Trader's Highlight

DJI - NEW YORK, May 24 (Reuters) - Global stocks eked out gains on Thursday while the euro fell as data suggested Europe's debt woes were spreading and worsening a global economic slowdown, adding to investor concerns about Greece's possible exit from the euro zone. 

   In a volatile session, investors looking for bargains initially bought equities, oil and gold, which have been beaten down this week by worries a Greece exit would deepen the euro zone debt crisis.  

   The appetite for growth-oriented assets faded as fears about the euro zone's drag on the world economy returned. Then for a second straight day, a wave of buying emerged shortly before Wall Street's close. 

   "The market has pulled back far enough that people are trying to assess if we've priced the worst of what's known. But with the problems in Europe and the fact the news isn't reassuring, prices are still somewhat soft," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.   

   Speculation of more coordinated efforts from major central banks to stem further deterioration of the euro zone debt crisis helped steady the yields on bonds of Spain, Italy and other weaker euro zone members. Still, the yields remained at levels considered unsustainable, and this moderated the safe-haven appetite for U.S. and German government debt. 

   "We are just being buffeted around by despair and hope of the possible solution to the euro zone crisis. Risk appetite is still at a very low level, but there is plenty of value," said Robert Parkes, equity strategist at HSBC in London. 

   The Dow Jones industrial average <.DJI> closed up 33.60 points, or 0.27 percent, at 12,529.75. The Standard & Poor's 500 Index <.SPX> finished up 1.82 points, or 0.14 percent, at 1,320.68. The Nasdaq Composite Index <.IXIC> ended down 10.74 points, or 0.38 percent, at 2,839.38. 

   The late bounce in U.S. stocks pushed the MSCI world equity index back above 300 points. It ended up 0.3 percent following Wednesday's 1.2 percent drop.  

NYMEX - NEW YORK, May 24 (Reuters) - U.S. crude futures rose on Thursday after Iran and major powers, unable to produce an agreement on Tehran's disputed nuclear program, ended negotiations until next month. 

    Crude prices rebounded after slumping more than 2 percent the previous session and approaching the U.S. Memorial Day holiday weekend, but traded within Wednesday's range. 

    Iran and world powers agreed to meet again in Moscow next month for more talks to try to end the dispute over Tehran's nuclear program, but there was scant progress to resolve the main sticking points between the two sides.

    After discussions in Baghdad extended late into an unscheduled second day between envoys from Iran and the six powers, European Union foreign policy chief Catherine Ashton said it was clear both sides wanted progress and had some common ground, but significant differences remained. 

    * On the New York Mercantile Exchange, July crude   rose 76 cents, or 0.85 percent, to settle at $90.66 a  barrel, having traded from $89.81 to $91.52. 

    * China's factories faltered in May as export orders fell to two month lows, according to the HSBC Flash Purchasing Managers Index, the earliest indicator of China's industrial sector. The index fell to 48.7 in May from a final reading of 49.3 in April, marking the seventh straight month below 50, indicating contracting activity. 

CBOT SOYBEAN -     Soybean futures on the Chicago Board of Trade ended higher at the 1:15 p.m. (1815 GMT) close of pit trading, rebounding from a near two-month low on bargain-buying and support from higher crude oil, traders said. 

    * Market supported by news the Buenos Aires Grains Exchange cut its estimate of Argentina's 2011/12 soybean crop to 39.9 million tonnes, from 41 million previously.

    * Worries about dry conditions threatening soybeans in the southern U.S. Midwest and Delta lent support. "The northwest third of the Midwest should be okay but there is dryness in the southeast that needs to be watched," said John Dee with Global Weather Monitoring. 

    * USDA reported export sales of U.S. soybeans in the latest week at 953,700 tonnes (old- and new-crop years combined), below a range of trade estimates for 1 million to 1.25 million tonnes. But most of the sales -- 800,100 tonnes -- were for the old crop year, a supportive factor.    

    * USDA reported weekly export sales of U.S. soymeal at 176,600 tonnes, within the range of trade estimates for 100,000 to 200,000 tonnes. 

    * USDA reported weekly export sales of U.S. soyoil at 24,400 tonnes, above estimates for 15,000 to 20,000 tonnes. 

    * A private Chinese trading house canceled four cargoes of Brazilian soybeans due to low domestic crushing margins, but traders said the cancellations were not widespread and China was still shopping for third-quarter delivery supplies.

    * The Chinese government sold 188,410 tonnes of soy out of an offer of 605,356 tonnes of soy reserves. A majority of the sales went to crushers in the northeast, which process only domestic soybeans. 

