Trader's Highlight

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

DEMAND FORECASTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trader's highlight

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

RTRS - USDA seen trimming U.S., global soy stocks forecasts

CHICAGO, Feb 5 (Reuters) - Stressful crop weather has eroded soybean production prospects in Argentina and should prompt the U.S. Department of Agriculture to tighten its forecast of global soy inventories this week, analysts said.

Domestically, analysts expect USDA to raise its estimate of the U.S. 2012/13 soybean crush, an adjustment that should cause a 4.4 percent drop in soybean ending stocks that are already projected to hit a nine-year low at 135 million bushels by the end of August 2013.

With U.S. supplies so tight, the trade is counting on South America to replenish world soybean inventories. The early harvest is under way in parts of Brazil, which the USDA has projected will surpass the United States as the world's top soy exporter.

However, warm and dry weather has stressed developing crops in Argentina, the No. 3 soybean supplier after Brazil and the United States. The dry conditions represent a sharp turnabout for Argentina, after excessive rains delayed planting in December.

"We are dropping a bit (on production estimates) from Argentina, both from the later plantings as well as the slight dryness beginning to show," Allendale Inc. analyst Rich Nelson said.

The average estimate for Argentina's 2012/13 soybean production among 19 analysts surveyed by Reuters was 53.095 million tonnes, down from USDA's January estimate of 54 million. Estimates ranged from 51 million to 55.7 million.

A 53 million-tonne soybean crop would still represent Argentina's second-largest on record, following its 2009/2010 crop that totaled 54.5 million tonnes.

The average analyst estimate for Brazilian soybean production was 82.645 million tonnes, up slightly from USDA's January estimate for a record-large crop of 82.5 million tonnes. Estimates ranged from 80.9 million to 84 million.

Weather in Brazil has been largely favorable, although excessive rains have slowed the soybean harvest in a few areas and raised questions about crop quality. Brazil's government, which previously estimated the crop at 82.7 million tonnes, will update its official forecast on Thursday.

The expected drop in Argentine production, coupled with forecasts for a smaller U.S. soybean carry-out, should lead USDA to tighten its outlook for global soybean stocks at the end of the 2012/13 marketing year.

The average analyst estimate for world soybean ending stocks was 59.19 million tonnes, down from USDA's January forecast of 59.46 million.

U.S. SOYBEAN STOCKS SEEN SHRINKING

USDA in January projected U.S. soybean stocks at the end of the 2012/13 marketing year at 135 million bushels, the smallest since 2003/04. But several analysts said the government's figure undercounts usage from domestic soy crushers.

These processors have been earning historically high margins by aggressively crushing soybeans into soymeal, a critical source of protein in animal feed, and soyoil, used in foods and biodiesel fuel.

"The real glaring thing on their balance sheets, to me, is that it looks like they have underestimated the crush," said Anne Frick, oilseeds analyst with Jefferies Bache in New York. She predicted USDA would raise its soy crush estimate and lower soybean ending stocks to 120 million bushels.

The average analyst estimate of U.S. 2012/13 soybean ending stocks was 129 million bushels.

However, others said robust U.S. soybean exports are likely to stall in the coming months as the South American harvest hits the market, keeping ending stocks fairly stable.

"Even though we are ahead on export pace, USDA could easily make the assumption that we are going export next to nothing, starting in about three or four weeks," said Jack Scoville, vice president of the Price Futures Group in Chicago.

Trader's highlight

DJI - NEW YORK, Feb 5 (Reuters) - Global equity markets and oil prices bounced back on Tuesday after data showed the vast U.S. services sector extended a three-year expansion in January, while business activity in the euro zone showed signs of recovery.

U.S. and European stocks rallied, with the S&P 500 and Nasdaq gaining more than 1 percent, recouping most of their losses after a sharp sell-off the previous session that was sparked by renewed worries about the euro zone crisis.

A measure of world equity markets also was higher, though only slightly, because of a decline in emerging market shares.

Strong fourth-quarter earnings and signs of improving economic growth suggested the trend for equities remains higher.

"Yesterday was the first real down day of the year, which shows that we are in this strong bull market. Today we are back to the normal pattern. People are realizing that we've over-reacted to Europe yesterday," said Uri Landesman, president of hedge fund Platinum Partners in New York.

The Institute for Supply Management said its U.S. services sector index eased slightly, to 55.2 last month from 55.7 in December. The reading was in line with economists' forecasts, according to a Reuters survey.

In Europe, Markit's Eurozone Composite PMI, based on business activity across thousands of companies and a good gauge of economic growth, rose in January to a 10-month high of 48.6 from 47.2 the previous month.

The day's data bolstered the view that the world economy was improving, a sentiment that has lifted stock markets around the globe and pushed the benchmark U.S. S&P 500 to a fresh five-year intraday high on Tuesday.

Corporate results also helped the rally. With 56 percent of S&P 500 companies reporting, 68.7 percent posted earnings that beat expectations, or better than the 65 percent rate over the past four quarters or the 62 percent pace since 1994.

The Dow Jones industrial average closed up 99.22 points, or 0.71 percent, at 13,979.30. The Standard & Poor's 500 Index rose 15.58 points, or 1.04 percent, at 1,511.29. The Nasdaq Composite Index gained 40.41 points, or 1.29 percent, at 3,171.58.

