonesian indexes to a record close and Thailand breaking the 1,500 barrier to a more than 18-year high.

Outperforming the region, the Philippine index climbed 1.9 percent to 6,435.98, topping Friday's record finish of 6,318.61. Jakarta's Composite Index  edged up 0.2 percent at 4,490.57, a record close.

Bangkok's SET index ended up 0.5 percent at 1,506.37, the highest close since November 1994 as investors bought blue chips seen as laggards such as PTT Pcl  and Kasikornbank Pcl

Banking shares such as BDO Unibank Inc and PT Bank Rakyat Indonesia led among gainers in the Philippine and Indonesian bourses.

The Thai stock market took in foreign inflows of 864.93 million Thai baht ($29.02 million) and Malaysian bourse reported 218.59 million ringgit ($70.35 million) worth of inflows on Monday, stock exchange data showed.

RTRS - China soy stocks to fall 20 pct amid low Q1 imports -thinktank

BEIJING, Feb 1 (Reuters) - Soy stocks at major ports in China, the world's largest buyer of the grain, may fall about a fifth by the end of March on expectations of lower imports and high production by crushers, an official think-tank said on Friday.

"Crushers along coastal areas are running at a high rate since mid-December on robust seasonal demand for soyoil and soymeal," the China National Grain and Oils Information Centre said on its web site ((www.grain.gov.cn)).

"With expected lower imports of soybeans in coming months, soy stocks at ports will start to decline."

China's soy stocks may fall to about 4 million tonnes by the end of March from roughly 5 million now, the think tank said. This figure is well below the figure of 6.2 million a year ago.

The centre also estimated China's soy imports in the first quarter of 2013 at about 11.6 million tonnes, 13 percent lower than 13.26 million in the first quarter of 2012.

Traders told Reuters that some crushers had cancelled expensive U.S. soy shipments in December in favour of supplies at ports, which were offered at a discounted price, dragging down stocks.

"Although the number is put at 5 million tonnes, lots of the stocks have been booked by those crushers which cancelled their U.S. shipments," said one trading manager with an international trading house.

Port congestion in Brazil, the second largest exporter, may delay shipment and lower imports for the first quarter are expected, the centre said. Earlier, traders told Reuters that China might shift to book more cargoes from the United States to make up for the shortfall during this period.

Most Chinese crushers will shut down operation in coming weeks due to holidays for the Lunar New Year, which falls on Feb 10 this year.

RTRS - GRAINS-U.S. prices fall with twist in Argentina weather forecast

CHICAGO, Feb 1 (Reuters) - U.S. corn and wheat futures fell on Friday and soybeans trimmed gains after reaching a six-week high as forecasts showed dry areas of major exporter Argentina are in line to receive favourable rains.

Northern crop areas of the world's No. 2 corn exporter and third largest soybean supplier are set to receive more rain than previously expected during the weekend, said Andy Karst, meteorologist for World Weather Inc. The rain "would be notable if it happened" after weeks of recent dryness, he said.

The markets retreated on the outlook after rising in earlier trading on worries about lighter-than-expected rains that fell on Thursday.

Traders are focusing on the weather because farmers in South America need to produce large crops to meet strong demand from top soybean importer China and compensate for a drought-reduced U.S. harvest last year .

Traders broadly expect large harvests in South America in the coming months, but every twist in the weather is being scrutinized amid tight global supplies.

Conditions look "a little bit wetter in the northern fringe of the corn and soybean belt," said Jim Gerlach, president of A/C Trading.

Chicago Board of Trade March March corn dipped 0.6 percent to $7.36 a bushel, while March wheat 

slid 1.8 percent to $7.65 a bushel. March soybeans  ended up 0.4 percent at $14.74-1/4 a bushel after touching a six-week high of $14.86-1/2 a bushel earlier in the session.

ARGENTINA VS. BRAZIL

With traders focused on South America, Informa Economics, a closely watched crop forecaster, cut its estimate for Argentina's soybean harvest by 6.7 percent to 54.5 million tonnes and its estimate for the corn harvest by 7.4 percent to 25 million tonnes.

