Bloomberg - China’s Slower Manufacturing Casts Shadow Over Recovery: Economy

China’s manufacturing is expanding at the slowest pace in four months, a private survey showed, underscoring the headwinds faced by policy makers in the world’s second-biggest economy.

The preliminary reading of a Purchasing Managers’ Index was 50.4 in February, according to a statement from HSBC Holdings Plc and Markit Economics today. That compares with the 52.3 final reading for January and the 52.2 median estimate of 11 analysts surveyed by Bloomberg News. A number above 50 indicates expansion.

By Bloomberg News - Feb 25, 2013 2:17 PM GMT+0800

Source : http://www.bloomberg.com/news/2013-02-25/china-s-manufacturing-may-expand-at-slower-pace-hsbc-pmi-shows.html

RTRS - Record US soy crop means bigger crush, exports in '13 and 14-USDA

WASHINGTON, Feb 22 (Reuters) - The U.S. soybean crop will be a record 3.405 billion bushels this year, a dramatic 13 percent increase from 2012's drought-hit crop that will allow larger U.S. crushings and exports while rebuilding stocks, said the Agriculture Department on Friday.

At its annual Outlook Forum, USDA forecast end stocks for 2013/14 of 250 million bushels, double the amount expected at the end of this marketing year and the largest stocks since 2006/07.

With the larger crop, soybean use was forecast to rise by 3 percent. Crushings would climb to 1.66 billion bushels and exports to 1.5 billion bushels. Soymeal exports were forecast to grow by 4 percent on stronger demand in Europe and Southeast Asia.

Soyoil exports would plunge by 43 percent, however, to 1.3 billion pounds due to tightening U.S. supplies, allowing Brazil and Argentina to dominate trade, said USDA.

Domestic use of soyoil was projected to rise by 0.6 percent in 2013/14, supported by a higher U.S. target, at 1.28 billion gallons, for biodiesel use.

"The use of soybean oil for U.S. biodiesel production is projected at 5.2 billion lbs - up 300 million from 2012/13," said USDA. "At this level, soybean oil accounts for just over half of expected U.S. biodiesel production."

Larger use of soyoil for biodiesel would be offset by a 1.5 percent decline in soyoil in food.

USDA said the record crop would be grown on 77.5 million acres, matching the record for plantings. The record soybean crop now is 3.359 billion bushels in 2009.

Following are USDA's projections for production and use in the 2013/14 marketing year with comparisons to USDA estimates for 2011/12 and 2012/13. 

U.S. soybean production and demand (in millions of bushels)

RTRS - Indonesia raises crude palm oil tax to 10.5 pct for March

JAKARTA, Feb 22 (Reuters) - Indonesia, the world's top palm oil producer, will increase its export tax for crude palm oil to 10.5 percent for March, from 9 percent this month, a trade ministry official said on Friday.

The government will also up its export tax for RBD palm olein to 4 percent for March from 3 percent in February, and leave its tax on cocoa bean exports unchanged at 5 percent.

Trader's highlight

Dow Jones Index - NEW YORK, Feb 22 (Reuters) - U.S. stocks rose on Friday as Dow component Hewlett-Packard surged on strong results and comments from Fed officials allayed fears that the central bank would curtail its stimulus measures.

Federal Reserve Chairman Ben Bernanke downplayed worries that the Fed has fueled asset bubbles that could hurt the economy in a private meeting with bond dealers and investors earlier this month, Bloomberg reported on Friday.

Bernanke's view helped ease fears that the central bank may end its easy money policies. Minutes from the Federal Reserve's January meeting hit markets on Wednesday as investors interpreted divergent opinions on the benefit of stimulus as a sign the measures may be halted sooner than thought.

"They are in uncharted territory with divergent views," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "I could see some pretty heated opinions on what the ultimate outcome is, so I do believe there is dissension."

The Dow Jones industrial average  gained 119.95 points, or 0.86 percent, to 14,000.57 at the close. The Standard & Poor's 500 Index rose 13.18 points, or 0.88 percent, to 1,515.60. The Nasdaq Composite Index  added 30.33 points, or 0.97 percent, to end at 3,161.82.

With Bernanke's reported comments much on their minds in Friday's session, investors will want the Fed chairman to reiterate his remarks publicly when he speaks before the Senate Banking Committee on Tuesday. That would echo comments made by two top Fed officials on Friday.

The S&P 500 shed 1.9 percent over the previous two sessions, its worst two-day drop since early November, following the release of the Fed's minutes on Wednesday. The selloff marked the end of seven back-to-back weeks of gains for stocks.

Brent Crude Oil - NEW YORK, Feb 22 (Reuters) - Brent crude futures rose on Friday, but posted a 3 percent loss for the week, as signs of improving German business morale provided a lift following sharp losses for oil prices in the previous two sessions.

