RTRS - Palm oil demand to rise on competitive price- Oil World

HAMBURG, Feb 26 (Reuters) - Palm oil’s competitive price against other vegetable oils means palm is likely to win more sales in coming months in markets including India, Europe, China and even the United States, Oil World said on Tuesday.

“The preconditions for the demand of palm oil and its sister product palmkernel oil are unusually favourable for the remainder of this season, given waning competition from other vegetable oils,” Hamburg-based oilseeds analysts Oil World said.

Malaysian fob export prices for refined, bleached and deodorised palm oil were around $270 a tonne cheaper than Argentine soyoil export prices in the past week, Oil World said.

This is down from $330 in December but still makes palm oil attractive compared with seed-based edible oils such as soyoil, rapeseed oil and sunflower oil, it said.

Global October 2012/September 2013 palm oil imports are likely to rise to 42.7 million tonnes from 40.2 million tonnes in the same period a year previously, Oil World estimates.

Among major buyers is likely to be India, which may raise palm and palmkernel oil demand this season by 0.7 million tonnes, Oil World said.

The European Union is likely to cut seed oil consumption by 0.3-0.4 million tonnes this season and raise consumption of palm oil and palmkernel oil by roughly 0.5 million tonnes, it said.

“In China, the consumption of palm oil and palmkernel oil may show a relatively moderate increase of 0.3-0.4 million tonnes this season given the country’s strong focus on oilseed imports and crushings to satisfy its (animal feed) protein requirements,” it said.

The United States may also raise palm oil imports by 0.1 million tonnes, especially for biodiesel, but this may depend on U.S. rules about sustainable palm oil production, it said.

RTRS - EU to raise soymeal imports in coming months- Oil World

HAMBURG, Feb 26 (Reuters) - The European Union is likely to raise soymeal imports in coming months as animal feed makers hope the new South American soybean crops in early 2013 will depress prices, Hamburg-based oilseeds analysts Oil World said on Tuesday.

The EU will import 17.50 million tonnes of soymeal between January and September, up from 16.21 million in the same period a year ago, Oil World estimates.

EU animal feed producers cut soymeal imports last year in the face of high prices following drought damage to soybean harvests in several regions and the depressed state of Europe’s livestock farming, Oil World said.

EU feed makers have low soymeal supply cover for the 2013 summer months and are expected to start raising imports from April as supplies from large harvests in Argentina and Brazil come on to the global market, it said.

Yet the large number of consumers waiting to buy low price soymeal as South American supplies enter the market may push prices up, Oil World warned.

Trader's highlight

DJI - NEW YORK, Feb 26 (Reuters) - U.S. stocks rebounded from their worst decline since November on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus and sales of new homes hit a 4 1/2-year high.

The S&P 500 had climbed 6 percent for the year and came within reach of all-time highs before the minutes from the Fed's January meeting were released last Wednesday. Since then, the benchmark S&P 500 has fallen 1 percent.

Bernanke, in testimony on Tuesday before the Senate Banking Committee, strongly defended the Fed's bond-buying stimulus program and quieted rumblings that the central bank may pull back from its stimulative policy measures, which were sparked by the release of the Fed minutes last week.

Bernanke's comments helped ease investors' concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority, posing the threat of prolonged instability and financial crisis in Europe, and sending the S&P 500 to its worst decline since Nov. 7 in Monday's session.

Bernanke "certainly said everything the market needed to feel in order to get comfortable again," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"The fear is we were going to see a rollover, and the first shot over the bow was what we saw out of Italy yesterday with the elections," Kenny said. "When it came to U.S. markets, we saw some of that bleeding stop because our focus shifted from the Italian political circus to Ben Bernanke."

Economic reports that showed strength in housing and consumer confidence also supported stocks. U.S. home prices rose more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in 4-1/2 years in January.

However, the central bank chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the economic recovery.

The Dow Jones industrial average gained 115.96 points, or 0.84 percent, to 13,900.13 at the close. The Standard & Poor's 500 Index rose 9.09 points, or 0.61 percent, to 1,496.94. The Nasdaq Composite Index  advanced 13.40 points, or 0.43 percent, to close at 3,129.65.

Despite the bounce, the S&P 500 was unable to move back above 1,500, a closely watched level that was technical support until recently, but could now serve as a resistance point.

The CBOE Volatility Index  or the VIX, a barometer of investor anxiety, dropped 11.2 percent, a day after surging 34 percent, its biggest percentage jump since Aug. 18, 2011.

The uncertainty caused by the Italian elections continued to weigh on stocks in Europe. The FTSEurofirst-300 index of top European shares closed down 1.4 percent. The benchmark Italian index tumbled 4.9 percent.