However, the firm increased its estimate for Brazil's soybean harvest 6.2 percent to 70.3 million and its outlook for Brazil's corn harvest 1.3 percent to 84.0 million.

The U.S. Department of Agriculture last pegged Argentina's soybean crop at 54 million tonnes and the corn crop at 28 million tonnes. The department estimated Brazil's soybean crop at 82.5 million and its corn crop at 71 million.

The USDA will update its crop forecasts next Friday in a monthly global supply and demand report.

RTRS - Indonesian province to halt palm, mining expansion

JAKARTA, Jan 31 (Reuters) - Indonesia's province of East Kalimantan has imposed a one-year ban on forest destruction, a governor on the island of Borneo said on Thursday, citing the need to curb mining and palm oil expansion and cut back on land disputes.

The move is a potential roadblock for investors in Indonesia, who already face a thicket of overlapping regulations at the provincial and federal levels.

But Indonesia, home to the world's third-largest expanse of tropical forests, is under international pressure to curb deforestation and destruction of its carbon-rich peatlands.

It is the world's biggest exporter of thermal coal and the top producer of palm oil, with estates growing palm sprawling across 8.5 million hectares and expected to add about 200,000 hectares a year.

"We have applied this moratorium policy for new permits on forestry, mining and plantation since several weeks ago and it will last for a year," East Kalimantan governor Awang Faroek Ishak told Reuters, without giving a specific start date.

"We will stop issuing new permits for forestry, mining and plantation business," he added. "However, companies that have got permits before the moratorium (began) can still continue their business activities as usual."

It was not clear if the ban covered land included under an existing nationwide moratorium in place since 2011.

Another reason for the 2013 ban was the 742 overlapping land cases and disputes in East Kalimantan between palm and mining companies or local communities, Faroek said.

"I am responsible for providing a conducive investment climate for investors," he added. "That's why we take this measure aimed at creating a conducive investment climate here."

East Kalimantan, recently ranked fourth among Indonesia's 33 provinces in terms of infrastructure development and quality of life, sits on about 40 percent of Indonesia's coal reserves or 8.5 billion tonnes.

Faroek, whose province produces about two-thirds of Indonesia's coal, has previously called for an output cap to promote sustainability.

REGIONAL VS CENTRAL GOVT

The East Kalimantan forest ban is a sign of the problems faced by investors in Indonesia. The central government shook up the resource sector last year with measures to tighten control by centralizing the licensing process and taxing ore exports.

Indonesia is also now deciding whether to extend a two-year ban on clearing forest that started in May 2011 and covers about a third of the country.

Provincial governments do not have the authority to issue a separate forest moratorium policy, said Tofan Mahdi, spokesman at Indonesia's largest listed plantation firm Astra Agro Lestari

"The (national) forest moratorium will end in May this year but some NGOs and government officials propose to extend the forest moratorium," Mahdi said in a text message. "Some governors see this situation and take early action to support the extension."

Palm oil companies such as Astra Agro Lestari, Sime Darby , Wilmar International , Sinar Mas  and BW Plantation , are some of the biggest in Indonesia and will contribute to the 27.5 million tonnes of production forecast for this year.

Kalimantan is the second largest contributor to Indonesia's palm oil production, with a share of 35 percent, after Sumatra, which has a 55 percent share, said Joko Supriyono, secretary general of the Indonesian Palm Oil Association.

Palm oil plantations now cover about 700,000 hectares of East Kalimantan and produce 2 million tonnes of output each year, Supriyono added. Many investors see Kalimantan as the best and easiest site for future expansion.

Provincial governor Faroek said the figure was 1 million hectares, out of permits issued covering 2.4 million.

Still, it could be several years before the effect of the ban shows up in production.

"If it goes through, the impact will come in four to five years down the road," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank. "Palm oil trees take a minimum of three years to bear fruit."

