Trader's Highlight

DJI- NEW YORK, June 14 (Reuters) - U.S. stocks rose on Thursday after news major central banks are preparing coordinated action if the results of Greek elections this weekend generate turmoil in financial markets.

Based on the latest available data, the Dow Jones industrial average <.DJI> was up 156.51 points, or 1.25 percent, at 12,652.89. The Standard & Poor's 500 Index <.SPX> was up 14.27 points, or 1.09 percent, at 1,329.15. The Nasdaq Composite Index <.IXIC> was up 17.72 points, or 0.63 percent, at 2,836.33.

NYMEX- NEW YORK, June 14 (Reuters) - U.S. crude futures rose on Thursday as OPEC agreed to keep its current production ceiling steady and oil moved even higher in post-settlement trading on news that central banks are preparing to respond to any turmoil resulting from Greece's upcoming election.

OPEC left oil output limits on hold, hoping that top producer Saudi Arabia scales back its production after its recent unilateral increase in output. [ID:nL5E8HE6GW]

Several members in the Organization of the Petroleum Exporting Countries called on Saudi to cut back to bring collective supply down to the 30 million barrels per day (bpd) limit. Extra Saudi production is largely responsible for lifting actual OPEC output to 31.6 million bpd.

Oil prices extended gains in post-settlement trading on news that central banks from major economies are ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading. [ID:nL1E8HEEK]

The news also sent U.S. stocks and the euro higher.

* On the New York Mercantile Exchange, July crude rose $1.29, or 1.56 percent, to settle at $83.91 a barrel, trading as low as $82.27 and reaching $84.42 in post-settlement trading.

* India is seeking extra oil supplies from OPEC members Saudi Arabia, Qatar and Algeria.[ID:nL3E8HE6DF]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell for a second day on corn/soybean spreading and long liquidation tied to economic uncertainty, especially in top soy buyer China, traders said.

* Traders hold a near-record-large long position in CBOT soybeans, leaving the market vulnerable to bouts of long liquidation.

* Open interest in spot July soybeans was above 176,000 contracts with just over two weeks left before first notice day for deliveries on June 29.

* Soyoil posted the biggest losses in the soy complex, pressured by macroeconomic worries that also dragged down European and Asian vegoil markets. Malaysian palm oil futures slumped to their lowest level of 2012. [ID:nL3E8HE2UA]

* Market expecting updated acreage figures Friday from Informa Economics. Informa in May forecast U.S. soybean seedings at 75.8 million acres, nearly 2 million more than USDA'S March planting intentions figure.

* The market fell despite larger-than-expected weekly soy export sales. USDA reported sales of U.S. soybeans in the latest week at 1.005 million tonnes, above trade estimates for 500,000 to 750,000 tonnes.

* USDA reported weekly U.S. soymeal sales at 141,400 tonnes, near the high end of expectations for 75,000 to 150,000 tonnes. USDA pegged weekly soyoil sales at 7,300 tonnes, within a range of trade estimates for 5,000 to 15,000 tonnes.

* Market also bucked bullish monthly soy crushing data. The National Oilseed Processors Association reported the U.S. soybean crush for May at 138.266 million bushels, up from 131.708 million in April and above the average trade estimate of 135.1 million.

* NOPA showed U.S. May soyoil stocks at 2.312 billion lbs, down from 2.385 billion in April and in line with trade expectations.

FCPO- SINGAPORE, June 14 (Reuters) - Malaysian palm oil futures slumped to their lowest in 2012 on Thursday as the euro zone debt crisis and sluggish U.S. growth triggered a flight of capital from riskier assets.

Investors were waiting for fresh trading cues from the results of an Italian debt auction and U.S. jobs data later in the day, as well as Greek polls this weekend that could precipitate the country's exit from the bloc. Uncertainty about the global economy pushed Asian shares down on Thursday. [MKTS/GLOB]

"On the weekend ahead we are going to see the Greek election and market participants are staying away from the market for the time being," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.

"Fundamentals remain quite encouraging, we have a higher demand and lower stocks. But fundamentals are not taking the front seat as macroeconomic factors are still dominating at the moment."

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 3.5 percent to close at 2,846 ringgit ($893) per tonne, the lowest level this year. Futures have lost more than 10 percent this year.

Prices also dropped below the 2,900-ringgit mark for the first time this year. The market hit a low of 2,838 ringgit earlier in the session, a level unseen since Oct. 20, 2011.

Traded volumes were high, at 37,755 lots of 25 tonnes each, compared to the usual 25,000 lots, as investors rushed to liquidate their positions.

Fundamentals were supportive, with Malaysian palm oil stocks hitting a 13-month low in May, a sign that strong demand was eating into stocks. [ID:nK7E8EU00L]

Malaysian palm oil exports were lacklustre for June 1-10, but traders expect shipments to pick up as India and Pakistan restock ahead of the Muslim fasting month starting in mid-July.

Cargo surveyors will report export numbers for the first half of the month on Friday. [PALM/ITS][PALM/SGS]

Lower soybean ending stocks reported by the U.S. Department of Agriculture on Wednesday also suggested tighter supply and could provide support for palm oil prices.

REGIONA EQUITY- BANGKOK, June 14 (Reuters) - Southeast Asian stock markets fell along with other world markets on Thursday, led by losses in commodity-linked shares that came under selling pressure amid global price weakness.

News that Spain's 10-year bond yields hit a euro-era record of 7 percent on Wednesday kept investors cautious about the debt situation in Europe, brokers in the region said.

Among underperformers, Jakarta's Composite Index <.JKSE> fell 1.8 percent to 3,791.62, its lowest close since June 6, and the Philippine index <.PSI> ended down 1.7 percent, reversing two sessions of gains.

Indonesia's biggest coal miner Bumi Resources Tbk plunged 8.9 percent, and Philippine Aboitiz Power Corp shed 3.1 percent.

Trader's Highlight

DJI - NEW YORK, June 13 (Reuters) - Wall Street ended lower on Wednesday as fears ahead of the weekend elections in Greece finally drove down a market that had been treading water through most of the day. 

Up to 800 million euros ($1 billion) have been pulled out of Greek banks daily ahead of the cliffhanger election on Sunday, which many fear will result in Greece leaving the euro zone. If that happens, investors fear other peripheral nations may also have to exit.  

The euro zone's cloudy future has made investors inclined to quickly reverse positions. On Wednesday, they pounded shares in financial, energy and materials sectors into the close.  

Volume surged after three weak sessions. About 7.1 billion share trade on the NYSE, Amex and Nasdaq, slightly above the 20-day moving average. 

There's a "lack of details or specifics coming out of Europe, and that creates more of a vicious cycle," said Larry Peruzzi, senior equity trader at Cabrera Capital Markets Inc in Boston. "The euro has been a concern every single day." 

Also weighing on sentiment, the government reported U.S. retail sales fell in May to their worst level in two years, the latest data to point to sluggish U.S. growth after a weaker-than-expected U.S. jobs report in May sparked widespread fears of a slowdown. The S&P Retail Index <.RLX> lost 1.5 percent. 