Brent Crude Oil - NEW YORK, Feb 26 (Reuters) - Brent crude oil futures fell $1.73, or 1.51 percent, to settle at $112.71 a barrel on Tuesday as inconclusive Italian election results revived investor concerns about instability in the euro zone and threatened the outlook for fuel demand.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a third day on pressure from the expanding Brazilian soybean harvest and market participants exiting long soybean/short corn spreads, traders said.

* Unconfirmed talk that China may sell 1 million to 2.5 million tonnes soybeans out of reserves to ease supplies until Brazilian shipments arrive.

 

·         Soymeal futures closed higher while soyoil sank for a  fifth day, with March soyoil briefly dropping below 49  cents per lb, its lowest level since Dec. 31.

 

·         The European Union is likely to raise soymeal imports in  coming months as supplies from large harvests in Argentina and  Brazil come on to the global market - analysts Oil World.

 

·         Palm oil’s competitive price against other vegetable oils   means palm is likely to win more sales in coming months in  markets including India, Europe, China and even the United  States - Oil World. 

 

·         Germany’s 2013 rapeseed crop is likely to rise to 5.3   million tonnes from 5.0 million tonnes in 2012, the German Farm Cooperatives Association said.

BMD CPO - KUALA LUMPUR, Feb 26 (Reuters) - Malaysian palm oil futures slipped on Tuesday to their lowest in more than five weeks, as weak overseas vegetable oil markets kept investors on edge, although upbeat export data and slowing production helped limit losses.

China and U.S. soy markets, which are tracked by palm, remained weak after suffering steep falls on Monday and as better weather in the U.S. Midwest and South America improved the prospects for supply.

But stronger-than-expected exports in the first 25 days of February, buoyed by increased shipments of Malaysian palm oil products to Europe and India, kept prices from tumbling further.

"The market is a little oversold at the current juncture after a slew of negative news from pundits and analysts," said a trader with a local commodities brokerage in Malaysia.

"The external market 'grains' are a major contributor to the current low prices. We anticipate demand to pick up very soon, and prices to recover once the selling pressure subside."

The USDA outlook numbers, with projections of a record soybean crop at 3.4 billion bushels, are bearish, he added. "This certainly spells trouble for palm oil in the second quarter of 2013."

The benchmark May contract on the Bursa Malaysia Derivatives Exchange had dipped to 2,411 ringgit per tonne, the lowest since Jan. 21, before closing at 2,417 ringgit ($779), a fall of 2.2 percent.

Total traded volume stood at 35,620 lots of 25 tonnes each, higher than the average 25,000 lots.

Investors are pinning hopes on healthy exports alongside seasonally slowing production to ease the current stockpile of 2.58 million tonnes in Malaysia, the world's No.2 producer.

"At the end of the month we might see an 18 percent drop in production. And with this kind of exports, we will definitely see a drawdown in the stocks," said a trader who deals with a foreign commodities brokerage.

Oil fell below $114 a barrel on Tuesday, hit by doubts over demand growth as a potential political vacuum in Italy revived concern over instability in the debt-plagued euro zone. 

In competing vegetable oil markets, the U.S. soyoil for May delivery fell 1.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodity Exchange slipped 1.5 percent.

Regional Equities - BANGKOK, Feb 26 (Reuters) - Southeast Asian stock markets fell on Tuesday on profit-booking in recent gainers such as PT Bank Mandiri Persero Tbk  and Ayala Land Inc after Italy's inconclusive election fuelled concerns of a resurgent euro zone debt crisis.

Jakarta's Composite Index  lost 0.7 percent to 4,663.03 with Bank Mandiri fell 0.5 percent after Monday's 2.1 percent gain on strong results.

The Philippines  slid 1.4 percent to 6,630.67 as large cap Ayala Land declined 3.5 percent.

Indonesia and the Philippines both hit record closes on Monday, making them among overbought markets, with the 14-day relative strength index ending at 72.4 and 70.2, respectively, on Tuesday. The level of 70 or above indicates a market is overbought.

Singapore's Straits Times Index fell 1.1 percent to a one-month low of 3,254.26 on heavy volume of 3.3 times a monthly average, led by a 6.6 percent drop in shares of Global Logistic Properties Ltd .

The Ho Chi Minh Stock Exchange's VN Index dropped 3.9 percent, its biggest one day loss since August.

Malaysia's main index eased 0.2 percent to 1,624.18, with retail and domestic institution selling shares worth $14.8 million and $26.7 million, respectively, countering foreign buying on the day, stock exchange data showed.

Thai SET index  finished down 0.6 percent at 1,530.32. Top energy firm PTT Pcl  fell 1.4 percent after it reported a weaker-than-expected net profit for the fourth quarter.

More than 70 stocks were trading at high valuations, about 40 times price to earnings multiple, Thai stock exchange president Charamporn Jotikasthira said.