Trader's highlight

DJI - NEW YORK, Feb 1 (Reuters) - U.S. stocks rose to five-year highs on Friday, with the Dow closing above 14,000 for the first time since October 2007, after jobs and manufacturing data showed the economy's recovery remains on track.

The S&P touched its highest since December 2007 after a 5 percent gain in January, which was its best start to a year since 1997. The index is now just about 60 points away from its all-time intraday high of 1,576.09.

Employment grew modestly in January, with 157,000 jobs added. That was slightly below expectations, but Labor Department revisions showed 127,000 more jobs were created in November and December than previously reported.

Analysts attributed the market's robust showing so far this year partly to a deluge of cash flowing into equities.

Investors poured $12.7 billion into U.S.-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996, data showed on Thursday.

"There is a lot of money looking for a home, and people are finally deciding the bond market is done and moving money into equities," said Edward Simmons, managing director and partner at HighTower in Portland, Maine.

"I see the rotation (of assets) pushing the market up in the face of not-massive amounts of good news," he said. "People are overlooking the higher risk in equities."

Other reports released Friday showed the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months, U.S. consumer sentiment rose more than expected last month, while December construction spending also beat forecasts.

"All the data seems to keep pointing to a slowly, steadily improving economy," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

The Dow Jones industrial average was up 149.21 points, or 1.08 percent, at 14,009.79. The Standard & Poor's 500 Index was up 15.06 points, or 1.01 percent, at 1,513.17. The Nasdaq Composite Index was up 36.97 points, or 1.18 percent, at 3,179.10.

Of the 252 companies in the S&P 500 that have reported earnings so far, 69 percent have exceeded expectations, according to Thomson Reuters data. That is a higher proportion than over the past four quarters and above average since 1994.

Overall, S&P 500 fourth-quarter earnings are estimated to have grown 4.4 percent, according to the data, up from a 1.9 percent forecast at the start of the earnings season but well below a 9.9 percent profit growth forecast on Oct. 1.

NYMEX - SEOUL, Feb 1 (Reuters) - U.S. crude oil futures steadied on Friday, giving up early gains, after China's official factory activity gauge missed market expectations.

West Texas Intermediate crude is still on track to rise for an eighth week in a row, matching a similar winning streak in July-August 2004, after hitting four-month highs on upbeat global economic data earlier this week.

CBOT Soybean -  Soybean futures on the Chicago Board of Trade rose to a 6-1/2 week high on technical buying and uncertainty about prospects for needed rains in Argentina, traders said.

* The market pared early gains after updated forecasts showed dry crop areas of major soy exporter Argentina in line to receive favorable rains. However,concerns remain about a threat to crops. 

·         Informa Economics cut its estimate of Argentina's soybean crop to 54.5 million tonnes, from 58.4 million previously, citing dry conditions.

·         But Informa also raised its estimate of Brazil's soybean crop to 84.0 million tonnes, which the firm said was up 1.1 million from its previous forecast.

·         CBOT March soybeans ended the week up 2.3 percent, the market's fourth straight weekly rise. March soymeal   rose 2.8 percent, extending its rally to four weeks, while March   soyoil  rose 1.7 percent for its third straight increase.

·         Strength in outside markets lent support. Major worl  stock markets climbed to their highest levels in nearly two  years, helped by manufacturing and employment data indicating  the global economic recovery is on track. 

·         Soy stocks at major ports in China, the world's largest  buyer of the grain, may fall about a fifth by the end of March  on expectations of lower imports and high production by crushers, an official think-tank said. 

 FCPO - SINGAPORE, Jan 31 (Reuters) - Malaysian palm oil futures jumped on Thursday to their highest in more than three months, supported by better-than-expected exports and concerns over dry weather in key soy-producing areas in Argentina.

Dry weather is starting to threaten soybean yields in parts of Argentina's main crop belt, possibly hurting soybean oil output and turning buyers to cheaper palm oil, which is priced at a discount of more than $300.

Traders were also cheered by Malaysia's January palm oil exports that fell marginally from a month ago and showed a significant improvement from a double-digit decline earlier in the month.