FCPO -     SINGAPORE, May 24 (Reuters) - Malaysian palm oil futures ended higher on Thursday on bargain hunting after a big sell-off the previous day, although gains were curbed as fears over the euro zone crisis dampened sentiment. 

    The uncertainty surrounding the debt crisis dragged palm oil down to its lowest in 2012 on Wednesday, attracting buyers to take up the edible oil at cheaper prices. 

    Firm demand for the edible oil indicated by rising export data could also be supportive for futures prices.  

    "With the Ramadan demand coming in, most of the traders are bullish. So palm oil is still holding above 3,000 ringgit and that could be because of demand," said a trader with a foreign commodities brokerage in Singapore, referring to the Muslim fasting month.  

    The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange gained 1.7 percent to close at 3,069 ringgit ($975) per tonne. Prices touched a five-month low of 2,993 ringgit on Wednesday, a level not seen since Dec. 19. 

    Traded volumes stood at 40,959 lots of 25 tonnes each, higher than the usual 25,000 lots on increased hedging activities because of the global uncertainty. 

    Demand appeared to be firm. Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance both reported a slight increase in shipments for Malaysian palm oil for May 1-20. 

    Market players will be watching exports for May 1-25 due on Friday and traders expect better numbers compared with a month ago on growing appetite for the edible oil.  

    Traders are also watching dry U.S weather that could hurt the soybean crop and the possibility of a return of the El Nino weather pattern that could damage oil palm production in Southeast Asia.  

    The Australian Bureau of Meteorology said on Tuesday that the climate models it monitors indicated a possible return of  El Nino, often linked to heavy rainfall and droughts, in the second half of 2012.

REGIONAL MARKET - BANGKOK, May 24 (Reuters) - Thai stocks bounced on the back of data showing strong lending growth for large-cap banks, but shares elsewhere in southeast Asia were mixed on Thursday as investors fretted over the wider impact of the euro zone's debt crisis.   

    The Thai main SET index <.SETI> ended up 1.36 percent at 1,125.78, after a four-day losing streak, led by gains in big banks such as Bangkok Bank Pcl . 

    Brokers said investors were also looking to buy shares at bargain prices.  

    "I think the selling here is overdone although the outlook in euro zone does not look good. I think we can bounce here from 1,100 in the near term as the SET has fallen from 1,250 to these levels without pause," said Andrew Yates, head of international equity sales at broker Asia Plus Securities.  

    "Earnings outlook in Thailand remains positive and the economy is growing again. So the fall in share prices has brought valuations down from overbought levels," he said. 

    Malaysian shares <.KLSE> also rose 0.6 percent and Indonesia's index <.JKSE> edged up 0.08 percent. 

    But Singapore's index <.FTSTI> inched down 0.03 percent, the Philippine index <.PSI> declined 0.5 percent and Vietnamese <.VNI> stocks dropped 2.3 percent.  

RTRS- World Bank cuts China forecast, urges measured policy

BEIJING, May 23 (Reuters) - The World Bank cut its economic growth forecast for China this year to 8.2 percent on Wednesday and urged the country to rely on easier fiscal policy that boosts consumption rather than state investment to lift activity.

In a biannual East Asia and Pacific economic update, the World Bank said a slowing China will drag growth in emerging East Asia to two-year lows this year, but warned Europe's seething debt crisis could inflict even bigger damage if it worsens.

Sluggish U.S. and European demand and a softening Chinese property market would combine to weigh on the Chinese economy in the near term, it said.

But if governments and central banks act in time to stabilise activity, economies should recover next year.

It said countries could further loosen monetary and fiscal policies to foster activity, but noted their room for manoeuvre is constrained by inflation risks that could spike when growth rebounds amid rising public debt now.

"The region's authorities should remain flexible to shift monetary policy gears should growth gain traction and inflationary pressures build up," the World Bank said.

In China, where 2012 economic growth was lowered to 8.2 percent from 8.4 percent previously, it said Beijing should only marginally tweak monetary policy for now by lowering banks' reserve requirements as real interest rates are negative.

That leaves the world's No. 2 economy to lean on fiscal policy instead to fuel growth.

"Fiscal stimulus would ideally be less credit-fuelled, less local government-funded, and less infrastructure-oriented," the World Bank said.

"Fiscal measures to support consumption, such as targeted tax cuts, social welfare spending and other social expenditures, should be viewed as the first priority."

The World Bank's recommendations come just a day after a top Chinese financial paper cited unnamed sources as saying China will fast track approvals for infrastructure to combat an economic downturn. [ID:nL3E8GM26W]

The World Bank's lowered growth forecast for this year also comes after the International Monetary Fund kept its forecast for China unchanged at 8.2 percent in its April report.