There was a defensive tilt to trading for much of the day as gains in sectors such as healthcare and telecoms managed for a time to offset declines in cyclical areas. Shares in telecom provider AT&T hit a 52-week high at $35.06, before closing unchanged at $34.98. The telecom sector <.GSPL> ticked up 0.1 percent. 

Shares of JPMorgan Chase & Co were a standout, rising 1.6 percent as the bank's chief executive, Jamie Dimon, defended the portfolio behind JPMorgan's recent multibillion-dollar trading loss, telling lawmakers it was a genuine hedge that would make the firm a lot of money if a credit crisis hit. 

In the overall market, the Dow Jones industrial average <.DJI> fell 77.42 points, or 0.62 percent, at 12,496.38. The Standard & Poor's 500 Index <.SPX> lost 9.30 points, or 0.70 percent, at 1,314.88. The Nasdaq Composite Index <.IXIC> dropped 24.46 points, or 0.86 percent, at 2,818.61.  

The S&P 500 had moved more than 1 percent in opposite directions on the previous two trading days, which were largely dictated by the events in the euro zone. 

On Tuesday the index bounced after falling toward the 1,300 level, a psychological milestone that some traders are using to trade against as index levels assume more importance given the lack of a clear outlook.  

Investors have pushed Spain's 10-year borrowing costs to their highest level since the launch of the euro in 1999, adding to uncertainty over the plan to bail out the country's struggling banks. 

    

An influential government adviser in China was quoted as saying the country's economic growth could fall below 7 percent in the second quarter if weak activity persists in June. 

Investors have been looking to China's relatively robust expansion to pick up the slack from Europe, especially demand for commodities. 

NYMEX - NEWYORK, June 13 (Reuters) - U.S. crude futures fell on Wednesday ahead of an OPEC policy meeting expected to leave the group's production target unchanged, while weak economic data added to the bearish sentiment. 

Saudi Arabia came under pressure from fellow OPEC producers to cut oil output to prevent a further slide in crude prices a day ahead of the group's Thursday policy meeting in Vienna.

After Saudi Arabia initially floated a proposal to lift OPEC's output target, Riyadh quickly dropped the idea and the 12-member producer group looks set to leave its production ceiling unchanged at 30 million barrels per day.     

U.S. data showed retail sales fell for a second straight month in May and wholesale prices dropped the most in three years. The reports were expected to boost chances of further action by the Federal Reserve to shore up the flagging recovery.

U.S. crude inventories fell 191,000 barrels to 384.44 million barrels last week, the Energy Information Administration (EIA) said in a weekly report, a smaller drop than expected.

  

Gasoline stocks fell 1.72 million barrels and distillate stocks fell 63,000 barrels, the EIA said. 

Crude stocks were expected to be down 1.4 million barrels, a Reuters survey of analysts showed. Gasoline stocks were expected to be up 1.1 million barrels and distillate stocks up 1.3 million barrels.  

CBOT Soybean - Soybean futures on the Chicago Board of Trade fell nearly 2 percent by the end of pit trading on long liquidation tied to improving U.S. weather forecasts and on concerns about the global economy, traders said. 

* Front-month July soybeans fell to the lowest level in a week, and soymeal lost ground to soyoil as meal/oil spreads unwound. 

* Slower-than-expected economic expansion in China, the world's largest importer of soybeans, lent further pressure to the soy market. 

* Weather patterns have shifted to a wetter scenario, though they are still short of perfect. Light rain is expected late this week in northwest portions of the U.S. Midwest but dry weather is likely elsewhere, agricultural meteorologists said. 

* Analysts expect the National Oilseed Processors Association's monthly U.S. soybean crush report on Thursday to show the May crush at 135.1 million bushels, up from NOPA's April figure of 131.708 million.

* CBOT reported the number of soybean contracts registered for delivery fell by two contracts late Tuesday, leaving a total of eight contracts registered. Soybean registrations have fallen from more than 600 contracts in late May, a reflection of firming cash markets.  

FCPO SINGAPORE, June 13 (Reuters) - Malaysian palm oil futures closed lower on Wednesday, as concerns that the euro zone debt crisis could slow growth offset demand chasing tighter stocks. 

Uncertainty over Europe's debt crisis comes as investors focus on the Greek elections on June 17 that could lead to the nation's exit from the currency bloc. 

But analysts remained upbeat on lower stocks in No.2 producer Malaysian and crude palm oil's discount of above $160 per tonne to competing soybean oil, a tad higher than a 5-year average level of $158 per tonne. 

The U.S. Department of Agriculture made a slight downward revision in its outlook for soybean ending stocks for both old- and new-crop marketing years, providing support for palm oil prices. 

"In addition, supply shortage due to the tree stress effect (in Malaysia) and monetary easing policy from China should continue to support crude palm oil prices," Alan Lim, research analyst with Malaysia's Kenanga Investment Bank, said in reference to weak production growth.      

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.5 percent to close at 2,950 ringgit ($930) per tonne. 

Traded volumes picked up from just 4,331 lots before the midday break to 18,627 lots of 25 tonnes each, but still lower than the usual 25,000 lots. 

Local fundamentals were strong with Malaysian palm oil stocks hitting a 13-month low in May, signalling strong demand was eating into stocks.

Although cargo surveyors have reported lacklustre exports for June 1-10, traders expect shipments to pick up in the later in the month as India and Pakistan do last minute buying ahead of the Muslim fasting month starting in mid-July.      

Brent crude oil held firm on Wednesday, with investors awaiting the outcome of the meeting this week of the producer group OPEC, while gains were capped by worries about Europe's debt crisis and prospects for oil demand.

In other vegetable oil markets, U.S. soyoil for July  delivery gained 0.4 percent in late Asian trade. The most active Jan 2013 soyoil contract on the Dalian commodity exchange closed 0.2 percent lower.  

Trader's Highlight

DJI - NEW YORK, June 12 (Reuters) - U.S. stocks took their cues from Europe's troubled debt markets on Tuesday, staging a comeback rally to end up more than 1 percent as Spanish bond yields came off euro-era record highs. 

Trading has been choppy this week as investors struggle for clarity over whether the $125 billion bailout for Spanish banks agreed over the weekend will be effective and have turned to bond yields as a thermometer for risk aversion. 

Economically sensitive sectors that had sold off recently were the strongest performers, suggesting investors saw value in beaten down shares, while traders looked for an oversold bounce as the S&P 500 slipped back toward 1,300. 

"We are just being held hostage by all the news flow," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "I don't think anyone has a handle on this." 

"Right now everyone has got a pretty short-term trading mentality," he said. "You have to be ready to abandon your thoughts and change your mind at a moment's notice."    

Economically sensitive shares that rise and fall as fears ebb and flow were the biggest gainers. Materials, financial and industrial shares were up over 1.5 percent. 

Boeing Co led the Dow, climbing 3.5 percent, helped by an upgrade by Sanford C. Bernstein, which said it saw a better outlook for the company's new Dreamliner plane. 