"For the first half of the month exports were very bad, but in the last six days exports made a strong comeback," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"If this continues into February, we will see high exports that could help ease stocks. On top of that, external markets are also very strong."

The benchmark April contract on the Bursa Malaysia Derivatives Exchange rose 1.8 percent to close at 2,555 ringgit ($823) per tonne. Prices earlier went as high as 2,593 ringgit, a level unseen since Oct. 25.

Total traded volumes stood at 45,100 lots of 25 tonnes each, higher than the usual 25,000 lots, as investors squared their positions ahead of a Malaysian holiday on Friday.

Malaysian palm exports in January fell 7 percent from a month ago, said cargo surveyor Intertek Testing Services, while another surveyor, Societe Generale de Surveillance, put the figure at 6.4 percent.

For the month, palm prices posted a gain of 4.8 percent, mostly driven by dry weather concerns in South America that could lower global vegetable oil output. It was their second successive rise, following last month's gain of 2.9 percent.

But palm oil prices may still post a second straight year of declines in 2013 as strong output from top producers Indonesia and Malaysia overwhelm global food and fuel demand in a scenario that has already led to record stocks, a Reuters poll of 28 analysts showed on Thursday.

Brent crude hovered near $115 per barrel, not far from a more than three-month high, as the U.S. Federal Reserve's pledge to stick to its bond-buying stimulus plan and upbeat euro zone data fuelled optimism about oil demand.

In competing vegetable oil markets, U.S. soyoil for March delivery  edged down 0.2 percent in late Asian trade, as some traders booked profits from a 1.5 percent gain the previous session. The most active September soybean oil contract on the Dalian Commodity Exchange ended 1.2 percent higher, slightly lower than its a one-week high.

Regional Equities - Feb 1 (Reuters) - Southeast Asian stock markets gained on Friday, helped by banking stocks, with the Philippines and Indonesia rising to a record high while Thailand hitting a more than 18-year high ahead of a raft of major U.S. and European economic data.

The Philippine Composite Index closed 1.2 percent to its record closing high of 6,318.61 after hitting an intraday high of 6,342.72.

Indonesia , which enjoyed a foreign inflow of $75.84 million on the day, rose 0.6 percent to a new record closing peak of 4,481.63 after hitting a fresh intraday high of 4,519.46.

Investors will be looking at the economic outlook with the release of January data on factory activity across the euro area to be followed by the latest U.S. jobs report at 1330 GMT and a national report on the state of American manufacturers.

Thailand index  closed 1.7 percent firmer at 1,499.22, its highest since November, 1994, led by energy and banking shares.

Vietnam , the region's best performer so far this year, gained 0.8 percent with a 7.3 million foreign inflow, while Singapore  rose 0.3 percent to its highest since November 2010.

Malaysia , the worst performer of the region for the year, was closed for a holiday.

RTRS - India may raise palm oil import duties again this yr -analyst

KUALA LUMPUR, Jan 30 (Reuters) - India may raise import duties on edible oils such as palm oil and soyoil again this year, with the government looking to protect domestic oilseed farmers as inflation slows, leading industry analyst Dorab Mistry said.

India, the world's No.1 edible oil buyer, this month hiked import duties on crude imports to 2.5 percent from zero and lifted a six year freeze on the taxable value of cargoes to curb cheap imports from top palm suppliers Indonesia and Malaysia.

While India left refined edible oil import duties unchanged, the policy move on crude showed it was still wary on inflation that slowed last month to its lowest in three years, said Mistry, who closely tracks the country's oilseed sector.

"I expect the next step to be announced in the budget at the end of February," Mistry, head of trading with India's leading speciality chemicals group, Godrej Industries, told Reuters in an interview on Wednesday.

"The industry has requested import duty at 10 percent on unrefined oils and 17.5 percent on refined oils and I believe we shall get that level by end of March 2013 at the latest," he said.

New Delhi raising import taxes counters Malaysia's move to lower its crude export duty to reduce record palm oil stocks and helps to raise India's falling domestic oilseed price.

