RTRS-UPDATE 1-Malaysia aims to parry Indonesia palm tax change

NEW DELHI, June 4 (Reuters) - Malaysia will soon take steps to make its palm oil exports competitive, the country's commodities minister said on Monday, as it moves to counter efforts by top producer Indonesia to promote its downstream industries.

Indonesia last year changed its export tax in favour of its refining industry, which narrowed margins for palm oil processors in Malaysia, the No. 2 producer of the vegetable oil.

Indonesia's export tax changes have put a spotlight on Malaysia's own tax-free quota on crude palm oil exports, which refiners say is further squeezing supply in a country where production growth has slowed because of limited expansion of acreage.

Malaysia has struggled to frame an immediate response to the new tax regime, allowing Indonesian refiners to export at a sizeable discount and grab market share.

"We have received a lot of complaints from farmers and industry," Malaysian Commodities Minister Bernard Dompok told reporters in the Indian capital after a meeting with Indian food minister K.V. Thomas.

"These are the things that the government has to consider. We are looking at the competitiveness of the entire palm oil industry."

Malaysia is studying the impact of Indonesia's tax changes on its palm oil industry, he added.

"I am preparing a submission to the cabinet to see how the tax structure promulgated by Indonesia can affect the industry in Malaysia," Dompok said. "We have not taken any decision, but this has to be considered soon."

Malaysia's palm oil output will rise in the next 2 to 3 months, helping the Southeast Asian nation hit its 2012 target, Dompok said, adding that production is expected to jump 2.3 percent to 19.3 million tonnes for a second consecutive rise.

Malaysia usually charges a high duty on crude palm oil shipments to protect its domestic refining industry. It does not impose any export taxes on processed palm oil.

Indonesia's tax changes have also hit processors in India, the world's top vegetable oil buyer, prompting them to demand import curbs. Industry body the Solvent Extractors' Association of India called Indonesia's move a "death blow" to its business.

Last week, sources said India could end a freeze on the base import price for refined palm oil to protect its refineries from cheaper imports from Indonesia.

Separately, India offered to sell wheat to Malaysia, Thomas said, but gave no details. India, sitting on huge stockpiles of wheat, is grappling with storage problems due to bumper harvests since 2007.

RTRS-U.S. corn condition seen falling on dryness

CHICAGO, June 4 (Reuters) - U.S. corn ratings were seen falling slightly, the second straight week of declines, due to dry weather in southern areas of the Corn Belt, analysts said.

The U.S. Agriculture Department's weekly crop ratings survey was expected to show that U.S. corn was rated 71 percent good to excellent, down 1 percentage point from a week earlier, according to the average estimate in a Reuters survey of 11 analysts.

From 2007-2011, corn ratings averaged 71 percent good to excellent in early June.

USDA also was expected to rate the soybean crop 69 percent good to excellent it its first estimate of soybean conditions for the year.

Dry and warm conditions through much of the spring allowed for a fast planting of both corn and soybeans, which most crop-watchers typically view as beneficial to crop development.

But the dry soils also raised concerns about crop deterioration. Some rain in many parts of the Midwest last week alleviated those worries but analysts estimated that about one-third of the Corn Belt still was dry.

Trader's Highlight

DJI- NEW YORK, June 4 (Reuters) - The S&P 500 ended flat on Monday after recent sharp losses, though worries about the European debt crisis and weaker U.S. data kept investors wary of equities.

Signs of economic weakness around the globe and Europe's intensifying debt crisis have rattled investors, who have been dumping riskier investments like commodities and equities for the safety of government bonds.

On Monday, U.S. data showed orders for manufactured goods dropped 0.6 percent in April, its third decline in four months and confounding expectations calling for a 0.2 percent gain.

In a potential boost to markets looking for measures to end the debt crisis, German Chancellor Angela Merkel is pressing for much more ambitious measures, including a central authority to manage euro-area finances and major new powers for the European Commission, European Parliament and European Court of Justice.

Spanish Prime Minister Mariano Rajoy is advocating a direct European rescue for the country's banks with moral support from the European Commission, but Germany appeared cool to such a move for the euro zone's fourth biggest member.

The Dow Jones industrial average <.DJI> slipped 17.11 points, or 0.14 percent, to 12,101.46 at the close. The Standard & Poor's 500 Index <.SPX> inched up just 0.14 of a point, or 0.01 percent, to 1,278.18. The Nasdaq Composite Index <.IXIC> rose 12.53 points, or 0.46 percent, to close at 2,760.01.

 

NYMEX- NEW YORK, June 4 (Reuters) - U.S. crude futures rebounded on Monday after four days of losses and last week's slide of 8.4 percent, as the euro rallied on hopes that European authorities can contain the euro zone debt crisis.

Bargain hunting also encouraged some buyers to step back in, after the recent sell-off had dragged prices to near eight-month lows and, according to a technical indicator, put the market in a sharply oversold condition.

Ahead of weekly inventory reports, domestic crude stockpiles were forecast to have fallen by 900,000 barrels in the week to June 1. That would snap 10 straight weeks of builds in government stocks data, with analysts citing lower imports.

On the New York Mercantile Exchange, crude for July delivery settled at $83.98 a barrel, gaining 75 cents, or 0.9 percent. It earlier dropped to a session low of $81.21, the lowest since Oct. 6.

CBOT SOYBEAN- Nearby July soybean futures on the Chicago Board of Trade were lower at the close of pit trading as traders exited long soybean/short corn spreads, traders said.

But back months rose on anticipation that funds would roll long nearby positions forward.

Trade was thin, with soybean futures volume near 130,000 contracts by the close of pit trade at 1:15 p.m. CDT (1815 GMT), about one-quarter less than the 250-day average.

New-crop contracts including November supported by USDA confirming sales of 165,000 tonnes of U.S. soybeans to China for delivery in 2012/13.

New-crop contracts also supported by weather forecasts showing mostly dry conditions in the U.S. Midwest for the next week to 10 days that could stress crops.

A Reuters poll of 11 analysts predicted that USDA in its first U.S. soybean condition ratings of the season later on Monday would show the crop rated 69 percent good to excellent.

USDA reported export inspections of U.S. soybeans in the latest week at 16.965 million bushels, above trade expectations for 12 million to 14 million.

CBOT reported late Friday that the amount of soybeans registered for delivery fell by 99 contracts and soyoil registrations fell by 125 contracts, a possible sign of firming cash markets.