"We do not envisage prices receding for any great length of time," said Carsten Fritsch, an analyst at Commerzbank. "The supply-side risks still prevailing, shrinking OPEC supplies and the brightening global economic outlook all suggest that such a retreat is unlikely."

The euro rose against the dollar and yen, returning to its months-long trend of appreciation, as better-than-expected euro zone data affirmed expectations that the European Central Bank will keep policy steady when it meets this week.

NYMEX - SINGAPORE, Feb 5 (Reuters) - U.S. crude slipped on Tuesday to trade near $96 per barrel as traders booked profits on renewed euro zone worries following signs of political uncertainty in the troubled region, while a slightly firmer dollar also hurt prices.

CBOT Soybean - Soybean futures on the Chicago Board of Trade rose for a third

session on Tuesday, buoyed by uncertainty about crop weather in

Argentina, traders said.

·         Some midday weather forecasts for Argentina's crop belt looked warmer and drier, raising concern about crop stress in the world's No. 3 soy producer.

·         Crop weather in Brazil remains mostly favorable but rains are expected to slow the harvest in Mato Grosso this week.

·         Brazil's vegetable oils association Abiove raised its soy crop forecast to a record 82.3 million tonnes from 81.6 million in December. The adjustment came a day after Brazilian analytical firms AgRural and Celeres both lowered their forecasts for the crop.

 

·         Canadian canola supplies dropped to a six-year low as of Dec. 31, highlighting a disappointing crop and strong demand for oilseeds, a Statistics Canada report said.

 

·         A group of Paraguayan farmers asked the courts to stop U.S. biotech company Monsanto from charging royalties for use of its genetically modified soybeans in the world's No. 4 soy exporter. The farmers were inspired by a similar case in neighboring Brazil. 

FCPO  - SINGAPORE, Feb 5 (Reuters) - Malaysian palm oil futures eased on Tuesday on profit-taking after four straight sessions of gains, but hopes of better-than-expected inventory and export data next week limited losses.

Persistent concerns over dry weather in South America and its impact on the soy crop there also kept a floor under palm oil prices. Lower soybean oil production could shift some demand to the cheaper palm oil, which in turn may help ease record stocks for the tropical oil.

"We are revising our January inventory forecast to 2.57 million tonnes from 2.66 million tonnes as we believe that exports in the month may have turned out better than expected at a 7 percent decline as compared to our earlier estimate of an 11 percent decline," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note.

"Although we believe the overall data will be positive on prices, the upside should still be limited in view of the still high inventory level at way above 2 million tonnes."

January palm oil stocks data from the Malaysian Palm Oil Board is due on Feb. 13. Inventory levels in the world's No.2 producer hit an all-time high of 2.63 million tonnes in December.

Traders are also eyeing Feb. 1-10 export data after a better-than-expected performance in January.

By the close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had shed 0.7 percent to 2,549 ringgit ($826) per tonne, after adding almost 5 percent in the last four sessions.

It rose to 2,592 ringgit the previous day, just slightly off a 3-month high touched on Thursday.

Total traded volumes stood at 25,536 lots of 25 tonnes each, slightly higher than the average 25,000 tonnes.

In other markets, oil edged higher above $115 a barrel on Tuesday as investor concerns faded about political risks in the euro zone, although ample supply could hinder its chances of extending a three-week rally.

In competing vegetable oil markets, U.S. soyoil for March delivery eased 0.1 percent in late Asian trade, giving up some gains from the previous sessions.

The most active September soybean oil contract on the Dalian Commodity Exchange also edged lower, coming off the previous day's three-month high.

Regional Equities - BANGKOK, Feb 5 (Reuters) - Southeast Asian stock markets ended mostly lower on Tuesday as weaknesses in broader Asia prompted profit-taking, with Singapore falling to a one-week low while Indonesia ending off record high after weaker-than-expected fourth quarter GDP data.

Singapore's Straits Times Index  was down 0.8 percent at 3,272.66, the lowest close since Jan. 29, matching a 0.9 percent fall in the MSCI's broadest index of Asia-Pacific shares outside Japan

Jakarta's Composite index eased 0.3 percent to 4,479.44, climbing at one point to an intraday record of 4,492.53 and after Monday's record finish of 4,490.57.

Stocks in Malaysia and Thailand recouped most of their early losses amid late buying into battered energy names such as PTT Pcl and Petronas Gas Bhd 

Malaysia's index edged down 0.07 percent to 1,633.35 and Thai index eased 0.04 percent to 1,505.72. The Philippines pared early losses to rise 0.5 percent to 6,470.49, topping Monday's record finish of 6,435.98.

Valuations of some Southeast Asian blue chips has recently increased amid optimism about 2013 earnings growth.

"Last week, MSCI Thailand 2013 consensus earnings growth estimates were revised up the most by 35 basis points, followed by MSCI Singapore by 3 bps," Morgan Stanley Research said in its ASEAN weekly chartbook dated Feb. 1.

"During the last one month, PER for Indonesia has increased the most, by 3 percent... MSCI Thailand is currently trading at 16 percent premium to its 7-year average at 12.0x," it said.

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."