For the week so far, the S&P is close to flat, reflecting the uncertainty in the market. 

For the day the Dow Jones industrial average gained 162.57 points, or 1.31 percent, to 12,573.80. The Standard & Poor's 500 Index rose 15.25 points, or 1.17 percent, to 1,324.18. The Nasdaq Composite Index added 33.34 points,or 1.19 percent, to 2,843.07. 

NYMEX - NEWYORK, June 12 (Reuters) - U.S. crude futures traded little changed in positive territory on Tuesday after industry data showed domestic oil inventories rose last week, against forecasts that they fell. 

Earlier, crude futures settled up for the first time in four sessions, rebounding from an eight-month low as traders geared for the release of weekly industry and government petroleum inventory reports. 

Bargain-hunting helped lift prices, but volume was slightly below the 30-day average as oil markets awaited an OPEC policy meeting on Thursday in Vienna. 

The American Petroleum Institute said that for the week to June 8, domestic crude stocks rose by 1.6 million barrels due to higher imports, against the forecast for a 1.4-million-barrel decline in a Reuters poll of analysts.

Stockpiles at the Cushing, Oklahoma delivery point fell by 344,000 barrels.  

Gasoline stocks fell by 878,000 barrels against the forecast for a 1.1-million-barrel increase while distillate stocks rose by 519,000 barrels, far less than the forecast for a 1.3-million-barrel build.  

Refinery utilization rose 0.7 percentage point, to 88.7 percent of capacity. The forecast was for a decline by 0.1 percentage point. 

CBOT SOYBEAN - Soybean futures on the Chicago Board of Trade were up 0.8 percent at the end of pit trade after the U.S. Department of Agriculture cut its forecast of U.S. soy inventories, traders said. 

* Nearby July soy posted its biggest gain after USDA slashed its forecast of the 2011/12 old-crop U.S. soybean carryout to 175 million bushels, down 35 million from the May estimate and below the average trade expectation of 189 million.

* USDA also lowered its forecast of 2012/13 U.S. soybean ending stocks by 5 million bushels to 140 million, slightly below the average trade estimate of 143 million. 

* Nearby soybeans hit an intraday high of $14.49-1/4 per bushel, the highest spot soybean price since the May 17 peak of $14.50. 

* Contract highs set in soymeal, including the spot July and December contracts. Nearby soymeal reached $439.90 per ton, the highest spot soymeal price in nearly four years. 

* Gains in deferred soybeans limited by spillover weakness from corn and improved weather forecasts for the U.S. Midwest, with more rainfall expected over the next two weeks than previously predicted. 

* Argentine farmers planned to end a week-long sales strike on Tuesday night. The freeze was called last week by growers angry about profit-cutting agricultural policies and a recent tax hike in Buenos Aires province.

* Soybean prices seen remaining firm for the rest of 2012 because of high U.S. exports, but could be pressured by larger South American crops in 2013 - oilseeds analysts Oil World.

* Global soymeal output and demand is likely to rise in 2012/2013, stimulating a 2 million tonne increase in global soymeal exports - Oil World.

FCPO SINGAPORE, June 12 (Reuters) - Malaysian palm oil futures closed lower on Tuesday, as renewed fears over the euro zone debt crisis weighed on investor sentiment and the broader financial markets, although losses were limited by lower palm oil stocks. 

Palm oil, along with other commodities such as crude oil and soybean oil, gained on Monday on news that euro zone finance ministers approved a $125 billion rescue package for struggling Spanish banks. 

But investors feared that the bailout would not be sufficient to solve the crisis and the focus has now shifted to the Greek elections on June 17 that could lead to the nation's exit from the currency bloc. 

"A key factor contributing to the price downtrend is the renewed euro zone debt crisis and uncertain global economic outlook, which have dampened sentiments as well as raising the prospect of lower demand for commodities, including vegetable oils," said Malaysia's Affin Investment Bank in a research note. 

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.8 percent to close at 2,965 ringgit ($933) per tonne. 

Traded volumes stood at 26,461 lots of 25 tonnes each, just slightly higher than the usual 25,000 lots. 

Malaysian palm oil stocks were at a 13-month low in May, and that has helped cut some losses. 

Malaysian palm oil exports for the first 10 days of June fell 6.6 percent, said cargo surveyor Intertek Testing Services, going against market expectations of a stronger demand ahead of the Muslim fasting month starting in mid-July. 

Another cargo surveyor Societe Generale de Surveillance reported a slight 1.8 percent increase for exports for the same period.

   
Traders are eyeing a supply-demand report from the U.S. Department of Agriculture (USDA) due later in the day that could show tighter soybean supply and lend support to palm oil. 

Industry players are also watching for any volatility in price movement as this is the first time that the report will be released during active Chicago futures trading hours.

On the technicals front, palm oil is biased to fall below 2,925 ringgit per tonne, as the rebound from its June 4 low has completed, said Reuters market analyst Wang Tao.

Crude oil futures fell below $98 a barrel on Tuesday, extending losses due to fears that the euro zone debt crisis will worsen and hurt the global economy, threatening growth in oil demand. 

In other vegetable oil markets, U.S. soyoil for July delivery gained 0.3 percent in late Asian trade while the most active Jan 2013 soyoil contract on the Dalian commodity exchange closed 0.3 percent lower.     

REGIONAL EQUITY, BANGKOK - June 12 (Reuters) - Stocks in Singapore and Thailand closed higher on Tuesday while other Southeast Asian stocks drifted lower as players remained cautious of a possible Greek exit from the euro zone and doubts over the Spanish bank bailout plan. 

Singapore's Straits Times Index ended up 0.3 percent at 2,797.08, with commodities firm Olam International Ltd rising 2 percent after a share buyback plan which signals management confidence in the company's outlook. 

The Thai SET index edged up 0.4 percent at 1,162.93 amid late bargain hunting which helped send shares in PTT Pcl 1.6 percent higher. 

Stocks in Malaysia, Indonesia and Vietnam fell 0.15 percent, 0.35 percent and 1 percent, respectively. The Philippines market was shut on Tuesday and will reopen on Wednesday.  

     

Trader's Highlight

DJI - NEW YORK, June 11 (Reuters) - U.S. stocks fell on Monday as Europe's aid package for Spanish banks did little to alleviate investor concerns about the euro zone's finances and a slowdown in the wider global economy. 

The equity market bounced in early trading, but the rally was quickly snuffed out by sellers and a sharp decline accelerated into the market's close. 

Spanish bond yields rose as a bailout of up to $125 billion  for the country's struggling banks failed to quell concerns that Madrid may be locked out of funding markets and forced to seek external help. 

"They're borrowing more money, not doing anything about growth," Paul Zemsky, head of asset allocation at ING Investment Management in New York, said. "Today we're not worried about Spain's banking system falling off a cliff, but other than that, nothing has changed." 

The New York-traded stock of Spanish lender Banco Santander fell 3.1 percent to $5.92. Weakness in Europe's financial sector was mirrored in the United States where the S&P financial index fell 1.9 percent and was the weakest performing sector. 