Farmers in Argentina's biggest agricultural province, Buenos Aires, started a nine-day freeze on grains sales on Saturday to protest a tax hike by the cash-strapped local government. However, the protest is not expected to cause much disruption to corn and soy shipments.

FCPO- SINGAPORE, June 4 (Reuters) - Malaysian palm oil futures fell to the lowest so far this year on Monday, as investors rushed for the exits on growing global economic fears that also triggered a broader sell-off in other commodities markets.

Palm oil closed below the key 3,000-ringgit mark for the first time since December 2011, with investors bearish due to weak economic data and as the eurozone debt crisis rumbles on.

"Sentiment is bad across all risky assets, for example crude oil. On the demand side, however, palm oil is still positive," said Alan Lim, research analyst with Kenanga Investment Bank in Malaysia.

"Palm oil is more on the defensive side because it's used mainly for food, so demand should be sustainable. Investors will be looking closely at the Greece election on June 17, so the market will still be volatile for this week and next week."

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange slumped 1.6 percent to close at 2,958 ringgit ($923) per tonne after going as low as 2,925 ringgit, the lowest since Nov 2, 2011.

REGIONAL EQUITY- June 4 (Reuters) - Southeast Asian stock markets fell on Monday as investors dumped risky assets across the region on heightened fears of a global slowdown after disappointing data from U.S. and China.

Indonesia's Jakarta Composite <.JKSE> was one of the region's worst performers on Monday, losing 3.8 percent. The index had been among Asia's top gainers since the 2008 financial crisis.

Philippines' benchmark index <.PSI>, which hit a record high last month, fell 3.4 percent.

Earlier in the day, Asian share dived, with Tokyo stocks slumping to a 28-year low, on fears of a nightmare scenario of euro-zone breakup, U.S. economic relapse and a sharp slowdown in China.

While South East Asian countries sport relatively healthier economic growth than larger regional or global peers a slowdown in external demand is expected to take its tool hitting markets at a time when investors remain risk-averse.

Analysts at Malaysia's Affin Investment Bank said in a note to clients that weak manufacturing activity across the globe points to a further slowdown in growth over the second quarter in South East Asia.

Singapore's Straits Times index <.FTSTI> fell 1.7 percent to its lowest level in nearly five months led by commodities trader Olam International which slumped 5 percent. Global Logistic Properties fell 4.3 percent.

Trader's Highlight

DJI - NEWYORK,    NEW YORK, June 1 (Reuters) - U.S. stocks fell more than 2 percent on Friday, dragging the Dow into negative territory for the year after a dismal U.S. jobs report added to fears that Europe's spiraling debt crisis was dragging down the world economy. 

   The S&P 500 closed at its lowest since early January and  ended below its 200-day moving average for the first time in 2012 after the Labor Department said employers created just 69,000 jobs last month, the weakest in a year. 

   The bleak May jobs report caps a week of soft economic data from China and growing problems in Europe as Spain's bank crisis deepened.  

   The global flight to safety pushed U.S. and German government debt yields to record lows while the VIX , a gauge of U.S. stock market anxiety, jumped more than 20 percent for the week. 

   "The vast majority of investors are choosing to panic," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. 

   "It's been pretty clear for the last year that Europe was going to be a drag for the global economy." 

   Though steep, Jacobsen said he would view the pullback as a buying opportunity unless it pushed the S&P 500 below 1,250. 

   The Dow Jones industrial average fell 274.88 points, or 2.22 percent, to 12,118.57 at the close. The S&P 500 Index dropped 32.29 points, or 2.46 percent, to 1,278.04. The Nasdaq Composite dropped 79.86 points, or 2.82 percent, to 2,747.48. 

   The benchmark S&P 500 ended below its 200-day moving average, which was 1,284.53 late Friday afternoon. 

   Friday's decline was the largest daily percentage drop for the S&P 500 since Nov. 9, when a spike in Italian benchmark bond yields sent the broad U.S. stock index down 3.7 percent. 

   For the week, the Dow fell 2.7 percent, the S&P 500 lost 3 percent and the Nasdaq dropped 3.2 percent. 

   Financial sector stocks were among the worst hit in Friday's selloff, with the KBW bank index <.BKX> down 4.9 percent, its largest daily drop since early November. 

   "Most investors don't think the problem in Europe is going to infect the U.S. economy as much as it would the U.S. financial system," Wells Fargo's Jacobsen said. 

   More than six issues fell for every one that rose on the New York Stock Exchange, while on the Nasdaq, more than five stocks fell for every one that advanced. 

   Homebuilders ranked among the weakest stocks. Pulte Group plunged 11.8 percent to $8.26 while D.R. Horton lost 8.4 percent to $15.21. The PHLX housing sector index fell 6.3 percent, but it was still up nearly 14 percent for the year. 

   In one of the few positive moves of the day, Newmont Mining surged 6.7 percent to $50.30 and Barrick Gold added 7.3 percent to $41.91 as the price of gold scored its biggest one-day rise in slightly more than three years. 

   More than 8.3 billion shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, about 21 percent higher than the year-to-date daily average of 6.85 billion shares.  

NYMEX - NEWYORK,     NEW YORK, June 1 (Reuters) - U.S. crude oil futures fell on Friday for the fourth day in a row, hitting their lowest levels in nearly eight months and extending losses to a fifth week, as weak U.S. jobs data, soft Chinese manufacturing and the deepening euro zone crisis sparked a broad market selloff. 

    All the bleak economic news spurred further oil demand worries just a day after U.S. government data showed that domestic crude stockpiles rose for the 10th straight week last week. 

    Crude oil futures sank with Wall Street, which dropped more than 2 percent. The Dow industrials average <.DJI> crossed into negative territory for the year. 

    Jobs growth in the United States, the biggest oil consumer, slowed sharply for a third straight month as only 69,000 jobs were added to nonfarm payrolls in May, less than half the number expected and the smallest rise in a year. The unemployment rate ticked up to 8.2 percent from April's 8.1 percent, Commerce Department data showed.

    China's manufacturing sector, as measured by its official purchasing managers' index, fell more than expected to 50.4 in May, the weakest level this year and down from its 13-month high hit in April. 

    In Europe, France and Germany's manufacturing industries contracted at the fastest pace in three years. The same sectors in Italy, Spain and Greece also weakened. Spain and Greece are also trying to grapple with serious financial setbacks. 

CBOT SOYBEAN,  Nearby soybean futures on the Chicago Board of Trade ended firm on Friday, gaining against back months on firm cash markets and ideas that recent declines were overdone, traders said. 