Palm Slumps to Four-Week Low as Global Oilseed Harvests Expand

Bloomberg - Palm oil dropped to the lowest level in four weeks as global production of palm and soybeans is set to climb this year on increased acreage.

Palm oil will probably decline this year after Asian producers boosted acreage and global oilseed supplies rose, said Dorab Mistry, a Godrej International Ltd. director who has traded the commodity for more than 30 years. The expansion of estates will increase output, while bad weather that disrupted soybean supplies in 2012 will prompt farmers to ramp up harvests, said Mistry. Soybean oil also fell for a fifth day.

Full article : http://www.bloomberg.com/news/2013-02-26/palm-slumps-to-four-week-low-as-global-oilseed-harvests-expand.html

Palm Oil Outlook Seen Bearish by Mistry on Oilseed Supplies

Bloomberg - Palm oil probably will fall this year after Asian producers boosted acreage and global oilseed supplies rose, said Dorab Mistry, a Godrej International Ltd. director who has traded the commodity for more than 30 years.

Full article : http://www.bloomberg.com/news/2013-02-25/palm-oil-outlook-seen-bearish-by-mistry-as-oilseed-supply-jumps.html

RTRS - Weekend rains in Argentina seen averting crop losses

BUENOS AIRES, Feb 25 (Reuters) - Rains in the last few days in Argentina's main crop belt arrived just in time to avert serious damage to soy and corn crops after weeks of dry weather in the world's No. 3 exporter, a meteorologist said on Monday.

Scant rainfall from early January until the middle of last week pushed global grains prices higher on supply concerns and spurred analysts to trim their production estimates. Many crops are passing through yield-defining growth stages.

"From last Friday until now, there has been some decent rain, especially in the main agricultural belt. That means the damage has been limited and moisture levels have been restored," said Eduardo Sierra, a climate adviser to the Buenos Aires Grains Exchange.

"This should consolidate production expectations," he added.

The grains exchange expects soy and corn output of 50 million tonnes and 25 million tonnes, respectively. The U.S. Department of Agriculture sees production at 53 million tonnes and 27 million tonnes.

According to the latest weather report by the Rosario grains exchange, between 5 millimeters and 25 millimeters of rain fell across the country's main grains-producing region during the weekend alone.

Argentina's most-productive farming area straddles northern Buenos Aires and southern Santa Fe, Cordoba and Entre Rios.

"This week we're going to see some more rain and that means we're virtually safe to say 'we've made it,'" Sierra said.

The agriculture ministry said last week that showers had helped revive wilting soybean crops but that many were still in urgent need of rain.

Global soy prices rose slightly on Monday after falling to extend a sharp drop on Friday, pressured by rains in Argentina, which is also the world's biggest supplier of soymeal and soyoil.

Trader's highlight

DJI - NEW YORK, Feb 25 (Reuters) - U.S. stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy.

The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since Nov.7, and drove the S&P down to its lowest close since Jan. 18. The CBOE Volatility Index  or VIX, Wall Street's favorite barometer of fear, surged 34 percent, its biggest jump since Aug. 18, 2011.

Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since Feb. 4.

Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region.

The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.

"Europe hasn’t gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

"If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."

Earlier polls pointing to a center-left victory boosted stocks in Milan and other European markets, and also helped lift the S&P 500 to a session high of 1,525.84 on optimism that Italy would continue down its austerity path.

The Dow Jones industrial average dropped 216.40 points, or 1.55 percent, to 13,784.17 at the close. The Standard & Poor's 500 Index lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index fell 45.57 points, or 1.44 percent, to 3,116.25.

U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted. 

Brent Crude Oil - NEW YORK, Feb 25 (Reuters) - Brent crude futures edged up on Monday, supported by data showing strong demand for imported crude in China in January, but uncertainty about Italy's election pulled oil off its early peak.

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell for a second straight session, pressured by the expanding harvest of a likely record-large crop in Brazil and welcome rains in Argentina, traders said.

* Additional pressure stemmed from long liquidation following last week's 3-1/2 month high.

·         However, the market pared losses toward the close, helping   March soybeans   to settle nearly 13 cents above its  intraday low of $14.38-1/2.

·         Brazil's 2013/14 soybean harvest was 28 percent complete  as of Friday, up from 19 percent a week earlier, analyst Celeres said.

 

·         Weekend rains in Argentina's main crop belt arrived just  in time to avert serious damage to soy and corn crops after   weeks of dry weather, said Eduardo Sierra, a climate adviser to  the Buenos Aires Grains Exchange.

 

·         Argentina's Rosario grains exchange lowered its estimate of the country's 2012/13 soybean harvest to 48 million tonnes,   down almost 10 percent from a month ago due to a long dry spell. 

 

·         USDA said private exporters reported sales of 120,000 tonnes of U.S. soybeans to China for 2013/14 delivery.