   

Shares of Morgan Stanley , which has recently been a barometer of concerns about Europe due to perceptions of the investment bank's exposure to the region, fell 2.5 percent to $13.37.    

Spain's 10-year bond yieldsended higher at 6.5 percent as an early rally in prices quickly evaporated. Some investors were concerned the new debt would put existing bondholders lower in the capital structure, which increases the risk for those holders. 

"This is a realization that Spain, while providing money for its banks, is going to add to its debt-to-GDP ratio, and it's going to potentially subordinate some of the current Spanish sovereign debt, which doesn't make those bondholders happy," said Zemsky. 

The Dow Jones industrial average <.DJI> dropped 142.97 points, or 1.14 percent, to 12,411.23. The Standard & Poor's 500 Index <.SPX> fell 16.73 points, or 1.26 percent, to 1,308.93. The Nasdaq Composite Index <.IXIC> lost 48.69 points, or 1.70 percent, to 2,809.73.  

Investors fear a crisis in Spain would compound the currency bloc's troubles as June 17 elections loom in Greece, which many think could lead to Greece's exit from the euro zone. 

The worries come at a time when economies the world over are showing signs of slowing. China's inflation, industrial output and retail sales all flagged in May. It was the second straight month of sluggish growth. 

Trading volume was light on the NYSE, Nasdaq and AMEX with 6 billion shares traded, about 14 percent below its 10-day moving average. About four shares fell for every one that rose on NYSE.

 

U.S. companies are finding it more difficult to increase  revenue now than at just about any time since the financial crisis. Firms that make up the S&P 500 are expected to boost sales by just 2.2 percent in the current quarter, according to Thomson Reuters data.

AK Steel Holding Corp tumbled 14 percent to $4.99 after two brokerages cut their ratings on the small cap, including a "sell" rating from Goldman Sachs, which cited a highly leveraged balance sheet and weak steel prices. 

U.S. steelmakers are struggling with weak demand, rising costs and narrowing margins. Production capacity has yet to fully recover from the most recent recession. 

NYMEX - NEWYORK,  June 11 (Reuters) - U.S. crude futures were lower for a third straight session on Monday, and set a new 2012 low in late trading, as an early rally on EU's rescue of Spanish banks faded amid investors raising questions about the aid package and focused on other troubled euro zone nations like Greece.   

Leading oil producer Saudi Arabia called for an increase in OPEC's output target, despite falling oil prices, further adding to bearish sentiment in the oil markets.  

The euro fell against the U.S. dollar and equities ended lower on disappointment over the Spanish aid package, to keep oil futures under pressure. 

Also bearish for crude was news that an outage at a new crude distillation unit at Motiva Enterprises' 600,000 barrels per day refinery in Port Arthur, Texas, -- the nation's largest -- would be offline for at least two months and potentially five months, for repairs, sources familiar with operations said.

Ahead of weekly inventory reports, U.S. crude oil inventories were forecast down 1.5 million barrels last week with analysts citing lower imports in a Reuters poll. 

Distillate stocks were predicted up 1.0 million barrels while gasoline stocks were expected to show a 1.5-million-barrel increase, the poll also showed. 

The American Petroleum Institute will issue its report for the week to Jan. 8 on Tuesday, after the oil markets close. 

That will be followed by the report from the U.S. Energy Information Administration, due Wednesday morning.

CBOT SOYBEAN - Soybean futures on the Chicago Board of Trade were lower at the close of pit trading, pressured by declines in U.S. equities and crude oil after traders digested potential fallout from a euro zone deal to shore up Spain's banks. 

* Yet nearby soybean contracts gained against deferreds on spreads, one day ahead of a monthly government crop report that analysts expected to show smaller U.S. old-crop soy inventories. 

* Nearby July soybeans traded on both sides of unchanged in the final minute before the close of pit trade at 1:15 p.m. CDT (1815 GMT). 

* Analysts expect USDA's monthly supply/demand report on Tuesday to show a smaller forecast of U.S. 2011/12 soybean ending stocks while leaving 2012/13 U.S. soy ending stocks roughly unchanged. 

* CBOT was set to open pit trading at 7:20 a.m. (1220 GMT) on Tuesday, more than two hours earlier than normal, so both the pits and the electronic trading platform will be open when USDA releases its monthly supply/demand report.     

   
* Nearby soybean contracts underpinned by fears of supply disruptions out of South America. Grain trucks entering Argentina's main port of Rosario slowed to a trickle due to a five-day-old sales strike by farmers, but exports were uninterrupted because of dockside reserves.

* USDA's weekly crop progress report later Monday was expected to show the U.S. soybean crop rated 63 percent good to excellent, down 2 percentage points from the previous week, according to a Reuters survey of 12 analysts.

* The U.S. corn and soybean crops are likely to face stress from overall dry conditions for at least the next two weeks, trimming production potential, an agricultural meteorologist said Monday.

* USDA reported export inspections of U.S. soybeans in the latest week at 14.215 million bushels, within a range of trade estimates for 13 million to 16 million.   

FCPO SINGAPORE, June 11 (Reuters) - Malaysian palm oil rose on Monday on a bigger-than-expected stock draw although gains were curbed by concerns the euro zone debt crisis was far from resolved even after the bloc agreed on a rescue package for Spain's struggling banks. 

The $125-billion bailout calmed some of the fears seen last week that triggered a global sell-off in the financial markets and dragged palm oil to its lowest in the year. 

But investors are now focusing to Greek national polls on June 17 that could put Athens on a path out of the bloc and trigger a deeper crisis over the future of the currency bloc. 

For now, Malaysian palm oil stocks at a 13-month low in May have been holding up the market although some traders said the 4.5 percent drop from a month ago was already priced in. 

Traders are also eyeing a supply-demand report on U.S. and global grains from the U.S. Department of Agriculture (USDA) due Tuesday that could show tighter supply and lend support to palm oil. 

"There was a sense that the Malaysian stocks numbers are bullish but the euro zone debt crisis clouds over everything," said a trader with a foreign commodities brokerage in Kuala Lumpur. 

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.5 percent to close at 2,989 ringgit ($944) per tonne after going as high as 3,028 ringgit. 

Traded volumes stood at 32,538 lots of 25 tonnes each, higher than the usual 25,000 lots. 

On the technicals front, palm oil faces resistance at 3,038 ringgit per tonne, said Reuters market analyst Wang Tao.

Malaysian palm oil exports for the first 10 days of June fell 6.6 percent, said cargo surveyor Intertek Testing Services, going against traders' expectations of a stronger demand ahead of the Muslim fasting month starting in mid-July.

"This is quite a surprise. But we still expect real demand to come in the later part in June," said a dealer based in Malaysia. 

Another cargo surveyor Societe Generale de Surveillance reported a slight 1.8 percent increase for exports in the same period.

REGIONAL EQUITY - BANGKOK, June 11 (Reuters) - Southeast Asian stock markets ended mostly higher on Monday as a bailout for Spanish banks improved sentiment, with Thai stocks leading the way amid a flurry of short covering in large cap shares. 