    * Spot July soybeans supported by news that CBOT soybean registrations for delivery fell by 352 contracts late Thursday, an indication of strengthening cash markets. 

    * But back months declined, joining a cross-market sell-off tied to weak U.S. jobs data, poor Chinese manufacturing figures and the euro zone's debt crisis. 

    * CBOT soybeans unofficially ended the week down about 3 percent on continuous charts, the second straight weekly decline and the fourth in five weeks.   

    * USDA reported export sales of soybeans in the latest week at 418,800 tonnes (old and new crop years combined), below trade expectations for 450,000 to 700,000 tonnes and the lowest total in four months.  

    * USDA reported weekly export sales of U.S. soymeal at a net 29,200 tonnes, below trade estimates for 100,000 to 150,000 tonnes. USDA reported weekly soyoil sales at 17,700 tonnes, in line with trade estimates.  

    * Worries about U.S. crop weather underpin the market. Less-than-stellar conditions are expected over the next few weeks in the U.S. corn and soy region with only light rain and moderate temperatures expected - forecaster World Weather Inc.

    * Brazil's soybean farmers, hit hard by drought this year, are laying the groundwork for a record comeback in 2013, buying plenty of seed and fertilizer with healthy revenues from advance sales of next year's crop, which won't be planted for months.

FCPO - SINGAPORE,  June 1 (Reuters) - Malaysian palm oil prices dropped to their lowest level in a week on Friday as investors worried about demand from China after weak manufacturing data and Spain's shaky finances, the latest signs that the euro zone debt crisis will further slow global growth.

   The decline in China's official purchasing manager's index showed output in the world's second largest economy was cooling, denting the optimism of traders who are betting on firm demand for palm oil ahead of the Muslim fasting month of Ramadan which begin in mid-July.

   Traders fretted more after Germany's manufacturing sector contracted at the fastest pace for almost three years and the euro tumbled against the dollar thanks to worries on the Spanish banking sector.  

   "The palm oil market just lost close to 100 ringgit in one session. People are nervous and forgetting about palm oil's bullish tone," said a trader with a foreign commodities brokerage in Kuala Lumpur.  

   "I suspect the investors will come in next week for bargain hunting unless there is more gloomy news in store." 

   The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange tumbled 3.1 percent to end at 3,006 ringgit ($950) per tonne. It earlier went as low as 3,002 ringgit, a level unseen since May 24. 

   Reuters analyst Wang Tao kept his bearish target for palm oil prices at 2,993 ringgit per tonne, as its downtrend from an April 10 high of 3,628 ringgit is intact.

   Asian palm oil remains firm with cargo surveyors reporting a slight increase in Malaysian exports in May. 

   The bulk of the orders mostly come from Pakistan and the Middle East where Muslims are getting ready to observe the fasting month starting in mid July, which is followed by another month of feasting. 

   Stocks are likely to drop for a third month in May, traders say, as exports probably outpaced sluggish production in Malaysia, the world's second largest supplier. 

   Other global commodity markets also weighed on palm oil. Oil fell below $100 a barrel for the first time since October 2011. 

   U.S. soyoil for July dropped 1.2 percent in late Asian trade and the most active Jan 2013 soyoil contract on the Dalian commodity exchange lost 1.1 percent.  ($1 = 3.1717 Malaysian ringgit)  

Trader's Highlight

DJI - NEW YORK, May 31 (Reuters) - Stocks ended May with their largest loss in eight months and commodities also took a battering after a spate of worrying U.S. economic data on  Thu rsday hit markets already reeling from  Europe's debt troubles. 

   The euro had its worst performance since September too, repeatedly hitting a near two-year bottom. 

   U.S. bond yields fell to record lows as fears about Spain's troubled banks and Greece's possible exit from the euro zone spurred a global race for safe assets. 

   Many investors braced for another round of risk aversion on Friday should the monthly jobs report from the U.S. government contain weaker numbers than preliminary data issued by a payrolls processor on Thursday. 

   "Europe is the main issue, no question about it, but you have a supporting cast from the U.S. data," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.       

    

   Spain remained the focal point of traders on growing speculation that Madrid would sooner or later ask for outside help to bail out its banks. Wall Street pared some of the day's losses on a report -- later denied -- of possible International Monetary Fund aid. But the European Commission has offered direct aid for a euro zone rescue fund to recapitalize distressed Spanish banks and more time for Spain to reduce its budget deficit. 

   Markets got an inkling of what was to come in Friday's U.S. jobs report after payrolls processor ADP said private employers created 133,000 jobs in May, fewer than the expected 148,000. New claims for unemployment benefits rose by 10,000 for the fourth straight weekly increase, the Labor Department reported.  

   Investors were dismayed by another report on economic growth and manufacturing in the U.S. Midwest that pointed to a slowdown.  

   At the close, the Dow Jones industrial average was down 26.41 points, or 0.21 percent, at 12,393.45. The Standard & Poor's 500 Index lost 2.99 points, or 0.23 percent, at 1,310.33. The Nasdaq Composite Index  fell 10.02 points, or 0.35 percent, to 2,827.34. 

   For the month, the S&P 500 was down 6 percent -- its sharpest loss since September. 

   European stocks closed down 7 percent for May and global equities tumbled 10 percent -- also marking their worst showing since September. 

   Commodities fell even more, with crude oil futures plunging 15 percent for the month both in London and New York for their biggest loss since December 2008. Copper lost 11 percent for the month. 

   "There's a lot of instability in the world, and along with the weak economic signals there's going to be significant volatility that I don't expect to end anytime soon," said Don Steinbrugge, managing partner of Agecroft Partners in Richmond, Virginia.  

   The benchmark 10-year U.S. Treasury note rose 12/32 in price, its yield at 1.578 percent -- down from Wednesday's 1.6 percent levels, which already marked a 60-year bottom. 

        

   NO ECB HELP 

   In Europe, ECB President Mario Draghi ruled out hopes that the central bank would step in to ease the pressure in financial markets as EU leaders grappled with measures to tackle structural problems in the debt crisis.

   "Can the ECB fill the vacuum of lack of action by national governments on fiscal growth? The answer is 'No,'" Draghi told the European Parliament. "Can the ECB fill the vacuum of the lack of action by national governments on the structural problem? The answer is 'No.'"  

   Concerns over Europe's debt crisis and the lack of a clear policy response have been rising since Spain unveiled unconvincing plans to recapitalize nationalized lender Bankia, raising the possibility it could need outside help.   

   Those worries kept Spain's 10-year bond yields at around 6.6 percent, not far from Wednesday's euro-era high of 6.79 percent and close to the crucial 7 percent mark, which has led to troubled nations like Portugal and Ireland needing bailouts.   