Brent April crude  rose 57 cents, or 0.50 percent, to settle at $114.10 a barrel, having traded from $113.60 to $114.79.

CBOT Soybean - Soybean futures on the Chicago Board of Trade ended down nearly 2 percent in a reversal tied to profit taking, after the market rose to a 3-1/2 month high.

* Traders said funds appeared to be liquidating long soybean/short wheat spreads and soybean calendar spreads.

 

·         USDA at its outlook forum projected that a rebound i  yields would cause 2013/14 U.S. soybean ending stocks to double  to 250 million bushels, from 125 million in 2012/13. USDA also   projected the average U.S. soybean cash price would fall to $10.50 a bushel in 2013/14, from $14.30 in 2012/13.

·         Weather forecasts called for beneficial rains in dry areas  of Argentina this weekend and later next week, which could bring  relief to stressed crops. Rainfall this week in Argentina's top  soy province revived wilting crops, but others were still in   need of rain, the agriculture ministry said. 

 

·         USDA's weekly export sales report showed net cancellations   of U.S. soybeans totaling 119,500 tonnes for 2012/13 and net  sales of 62,000 for 2013/14. The total for the combined   marketing years was the worst since March 2002.   

 

·         USDA reported export sales of soymeal for the week at  236,100 tonnes, topping trade expectations, and soyoil sales at 28,900 tonnes.

 

·         USDA also said private exporters reported sales of 410,000  tonnes of U.S. soybeans to China, but most of the total, 350,000  tonnes, was for delivery in 2013/14. 

 

·         Dock workers returned to work at Brazil's ports after a  six-hour strike in protest of the government's plan to privatize  hundreds of terminals. Workers decided to call off a second six-hour stoppage planned for Tuesday. 

 

·         Soyoil pressured by unconfirmed talk that China might release rape oil from reserves.

 

·         Despite the sell-off, CBOT March soybeans  ended the week up 36-3/4 cents, or 2.6 percent, halting a two-week  decline. March soymeal  rose 4.3 percent for the week while March soyoil fell 2.56 percent.

·         CBOT March options expired at the close. Traders said   heavy open interest in calls at the $15.00 strike may have  helped lift futures prices above that level in the early trade.

BMD CPO - KUALA LUMPUR, Feb 22 (Reuters) - Malaysian palm oil futures inched down in light trade on Friday, as lingering investor concern on the tropical oil's sluggish demand weighed on prices.

Seasonally slowing output in Malaysia, the No. 2 producer of the world's most consumed vegetable oil, is expected to help ease stockpiles in February but exports need to pick up faster.

Inventory levels, which have hovered above the 2.5 million tonne mark since October last year, finally edged down in January, but only by 1.9 percent to 2.58 million tonnes, compared with a bigger fall of 2.9 percent expected by traders.

"There is concern soft demand may persist in March, and traders ponder how much upside is left," said a trader with a local commodities brokerage in Malaysia.

"Some consumers remain cautious about buying into the market until they see signs that palm oil demand is improving."

At the close, the benchmark May contract  on the Bursa Malaysia Derivatives Exchange eased 0.2 percent to 2,532 ringgit ($817) per tonne, but still posted a weekly gain of 2 percent. Prices traded in a tight range between 2,527 and 2,555 ringgit on Friday.

Total traded volume stood at 18,939 lots of 25 tonnes each, below the typical 25,000 tonnes.

Strong output amid a tepid global economy and dry demand last year weighed on palm oil markets in Malaysia, causing prices to tumble 23 percent and record their biggest loss since the 2008 financial crisis.

But the lower prices have shifted demand towards palm oil that trades at a steep discount of almost $300 per tonne to competing soyoil. Malaysian palm oil is also currently the cheapest vegetable oil in the market after its government revamped export tax structures in the hope of spurring demand.

Brent crude oil rose more than $1 per barrel on Friday, recovering some ground after three days of heavy falls on worries over the state of the world economy.

In other vegetable oil markets, the U.S. soyoil for May delivery  crept up 0.5 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange closed 0.6 percent higher.

Regional Equities - Feb 22 (Reuters) - Southeast Asian stocks gained on Friday, recovering from sharp falls a day earlier, with foreign investors buying into equities in Indonesia and Malaysia amid hopes the U.S. Federal Reserve would not end its ultra-soft monetary policy prematurely.

Indonesia  gained 0.4 percent to close at a record high of 4,651.12, with a net foreign inflow of $108.85 million.

Malaysia , the region's worst performer this year, closed up 0.5 percent at a one-week high of 1622.08, with foreign investors buying a net $59.41 million in shares.

Thailand  ended 0.8 percent firmer, recovering sharp losses in the previous day as property and construction shares helped the overall index to gain.

Vietnam , the region's best performer so far which saw its highest daily fall in six months in the previous day, edged up 0.2 percent helped by late buying and a government assurance that it was ready for an intervention to keep domestic markets stable.