Thailand's benchmark SET index <.SETI> posted its biggest daily gain in eight months, finishing up 2.8 percent at 1,158.07, led by PTT Pcl , the country's top energy firm and its biggest listed firm by market value. It rose 3.7 percent. 

"There's a strong buying position for short covering today. Foreign investors were quite active and I think the market seems set for a good rebound from this point," said Viwat Techapoonphol, senior strategist at broker Tisco Securities 

Stocks in Singapore <.FTSTI>, Malaysia <.KLSE>, Indonesia <.JKSE> and the Philippines <.PSI> gained 1.8 percent, 0.5 percent, 1.1 percent and 1.6 percent, respectively. 

The Philippine market will be shut for a holiday on Tuesday and will reopen on Wednesday.      

Trader's Highlight

DJI- NEW YORK, June 8 (Reuters) - U.S. equities ended on Friday on a high note, with the benchmark S&P 500 index registering its best week of the year as investors returned to stocks on expectations Spain was closer to getting aid for its troubled banks.

Oil prices fell as diminished hopes for more stimulus from central banks fueled concerns about demand.

The euro slid against the dollar, weighed by a three-notch downgrade to Spain's credit rating and signs of economic weakness in Italy and Germany, though it posted its first weekly gain in six weeks.

Senior EU and German officials told Reuters that deputy finance ministers of the 17-nation single currency area would hold a conference call on Saturday morning to discuss Spain's request for an aid package for its ailing banks, although no figure had been set. [ID:nL5E8H83EF]

On Wall Street, the S&P 500 ended its best week in 2012. The strong gains came after the benchmark index fell more than 6 percent in May and dropped just below its 200-day moving average, signaling a technical bounce for equities.

"What's driving the market here," said Robbert Van Batenburg, head of equity research at Louis Capital in New York, "is the belief we're in the final innings of approaching some form of a solution to contain the Spanish problem. I don't buy it, but maybe there's this understanding out there."

The Dow Jones industrial average <.DJI> ended up 93.24 points, or 0.75 percent, at 12,554.20. The Standard & Poor's 500 Index <.SPX> was up 10.67 points, or 0.81 percent, at 1,325.66. The Nasdaq Composite Index <.IXIC> was up 27.40 points, or 0.97 percent, at 2,858.42.

Losses in world shares followed a three-day rally built on expectations of global coordinated efforts to bolster slackening economic growth. But investors were disappointed after neither the European Central Bank nor the U.S. Federal Reserve signaled near-term action.

U.S. President Barack Obama said on Friday that European leaders face an "urgent need to act" to resolve the region's financial crisis as the threat of a renewed recession there spells dangers for an anemic U.S. recovery five months before elections.

NYMEX-NEW YORK, June 8 (Reuters) - U.S. crude futures fell for a second day in a row on Friday as Spain's banking troubles, broader European economic problems and fading hopes about more U.S. Federal Reserve monetary stimulus darkened the outlook for global oil demand.

For the week, however, U.S. crude rose more than 1 percent, snapping five straight weeks of losses, helped by late surge in pre-weekend short-covering, traders said.

Rating agency Fitch downgraded Spain's credit rating and said further downgrades could come as the country struggles to restructure its troubled banking system. [ID:nL1E8H79DE]

Spain is expected to ask the euro zone for help in recapitalizing its banks this weekend, sources in Brussels and Berlin told Reuters. [ID:nL5E8H898X]

In Italy, industrial output fell in April and in Germany imports tumbled at the fastest rate in two years while exports dropped more than expected -- another sign that Europe's largest economy is beginning to feel the chill from the euro zone debt crisis. [ID:nR1E8GN00M] [ID:nL5E8H80N1]

Meanwhile, hopes for a further round of U.S. Fed monetary stimulus were fading fast, a day after Fed Chairman Ben Bernanke offered few hints in a congressional testimony that the central bank would consider doing that as had been speculated in recent days.

* On the New York Mercantile Exchange, July crude settled down 72 cents, or 0.85 percent, at $84.10 a barrel. For the week, it rose 87 cents, or 1.05 percent, snapping five straight weeks of losses.

* The U.S. trade deficit narrowed 4.9 percent in April as slower growth in Europe and China bit into exports and the soft U.S. economy clipped import demand, a Commerce Department report showed. [ID: nnL1E8H83G]

* Hedge funds and other big investors increased their net long positions of NYMEX crude futures and options by 1,582 contracts to 140,750 in the week to June 5, the Commodity Futures Trading Commission said in a weekly report.[ID:nEMS1CU25N]

* U.S. oil production rose to more than 6 million barrels per day for the first time in 14 years in the first quarter of 2012, lifted by the oil boom in North Dakota and Texas, the Energy Information Administration said. [ID:nL1E8H8DND]

* The global oil market is well supplied and can cope with the loss of Iranian crude to Western sanctions, oil officials and executives, including the heads of Total and Royal Dutch Shell said.

CBOT SOYBEAN- CBOT soybean futures were slightly lower at the close of pit trading at 1:15 p.m. CDT (1815 GMT) on Friday as the market set back from a three-day rally, traders said.

* A firm dollar and weakness in the crude oil market weighed on soybeans.

* For the week, CBOT soybeans were up 6.2 percent, the biggest weekly gain in percentage terms for the front-month contract since mid-October.

* The weekly gain snaps a streak of two straight down weeks.

* CBOT July soybeans briefly fell below the 50-day moving average during the session before finding support near that level.

* Private exporters reported the sale of 530,000 tonnes of U.S. soybeans to China and Egypt, U.S. Agriculture Department said on Friday. [ID:nL1E8H826Q]

* High temperatures to stress developing soybean crop around U.S. Midwest this weekend. Some light showers in the forecast for Sunday through Tuesday but rain will provide little relief to parched soils. [ID:nL1E8H83FH]

* Crop forecaster Lanworth pegged U.S. soybean production at 3.019 billion bushels, below the USDA's forecast of 3.205 billion, trade sources said. [ID:nL1E8H89E4]

FCPO- SINGAPORE, June 8 (Reuters) - Malaysian palm oil futures ended almost flat on Friday, as a firm demand outlook for the edible oil was offset by fears of slowing global growth that could crimp commodity demand.

Federal Reserve Chairman Ben Bernanke's testimony to a congressional committee offered little clue on any monetary stimulus policy, overshadowing initial positive market reaction to a Chinese interest cut. [ID:nL3E8H72AO]

Palm oil had a volatile trading week on macroeconomic concerns triggered by the ongoing European debt crisis, and ended the week down 1.1 percent.

"Market sentiment is still uncertain, and the palm market is tracking external factors, such as what happened in Europe and China," said a trader with a foreign commodities brokerage in Malaysia.

"Although there was a rate cut in China, Bernanke's testimony didn't mention QE3, and that has created a lot of uncertainty," he added, referring to market expectations for a third round of quantitative easing.

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost one ringgit to close at 2,973 ringgit ($934) per tonne. Prices touched a low of 2,925 ringgit on Monday, their lowest since Nov. 2, 2011.