   The euro was last at $1.2358 to the dollar, after setting a 23-month low at $1.2335. The single currency was flat on the day and down nearly 7 percent on the month. 

   The flight from Spanish debt and Italian bonds, which are under threat of contagion from Spain, has boosted demand for the safety offered by German government paper. 

   Germany's two-year bonds traded just above zero percent on Thursday, while benchmark 10-year Bund yields hovered around their record low of about 1.25 percent. 

NYMEX - NEWYORK,     NEW YORK, May 31 (Reuters) - U.S. crude futures fell more than 1 percent on Thursday, and dropped 17.49 percent in May, as rising crude oil inventories, disappointing economic data and a deepening euro zone debt crisis pressured oil prices. 

    Crude stocks in the United States rose 2.21 million barrels in the week to May 25, the Energy Information Administration said in its weekly report. The increase exceeded expectations.

    The 10th straight rise in crude stocks reported by EIA was counter to the industry's American Petroleum Institute report released on Tuesday that showed crude stocks fell 353,000 barrels.

    The EIA reported gasoline stocks fell 833,000 barrels and distillate stocks fell 1.71 million barrels. 

    Crude stocks at Cushing, Oklahoma, delivery point for the U.S. light sweet crude contract, rose 54,000 barrels, the EIA said. 

    Crude stocks were expected to be up 600,000 barrels, gasoline stocks down 800,000 barrels and distillate stocks down 100,000 barrels, according to a Reuters survey of analysts taken ahead of the weekly inventory reports. 

    Oil and equities felt pressure from reports showing private payroll growth accelerated only slightly last month and claims for jobless benefits rose last week, indicating the U.S. labor market recovery was.

    A separate report showed factory activity in the Midwest slowed this month and U.S. economic growth in the first quarter was a bit softer than initially estimated. 

    The U.S. May nonfarm payrolls report is due on Friday. The data are expected to show a rise of 150,000, after the economy added 115,000 in April. 

    Crude pared sharp losses of more than 2 percent in afternoon trading, after Dow Jones reported that the International Monetary Fund was considering a rescue loan to Spain.  

    But later, IMF Managing Director Christine Lagarde said there was no such plan.

     

CBOT SOYBEAN - May 31 (Reuters) - Chicago Board of Trade soft red winter wheat futures fell to their session lows at the close of pit trading at 1:15 p.m. CDT (1815 GMT) on Thursday, hitting their lowest level in two weeks due to pressure from the ongoing harvest of this year's U.S. crop, traders said. 

    * CBOT wheat fell 0.3 percent in May, its fourth straight monthly decline. Prices have dropped 3.1 percent during the past four months. CBOT wheat's last four-month losing streak ended in October 2008. 

   * The benchmark CBOT July wheat contract has fallen for three straight days. Kansas City Board of Trade hard red winter wheat futures and MGEX spring wheat also were lower on Thursday, with KCBT July off 1.6 percent. 

    * Analysts were expecting a weekly U.S. Agriculture Department report on Friday morning to show wheat export sales ranging from 350,000 to 500,000 tonnes, down from 827,000 a week earlier. 

    * Spot basis bids for hard red winter wheat in the U.S. Plains were steady to weaker on Thursday morning as the advancing harvest boosted the the supply available to the market.  

    * Rainfall during the past week in key grain-growing areas of Russia and Ukraine raised hopes that drought damage to crops in those areas will not get any worse.

FCPO - JAKARTA, May 31 (Reuters) - Malaysian palm oil futures slipped to near a one-week low on Thursday and notched their biggest monthly loss since September 2009 as they tracked a wide sell-off in commodities due to worries over the effect of the euro zone debt crisis on the global economy.

    The hunt for safe-haven assets in Europe spread to Austrian and French bonds, although European shares and the euro regained some stability, as worries over Spain and its troubled banks weighed on market sentiment.

    The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended down 0.3 percent at 3,101 Malaysian ringgit ($980) per tonne. Prices, which earlier hit a low at 3,083 ringgit, have slipped more than 10 percent this month. 

    "Macro again," said a Jakarta-based palm trader. "Last night all European stock markets were much lower and the soybean complex was also lower. 

    "But the downside is limited due to a weaker ringgit."
 

    Traded volumes stood at 15,106 lots of 25 tonnes each, compared with Wednesday's total at 17,601 lots.

 

    Last week when no significant breakthrough was made in resolving Europe's debt crisis, the benchmark fell to its lowest this year at 2,993 ringgit per tonne. 

    Palm oil is set to revisit its May 23 low of 2,993 ringgit per tonne, driven by a wave (5), said Reuters market analyst Wang Tao based on technical analysis.

    In related markets, oil edged up near $104 as buyers moved back in after Wednesday's heavy sell-off, but continuing nervousness around the demand outlook and the euro zone crisis kept oil on course for its biggest monthly percentage drop in two years.

    Chicago corn and soybeans inched lower and were headed for their biggest monthly decline since September amid the deepening euro zone debt crisis. 

    Earlier this week, benchmark palm prices had risen to their highest in almost two weeks, buoyed by weather conditions in the United States. 

    Helping to stem losses in palm oil were expectations of a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening. 

    Indonesia kept its export tax for crude palm oil at 19.5 percent for June.

    In Malaysia, the world's second-biggest palm oil producer after Indonesia, Prime Minister Najib Razak unveiled the $3.3 billion listing of palm oil giant Felda Global.

    Data from Malaysia also showed palm oil product exports during May rose 2.4 percent to 1,382,091 tonnes from 1,349,642 tonnes shipped from April.

    "Exports were within expectations," said a Kuala Lumpur-based trader. "But many are still hopeful of an improvement in shipments due to Ramadan." 

    Cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products for May fell 0.2 percent to 1,333,869 tonnes.

    In other vegetable oil markets, the most active Dalian soyoil September contract eased 1 percent.  

Trader's Highlight

DJI - NEW YORK,    NEW YORK, May 30 (Reuters) - Benchmark U.S. Treasury yields fell to their lowest levels in at least 60 years on Wednesday, while stocks and commodities sold off as fear of the euro zone's debt crisis gripped investors.  

   The euro fell below $1.24 to a fresh 23-month low against the dollar after Italian borrowing costs soared, and concerns mounted over Spain's banking sector following a caution by its central banker that Madrid will miss deficit targets for this year. Crude oil prices fell 3 percent. 