Singapore ended steady, while the Philippines , which outperformed the regional markets in the week, edged down 0.04 percent on profit taking.

FOREX - NEW YORK, Feb 22 (Reuters) - The euro hit a six-week low against the dollar on Friday after the European Central Bank said banks will repay less than half the expected amount of loans, while a downgrade of Britain's government bond rating pressured sterling.

The yen dropped against the dollar and euro, with many investors forecasting further weakness as the Bank of Japan looked set to ease monetary policy further to fight deflation.

Banks will repay 61.1 billion euros ($80.8 billion) of the second round of the ECB's three-year loans next week, far below the 130 billion euros in repayments expected by the market. The smaller amount suggested many banks are still dependent on the ECB.

"The smaller than expected payback of loans means the ECB’s balance sheet will shrink at a slower than expected pace," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. It "further undermined confidence in the state of recovery in the 17-member bloc."

Bloomberg - India Seen Raising Cooking Oil Import Taxes to Protect Growers

India, the largest cooking oil consumer after China, will probably increase taxes on imports to shield oilseed farmers from cheap palm supplies from Indonesia and Malaysia, according to a trade group.

The government may raise the tariff on unprocessed oils to 10 percent from 2.5 percent in thefederal budget next week, while the tax on refined varieties could increase to 20 percent from 7.5 percent, B.V. Mehta, executive director of the Solvent Extractors’ Association of India, said in a phone interview.

India will present its annual budget on Feb. 28 and Finance Minister Palaniappan Chidambaram is seeking to raise revenue, partly by increasing taxes on commodities. Tariffs on gold imports may rise for a second time this year to curb a record current-account deficit, according to the All India Gem & Jewellery Trade Federation. Imports of palm and soybean oils surged to a record last month as refiners boosted purchases before the government imposed a tax on Jan. 17.

“If the government increases duties there may be a temporary setback to imports and palm product prices may drop in Indonesia and Malaysia,” said Prasoon Mathur, an analyst with Religare Commodities Ltd. “Even if local supplies are comfortable, India will still keep importing palm products as there is a price advantage.”

D.S. Malik, spokesman at the finance ministry in New Delhi, declined to comment on possible tax changes yesterday.

Record Stockpiles

Domestic inventories of vegetable oils surged to a record 1.75 million metric tons after imports climbed 27 percent to 2.77 million tons in the three months ended Jan. 31, the extractors’ association said Feb. 14.

The government may refrain from raising taxes because of concern about inflation, said Religare’s Mathur. While wholesale inflation eased to a 38-month low of 6.62 percent in January, the increase in consumer prices accelerated to 10.79 percent, one of the highest levels in major economies.

The contract for May delivery fell 1.1 percent to 2,536 ringgit ($815) a ton on the MalaysiaDerivatives Exchange yesterday, widening soybean oil’s premium over palm to $332.82.

Malaysia cut taxes on crude exports to zero in January and February to clear record stockpiles that reached 2.63 million tons in December. The duty will be 4.5 percent in March after an increase in global prices, according to the customs. Indonesia may keep the rate unchanged at 9 percent next month, the Indonesian Palm Oil Association said Feb. 19.

Oilseed Prices

Indonesia and Malaysia are the top producers of palm, which accounted for about 79 percent of Indian cooking oil imports in January. Palm and soy are the most consumed edible oils.

“Local oilseed prices have fallen and they will go down further if imports increase,” said extractors association’s Mehta. “Farmers will lose interest in growing oilseeds. The government should immediately increase the taxes.”

Oilseeds output in India will drop to 29.5 million tons in the year ending June 30 from 29.8 million tons a year earlier, the farm ministry said Feb. 8. Mustard futures fell 21 percent on the National Commodity & Derivatives Exchange Ltd. in Mumbai in the past six months as soybeans lost 17 percent.

* Source : http://www.bloomberg.com/news/2013-02-22/india-seen-raising-cooking-oil-import-  taxes-to-protect-growers.html

Palm Oil Heads for Weekly Gain as Soybeans Rally on Crop Concern

Feb. 22 (Bloomberg) -- Palm oil advanced, poised for aweekly gain, on speculation that demand for the world’s mostused cooking oil may increase after soybeans, crushed to make acompeting product, rallied to a two-week high.

The contract for delivery in May advanced as much as 0.8percent to 2,555 ringgit ($824) a metric ton on the MalaysiaDerivatives Exchange, and ended the morning session at 2,551ringgit. Futures are set to gain 2.7 percent this week.

Argentina’s 2012-2013 soybean crop output forecast will betrimmed to about 49 million tons, or 48 million, from a Decemberforecast of 53 million by the Rosario Grains Exchange as thisweek’s rain didn’t offset damage from the previous month’sdrought, according to a person with direct knowledge of thesituation yesterday.