Traded volumes stood at 31,567 lots of 25 tonnes each, higher than the usual 25,000 lots.

On the technicals front, palm oil will be neutral in a range of 2,925-3,038 ringgit per tonne, said Reuters market analyst Wang Tao. [ID:nL4E8H829U]

Palm oil prices are expected to be supported by healthy demand for the tropical oil as Muslims prepare to observe a month of fasting starting in mid-July.

Traders will be looking for clues to demand trends as cargo surveyors release June 1-10 export data on Monday. [PALM/ITS][PALM/SGS]

Market players were also betting on lower palm oil stocks, which probably fell to a 13-month low in May, as overseas demand and domestic consumption outweighed production, a Reuters survey showed on Wednesday. [ID:nL3E8H55J1]

Industry regulator the Malaysian Palm Oil Board (MPOB) will issue official stocks and output data, also on Monday.

The market has shifted its focus to external macroeconomic uncertainty that could hurt palm oil demand. The tropical oil may fall to 2,450 ringgit per tonne, said leading analyst James Fry on Friday. [ID:nL4E8H86YU]

Palm oil could fall to 2,700-2,800 ringgit with the euro debt crisis clouding economic outlook and crimping commodity demand, top oils analyst Dorab Mistry said. [ID:nL3E8H64AG]

REGIONAL EQUITY-BANGKOK, June 8 (Reuters) - Most Southeast Asian bourses edged lower on Friday, led by Singapore with commodity-related firms showing steady declines across markets on expectations of weak global demand.

Singapore's Straits Times Index <.FTSTI> ended down 0.77 percent at 2,737.89, down 0.28 percent on the week. The Philippines Stock exchange ended down 0.57 percent to 4,994.07.

Stocks in Malaysia <.KLSE> were also weaker, sliding 0.3 percent to 1,570.62, with a weekly loss of 0.19 percent.

Indonesia <.JKSE> eased 0.4 percent to 3,825.33, down 0.7 percent on the week, after its fourth-straight weekly loss.

Vietnamese stocks <.VNI> fell 0.4 percent, reversing Thursday's gain following the S&P upgrade of its credit outlook.

Bucking the trend, Thai SET index <.SETI> rose 0.8 percent on Friday amid late bargain hunting, dealers said.

RTRS-Malaysia palm stocks to fall further, support prices -MPOC

MUMBAI, June 7 (Reuters) - Palm oil stocks in Malaysia, the world's second biggest producer, are likely to fall further in the coming months as festival demand cuts into supply, a trade body executive said on Thursday, potentially supporting prices for the edible oil. 

Malaysian Palm Oil Council Chairman Lee Yeow Chor said there had been a slew of orders ahead of the Muslim holy month of Ramadan, when fasting in the day is followed by elaborate feasts at night. 

Strong orders ahead of Ramadan, which begins in the third week of July and heralds the start of the festival season in Asia, could help negate the impact of the euro zone debt crisis on demand for the oil. 

"Demand will improve in the next two months due to Ramadan. Pakistan and India will buy more," Lee, who is also the head of Malaysian palm oil firm IOI Corp , told reporters at a conference in Mumbai. 

Largely reinforcing Lee's views, a Reuters survey on Wednesday showed Malaysia's palm oil stocks probably dropped 2.9 percent to 1.79 million tonnes in May, the lowest since April 2011. 

Lee also said the Southeast Asian country's palm oil output in 2012 is likely to hover at 19 million tonnes, almost flat from 18.9 million tonnes a year ago. Exports will probably edge higher, he said, without giving an estimate. 

Thanks to tighter palm oil supply, Lee sees spot prices from 3,000 to 3,200 ringgit in the next three months. 

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange had fallen 1.4 percent to 2,962 ringgit per tonne by 0830 GMT on Thursday.  

Prices touched a trough of 2,925 ringgit on Monday, their lowest since Nov 2, 2011.

RTRS-Palm futures to drop on cloudy economic outlook-Mistry

KUALA LUMPUR, June 7 (Reuters) - Malaysian palm oil futures could fall to 2,700 ringgit-2,800 ringgit ($854-$886) per tonne with the euro debt crisis and lack of monetary stimulus clouding the global economic outlook and crimping commodity demand, a leading analyst said on Thursday. 

The forecast by Dorab Mistry, head of vegetable oil trading with Indian conglomerate Godrej Industries , represents up to a 10 percent drop from the current 3,000 ringgit per tonne as food demand from China and India has not been immune to slowing growth. 

"I no longer expect prices to reach 4,000 ringgit in view of the changed macro economic scenario," Mistry said in a speech to be delivered at an industry seminar in the Indian port city of Mumbai. 

"My forecast of the fundamentals of crude palm oil production was correct, but the macro situation has been very poor," he said, in reference to tight supply in Malaysia, the world's No.2 producer. 

If there is a repeat of the 2008 financial crisis, Mistry said prices could "collapse" to 2,200 ringgit although "the likelihood of that happening is no more than 20 percent." 

Palm oil prices may eventually recover to a level of 3,300 ringgit, he said without giving a time-frame, as the decline in the futures and falling production in Malaysia attracts more buyers. 

Any stimulus from the United States, Europe or China, could encourage a speedier recovery, Mistry said, with palm oil rising to a peak of 3,500 ringgit over the next few months. 

 PALM OIL SUPPLY SQUEEZE 

Mistry said "something odd" was happening in Malaysian plantations with combined output in the first five months of 2012 at less than 500,000 tonnes compared to a deficit of 53,969 tonnes in the same period in 2011. 

"I expect the same struggling performance from the oil palm in Malaysia in June and July also. It is conceivable that the year-on-year deficit January to July will be a record 900,000 tonnes, he said. 

The El Nino weather condition, which is set to emerge in August and brings a dry spell to Southeast Asia, could help prices recover, although Mistry said he would not be computing its effect into his forecasts this time. 

Hot weather usually accelerates the ripening of oil palm fruits. However, prolonged exposure to heat will trigger yield stress in the trees, eventually crimping production. 

When the last El Nino episode occurred in early 2010, yields weakened in Indonesia and Malaysia and lifted prices above 2,500 ringgit in the first quarter of that year. 

"There are now definite signals of an emerging El Nino. If those signals give us an El Nino, prices will recover faster than most people expect," he said. 

Trader's Highlight

DJI- NEW YORK, June 7 (Reuters) - The S&P 500 ended barely changed on Thursday as optimism about China's interest-rate cut was offset by Federal Reserve Chairman Ben Bernanke's comments that dimmed hopes for more U.S. stimulus. 

Both the Dow industrials and the Nasdaq ended off session highs, with the Dow rising modestly for the day and the Nasdaq slipping. 

Stocks lost ground following Bernanke's comments a day after experiencing the best one-day rally so far this year. Over the previous three days, the S&P 500 gained 2.9 percent, recovering some of May's losses.  

The surprising move by China's central bank to cut its benchmark interest rate by 25 basis points helped ease worries about faltering global demand.  