   In equity markets, the three major indexes on Wall Street closed down more than 1 percent each. Pan-European and global share indexes also lost more than 1 percent apiece. 

   Spain's stock market hit a nine-year low as the country's borrowing costs rose to near the 7 percent level that had forced other euro-zone nations to seek bailouts. 

   "You're seeing the deterioration in Spain gain magnitude and that is worrisome because it involves a larger bailout (than Greece's) and far more capital to alleviate banking problems," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.   

   "Traders and long-term investors believe Europeans are working on solutions. But the ultimate question is, 'Will capital markets give them the time before a liquidity issue becomes a solvency issue?'" 

    

   GREEK POLLS CLOUDY; SPANISH STOCKS LANGUISH   

   In Greece, the outcome of an election next month that may decide whether it remains in the euro was still uncertain as polls showed parties for and against a bailout neck-and-neck.  

   At the close, the Dow Jones industrial average <.DJI> was down 160.83 points, or 1.28 percent, at 12,419.86. The Standard & Poor's 500 Index <.SPX> was down 19.10 points, or 1.43 percent, at 1,313.32. The Nasdaq Composite Index <.IXIC> was down 33.63 points, or 1.17 percent, at 2,837.36. 

   The benchmark 10-year U.S. Treasury note was up 7/32 in price, with its yield of 1.620 percent falling to its lowest in at least 60 years, based on monthly figures gathered by Reuters. 

   European stocks, tracked by the FTSEurofirst 300 index <.FTEU3>, fell 1.5 percent to close at 975.74, after trading 105 percent of its 90-day volume average. The blue-chip Euro STOXX 50 <.STOXX50E>, which fell 2 percent, traded 70 percent of its volume average.   

   Spain's Ibex 35 index fell as much as 2.9 percent to a session low at 6,073.70, its lowest since 2003. 

   MSCI's all-country world equity index shed 1.66 percent. 

   The yield on Spain's 10-year benchmark note was at 6.675 percent. Italy's funding costs rose sharply at a bond sale, with 10-year yields topping 6 percent for the first time since January.

   The euro was last down 1 percent at $1.2367 after touching $1.2360 earlier, its lowest level since early July 2010. The euro also fell against the safe-haven yen, losing nearly 1.5 percent to trade near 97.82 yen, a four-month low.    

    

   ONLY "BAND-AID" SOLUTIONS FROM EUROPE 

   "Uncertainty remains high and headline risk is likely the key driver," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto. "The fear is that we only have Band-Aid solutions, and we still don't have a medium-term plan for Europe." 

   The European Commission threw Spain two potential lifelines, offering more time to reduce its budget deficit and offering direct aid from a euro-zone rescue fund to recapitalize distressed banks.  

   The euro's weakness underpinned the dollar index <.DXY>, which measures the dollar against a basket of major currencies. The index hit a session high above 83.1, its highest level since September 2010. 

   The rise in the dollar, as well as fears about the European debt crisis, dragged down commodities. Copper and platinum both sank to 4-1/2-month lows as investors piled into safe havens. [MET/L] 

   "As we've seen during other periods of extreme risk aversion, investors go into Treasury bonds, which are yielding record lows, or they stay in cash. It's preservation of capital," said analyst Robin Bhar at Societe Generale in London.

NYMEX - NEWYORK,     NEW YORK, May 30 (Reuters) - U.S. crude futures tumbled more than 3 percent o n W ednesday, falling to a seven-month low on the threat to petroleum demand from a spreading euro zone debt crisis and China's signal that it is not planning a large economic stimulus.  

    Rising borrowing costs for Spain and Italy and the latest poll showing a lead for Greece's left-leaning, anti-austerity parties ahead of next month's elections added to concerns about the region's economy being enveloped in the debt turmoil. 

    U.S. crude was headed for a monthly decline of more than 17 percent for May. Equities and other commodities, like industrial feedstocks platinum and copper, also felt pressure from the mounting crisis in the euro zone economy. 

    Expectations that China would act to counter slowing growth were dimmed after influential academics said Beijing should shun aggressive fiscal stimulus, in remarks published in leading state-backed newspapers.

    U.S. crude inventories fell by 353,000 barrels last week, according to industry group the American Petroleum Institute's weekly report.

    Gasoline stocks rose 2.1 million barrels and distillate stocks fell 1.3 million barrels, the API said. 

    Crude stocks had been forecast to be up, by 600,000 barrels. Gasoline stocks were expected to be down 800,000 barrels, with distillate stocks seen near flat, down 100,000 barrels.     

    

    MARKETS NEWS 

   

    * London copper fell more than 2 percent, turning negative for the year and coming within $20 of its 2012 low on fears of a widening European debt crisis and fading hopes for a Chinese stimulus. 

CBOT SOYBEAN - May 30 (Reuters) - Nearby soybean futures on the Chicago Board of Trade fell, halting a three-day rally, as mounting concerns over Europe's debt crisis prompted investors to exit risky assets including commodities. 

    * U.S. crude oil futures fell about $3 per barrel, adding pressure on soybeans and soyoil.  

    * But new-crop November soybeans were higher at the end of pit trading at 1:15 p.m. CDT (1815 GMT), buoyed by worries about dryness in parts of the U.S. Midwest crop belt, and updated forecasts that scaled back rains that had been expected this week.     

    * USDA late Tuesday said the U.S. soybean crop was 89 percent seeded, up from 76 percent a week earlier and well ahead of the five-year average of 61 percent. 

    * USDA said the crop was 61 percent emerged, ahead of the five-year average of 30 percent. [US/SOY] 

    * Stevedores at Brazil's largest port, Santos, went on strike on Wednesday, threatening delays to shipments of soy, coffee, sugar and other commodities, the port authority said.

    * CIF soybean basis bids for soybeans shipped to the U.S. Gulf were mostly steady as moderate demand from exporters was met by limited farmer sales. 

    * Front-month July soybeans fell to a one-week low before paring losses. The contract traded between support at the 100-day average of $13.48-1/2 and resistance at the 50-day average of $14.22.  

FCPO- JAKARTA,  May 30 (Reuters) - Malaysian palm oil futures snapped a four-day rally on Wednesday, falling more than 2 percent as euro zone debt jitters weighed on prices, although losses were capped by expected demand ahead of the Muslim fasting month of Ramadan in July. 

    European shares slipped and the euro touched a 23-month low on Wednesday as investors worried that Spain's banking problems would push its borrowing costs to unsustainable levels and after China signalled it is not planning a large stimulus package. 