Trader's Highlight

DJI- NEW YORK, May 23 (Reuters) - U.S. stocks staged a late-day reversal on Wednesday, rallying into the close in another volatile session as a sharp rise in materials shares boosted the S&P 500 and gains in Apple helped lift the Nasdaq.

The action shortly before the market's close was a mirror image of Tuesday when stocks gave up gains in the last minutes of trading. The late rebound suggested investors saw value in the market after the S&P 500 fell just below 1,300 but also underscored the skittishness of the trading environment.

One trader warned not to read too much into the move that lifted the indexes near breakeven for the day.

"I don't make anything of this. Volumes are very low, so there's no conviction," said Todd Schoenberger, managing principal at the BlackBay Group in New York. "We're only hearing what we want to hear. Don't be surprised if futures are disappointed tomorrow."

Towards the close traders cited rumors that the European Union was considering a proposal to guarantee bank deposits across the bloc. Such a move could assuage fears of bank runs in Spain and Greece. The rumors, which one trader said may have originated in London, appeared to be unfounded and served to highlight the markets' current sensitivity to events in Europe.

In the overall market, the Dow Jones industrial average <.DJI> dipped 6.66 points, or 0.05 percent, to 12,496.15. The S&P 500 Index <.SPX> edged up 2.23 points, or 0.17 percent, to 1,318.86. The Nasdaq Composite <.IXIC> gained 11.04 points, or 0.39 percent, to 2,850.12.

For most of the day shares fell by more than 1 percent as EU officials said euro zone countries must prepare contingency plans for a possible Greek exit of the currency bloc, while a weak outlook from Dell Inc cast doubts about the strength of global tech spending.

The agreement by euro-zone officials on contingency planning for a Greek exit of the euro zone, or "Grexit" as some investors are now calling it, came during a teleconference of the Eurogroup Working Group on Monday, sources told Reuters.[ID:nL5E8GN7NF]

Eric Kuby, chief investment officer at North Star Investment Management in Chicago, said renewed concerns about Greece, troubling outlooks from Dell and others, worries about the economy, Facebook's disappointing IPO and JPMorgan's recent trading loss were adding up to significant headwinds.

"It has made people less likely to jump in there and buy stocks," he said. "A lack of good news, some bad news and these worries that have been around for a long time make it hard to get a rally going."

The S&P 500 is down 7 percent from a peak in April but is up 4.9 percent for the year so far. Some analysts are expecting the index to test its 200-day moving average at around 1,280, another 2 percent below current levels.

Facebook Inc and banks, including Morgan Stanley , were sued by the social networking leader's shareholders, who claimed the defendants hid Facebook's weakened growth forecasts ahead of its $16 billion initial public offering. The stock was up 3.2 percent at $32 after falling more than 30 percent from it peak on Friday. [ID:nL1E8GN26I]

NYMEX- NEW YORK, May 23 (Reuters) - U.S. crude futures fell more than 2 percent and settled below $90 a barrel on Wednesday as talks between Iran and the West eased supply disruption fears and as concerns about slower economic growth fueled worries about curbed petroleum demand.

Iran and six major powers exchanged proposals at talks in Baghdad on Wednesday, attempting to defuse a dispute over Tehran's nuclear energy program. [ID:nL5E8GN43L]

Wednesday's meeting came a day after International Atomic Energy Agency (IAEA) Director General Yukiya Amano said he expected to sign a deal with Iran soon to boost cooperation with the investigation into the Islamic Republic's nuclear activity, although differences remained. [D:nL5E8GM7JN]

Also pressuring oil prices was the Energy Information Administration's weekly report showing rising U.S. crude inventories and lackluster fuel demand.

U.S. crude stocks rose 883,000 barrels last week, only slightly less than expected, the EIA said. [EIA/S]

* On the New York Mercantile Exchange, July crude fell $1.95, or 2.12 percent, to settle at $89.90 a barrel, having traded from $89.28 to $91.72.

* The World Bank cut its economic growth forecast for China this year to 8.2 percent and urged the country to rely on easier fiscal policy that boosts consumption rather than state investment to lift activity. [ID:nL4E8GM24J]

* European leaders, meeting on Wednesday and at odds over how to resolve the deepening crisis in the euro zone, have been advised by senior officials to prepare contingency plans in case Greece quits the single currency area. [ID:nL5E8GN3TF]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell to a near two-month low, pressured by a broad sell-off in commodities tied to worries about the euro zone, as well as improving U.S. crop weather, traders said.

* World stocks skidded and the dollar firmed on worries about Greece's possible exit from the euro zone, which would deepen the region's debt crisis and hurt an already fragile global economic recovery. [MKTS/GLOB]

* Additional pressure stemmed from fears that China, the world's biggest soy buyer, might be either canceling purchases of U.S. soybeans or rolling old-crop sales forward to the next crop year due to sagging domestic crush margins.