Speculation has been rising that central banks will take more action to combat escalating debt problems in Europe and slower global growth. Bernanke, in testimony Thursday, said the Fed was ready to take action but gave no hint of imminent steps.

His remarks were seen as offsetting more supportive comments from other Fed members in the last 24 hours, but still leaving the door open for more action at the Fed's next meeting on June 20. 

The Dow Jones industrial average <.DJI> advanced 46.17 points, or 0.37 percent, to 12,460.96 at the close. The Standard & Poor's 500 Index <.SPX> edged down 0.14 of a point, or 0.01 percent, to 1,314.99. The Nasdaq Composite Index <.IXIC> slipped 13.70 points, or 0.48 percent, to close at 2,831.02.  

NYMEX- NEW YORK, June 7 (Reuters) - U.S. crude futures fell on Thursday as comments from U.S. Federal Reserve Chairman Ben Bernanke diminished expectations for additional economic stimulus and countered the supportive interest rate cut unexpectedly announced by China. 

Ben Bernanke said the U.S. central bank was ready to help the economy if financial troubles mount but offered few hints that further monetary stimulus was imminent.

For investors wanting indications about the prospect for a third round of large-scale Fed bond buying, Bernanke's testimony disappointed. 

As the euro zone debt crisis drags on, Spain's credit rating was slashed by three notches by Fitch, which signaled it could make further cuts as the cost of restructuring the country's troubled banking system spiraled and Greece remains in political turmoil. 

China delivered two surprises on interest rates on Thursday, cutting borrowing costs to combat faltering growth while giving banks additional flexibility to set competitive lending and deposit rates.         

On the New York Mercantile Exchange, July crude  fell 20 cents, or 0.24 percent, to settle at $84.82 a barrel, but extended losses and fell below $84 in post-settlement trading. 

CBOT SOYBEAN- Chicago Board of Trade soybean futures rose to their highest level in nearly three weeks on Thursday, surging through key technical resistance by the close of pit trading at 1:15 p.m. CDT (1815 GMT) on a weaker dollar and hopes that top importer China will step up its soy imports, traders said.  

China, the world's biggest importer of soybeans, cut interest rates for the first time in four years in a bid to bolster economic growth. 

China will import more corn and soybeans next season to keep pace with growing domestic demand, the state-owned China Grain Reserves Corp (Sinograin) said. 

The benchmark CBOT July contract burst through technical resistance at its 50-day moving average during Thursday's session, the first time it has breached that level since May 21. 

CBOT July soybeans peaked at $14.30 a bushel, their highest level since May 18. 

CBOT showed another drop in soybean registrations late Wednesday, a possible sign of firming cash markets. Soybean registrations fell by 54 contracts, leaving a total of 43 lots. The number of contracts registered for delivery has dropped from 667 contracts as of May 30. 

FCPO- SINGAPORE, June 7 (Reuters) - Malaysian palm oil futures fell on Thursday, tracking lower crude oil as investors turned cautious on prospects of the United States introducing fresh monetary stimulus and European policymakers rescuing Spanish banks.   

Fed Chairman Ben Bernanke is due to testify on the U.S. economy before a congressional committee later in the day, and investors will be watching closely for any clues to policy that could boost global growth and commodity demand.  

Palm oil has been recovering on bargain hunting after  plunging to its 2012 low on Monday. But the market returned to the red on Thursday as most investors were still waiting for further cues before jumping in. 

"The market is playing a waiting game," said a dealer with a foreign commodities brokerage in Malaysia.  

"Traders are awaiting Bernanke's talk tonight and also Dorab's talk later in the day," he added, referring to top oils analyst Dorab Mistry, who is set to speak at a palm oil trade fair in India.     

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 1 percent to close at 2,974 ringgit ($941) per tonne. Prices touched a low of 2,925 ringgit on Monday, their lowest since Nov 2, 2011. 

Traded volumes stood at 34,801 lots of 25 tonnes each, higher than the usual 25,000 lots. 

REGIONAL EQUITY- BANGKOK, June 7 (Reuters) - Southeast Asian stock markets traded mainly flat to higher on Thursday amid hopes about debt situation in Europe and gains in commodities-related stocks, with Vietnam leading the way after the credit upgrade by ratings agency Standard & Poor's. 

Vietnam's index of Ho Chi Minh Stock Exchange <.VNI> jumped as much as 2.4 percent and ended the day up 1.88 percent at a one-week high of 434.41. The Southeast Asia's best performer has racked up gains of nearly 24 percent so far this year. 

The upgrade stoked expectations of increased fund flows and lower borrowing costs. Foreign investment to Vietnam has been  negative so far this month, in line with others in the region.  Vietnam had $7.8 million in foreign outflows in June to Wednesday. For the same period, the Philippines <.PSI> reported $19 million in outflows, Thailand <.SETI> had $143 million in outflows and Indonesia <.JKSE> posted $158 million in outflows. 

Stocks in the Philippines, Malaysia <.KLSE> and Thailand <.SETI> gained 1.1 percent, 0.4 percent and 0.05 percent, respectively. Singapore <.FTSTI> and Indonesia <.JKSE> retreated from day highs to end a tad lower. 

Trader's Highlight

DJI- NEW YORK, June 6 (Reuters) - U.S. stocks jumped on Wednesday, giving the S&P 500 its best day since December, as talk of a rescue of Spain's troubled banks and hopes for more monetary stimulus sparked a rebound from recent selling.

After a 6 percent fall by the S&P 500 in May that took the index below its key 200-day moving average on Friday, the market was ripe for a rebound, analysts said. Buying was strong across the broad market, with all 10 S&P 500 sectors gaining ground.

The energy, financial and technology sectors, all of which are tied to strong global demand, led gainers Wednesday. Among the big banks, shares of Bank of America shot up 7.6 percent to $7.64 and shares of Morgan Stanley climbed 8.4 percent to $13.94, both extending gains just ahead of the close.

European sources said German and European Union officials were seeking solutions for Spain's weakened banks, the latest worry in the fiscally troubled euro zone. Madrid has not yet requested assistance and is resisting political conditions.

European Central Bank President Mario Draghi suggested earlier Wednesday that further stimulus to tackle the euro zone's debt crisis would not necessarily be forthcoming, but speculation persisted that the ECB could act if financial market tensions intensify further.

The ECB left interest rates unchanged following its meeting Wednesday.

The Dow Jones industrial average <.DJI> was up 286.84 points, or 2.37 percent, at 12,414.79. The Standard & Poor's 500 Index <.SPX> was up 29.63 points, or 2.30 percent, at 1,315.13. The Nasdaq Composite Index <.IXIC> was up 66.61 points, or 2.40 percent, at 2,844.72.

NYMEX- NEW YORK, June 6 (Reuters) - U.S. crude futures rose for a third straight day on Wednesday as European efforts to rescue troubled Spanish banks sent the euro higher, weakened the dollar and boosted equities and oil prices.

Oil prices also received support when a U.S. Fed official hinted at more monetary easing to support the economy. Germany and European Union officials are urgently exploring ways to rescue Spain's debt-stricken banks, although Madrid has not yet requested assistance and is resisting political conditions, European Union sources said.