Soybeans in Chicago today rallied for afifth day to the highest level since Feb. 8.“The market is focusing on Argentina although it is awarethat it’s going to be a big crop.” said Gnanasekar Thiagarajan,a director at Mumbai-based Commtrendz Risk Management ServicesPvt. “This will be a short-lived rally.”

Soybeans for May delivery climbed as much as 1.2 percent to$14.88 a bushel on the Chicago Board of Trade. Soybean oil for May delivery advanced 0.6 percent to 51.98 cents a pound.

The cooking oil’s premium to palm oil was at $322.52 a ton today. The two are the most consumed edible oils in the world. Refined palm oil for delivery in September rose 0.5 percentto 7,078 yuan ($1,134) a ton on the Dalian Commodity Exchange.Soybean oil for delivery in the same month increased 1.3percentto 8,738 yuan a ton.

RTRS - Brazil grain ship lineup swells, dock strike set for Friday

BRASILIA, Feb 21 (Reuters) - Strong global demand for Brazil's big corn and soybean crops has two to three times more ships lined up to load at its two main ports than a year earlier and to complicate loadings a six-hour dock workers strike is set for Friday.

Fifty-nine ships were waiting to load grain at Santos port on Thursday versus 29 a year ago, data from SA Commodities/Unimar showed. At the other main grain port, Paranagua, 82 ships were waiting compared with 31 ships this time last year.

The long queues, which are costly for shippers, reflect strong demand after drought reduced output in the top soy producer the United States and No. 2 grower Brazil last year.

They are set to get longer still when the harvest peaks next month. Port worker strikes set for Friday and Tuesday are exacerbating what is already expected to be one of the most challenging seasons ever for grain logistics in Brazil.

Brazil is expected to export a record soybean crop and large sugar and corn crops, but has a shortage of road haulage and port capacity.

The management at Paranagua, the most important grain port in Brazil, said in a Thursday statement it was "apprehensive" about the two work stoppages because of the intense shipping traffic, even though the strikes are to last just six hours each.

"At a time when the flow of bulk is large because of the harvest, stoppages like this can create all kinds of 

problems and losses," said Luiz Henrique Dividino, superintendent at the port authority of Paranagua.

Dock workers are striking to protest forthcoming changes to regulations governing port operations, which they say will lead to wage cuts and job losses by ending the obligation for terminals to hire workers through a centralized agency.

The government says the rule changes are needed to boost competitiveness as it seeks to attract billions of dollars in investment to expand port capacity to cope with burgeoning commodity exports.

The dock workers, represented by the umbrella union Forca Sindical, have not ruled out longer stoppages later on to prevent the changes being passed in Congress. Friday's strike will begin at 7 a.m. local time and end at 1 p.m.

Isis Markarian, a representative at shipping agency SA Commodities/Unimar at Santos port, said the strike was unlikely to have much effect on operations there since few laborers were involved in the bulk loading of ships via conveyor belt.

Several commodity trading houses with their own port operations were also switching over to bulk loading of grain instead of sugar which might help clear some of the growing backlog, she said.

RTRS - India soyoil drops on weak palm oil; soybean up

MUMBAI, Feb 21 (Reuters) - Indian soyoil futures fell nearly 1 percent on Thursday following losses in Malaysian palm oil, though a weak rupee limited the downside.

• Soybeans edged higher on thin supplies, while rapeseed was steady as an estimated rise in output weighed.

• A weak rupee makes edible oil imports expensive but raises returns of oilmeal exporters

• As of 0851 GMT, Malaysian palm oil futures  were down 1.17 percent at 2,535 ringgit per tonne, while U.S. soybeans  eased 0.24 percent to $14.79-1/4 per bushel. US soybeans had gained 0.9 percent in the previous session.

• "Overseas markets are influencing price movements in local markets. The record high imports of edible oils in January has raised supplies," said Chowda Reddy, a senior analyst with JRG Wealth Management.

• India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from southeast Asia.

• India meets more than half of its edible oil requirement through imports, with palm oil constituting a major part.

• The actively traded soyoil contract for March delivery on the National Commodity and Derivatives Exchange was 0.64 percent lower at 704.1 rupees per 10 kg.

• The soybean contract for March delivery was up 0.57 percent at 3,335 rupees per 100 kg, while the rapeseed contract for April edged up 0.06 percent to 3,472 rupees per 100 kg.

• India's rapeseed output is expected to surge by a fifth this year due to favourable weather conditions, helping the world's biggest vegetable oil importer boost local supplies by 400,000 tonnes.

• At the Indore spot market in Madhya Pradesh, soyoil dropped by 4.15 rupees to 729.35 rupees per 10 kg, while soybeans eased by 10 rupees to 3,414 rupees per 100 kg. At Jaipur in Rajasthan, rapeseed fell by 16 rupees to 3,900 rupees.