* Improving U.S. crop weather added pressure. Traders said updated midday forecasts for next week and beyond failed to confirm any additional heat in the U.S. Midwest crop belt.

* After a hot spell this weekend, cooler temperatures are expected next week and rains will shift back to the northwest half of the Midwest early in the 11- to 15-day period, the Commodity Weather Group said.

* Spot soybeans fell to the lowest level since March 29 on continuous charts, while the July soybean contract fell to its lowest level since March 22.

* Soyoil lost ground to soymeal on meal/oil spreads, dragged down by declines in U.S. crude oil. Spot soyoil hit a five-month and dropped nearly 3 percent, its biggest one-dayplunge since September 2011.

* As of 1:19 p.m. CDT (1819 GMT), ICE U.S. July soybeans were down 19 cents at $13.63-1/4 per bushel on volume of 823 contracts.

FCPO- SINGAPORE, May 23 (Reuters) - Malaysian palm oil futures slipped to their lowest in more than five months on Wednesday, tracking a downward trend in broader commodities markets as investor caution over the euro zone debt crisis resurfaced.

Germany has dismissed a French-led call for euro zone governments to issue common bonds, raising fears of a potential Greek exit from the single currency ahead of a meeting of European leaders. [ID:nL5E8GM4K6]

Palm oil futures were not spared from the broad-based commodities sell-off, losing almost 3 percent to close and just above the psychologically key level of 3,000 ringgit.

"The palm oil market was under pressure today from the beginning. External oilseed markets were down so palm oil fell in line with market sentiment," said a trader with a foreign commodities brokerage in Malaysia.

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 2.9 percent to close at 3,019 ringgit ($961) per tonne after touching a low of 2,993 ringgit, a level not seen since Dec. 19.

Traded volumes stood at 55,312 lots of 25 tonnes each, more than double the usual 25,000 as traders rushed in to liquidate their positions.

Reuters market analyst Wang Tao expressed a bearish view, saying palm oil would drop further to 2,971 ringgit, the Dec. 15 low, as it has dropped below 3,019 ringgit. [ID:nL4E8GN1AO]

Despite healthy demand, concerns about the global economy were playing a bigger role in driving the market, traders said.

"If you are talking about demand, it is definitely there. But with this kind of scenario, it's not like those days when the buyer will chase the seller," one trader said.

REGIONAL EQUITY- May 23 (Reuters) - Southeast Asian stocks fell on Wednesday, tracking losses across regional markets, as investors fretted over the impact of the possibility of a Greek exit from the euro zone.

Singapore's Straits Times index <.FTSTI> fell 1.5 percent and closed at the day's lows bringing its losses for the month to 6.5 percent. Indonesia <.JKSE> lost 0.98 percent while Thailand <.SETI> fell 1.84 percent as Tuesday's bounce from oversold levels proved temporary.

Shares in PTT Exploration and Production fell more than 5.9 percent to a seven-month low on concern about a possible capital increase after the oil and gas explorer offered $1.9 billion for Mozambique-focused explorer Cove Energy .[ID:nL5E8GN21B]

Along with energy stocks, financials across the region were weak putting pressure on markets as the two sectors generally carry the heaviest weights on regional benchmarks.

In Singapore, UOB Ltd and OCBC fell 2.6 percent and 2.2 percent respectively and were the top two drags on Singapore's Straits Times index.

Analysts at BNP Paribas estimate that bank shares in the ASEAN region could fall by about 16 percent, on average, in the event of a mild global recession.

While that remains the brokerage's most likely scenario, BNP warned that if a global financial meltdown were to occur bank stocks could see as much as a 50 percent drop that could take valuations to those seen in the global financial crisis in 2008.

RTRS- Oil World sees more falls in Argentine soy crop

HAMBURG, May 22 (Reuters) - Argentina's 2012 soybean crop may fall as low as 40 million tonnes from 49.2 million tonnes in 2011 as drought damage to crops is still becoming apparent, Hamburg-based oilseeds analysts Oil World said on Tuesday.

This would be down from Oil World's previous forecast of 41.0 million tonnes. Oil World had cut its Argentine crop forecasts by 4.0 million tonnes in April because of dry weather in the country. [ID:nL5E8FN7X0]

"The soybean crop is in trouble in northern Argentina," Oil World said. It estimates that about 0.5 million hectares of soybean plantings in north Argentina have been abandoned after dry weather following abandonment of 0.4 million hectares in other parts of the country.

"It is thus possible that the total Argentine soybean crop turns out at only around 40.0 million tonnes compared with our May 4 estimate of 41.0 million tonnes," it said.