As a rule of thumb, India's soybean and rapeseed farmers need a minimum price of 35,000-38,000 rupees ($650-$710) a tonne to continue planting these crops, Mistry said. Current prices for soybeans are hovering at 32,400 rupees a tonne, according to industry data.

This spurs farmers to switch to other more lucrative crops such as corn, pulses and vegetables, setting the stage for India's government to raise import duties on crude oils to 20 percent and refined oils to 27.5 percent by August, Mistry added.

"Remember from August we shall have a torrent of sunflower oil available for export from Russia and Ukraine, and this oil will go to a discount to soya oil and will pressure prices all over the vegetable oil complex."

VERY HIGH PALM OIL STOCKS

India imports about half the 16 million to 17 million tonnes of edible oils it consumes every year, mostly palm oil from Indonesia and Malaysia.

Mistry said that any further policy move by India would impact these two Southeast Asian countries where palm oil prices were very high at 2,400-2,500 ringgit ($790-$820) even though Malaysian stocks hit a record 2.6 million tonnes in December.

Mistry said these prices may not prompt much expansion in demand for the edible oil as palm oil output grows and competing soyoil supply jumps from May onwards.

"I do not expect Malaysian stocks to decline below 2 million tonnes in the foreseeable future," he said.

Malaysia's January palm oil stocks will be almost unchanged from December, with declines expected in February to April. By May, stocks will build again, Mistry said.

Indonesia, which does not publish stocks figures, has current inventories of about 5 million tonnes.

"Of these about 1 tonne is systemic stocks which are permanently required in view of the extended and poor logistics in Indonesia," Mistry said.

RTRS - China to raise soybean, soyoil and palm imports - Oil World

HAMBURG, Jan 29 (Reuters) - China is set to increase its soybean, soyoil and palm oil imports in the current 2012/13 season to meet demand created by the country’s continued economic growth, Hamburg-based oilseeds analyst Oil World said on Tuesday.

Soybean prices hit record highs in September 2012 after drought ravaged the U.S. crop, compounding supply shortages after poor Argentine and Brazilian harvests. However, huge South American crops are expected in early 2013, which may relieve pressure on world supplies created by China's rising appetite.

China's soybean imports in October 2012 to September 2013 will rise to 62 million tonnes from 59.2 in 2011/12 and only 50.3 million tonnes in 2009/10, Oil World forecast.

Soyoil imports in 2012/13 will rise to 1.55 million tonnes from 1.50 million tonnes in 2011/12, while 2012/13 palm oil imports will jump to 6.65 million tonnes from 5.95 million tonnes in 2011/12, it said.

However, the analyst added that China may have trouble buying all the soybeans it wants until the new harvests from South America become more widely available in the second quarter of 2013.

“Soybean imports may decline by 2 million tonnes to 12 million tonnes January to March 2013, as very little will be available from South America in this period,” it said.

“But for April to September 2013 we forecast a rise in Chinese imports to 35.9 million tonnes, versus 31 million tonnes, which must be covered largely by South American soybeans as U.S. export supplies will be depleted by then.”

Palm oil is expected to cover the bulk of edible oil import requirements, assuming that exporters are able to meet the stricter Chinese quality standards that took force on Jan. 1, Oil World said.

Imports of palm oil were boosted to a “spectacular” 960,000 tonnes in December 2012 from 669,000 tonnes in December 2011 as importers built up stocks ahead of the new quality regulations, it said.

Traders said on Jan. 24 that Chinese authorities have ruled that Malaysian palm oil shipments were reaching the new quality standards.

RTRS - South American soybean crop delay would raise prices-Oil World

HAMBURG, Jan 29 (Reuters) - Soybean harvest delays or transport problems in South America may shift business back to the United States in the next one to three months, pushing up U.S. soybean futures, Hamburg-based oilseeds analysts Oil World said.

The global soybean market is counting on huge South American crops in early 2013 to relieve tight world supplies after a drought in the United States in 2012, and there is intense concern about any delays or weather damage to harvests in Brazil and Argentina.