Trader's highlight

Dow Jones - NEW YORK, Feb 21 (Reuters) - U.S. stocks fell for a second straight day on Thursday and the S&P 500 posted its worst two-day loss since November after reports cast doubt over the health of the U.S. and euro-zone economies.

But a late-day rally helped stocks erase some of their losses with most of the pullback concentrated in the technology- heavy Nasdaq. The move suggested investors were still willing to buy on dips even after the sharp losses in the last session.

In Europe, business activity indexes dealt a blow to hopes that the euro zone might emerge from recession soon, showing the downturn across the region's businesses unexpectedly grew worse this month.

"The PMI numbers out of Europe were really a blow to the market," said Jack De Gan, chief investment officer at Harbor Advisory in Portsmouth, New Hampshire. "The market was expecting signs that recovery is still there, but the numbers just highlighted that the euro-zone problem is still persistent."

U.S. initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. mid-Atlantic region fell in February to the lowest in eight months. 

The Dow Jones industrial average fell 46.92 points, or 0.34 percent, to 13,880.62 at the close. The Standard & Poor's 500 Index lost 9.53 points, or 0.63 percent, to 1,502.42. The Nasdaq Composite Index  dropped 32.92 points, or 1.04 percent, to close at 3,131.49.

The two-day decline marked the U.S. stock market's first sustained pullback this year. The Standard & Poor's 500 has fallen 1.8 percent over the period and just managed to hold the 1,500 level on Thursday. Still, the index is up 5.3 percent so far this year.

The abrupt reversal in markets, which started on Wednesday after minutes from the Federal Reserve's January meeting suggested stimulus measures may end earlier than thought, looks set to halt a seven-week winning streak for stocks that had lifted the Dow and the S&P 500 close to all-time highs.

Wall Street will soon face another test with the upcoming debate in Washington over the automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. Those cuts, set to kick in on March 1 unless lawmakers agree on an alternative, could depress the economy.

Of the 427 companies in the S&P 500 that have reported results so far, 69.3 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data through Thursday morning.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.9 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

About two stocks fell for everyone that rose on the New York Stock Exchange and Nasdaq. About 7.64 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well above the 20-day moving average of around 6.6 billion shares.

Brent Crude Oil - NEW YORK, Feb 21 (Reuters) - Brent crude futures fell more than 1 percent on Thursday, pressured by weak economic data and the possibility that the U.S. Federal Reserve might curb its economic stimulus program.

Brent April crude fell $2.07, or 1.79 percent, to settle at $113.53 a barrel, having traded from $113.32 to $115.31.

CBOT Soybean - Soybean futures on the Chicago Board of Trade rose for a fourth straight session, with front months gaining against back months on fresh export demand for dwindling supplies of old-crop U.S. soybeans, traders said.    

* USDA said private exporters reported the sale of 130,450 tonnes of U.S. soybeans to unknown destinations, including 75,450 tonnes for 2012/13 delivery and 55,000 tonnes for 2013/14.

 

·         Trade talk swirled that China has bought up to nine   cargoes of old-crop U.S. soybeans, including some of which were switched to the United States from Brazilian origin.

 

·         Further support stems from concern about grain shipping  delays in Brazil, where two to three times more ships are lined   up to load at the country's two main ports than a year earlier, and a six-hour dock workers strike is set for Friday.

·         Soymeal follows soybeans, gaining against soyoil on  meal/oil spreads on ideas that port congestion and logistics  issues in South America will boost export demand for U.S. soybeans and meal.

·         Trade expects USDA's weekly export sales report on Friday  to show U.S. soybean sales in the latest week at 300,000 to  600,000 tonnes (old and new crop years combined), and soymeal  sales at 100,000 to 200,000 tonnes. 

 

·         CBOT March options expire on Friday and traders are eyeing  open interest in calls at the $15.00 strike, which could act as   a magnet drawing futures prices to that level.

 

·         CBOT March soybeans trading above all key moving averages; traders eyeing psychological resistance at $15.00.

BMD CPO - KUALA LUMPUR, Feb 21 (Reuters) - Malaysian palm oil futures slipped on Thursday, tracking weak U.S. and China vegetable oil markets and as investors booked profits from prices which have gained almost two percent so far this week.

U.S. soy prices slid on Thursday from a selloff in commodities amid speculation that a hedge fund had been forced to liquidate assets, rattling sentiment across major commodity markets and weighing on palm prices.

But major losses in palm oil were prevented by hopes that seasonally slowing output in Malaysia, the world's No.2 producer, will help ease stocks despite sluggish exports.

"At the end of the month exports may be slightly down compared to January, but it will not have much impact because production is slowing by more than ten percent," said a trader with a foreign commodities brokerage in Malaysia.

"I think there will be a slight drawdown in end-stocks again," the trader added. Inventory levels in January had inched down 1.9 percent from record highs of 2.63 million tonnes.