The Buenos Aires Grains Exchange on May 17 cut its forecast of Argentina's 2012 soybean crop by 1.4 million tonnes to 41.5 million tonnes. [ID:nL1E8GHCF7]

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.

"Consumers in China and elsewhere have an interest in extending (supply) coverage in view of the still dwindling South American soybean production estimates and the vagaries of weather and crop prospects in the U.S. still lying ahead," Oil World said.

China will import 57.0 million tonnes of soybeans in Aug. 2011/July 2012, up by 3.9 million tonnes on the same year-ago period, Oil World estimates.

Trader's Highlight

DJI- NEW YORK, May 22 (Reuters) - U.S. equities faltered minutes before the close on Tuesday and the euro fell as hopes European leaders will tackle the region's debt crisis ebbed, fanning doubts that much would come of a meeting just a day away.

European shares earlier gained almost 2 percent on optimism European leaders may devise new measures to foster growth in the euro zone and restore a doubtful market's confidence.

An informal summit of European Union leaders late on Wednesday is expected to discuss the idea of regional bonds jointly underwritten by all euro zone member states. [ID:nL5E8GL8MO]

However, Germany's long-standing opposition is unlikely to change; the country has dismissed the French-led call for the euro zone to issue common bonds. [ID:nL5E8GM4K6]

U.S. stocks ended the day mostly flat after gains of about 1 percent, pulled lower by a news report that some traders took as a sign that the risk of Greece crashing out of the euro zone was growing.

Dow Jones quoted former Prime Minister Lucas Papademos of Greece as saying that Greeks had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but was real.

The report weighed on a dose of pessimism in the market.

"The string of summit meetings that have been called to address the euro crisis thus far have more often than not failed to live up to market hopes for quick and decisive action and this one will be no exception," said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

The Dow Jones industrial average <.DJI> closed down 1.67 points, or 0.01 percent, at 12,502.81. The Standard & Poor's 500 Index <.SPX> rose 0.64 points, or 0.05 percent, at 1,316.63. The Nasdaq Composite Index <.IXIC> fell 8.13 points, or 0.29 percent, at 2,839.08.

Banking shares led the rally, with JPMorgan Chase & Co , Citigroup Inc , Bank of America and Wells Fargo Corp , the top four contributors to the S&P 500's gains. The KBW banking index <.BKX> rose 1.1 percent.

Another 8.9 percent downdraft in Facebook Inc pressured tech shares. Shares are now 18.4 percent off their initial public offering price after three days of trading.

The euro fell amid skepticism Wednesday's talks would yield much progress. The euro was down 1.0 percent against the dollar at $1.2681. The dollar index rose 0.7 percent to 81.679 <.DXY>, rising after three days of losses.

The dollar was boosted in part by a fall in the yen after Fitch ratings agency downgraded Japan on worries about its high level of public debt. [ID:nL4E8GM0XU]

"Tomorrow's meeting will not deliver any landmark solution. The market is likely to be more prone to disappointment," said Matteo Regesta, a strategist at BNP Paribas.

"There's this delusion of a quick fix either via monetary policy with the European Central Bank or via some kind of fiscal decision, but unfortunately this won't happen," Regesta said.

NYMEX-NEW YORK, May 22 (Reuters) - U.S. crude oil futures fell on Tuesday, as a potential deal between Iran and the U.N. nuclear watchdog eased worries about crude supplies, and after the OECD

warned the euro zone crisis threatened to derail the fragile global economic recovery.

NYMEX crude for June delivery expired and settled almost 1 percent lower, down for the seventh time in eight sessions.

In post-settlement trading, prices were little changed after the American Petroleum Institute reported that domestic crude stocks rose 1.5 million barrels in the week to May 18, just above the Reuters forecast for a 1.0-million-barrel rise.[API/S]

The increase included a 491,000-barrel gain in stocks at the Cushing, Oklahoma, delivery hub for U.S.-traded oil futures.

Stocks at the hub could dip by next week's report following the reversal of the Seaway pipeline flow, aimed at easing the Midwest oil glut. The pipeline began pumping crude from the hub to the main U.S. refining center in Houston on Saturday, outside of last week's inventory reporting period. [ID:nL1E8GJ2AE]

* On the New York Mercantile Exchange, crude for June delivery expired and settled at $91.66 a barrel, down 91 cents, or 0.98 percent, after trading between $91.39 to $93.01.

* NYMEX July crude closed at $91.85, falling $1.01, or 0.98 percent. Its discount against July Brent crude widened to $16.56, from $15.95 on Monday.

* U.S. crude's Relative Strength Index (RSI) fell back to 25.3, from 27.4 on Monday. The index fell below 30, the level indicating oversold conditions, beginning May 11, when it hit 29.799, according to Reuters data.