·         USDA reported export inspections of U.S. soybeans in the   latest week at 27.284 million bushels, below trade estimates for  35 million to 45 million.

·         The CBOT spot March soybean contract retreated below  its 50-, 100- and 200-day moving averages but held above chart  support at its 50-day average near $14.38.

 

·         Basis bids for soybeans shipped by barge to the U.S. Gulf  Coast drifted lower early on Monday following a flood of recent sales by farmers, traders said. 

BMD CPO  - SINGAPORE, Feb 25 (Reuters) - Malaysian palm oil futures slid to their lowest in nearly a month on Monday, tracking steep falls in other vegetable oil markets, although better-than-expected export numbers helped rein in losses.

The most active U.S. soyoil contract for May delivery  was down 0.7 percent in late Asian trade after losing almost 2 percent on Friday, weighed down by weak soybean prices due to improved prospects for South American supply.

Investors were also reacting to falls in China's most active September soyoil contract , which tumbled more than 3 percent to its lowest since mid-November, hurt by concerns over demand growth after a slip in the country's manufacturing output index. By 1011 GMT prices had slid by 3.2 percent.

"The market is tracking the U.S. and Dalian soybean oil markets. All these are external factors," said a trader with a foreign commodities brokerage in Kuala Lumpur.

The benchmark May contract  on the Bursa Malaysia Derivatives Exchange had eased 2.5 percent to 2,471 ringgit ($797) per tonne by Monday's close, but were off an earlier low of 2,461 ringgit, the lowest level since Jan. 29.

Total traded volume stood at 37,569 lots of 25 tonnes each, higher than the usual 25,000 lots, as traders rushed to liquidate positions.

Investor sentiment picked up, however, after cargo surveyor Intertek Testing Services reported a 4.6 percent increase in Malaysian palm oil exports to 1,153,852 tonnes for the Feb. 1-25 period from a month ago.

Another cargo surveyor, Societe Generale de Surveillance, reported exports in the same period picked up 2.7 percent, buoyed by higher shipments to Europe and India.

"The numbers were slightly better than expected and will probably stay at this pace towards the end of the month on a last-minute push to ship out tax-free crude palm oil," said a dealer with a foreign commodities brokerage in Malaysia.

Malaysia, the world's No.2 producer of the edible oil, will raise February's zero percent export tax to 4.5 percent in March after keeping it unchanged for two months.

Traders are counting on improving palm oil exports and seasonally slowing output in the world's No. 2 producer of the edible oil to help ease stockpiles that stood at 2.58 million tonnes in January.

In other markets, Brent crude wiped out early losses to trade above $114 per barrel on Monday as a firmer euro supported prices, although worries that a retreat in China's manufacturing activity would dent demand from the world's top energy consumer capped gains.

Regional Equties - BANGKOK, Feb 25 (Reuters) - Southeast Asian stock markets rose on Monday as investors bought shares in companies such as Genting Singapore Plc  and PT Bank Mandiri Persero Tbk  that showed strong quarterly results with rosier earnings prospects.

Singapore's Straits Times Index  closed 0.02 percent higher at 3288.76, with Genting among the top performers. It rose 1.9 percent, adding on Friday's 3.7 percent rise after the casino operator's results came above market estimates

Jakarta's Composite Index  gained nearly 1 percent to 4696.11, a record close, with shares in Bank Mandiri up 2.1 percent. For earnings report, click

The Philippine main index  hit a record finish of 6,721.33, up 0.8 percent. Malaysia's benchmark index ended near a one-week high of 1,627.35, up 0.3 percent and Vietnam  rose 1.3 percent to 483.69.

The Thai stock market  was shut for a market holiday, and reopens on Tuesday.

The region for the most part saw light trading volume as concerns over the pace of the global economic recovery weighed.

The MSCI's broadest index of Asia-Pacific shares outside Japan  was up 0.16 percent by 0930 GMT.

FOREX - NEW YORK, Feb 25 (Reuters) - The euro fell to a more than six-week low against the dollar on Monday, while the yen soared broadly as worries about political gridlock in Italy spurred investors to seek refuge in the U.S. and Japanese currencies.

With more than two-thirds of the vote counted, the projections suggested the centre left could have a slim lead in the race for the lower house of parliament. But no party or likely coalition appeared to be able to form a majority in the upper house or Senate.

A deadlocked parliament could threaten Italy's economic reforms and reignite the euro zone debt crisis. Optimism the worst of the region's crisis was over benefited the euro earlier this year.

The yen, at one point, soared more than 3 percent against the euro and 2 percent against the dollar. Steep losses in the yen in recent months on bets of further monetary easing in Japan have made it vulnerable to sharp reversals.

"Considering the substantial short yen positioning, I don't think it's completely surprising to see the move," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. "If you look at what's been moving, the largest move is really euro/yen."

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."