The euro rallied against the dollar and the yen after the European Central Bank held its main interest rate at 1.0 percent, resisting international pressure to provide more support for the euro zone's economy.

On the New York Mercantile Exchange, July crude rose 73 cents, or 0.87 percent, to settle at $85.02 a barrel, having traded from $84.03 to $86.27.

CBOT SOYBEAN- June 6 (Reuters) - Soybean futures on the Chicago Board of Trade rose 2.7 percent by the end of pit trading at 1:15 p.m. CDT (1815 GMT) on Wednesday, the biggest daily rise in two months, on firm cash markets and news of old-crop sales to China, traders said.

Additional support stemmed from a weaker dollar <.DXY> and broad-based strength in commodities amid talk major central banks would act to bolster a slowing global economy.

Nearby soybean and soymeal contracts gained against back months on spreads, supported by ideas a farmers' strike in Argentina could steer more export business to the United States.

Argentine farmers halted grain sales on Wednesday at the start of a one-week strike over government farming policy -- their first national freeze on sales of grains and livestock for 18 months.

USDA confirmed sales of 120,000 tonnes of U.S. soybeans to China for 2011/12 delivery.

The U.S. Midwest should remain dry this week, with rainfall next week totaling 0.50 to 1.50 inches. Temperaturewill remain moderate this week with highs in the 70s to 80s Fahrenheit, warm into the 90s F by the weekend and return to the 70s F and 80s F next week.

FCPO- SINGAPORE, June 6 (Reuters) - Malaysian palm oil futures extended gains on Wednesday, as investors bet on rising Asian demand for the edible oil, although caution prevailed, inspired by concerns the euro zone crisis will crimp economic growth and commodity demand.

Palm oil closed at its lowest level in 2012 on Monday, setting the stage for a price recovery as market players went bargain hunting.

"After the shock on Monday, for the past two days prices have recovered lost ground. But on the backdrop, the euro zone problem is still not solved," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.

"So although we are going to see some rebound, it's likely that investors will adopt a cautious attitude. They are more concerned about the upcoming Malaysian Palm Oil Board data to gauge the extent of the impact of the crisis."

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange gained 1.3 percent to close at 3,003 ringgit ($946) per tonne. Prices touched a low of 2,925 ringgit on Monday, their lowest since Nov 2, 2011.

Traded volumes stood at 25,208 lots of 25 tonnes each, just slightly higher than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, June 6 (Reuters) - Indonesian shares jumped 3.3 percent on Wednesday, helping them post their biggest daily gains since September, while Thai shares snapped their two-session losing streak as banking shares rose after losses.

Jakarta's Composite Index <.JKSE> ended at 3,841.33, gaining for a second straight day as the technically oversold market lured bargain hunters.

Buying momentum has picked up, with Indonesia's index climbing above the "oversold" mark. Its 14-day relative strength index (RSI) closed at 40.5, compared with 28.9 on Tuesday and 17.95 on Monday. A level of 30 or lower indicates the market is oversold.

Among advancers, shares of the world's biggest microlender PT Bank Rakyat Indonesia surged 11.2 percent thanks to its strong loan growth, a broker said.

RTRS-INDONESIA MAY GIVE GREATER PRIORITY TO ASIA, E.EUROPEAN AND MIDDLE EASTERN PALM OIL BUYERS DUE TO POSSIBLE ENVIRONMENTAL RULES IN EUROPE AND US -ASSOCIATION

JAKARTA, June 5 (Reuters) - Indonesia may give greater priority to Asian, Eastern European and Middle Eastern palm oil buyers because of possible new environmental regulations in the United States and Europe, the Indonesian palm oil association (Gapki) said on Tuesday.

"We threat (threaten) EU and US to move our product to other regions because of too many non-tariff barriers," said Gapki official Tofan Mahdi.

The Southeast Asian palm oil industry failed in late January to meet greenhouse gas saving standards to qualify for the U.S. renewable fuels programme.

The U.S. Environmental Protection Agency (EPA) said palm oil converted into biofuels in Indonesia and Malaysia cut up to 17 percent of climate warming emissions, falling short of a 20 percent requirement to enter the world's largest energy market.

Gapki officials fear U.S. efforts to limit palm oil's uses based on environmental concerns could spread to Europe.

RTRS-UPDATE 2-Brazil gov't cuts soy estimate, raises corn view

SAO PAULO, June 5 (Reuters) - Brazil's government trimmed its 2011/12 soybean crop estimate on Tuesday after drought ravaged output in the world's second biggest producer this season, but raised its forecast of corn output to a record.

U.S. soybean futures rose after Brazil's food supply agency Conab cut its production forecast and U.S. crop ratings disappointed. [ID:nL3E8H553C]

Brazil's soy crop that finished harvest in May is now estimated at 66.37 million tonnes, after drought erased about 10 million tonnes from crop's potential, Conab data showed. The latest output number is down slightly from last month's estimate of 66.68 million tonnes.

Carry-over stocks of soybeans are set to drop to 1 million tonnes, Conab estimates, their lowest since 2008/09 and down about 65 percent from last year. No major revisions to the soy crop are expected in the coming months. Brazil harvested a record 75.3 million tonnes the year before.

Despite the drought, corn production jumped in Conab's ninth forecast of the grain crop to a record 67.79 million tonnes from the 65.90 million projected a month ago. It is the first time in over a decade that Brazil will harvest less soy than corn, which is mostly consumed by the local pork and poultry industry.

Producers have shifted more of their corn planting to the winter crop recently. This winter, or second crop, that is planted from January to March leapt 53 percent from last year to 32.9 million tonnes. The winter crop will be harvested in the coming weeks.

RTRS-Oil World sees US soy exports up 40 pct in 2012/13

AMSTERDAM, June 5 (Reuters) - US soybean exports will increase by nearly 40 percent from September 2012 to February 2013 to compensate for the shortfall in the South American crop which has been hit by drought, German-based analyst Oil World said on Tuesday.

"Insufficient South American export supplies of soybean, soymeal and oil will shift world demand to US origin in Sept-Feb 2012/2013," Oil World said.

"Such a huge shift has not been experienced before."

Oil World said that US soybean exports will reach 33.5 million tonnes in the first half of the US crop season, up 9.3 million tonnes or 39 percent from a year earlier.

Total world exports of soybeans in the same period will reach 43.4 million tonnes, Oil World said.

It said that exports from leading South American producers -- Argentina, Brazil, Paraguay and Uruguay - are expected to decline by 9 million tonnes in the same period.

"With our current us soybean crop estimate of 88.7 million tonnes, we consider it necessary that total US soybean stocks will be reduced to a multi year low of only 31.5 million tonnes as of end of February 2013," Oil World said.

"This is an unusually low inventory and sharply down from 38.7 million tonnes from a year earlier."

Oil World said that US crushings are likely to be boosted in response to reduced processing in South America and that it will probably reach 25.5 million tonnes in the period from September 2012 to February 2013.