* Iranian oil exports have not dropped further in May after falling sharply since March, industry sources said on Tuesday, because core customers in Europe and Asia continue to buy ahead of European sanctions aimed at slowing Tehran's nuclear program. [ID:nL5E8GMBNV]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell more than 2 percent, hitting a one-week low as funds liquidated long positions on favorable U.S. crop weather and spillover pressure from corn, traders said.

* Softening cash markets for corn and soybeans at the U.S. Gulf added pressure.

* Unconfirmed rumors that China might cancel some purchases of old-crop U.S. corn and soybeans also weighed on prices, along with a firmer dollar.

* Front-month soybeans fell to a one-month low on continuous price charts, while the July soybean contract fell to its lowest level since March 30.

* The U.S. Department of Agriculture said the U.S. soybean crop was 76 percent planted as of Sunday, up from 46 percent the previous week and above trade expectations. The crop was 35 percent emerged, well ahead of the five-year average of 13 percent. [US/SOY]

* Some traders said forecasts for the six- to 15-day period in the U.S. Midwest had turned wetter, easing worries about potential crop stress.

* Argentina's 2012 soybean crop may fall as low as 40 million tonnes, from 49.2 million tonnes in 2011, as drought damage to crops is still becoming apparent, Hamburg-based oilseeds analysts Oil World said. [ID:nL5E8GM73P]

FCPO- SINGAPORE, May 22 (Reuters) - Malaysian palm oil futures edged up on Tuesday, as hopes grew that Europe would take steps to tackle its debt crisis, which has triggered a massive selloff in global financial markets.

France's Francois Hollande will push a proposal for mutualising European debt at an informal summit of EU leaders on Wednesday, sending the markets positive signals and easing some investors' fears. [ID:nL5E8GL8MO]

But optimism was muted as most traders chose to remain on the sidelines until more concrete steps to tackle the crisis emerge.

"The market is still stuck within yesterday's range, it's a continuation of the consolidation phase. No one wants to do anything as market sentiment is still rather mixed," said a dealer with a foreign commodities brokerage in Malaysia.

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended up 0.4 percent higher at 3,110 ringgit ($997) per tonne.

Traded volumes picked up after the midday break with 27,849 lots of 25 tonnes each, slightly more than the usual 25,000 lots.

Palm oil trading looks neutral in a range of 3,019 to 3,136 ringgit per tonne, said Reuters market analyst Wang Tao based on technical analysis. [ID:nL4E8GL1AY]

Fundamentals remain intact as demand for the edible oil looks healthy, reflected by higher Malaysian palm oil exports for May 1-20 from a month ago.

On the supply side, dry weather concerns in the United States that threatened to hurt soybean crop reinforced expectations of tighter global oilseed supply.

REGIONAL EQUITY- BANGKOK, May 22 (Reuters) - Southeast Asian stocks were broadly higher on Tuesday led by Indonesia, rebounding from five straight losses, and Singapore on the back of commodities firms such as palm oil giant Wilmar International Ltd .

Indonesia <.JKSE> climbed 2.1 percent led by financial firms, after a combined 4.76 percent loss in the previous sessions. Singapore <.FTSTI> rose 1.2 percent.

Stocks also advanced on the Malaysian market <.FTSTI>, up by 0.5 percent and in the Philippines <.PSI> which ended 0.09 percent higher.

Vietnamese stocks <.VNI> bucked the regional trend to fall 0.02 percent, reversing Monday's 3 percent climb, while Thai stocks <.SETI> edged down 0.3 percent amid late selling in energy shares.

Investors were looking to an informal summit of the European Union on Wednesday where leaders could agree on measures to boost growth, brokers said.

"Investors are looking forward to the EU summit for possible pro growth measures. Overall, stock market sentiment will still very much depend on external development," said Bangkok-based Pichai Lertsupongkij, head of investment advisory services at broker Thanachart Securities.

Trader's Highlight

DJI- NEW YORK, May 21 (Reuters) - Global stocks on Monday rebounded from lows for the year and oil prices rose for the first time in four sessions as world leaders emphasized support for growth in the euro zone, and China said priority should be given to maintaining its economic expansion.

Still, most investors and analysts see the pause in selling of stocks, oil and other commodities as temporary, given the uncertainties ahead for Greece, which holds national elections on June 17.

Risk that Greece might leave the euro zone curbed a recovery for the euro, which stabilized above its lowest level in about four months.

On Saturday, leaders of the Group of Eight nations stressed that their "imperative is to promote growth and jobs" for the euro zone, and expressed support for Greece to stay in the euro.