“If insufficient South American exports in February and March shift back some business to U.S. origin, it could have an explosive impact on U.S. soybean futures in the May contract,” Oil World said on Tuesday.

“Although the South American crops are record high - at least on paper - it is questionable whether sufficient quantities can be physically moved in time, considering the insufficient facilities for inland transportation and at the ports,” Oil World said.

Brazil is forecast to overtake the United States as the number one exporter and producer of soybeans this season, with a 30 percent increase in its soybean crop, but the country has added no new capacity to its ports.

“The current harvest delays in Brazil are further complicating the situation,” the firm said.

Brazilian farmers have already started harvesting this year’s soybean crop, which is set to reach a record 85 million tonnes.

But rain has delayed some early Brazilian harvesting, and export supplies arriving at Brazilian ports are smaller than expected, leading to an increasing number of ships waiting to load, Oil World said.

Argentine farmers have sold only an estimated 10 percent of their expected 2013 crop so far, less than half of they sold in early 2012, because of fears about exchange rate movements, it said.

“The transition from U.S. to South American (export) supplies could turn out more difficult than expected,” Oil World said.

Oil World warned on Monday that U.S. soybean supplies will be tight in early 2013 after its poor crop and large export sales.

Trader's highlight

DJI - NEW YORK, Jan 29 (Reuters) - Stock markets around the world rose and the dollar fell to a 14-month low against the euro on Tuesday amid rising risk appetite as the Federal Reserve began a two-day policy meeting in which it is expected to maintain its easy monetary policy.

A report that showed U.S. single-family home prices rose in November, building on a string of gains that point to a housing market that is on the mend, added to investor optimism on economic growth.

Still, investors were cautious about making big bets, given mixed U.S. economic data, the run-up in stocks in recent weeks and risk in the form of a slew of economic reports for the rest of the week, as well as the Fed meeting.

Markets were initially weaker on a report showing U.S. consumer confidence dropped in January to its lowest in more than a year. But that same data kept alive expectations the Fed will maintain its ultra-easy monetary policy for the foreseeable future.

"There is a serious split between the attitudes of consumers and the attitudes of the markets," said Joseph Trevisani, chief market strategist at WorldWideMarkets, in Woodcliff Lake, New Jersey, after the consumer confidence data. "This may make for a weaker dollar as it makes it less likely the Fed will contemplate an early removal of QE," referring to the central bank's debt-buying program called quantitative easing.

The euro extended gains versus the dollar, breaking above key resistance to hit a 14-month high It last traded at $1.3491.

STOCKS GAIN

The Dow Jones industrial average gained 72.49 points, or 0.52 percent, at 13,954.42. The Standard & Poor's 500 Index was up 7.66 points, or 0.51 percent, at 1,507.84. The Nasdaq Composite Index was down 0.64 points, or 0.02 percent, at 3,153.66.

"A move like this in one month is extraordinary, and keeping the gains going will depend on concrete news like earnings and data that show the economy is getting better," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "We haven't seen enough of that to make people jump in after the rally we've had."

European stocks scaled two-year highs, boosted by miners, as optimism about economic recovery gained momentum following the encouraging U.S. home price data and comments on growth in top metals consumer China.

U.S. DEBT

In the U.S. Treasury debt market, benchmark 10-year yields proved unable to hold above the key 2 percent level touched on Monday, with investors looking ahead to a debt auction later in the day, as well as the Fed meeting.

The benchmark 10-year U.S. Treasury note was down 9/32, the yield at 1.9955 percent.

Debt prices had earlier reversed losses to advance after the U.S. consumer confidence data.

Investors now await the outcome of the Fed meeting on Wednesday. The Fed is not expected to change its stance after deciding only in December to loosen conditions further. However, investors are watching to see if changes in the membership of the policy-setting committee for 2013 could signal a shift in the future.

Gold snapped a four-day losing streak to rise 0.5 percent to around $1,662.60 an ounce, but any hint that the Fed is considering an end to its loose monetary policy would probably send the precious metal down.