    The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended 2.1 percent lower at 3,111 Malaysian ringgit ($990) per tonne. Prices, which earlier hit a low at 3,106 ringgit, have slipped more than 10 percent this month. 

    Traded volumes stood at 17,601 lots of 25 tonnes each, compared with Tuesday's total at 15,689 lots. 

    Palm oil is "taking its cue from macro uncertainties," said a Kuala Lumpur-based trader. "If Europe fail to provide the much needed simulation, it will have more downside."

    Last week, palm prices were weighed down as no significant breakthrough was made in resolving Europe's debt crisis, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne. 

    Palm oil will drop to 3,069 ringgit per tonne, driven by a wave (5), the fifth wave of a five-wave cycle, said Reuters market analyst Wang Tao based on technical analysis.

    "The market fundamentals are still bullish because of slower production and exports not being too bad, but outside factors really scared buyers," said a Jakarta-based buyer. 

    But highlighting how jittery investors are, benchmark palm prices rose to their highest peak in almost two weeks earlier this week as investors keep a close eye on weather conditions in the United States. 

    Soybeans rose for a fourth straight session, supported by dryness in parts of the U.S. Midwest, tight supplies from South America and strong Chinese demand. 

    "Palm oil today is down a bit," a second Kuala Lumpur-based trader said. "With the euro zone crisis dragging ... everything is uncertain." 

    "So far so good," he added on the U.S. weather patterns. "But it's only the initial part of the planting season." 

    Also helping to boost palm prices, according to traders, was a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening. 

    "We are moving into the fasting season, where demand is going to come in and pick up," the second trader added. 

    In other vegetable oil markets, the most active Dalian soyoil September contract eased slightly. 

REGIONAL EQUITY - May 30 (Reuters) - Thailand's stock market ended Wednesday 1.3 percent weaker, while other southeast Asian markets closed mixed as fears over Spain's bank crisis and the possibility of China taking a cautious stance on economic stimulus measures damped investor appetite for risky assets.  

    Concerns over Spain's borrowing costs rising to unsustainable levels hit hopes for the recovery of the euro zone.  

    Thailand <.SETI> snapped a four-session rising streak, but Bangkok-based Viwat Techapoonphol, senior strategist of Tisco Securities, said the fall would help boost buying in the Bangkok market, where foreigners have been net sellers only for one month so far this year. 

    "There will be buying opportunities, especially for local investors, in this market at the lower prices. If you look at the domestic economy in the second half, I think it's a good story," Techapoonphol said. 

    Shares in Singapore <.FTSTI> lost 0.6 percent, and the Philippines benchmark <.PSI> edged down 0.1 percent.  

    Indonesian stocks <.JKSE>, recovering from early losses, closed steady with foreign inflows of $12.36 million, while Malaysian shares <.KLSE> gained 0.6 percent with net foreign buying of $29.80 million and Vietnam's benchmark <.VNI> added 0.9 percent.   

  

RTRS- India seen ending veg oil base import price freeze

NEW DELHI, May 28 (Reuters) - India is likely to end its freeze on the base import price of refined vegetable oils, government sources said on Monday, to protect its refineries from cheaper imports of palm oil from Indonesia, the world's top producer of the cooking oil.

Edible oil refineries in India, the world's top vegetable oil importer, have been complaining about cheaper imports after Indonesia cut export tax on refined varieties and raised the duty on crude palm oil.

India has kept the base import price, used to calculate import tax irrespective of the purchase price, unchanged since 2006 when the government was battling high food prices.

"There has been a freeze on base import price for some years now but there is a need to do away with the freeze on tariff value on refined vegetable oils. We also need to protect our domestic units," one of the sources said.

Importers are currently taxed 7.5 percent duties based on the tariff value set at $484 a tonne - a low price to pay and bring in processed edible oils.

RTRS- China to raise soybean imports again - Oil World

HAMBURG, May 29 (Reuters) - China is likely to raise soybean imports in the 2011/2012 season despite recent shipment cancellations as the country has harvested a smaller soy crop and faces continued high demand, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.

China is likely to import 56.8 million tonnes of soybeans in Oct. 2011/Sept. 2012 against 52.3 million tonnes in 2010/11, Oil World said.

"With the recent purchases and vessel lineups this quantity may actually turn out on the low side," it said. "Additional sizeable increases in imports will be required next season in view of the prospective further decline in Chinese oilseed production under the lead of soybeans and rising domestic requirements."

China's own 2011/12 soybean crop fell to 13.6 million tonnes from 15.08 million tonnes in the previous year, it said.

Global markets were surprised on May 24 when a Chinese trading house cancelled four soybean shipments, generating concern about possible falling demand from China, the world's largest soybean buyer. [ID:nL4E8GP0HB]

Oil World stressed such shipments were bought at previously high soybean prices which have since fallen back. [ID:nL4E8GN0M2]

"Of course China needs these quantities but is going to buy them at lower prices," it said.

RTRS- ARGENTINE 2012 SOYBEAN CROP MAY FALL TO 39 MLN T FROM 49.2 MLN T IN 2011- OIL WORLD

HAMBURG, May 29 (Reuters) - Argentina's 2012 soybean crop could fall as low as 39-40 million tonnes from 49.2 million tonnes in 2011 as drought and flooding continue to force farmers to abandon soy crops, Hamburg-based oilseeds analysts Oil World said on Tuesday.

"The Argentine soybean crop remains in trouble as acreage abandonment is exceeding expectations as a result of severe drought in the northern states as well as the latest flooding in parts of the Buenos Aires province," Oil World said.

"It is thus possible that the soybean crop plunges to only 39-40 million tonnes compared with our current estimate of 40.5 million tonnes and last year's 49.2 million tonnes."

Argentina is the world's third-largest soybean producer after the United States and Brazil. Estimates of South American soybean production continue to shrink as farmers harvest the remainder of the southern hemisphere crop, a factor driving down forecasts for U.S. and global inventories and supporting prices.

Drought and then flooding in Argentine crop areas prompted the Buenos Aires Grains Exchange on May 24 to cut its estimate for the country's 2011/12 soybean crop to 39.9 million tonnes from a previous estimate of 41 million tonnes. [ID:nL1E8GOD38] Brazil is also suffering a poor soybean crop. [ID:nL1E8GM8IP]

"This year's soybean crop failure in South America is additionally weighing on this season's tight soyoil supplies," Oil World said.

Global 2011/12 season soyoil output is likely to rise only 0.3 million tonnes on the year to 41.7 million tonnes following a 2.5 million tonne rise in 2010/11, it forecast.