"For today, the immediate support is 2,500 ringgit and resistance is 2,550 ringgit. There is a bit of profit taking and market correction."

The benchmark May contract  on the Bursa Malaysia Derivatives Exchange slipped 1.1 percent to close at 2,536 ringgit ($814) per tonne. Prices traded in a tight range between 2,513 and 2,543 ringgit.

Total traded volumes stood at 16,996 lots of 25 tonnes each, lower than the typical 25,000 tonnes.

Technicals showed a bullish target at 2,620 ringgit per tonne will only be valid when Malaysian palm oil climbs above a resistance at 2,593 ringgit, said Reuters market analyst Wang Tao.

Palm oil products shipped in the first twenty days of the month showed signs of slowing down from robust exports in earlier weeks, cargo surveyors data showed on Wednesday.

Oil extended the previous session's decline on Thursday to a three-week low on concern the U.S. Federal Reserve might stop its stimulus program sooner than thought and on the prospect of a rise in Saudi Arabian oil output.

In other vegetable oil markets, the U.S. soyoil for May delivery fell 0.4 percent in early Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange closed 1.4 percent lower.

Regional Equities - Feb 21 (Reuters) - Southeast Asian stock markets mostly fell on Wednesday with Indonesia coming off record high close and Thailand retreating from a 19-year high, on worries that the U.S. Federal Reserve could prematurely wind down its bond-buying programme.

The minutes from the Fed's January meeting showed many officials voiced concern over potential costs of more asset purchases, suggesting that the programme, known as QE, may slow before the pick-up in hiring it was intended to deliver.

Indonesia , after hitting a record high of 4,656.13 points in intraday trading, ended tad weaker, falling 0.04 percent to 4,632.04 from the previous day's all-time closing high, led by mining and finance shares.

Jakarta also enjoyed a net foreign inflow of $78.5 million on Thursday.

Thailand  fell 1.2 percent to 1528.74 from a 19-year high, led by 2.3 percent fall in top energy firm PTT PCL .

Singapore  fell 0.64 percent, weighed by a 2.7 percent fall in property developer CapitaLand Ltd after it posted a 45 percent drop in fourth-quarter net profit.

Vietnam , the region's best performer, plummeted as much as 3.7 percent to close at a near four-week low led by banks.

Bucking the trend, the Philippine index  hit a record closing high of 6,667.41 points with a 0.28 percent gain, while Malaysia's edged up marginally with a 0.04 percent gain helped by $17.96 million net foreign buying.

FOREX - NEW YORK, Feb 21 (Reuters) - The euro fell to a six-week low against the dollar and a three-week trough against the yen on Thursday, pressured by disappointing euro zone economic data and by uncertainty ahead of Italy's election at the weekend.

The dollar rose to a 5-1/2-month high against a basket of currencies, a day after minutes from the Federal Reserve's last meeting bolstered expectations the central bank may pull back from its bond-buying program sooner rather than later.

The downturn in the euro zone worsened unexpectedly this month, especially in France. The weak data kept alive chances of an interest rate cut by the European Central Bank in coming months.

"Today's data stands in sharp contrast to the consensus market expectations that the region will see turnaround in growth as soon as Q1 of this year," said Boris Schlossberg Managing Director of FX Strategy at BK Asset Management in New York.

Concerns that a fragmented parliament after Italy's national election could trigger a sell-off in the peripheral euro zone bond market also weighed on the euro.

Nichi Vendola, leader of the Left Ecology Freedom party (SEL) and frontrunner in polls for Italy's election, said the country should seek revisions of European Union budget rules.

That raised fears that Vendola will push a centre-left government too far to the left and prevent a coalition agreement with outgoing Prime Minister Mario Monti, which is seen as the most market-friendly election outcome.

RTRS - Lanworth sees 2013 and 2014 U.S. soy harvest up 15 percent

CHICAGO, Feb 20 (Reuters) - Crop forecaster Lanworth on Wednesday said it expects U.S. soybean production to rise to 3.465 billion bushels in the 2013/14 crop year, based on average yield of 43.1 bushels per acre.

"Rotation practices, lack of increase in expected corn profitability, and likely planting pace indicate that soybeans could capture a greater share of total corn and soybean area than last year and could see stronger planted area gains than corn in 2013," Lanworth said in a report.

It was Lanworth's first U.S. soybean forecast for the 2013/14 crop year. In the 2012/13 crop year, USDA reported U.S. soybean production was 3.015 billion bushels with an average yield of 39.6 bushels and plantings of 77.2 million acres.

Lanworth trimmed its outlook for U.S. corn production to 13.7 billion bushels, down from 13.8 billion bushels in a report issued two weeks ago, due to small changes to Lanworth's corn plantings outlook.

The forecaster also cut its forecast of U.S. wheat production to 1.910 billion bushels from 1.932 billion.