Despite calls from the United States for immediate moves to boost growth, no sign emerged that Germany would soften its stance on austerity as the cure for Europe's debt problems. [ID:nL1E8GK46A]

"We're in a bit of an oversold bounce in here at the moment and whether we're going to build on all of this we'll find outthis week. We'll still be hostage to European news and will be for the foreseeable future," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

The absence of negative news from Europe revived some appetite for U.S. equities despite a selloff of Facebook shares following its lackluster debut on Friday. [.N]

The Dow Jones industrial average <.DJI> gained 135.10 points, or 1.09 percent, to close at 12,504.48. The Standard & Poor's 500 Index <.SPX> rose 20.77 points, or 1.60 percent, to finish at 1,315.99. The Nasdaq Composite Index <.IXIC> advanced 68.42 points, or 2.46 percent, to close at 2,847.21.

U.S. stocks came off their worst weekly loss in a year as Facebook's sloppy debut on Friday disappointed investors. The social networking company's stock lost 11 percent on Monday to close at $34.03 on Monday. It fell as low as $33 - $5 below its initial offering price, wiping out $10 billion of its market value.

While Facebook shares faded after much fanfare, established technology companies did better, led by Apple Inc whose shares rose 5.8 percent to $561.28.

Spain's prime minister said on Monday that urgent solutions were needed to guarantee financial stability in Europe. [ID:nL5E8GLD9A] On Friday, Spain revised upward its estimated 2011 budget deficit.

Spanish benchmark 10-year bond yields held at 6.29 percent, while the 10-year Italian debt yield was flat at 5.94 percent. These long-term borrowing costs are seen as unsustainable for the euro zone's fourth- and third-largest economies, respectively.

The euro rose 0.25 percent in choppy trading to $1.2814, well above Friday's four-month low of $1.2642 , which was not far from its lowest point for 2012. [FRX/]

The dollar index <.DXY> slipped 0.43 percent to 80.941 after touching its highest level since mid-January on Friday on heavy bids for the U.S. currency and other perceived safe-haven assets.

Nagging jitters over the financial contagion from the festering debt problem in Europe offset earlier profit-taking on U.S. and German government debt.

NYMEX- NEW YORK, May 21 (Reuters) - U.S. crude oil futures ended more than 1 percent higher on Monday, snapping a six-session losing streak, on hopes of more economic stimulus in China, and in reaction to G8 leaders wanting to keep Greece in the euro zone while keeping pressure to Iran over its disputed nuclear program.

Crude oil bounced after the market had became oversold during the recent extended price slide, Reuters data showed.

Traders will look for fundamental guidance on Tuesday when the industry group American Petroleum Institute issues its weekly petroleum inventory report. That will be followed on Wednesday by the federal Energy Information Administration's weekly report.

Ahead of those reports, a Reuters poll of analysts forecast that domestic crude inventories rose 1.0 million barrels last week, rising for the ninth straight week. Distillates and gasoline stocks were forecast unchanged from the previous week's level. [EIA/S]

* On the New York Mercantile Exchange, crude for June delivery , which expires on Tuesday, settled at $92.57 a barrel, up $1.09, or 1.19 percent.

* U.S. crude's Relative Strength Index (RSI) rose to 27.496 from 21.366 on Friday. The index fell below 30, the level indicating oversold conditions, beginning May 11, when it hit 29.799, according to Reuters data.

* In London, ICE Brent crude for July delivery settled at $108.81 a barrel, rising $1.67, or 1.56 percent. Just before settlement, it climbed $2 and later posted the day's high at $109.22, up $2.08, or 1.94 percent. In early trade, it hit a session low of $106.75.

* July Brent's premium against the U.S. July crude contract widened to $15.95 at the close, from $15.55 on Friday.

* Volumes were slim, with U.S. crude dealings about 29 percent below its 30-day average and Brent down 33 percent from its 30-day average, according to Reuters data.

* Iran plans a new oil terminal outside the Strait of Hormuz to protect its exports against potential problems in the Gulf and to increase shipments of Caspian oil, the oil ministry said. [ID:nL5E8GL82Z]

CBOT SOYBEAN- Spot soybean futures on the Chicago Board of Trade closed 0.6 percent higher on Monday and back months had greater gains amid concerns hot and dry weather may limit 2012 U.S. soybean crop prospects, traders said.

* Soy July soybeans turned positive after falling 2.3 percent on Friday amid long liquidation of outright positions and bull spreads.

* Soybeans were supported by ideas that dry conditions in southern areas of the U.S. Plains and Midwest may limit planting of double-crop soybeans, which are typically seeded on winter wheat fields immediately after the wheat is harvested.