"We expect world consumption of soyoil to exceed production by 0.5-0.6 million tonnes this season, representing an imbalance which can persist only temporarily."

This will result in a "pronounced reduction" in global soyoil stocks to 3.8 million tonnes at the end of the 2011/12 season against 4.4 million tonnes a year previously, it forecast.

Trader's Highlight

DJI- NEW YORK, May 29 (Reuters) - The euro neared a two-year low o n T uesday as investors fretted about Spain's troubled banking system, but global stocks jumped on speculation Greece would stay in the euro zone and news that China would take new measures to stem an economic slowdown.

The euro fell further below $1.25 after Egan-Jones Ratings cut Spain's credit score for the third time in less than a month, saying the need to support the country's banks was putting new strains on Spanish public finances.

The euro fell to lows versus the U.S. dollar last seen in since July 2010, as Spain's 10-year borrowing costs rose to 6.54 percent. The euro traded down 0.3 percent to $1.2503.

Spanish stocks also fell and Spain's borrowing costs held near six-month highs after a source said the government would issue new debt to recapitalize troubled lender Bankia.

European Central Bank officials declined to comment on speculation of further action to bolster banks in the euro zone.

"The rumor mill has been busy, with talk of an ECB press conference about bank recapitalization, supporting the euro and giving euro zone stocks upside momentum," said Saxo Bank Chief Economist Steen Jakobsen, in Copenhagen. "We do not believe in it, for the record."

Stocks on Wall Street rose on renewed hopes Greece will stay in the euro zone after Greek election polls pointed to support for pro-bailout parties in elections next month.

The major U.S. indices were up more than 1 percent even though Facebook Inc hit a new low of $28.65, with losses accelerating after falling through the $30 per share barrier.

The Dow Jones industrial average <.DJI> added 125.86 points, or 1.01 percent, to end at 12,580.69. The Standard & Poor's 500 Index <.SPX> was up 14.60 points, or 1.11 percent, at 1,332.42. The Nasdaq Composite Index <.IXIC> was up 33.46 points, or 1.18 percent, at 2,870.99.

Investors took heart from polls showing a party that backs Greece's international bailout was leading ahead of a June 17 election. If the New Democracy Party can form a government, Greece would be less likely to quit the euro. [ID:nL5E8GTCHN]

"There's increasing hope that the more conservative party will win out in Greece, which is enough to spur some buying today," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Reports that China was planning a new round of stimulus spending to boost lending and growth also cheered stock markets and briefly boosted oil prices, which later slipped on the Spain downgrade and Middle East supply worries. [ID:nL4E8GT0AU]

Traders also appear to be anticipating better-than-expected economic news this week. U.S. May jobs and Institute for Supply Management reports are due on Fr iday, noted Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Still, a high degree of caution marked trading in the bond markets.

U.S. government debt prices slipped in late trade and the yield on Germany's 10-year bond hit a record low as doubts grew over Spain's plan to recapitalize its banks and obtain financing for its struggling regional governments.

"It's mostly how you solve the Spanish bank problem, so there's a bit of safe-haven buying," said David Keeble, global head of interest rates strategy at Credit Agricole Corporate & Investment Banking in New York.

Spanish debt rose within 46 basis points of the 7 percent threshold that was the tipping point that forced other euro zone countries such as Portugal and Ireland to seek emergency rescues.

NYMEX- NEW YORK, May 29 (Reuters) - U.S. crude edged lower on Tuesday, retreating after a downgrade of Spain's credit rating sent the euro reeling against the dollar, while hopes that Greece will remain in the euro zone and China will move to stimulate growth limited oil's losses.

Egan-Jones Ratings cut Spain's credit rating for the third time in less than a month, pressuring the single currency and rekindling fears of a spreading debt crisis in the euro zone. [ID:nL1E8GT7HY] [USD/]

Before the downgrade, oil and equities rose on optimism about polls showing leads for Greek political parties in favor of austerity and a report that China's biggest banks have accelerated lending. [ID:nL5E8GQ2CK] [ID:nL4E8GT0AU]

Also supportive for oil were revived concerns about supply disruptions because Iran's dispute with the West over Tehran's nuclear program remains unresolved.

* On the New York Mercantile Exchange, July crude fell 10 cents, or 0.11 percent, to settle at $90.76 a barrel, having traded from $90.25 to $92.21.

* China's biggest banks appeared to have accelerated lending toward the end of this month, the official Shanghai Securities News reported on Tuesday, citing unidentified sources. [ID:nL4E8GT0AU]

* OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained output at high rates and Iranian shipments did not fall substantially more ahead of a European Union embargo set for July, a Reuters survey found on Tuesday. [ID:nL9E8CA01M]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade ended higher for a third straight session, supported by soybean/corn spreading and concerns about dry weather limiting the early growth of the U.S. soy crop, traders said.

* However, soybean values backed off the day's highs by the close of pit trading at 1:15 p.m. CDT (1815 GMT) as a downgrade of Spain's sovereign rating prompted traders to exit risky assets such as commodities.

* Soymeal and soyoil followed soybeans higher but soymeal gained relative to soyoil on meal/oil spreading.

* Dry weather was a worry for soybeans in much of the Midwest, especially southern areas, following a hot and windy U.S. holiday weekend. But showers were crossing parts of Ohio, southern Indiana and Kentucky at midday Tuesday.

* MDA EarthSat Weather said much-needed rains were expected in the southern Midwest and northern Delta over the next few days, and more rains were expected in the Midwest next week. The showers should replenish moisture supplies and improve conditions for corn and soybean growth.

* Oilseed crushers in Argentina's main grains hub Rosario will go on strike over wages on Wednesday, the general secretary of the local union Pablo Reguera said. [ID:nL1E8GT56K]

* China is likely to raise soybean imports to 56.8 million tonnes in 2011/2012, despite recent shipment cancellations, as the country has harvested a smaller soy crop and faces continued high demand - oilseed analysts Oil World. [ID:nL5E8GTAS5]

* Argentina's 2012 soybean crop could fall as low as 39 million to 40 million tonnes, from 49.2 million tonnes in 2011, as drought and flooding continue to force farmers to abandon soy crops - Oil World. [ID:nL5E8GT5RI]

* USDA reported export inspections of U.S. soybeans in the latest week at 12.414 million bushels, near the low end of estimates for 11 million to 15 million bushels.

FCPO- JAKARTA, May 29 (Reuters) - Malaysian palm oil futures climbed to a near two-week high on Tuesday as investors cited a rebound from a sell-off on the euro zone debt crisis, while expectations of dry weather conditions in soybean-growing regions in the United States also supported prices.