NYMEX - NEW YORK, Jan 29 (Reuters) - U.S. crude futures rose more than 1 percent on Tuesday, after strong U.S. housing market data bolstered confidence that economic growth and fuel demand were accelerating.

CBOT Soybean -  Soybean futures on the Chicago Board of Trade ended higher on Tuesday on uncertainty about prospects for much-needed rains in crop areas of Argentina, traders said.

·         The market pared gains after the midday run of the main U.S. weather forecasting model added more rain to Argentina's crop belt, but some private forecasters were skeptical of the update, and values firmed by the close.

·         Soybean harvest delays or transport problems in South America may shift business back to the United States in the next one to three months, pushing up U.S. soybean futures, analysts Oil World said.

·         China is set to increase its soybean, soyoil and palm oil imports in the current 2012/13 season to meet demand created by the country’s continued economic growth, Hamburg-based oilseeds analyst Oil World said.

·         China's soybean imports between April and June are likely to reach 15 million tonnes, up from an estimated 11 million tonnes in the first quarter, according to government think tank the China National Grain and Oils Information Centre.

·         Brazilian analysts Safras e Mercado raised its estimate of Brazil's 2012/2013 soybean crop to 84.69 million tonnes, up 25 percent from last year's crop and up slightly from its previous outlook of 84.31 million tonnes in December.

·         Malaysian palm oil futures rose on expectation some buyers may switch after Indonesia announced a higher crude palm oil export tax, although gains were limited by persistent concerns over record stocks.

FCPO - SINGAPORE, Jan 29 (Reuters) - Malaysian palm oil futures gained on Tuesday on expectation some buyers may switch after Indonesia announced a higher crude palm oil export tax, although gains were limited by persisting concerns over record stocks.

Indonesia, the world's top palm oil producer, will increase its export tax for crude palm oil to 9 percent for February from 7.5 percent in the previous month, while Malaysia's crude palm oil export tax will remain at zero percent for February.

"The market is a bit uncertain now, the focus is on stocks and exports. That's why we see some range-trading today," said a trader with a foreign commodities brokerage in Malaysia. "But the higher Indonesia tax could be a reason why the market is a bit positive."

By market close, the benchmark April contract n the Bursa Malaysia Derivatives Exchange had climbed 1.3 percent to 2,476 ringgit ($805) per tonne. The market traded in a range of 2,446-2,484 ringgit after resuming trading from a Monday holiday.

Total traded volumes stood at 30,506 lots of 25 tonnes each, higher than the usual 25,000 lots.

Market players will be looking out for Malaysia's January palm exports data due Thursday for further trading cues.

Shipments for the first 25 days of the month suffered a double-digit decline on lower Chinese and European demand, raising worries that stocks could still climb higher in January after hitting a record 2.63 million tonnes last month.

Palm oil exports from Indonesia fell 4 percent to 1.9 million tonnes in December from the previous month, industry data showed on Tuesday.

Brent crude stayed above $113 on Tuesday on hopes that economic growth might be picking up in the world's largest oil consumer after a gauge of planned U.S. business spending rose in December, adding to recent positive global economic data. 

Jan 29 (Reuters) - Most Southeast Asian stock markets gained on Tuesday, with the Philippines hitting a record high and the region enjoyed foreign inflows ahead of more U.S. economic data and a Federal Reserve policy decision later in the week that may offer clues to the Fed's stimulus plans.

Philippine Composite Index ended 0.7 percent firmer at a record closing high of 6,234.73 points, after hitting a fresh intraday peak of 6,254.04.

Thai SET index rose 0.5 percent to 1,478.77, its highest close since November 1994.

Manila saw a net foreign inflow of $31.9 million, Jakarta received a net foreign buying of $20.4 million, and Kuala Lumpur witnessed an inflow of $49.46 million.

Indonesia gained 0.5 percent and ended at 4439.03 and Vietnam ended 0.9 percent higher at 484.01, a near nine-month high. Malaysia ended steady.