In South America, Lanworth reduced its expectations for corn and soybean production in Argentina following extreme dry conditions in January and early February.

The company cut its forecast for Argentine soybean production to 49.6 million tonnes from 51.6 million. It lowered its Argentine corn production estimate to 25.0 million tonnes from 25.1 million.

Lanworth raised its forecast for Brazil corn production to 75.8 million tonnes from 75.6 million and its estimate of Brazil soybean production to 81.0 million tonnes from 80.3 million.

The forecaster's estimates of wheat harvest in Russia and Ukraine were left unchanged, at 49.9 million tonnes and 23.0 million, respectively. Its forecast for Kazakhstan wheat production was lowered to 15.5 million tonnes from 16.5 million.

Lanworth is a brand of Thomson Reuters Commodities Research and Forecasts. A Lanworth spokesman said the reported estimates are the midpoints of confidence ranges and are best understood in the context of Lanworth's full report.

Trader's highlight

Dow Jones - NEW YORK, Feb 20 (Reuters) - U.S. stocks fell the most in three months and a key gauge of market volatility spiked on Wednesday after minutes from the U.S. Federal Reserve's most recent meeting suggested the central bank may slow or stop buying bonds sooner than expected.

The minutes from the Fed's January meeting showed many officials voiced concern last month over potential costs of more asset purchases, suggesting that the program, known as QE, may slow before the pickup in hiring it was intended to deliver.

"What Wall Street wants to hear is an absolute sign that the Fed will continue with QE for the indefinite future. When it says we may end it faster, that just raises the uncertainty, and the market hates that," said Todd Schoenberger, managing partner at LandColt Capital in New York.

Wednesday's slide marked a rare return of nervousness to markets after their solid march higher this year. The CBOE Volatility index or the VIX, a measure of investor fear, jumped 19.3 percent - the biggest daily gain for the VIX since November 2011.

In a sign of broad market weakness, the number of declining stocks outnumbered advancers by a ratio of more than 3 to 1 on both the New York Stock Exchange and the Nasdaq. The volume of traded shares hit its second-highest level this year.

A slide in the commodity sector also weighed on stocks. Spot gold dropped to the lowest level since July, benchmark industrial metal copper fell to a one-month low, and U.S. crude oil futures shed more than $2 a barrel.

On Wall Street, the Dow Jones industrial average  dropped 108.13 points, or 0.77 percent, to 13,927.54 at the close. The Standard & Poor's 500 Index  fell 18.99 points, or 1.24 percent, to 1,511.95. The Nasdaq Composite Index  lost 49.19 points, or 1.53 percent, to end at 3,164.41.

For the benchmark S&P 500, the day's decline was the largest since Nov. 14.

The Fed has used quantitative easing, or QE, since 2008 as it aims to stimulate the economy. The policy, which involves expanding the Fed's balance sheet to buy bonds, has been credited with pushing money into the stock market and it withdrawal is a wild card for markets.

Still, the S&P 500 has jumped about 6 percent so far this year. Many analysts have been expecting the market to ease after the Dow and the S&P 500 came close to all-time highs.

Energy companies' shares were among the weakest, hurt by disappointing results in the sector and a 2 percent drop in crude oil prices. The Energy Select Sector SPDR exchange-traded fund fell 2.1 percent.

Earlier in the day, unconfirmed rumors that a troubled hedge fund was selling assets added some downward pressure to the market. The rumors appeared to be unfounded.

"I heard the chatter about a hedge fund liquidating things today but how big, I don't know. Certainly, it sparks concern," said Michael James, senior trader at Wedbush Morgan in Los Angeles.

"Valuations appear a bit high at these levels, and if I was in a name that had seen a huge run, I'd want to take some chips off the table," said Matt McCormick, money manager at Bahl & Gaynor in Cincinnati.

Brent Crude Oil - NEW YORK, Feb 20 (Reuters) - Brent crude futures fell on Wednesday, joining in a sell-off hitting precious metals and copper, while expectations that Saudi Arabia intends to boost production also applied pressure to oil.

Brent April crude fell $1.92, or 1.63 percent, to settle at $115.60 a barrel, having traded from $115.05 to $117.66.

CBOT Soybean - Soybean futures on the Chicago Board of Trade rose for a third day on firm cash markets and fears that recent export  demand is eroding already tight U.S. soybean supplies, traders said.

* Traders worry that logistical delays will slow the movement of South American soybeans and soy products into the export pipeline, and steer export demand to the United States.

·         CBOT March options expire on Friday, and heavy open interest in CBOT March soybean call options at the $15 strike could act as a magnet for prices.

·         Basis bids for soybeans shipped by barge to the U.S. Gulf Coast were steady to firm early on Wednesday despite scattered farmer selling, with spot values supported by good exporter  demand for near-term supplies, traders said. 