The euro hovered near a two-year low as investors worried about Spain's banking problems, the outcome of the Greek elections and the health of the global economy. [MKTS/GLOB]

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange closed 1.1 percent higher at 3,178 ringgit ($1,000) per tonne. Prices have slipped about 8 percent this month.

Traded volumes stood at 15,689 lots of 25 tonnes each, compared with Monday's total at 14,730 lots.

"It was over-sold to begin with," said a Singapore-based analyst. "If you look at soybean prices, it has been quite resilient, so palm has been over-shooting to the downside.

"If you have a world (economic) crisis, you still need people to eat ... if there is no supplier, then prices will shoot up regardless."

Last week, the lack of any significant breakthrough in resolving the debt crisis in Europe weighed on palm prices, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne.

Prices rose as high as 3,193 ringgit on Tuesday, the highest level since May 16, and traders say they are likely to hit 3,200 before the end of May.

In related markets, corn and soybeans firmed as some weather models forecast crop-stressing heat in the U.S. Midwest this week. [GRA/]

"It was over-sold," said a Kuala Lumpur-based trader. "The fundamentals have been positive, even when we fell to 2,993. On the technical side, we have posted a bottom, so sentiment has shifted back to positive."

Traders also said there was some buying after leading palm oil buyer India, looked likely to end its freeze on the base import price of refined vegetable oils. [ID:nL4E8GS276]

"There is also some talk about India wanting to raise import products' base prices. Maybe some buying or covering before India raises base prices," said a second Kuala Lumpur-based trader. "Palm oil is more in consolidation mode after last week's sharp falls.

"There is not as much concern and fear about Europe. Maybe we can see some light at the end of the tunnel."

Also helping boost palm prices, according to traders, was a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening.

REGIONAL EQUITY- May 29 (Reuters) - Most Southeast Asian stocks ended firmer on Tuesday on hopes that China might launch spending measures to boost growth, but trading volumes and gains were capped asconcerns over a euro zone recovery flared after a surge in Spanish borrowing.

Investors were still cautious, waiting for clues from the euro zone, which is struggling to overcome its debt crisis, though an opinion poll pointed to the possibility of the formation of a Greek government committed to keeping the country in the euro zone in a June 17 election. [ID:nL5E8GQ2CK]

"China spending more is always welcome news for equities," said Song Seng Wun, an economist at CIMB, based in Singapore.

"Optimism has returned at least for now. But a long wobbly road is ahead," he said referring to the euro zone crisis.

Stocks in the Philippines <.PSI> rose 1.4 percent to hit a two-week high after Moody's Investor Service revised the country's rating outlook to positive from stable.

Energy shares lifted Thailand's benchmark <.SETI> by 1.2 percent in heavy trading, extending gains for the fourth session, while Singapore <.FTSTI> shares closed 0.5 percent firmer.

Malaysian shares <.KLSE> ended up 0.7 percent and the Indonesian benchmark <.JKSE> closed steady though the two countries saw net foreign selling of $2.13 million and $44.18 million respectively.

Trader's Highlight

FCPO- JAKARTA, May 28 (Reuters) - Malaysian palm oil futures rose to a near two-week high on Monday, as investor worries about the euro zone debt crisis eased and demand showed signs of improving ahead of the Muslim fasting month of Ramadan in July.

European stocks rose for a third straight session on Monday and the euro edged up, as Greek polls showed growing support for pro-bailout parties, yet Spain's debt yields hit a record high as the government worked on plan to fund troubled lender Bankia . [MKTS/GLOB]

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended 0.5 percent higher at 3,144 ringgit ($1,000) per tonne. Prices have slipped about 9 percent this month.

Traded volumes stood at 14,730 lots of 25 tonnes each, compared to Friday's total at 21,931 lots.

"Euro zone concerns and macro fears are easing," said a Kuala Lumpur-based trader. "Demand is also a tad better."

After peaking at 3,158 ringgit on Monday, traders said prices could peak at about 3,200 ringgit by the end of this month.

Last week, a failure by European policymakers to make any significant breakthrough in resolving the debt crisis weighed on palm prices, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne.

Palm oil will end its current rebound around resistance at 3,192 ringgit as indicated by a Fibonacci retracement analysis and a falling channel, said Reuters market analyst Wang Tao based on technical analysis. [ID:nL4E8GS159]

"Not much news in the market to move the price in a big way," said a second Kuala Lumpur-based trader. "Just a technical rebound -- markets are oversold. My guess is the down side is not over yet ... it's too early to say the market has bottomed out."

Also offering support to palm was crude oil, which edged above $107 per barrel on euro zone hopes and the lack of progress in talks over Iran's nuclear programme. [O/R]

The demand outlook was still uncertain however, and traders were looking for more news on Europe.

"In the 19th century we were worried about their invasion," the Kuala Lumpur trader said on Europe. "Today we're worried about their economies."

Another positive for edible oils was an upturn in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening.

"It is fair for the market to go higher, after being heavily oversold," said a Jakarta-based trader. "Fundamentals are still supportive - production is not really high and demand not too bad.

"Only the macro picture was behind the recent downtrend."

Data last week showed that palm oil exports rose slightly in May. [PALM/ITS] [PALM/SGS]

Investors are also keeping a close eye on weather patterns, where dry conditions in the United States could hurt the soybean crop, and a possible return of the El Nino weather pattern that may curb palm oil output in Southeast Asia. [GRA/]

U.S. markets will be closed most of Monday for the U.S. Memorial Day holiday.

In other vegetable oil markets, the most active Dalian soyoil September contract rose 1 percent.

REGIONAL EQUITY- May 28 (Reuters) - Southeast Asian stocks were higher on Monday on a slight easing of fears over Greece after surveys showed support for pro-bailout political parties ahead of next month's elections.

But trading volumes were below the 30-day moving average, reflecting investors' limited appetite for risk.

Singapore <.FTSTI> and the Philippines <.PSI> rose 0.5 percent each, while Indonesia <.JKSE> edged up 0.4 percent despite a foreign outflow of $45.82 million.

Shares on the Thai stock exchange <.SETI> advanced 0.6 percent to their highest level since May 18, while Malaysia <.KLSE> gained 0.3 percent to a near two-week high. The bourse recorded net foreign selling of $18.17 million.

Vietnam <.VNI> bucked the trend, losing 0.4 percent on investors' concerns about companies' access to loans despite a cut in key rates.