·         Crop forecaster Lanworth cut its forecast for Argentina's  2013 soybean harvest to 49.6 million tonnes, from 51.6 million  previously, and raised its forecast for Brazilian soybean   production to 81.0 million tonnes, from 80.3 million.

·         Lanworth said it expects U.S. 2013/14 soybean production    to rise to 3.465 billion bushels with an average yield of 43.1  bushels per acre, up from the 2012/13 crop of 3.015 billion  bushels with an average yield of 39.6. 

 

·         Grains and soy withstood weakness in equities, gold and  oil after minutes of the Federal Reserve's meeting last month  showed it may stop or slow its bond-buying program sooner than  expected.

 

·         Ag markets also shook off rumors that a troubled hedge  fund was selling assets. 

BMD FCPO - KUALA LUMPUR, Feb 20 (Reuters) - Malaysian palm oil futures edged down in choppy trade on Wednesday, as dismal export data offset optimism that demand could get a boost if dry Latin American weather dents supply of rival soyoil.

U.S. soybeans hit a 12-day high on Wednesday as the oilseed drew more support from concerns that dry weather in Argentina would cut the upcoming harvest.

Traders fear that a boost in palm oil demand may not be strong enough to reduce a 2.58 million tonne stockpile in Malaysia, with exports in the first 20 days of February inching up just 0.6 percent from a month ago.

Another cargo surveyor, Societe Generale de Surveillance, reported a slight 0.3 percent drop in palm oil exports for the same period.

Malaysia's plan to raise its crude palm oil export tax for March to 4.5 percent from February's zero percent, making the grade more expensive for overseas buyers, also weighed on prices.

"There is uncertainty over the demand in March because of the export tax on crude palm oil, while end-stocks are still hovering above 2.5 million tonnes," said a trader with a local commodities brokerage in Kuala Lumpur.

The benchmark May contract on the Bursa Malaysia Derivatives Exchange inched down 0.2 percent to close at 2,561 ringgit ($827) per tonne. Prices traded in a range between 2,546-2,584 ringgit.

Total traded volumes stood at 30,525 lots of 25 tonnes each, higher than the usual 25,000 tonnes.

Palm oil inventories in Malaysia, the world's No.2 producer, eased 1.9 percent in January from record highs of 2.63 million tonnes, the first decline in stocks since June.

Although overall output is expected to rise again this year, analysts say appetite could gain as well.

Hamburg-based oilseeds analysts Oil World said on Tuesday it expects Malaysia's 2012/2013 output to increase to 19.7 million tonnes, adding that growing consumption could help ease global stocks.

Brent crude dropped toward $117 a barrel on Wednesday on the prospect of more Saudi supply while investors look ahead to economic and inventory data from the United States for clues on demand in the world's largest oil consumer.

In other vegetable oil markets, the U.S. soyoil for May delivery edged up 0.2 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange rose 0.7 percent.

Regional Equities - Feb 20 (Reuters) - Southeast Asian stock markets mostly gained on Wednesday, with the Philippines and Indonesian stock markets hitting a record high, while Thailand ended at a 19-year peak as an improving global economic outlook helped boost investor appetite for risky assets.

The Philippine index , which saw a net foreign inflow of $7.5 million, hit a fresh all-time high of 6,690.00 points, before ending 0.42 percent up at 6,648.57, surpassing its previous record close of 6,632.56 on Tuesday.

Indonesia  gained 0.7 percent to hit a new record high close of 4,634.45 with a foreign inflow of $28.1 million, led by property shares, Reuters data showed.

Bangkok's SET index  jumped 0.95 percent to 1,546.64, to hit a 19-year closing high after the Thai central bank expectedly maintained its policy interest rate and said the economy could grow more than forecast this year.

Singapore ended 0.4 percent firmer at 3,308.89, while Vietnam, the region's smallest bourse and the best performer this year, gained 0.8 percent at 494.83.

Bucking the trend, Malaysia ended 0.1 percent weaker at 1613.33 with a net foreign outflow of $6.93 million, the stock market data showed.

FOREX - NEW YORK, Feb 20 (Reuters) - The dollar jumped to a four-week high against the euro and rose versus the yen on Wednesday after minutes from the Federal Reserve's last meeting suggested policymakers may have to slow or stop buying assets before seeing the pick-up in hiring.

The Australian, Canadian and New Zealand dollars fell as weakness in stocks and commodities prompted investors to dump riskier assets. Sterling tumbled on speculation of further monetary easing by the Bank of England.

Policymakers are increasingly worried about the costs and risks of their quantitative-easing program, the Fed minutes showed, fueling expectations the central bank may scale back its stimulus program sooner rather than later.

"The dollar has been generally firm all day and the (Fed) minutes have been seized as a handy reason to extend those gains," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

The U.S. currency had been rising even before the Fed minutes as weakness in equities and commodities and speculation of a hedge fund selling assets spurred investors to seek safe havens.