* Drier-than-normal weather is expected in much of the U.S. Midwest crop belt for the next week to 10 days, while above-average rainfall is seen for the northwest Midwest and the northern Plains, said John Dee, meteorologist for Global Weather Monitoring.

* Traders expect USDA's crop progress report due at 3 p.m. CDT (2000 GMT) to show U.S. soybean plantings at 68 percent complete, up from 46 percent the previous week. [ID:nL1E8GLA1A]

* USDA reported export inspections of U.S. soybeans in the latest week at 12.684 million bushels, below trade expectations for 14 million to 18 million bushels.

* The CIF soybean basis for soybeans shipped by barge to the U.S. Gulf Coast was steady to firm on Monday, supported by thin supplies in the export pipeline. [ID:nL1E8GL5SJ]

* The CFTC's supplemental report on Friday showed large speculators cut their near-record net long in CBOT soybeans for a second straight week. [ID:nEMS30DEWJ]

FCPO- SINGAPORE, May 21 (Reuters) - Malaysian palm oil futures edged up on Monday on improving exports, although gains were capped as investors remained wary over uncertainty surrounding the euro zone.

Malaysian palm oil exports for May 1-20 rose from a month ago, reflecting slightly better demand for the edible oil, according to cargo surveyor data. [PALM/ITS][PALM/SGS]

Futures hit a five-month low at 3,034 ringgit on Friday, ending a volatile trading week when the market suffered a 5.5 percent loss on concerns about contagion from the Greek political turmoil.

"Prices are poised to recover after the recent sell-off. It was oversold and a little divorced from fundamentals. Demand is creeping back and (supply) situation remains tight," said a trader with a local commodities brokerage in Malaysia.

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange inched up 0.1 percent to close at 3,098 ringgit ($998) per tonne. Prices touched 3,034 ringgit on Friday, a level last seen on Dec. 21 last year.

Traded volumes stood at 42,462 lots of 25 tonnes each, much higher than the usual 25,000 lots, on increased hedging activities.

On the technicals front, palm oil will consolidate in a range of 3,019-3,136 ringgit per tonne for one or more trading sessions, before dropping below it, said Reuters market analyst Wang Tao. [ID:nL4E8GL1AY]

On the demand side, exports inched up 2.1 percent to 862,337 tonnes for the first 20 days of the month, thanks mainly to slightly better shipments to India, said cargo surveyor Intertek Testing Services.

Another cargo surveyor, Societe Generale de Surveillance, reported a slightly higher 3.1 percent rise in exports for the same period.

Temperatures are set to rise in the southern portion of the Midwest grain belt in the United States, which produces the country's bulk of corn and soybeans, raising expectations of tighter soybean supply. [ID:nL4E8GL17T]

REGIONAL EQUITY-BANGKOK, May 21 (Reuters) - Southeast Asian stock markets were broadly higher on Monday on buying by investors after sell-offs in recent days, but gains were limited by worries over Europe's debt crisis.

Vietnamese stocks <.VNI> closed 3 percent higher, with its 14-day relative strength index (RSI) at 41.5, bouncing from 30.7 on Friday. A level of 30 or lower indicates the market is oversold.

Among the oversold markets, shares in Singapore posted a modest gain of 0.4 percent, with the 14-day RSI of Singapore's Straits Times Index closing at 25.4, compared with 22.2 on Friday.

The Thai stock market bucked the trend, though, dragged 1.7 percent lower by shares of energy firms as investors worried about the impact of weak oil markets on earnings.

The index of heavyweight energy firms <.SETEN> was down 2.4 percent.

Trader's Highlight

DJI- NEW YORK, May 18 (Reuters) - World stocks erased the year's gains o n F riday as investors fled risky investments for safe-haven assets on concerns about the euro zone's deepening debt woes, while U.S. stocks lost ground after the debut of Facebook's failed to ignite optimism.

Brent crude closed at its lowest in 2012 as the euro zone crisis raised fears of a global slowdown that could dent oil demand, while German borrowing costs hit record lows.

World stocks, as measured by the MSCI index <.MIWD00000PUS>, dropped 1.1 percent and gave up all of their gains for the year to date fueled by the European Central Bank's injection of more than 1 trillion euros. It was a sixth day of losses for the index, which is now down 0.4 percent for the year.

Riskier assets were all heading for big weekly losses.

Investors were unnerved by a ratings downgrade of 16 Spanish banks by Moody's Investors Service, which deepened worries about the euro zone contagion. But market speculation that regulators could reinstate a ban on short selling of financial stocks sparked a rally in banking shares, with Spain's Banco Santander up 3 percent. U.S.-listed shares of Banco Santander rose 3.6 percent to end at $5.76.

Spain's banks, saddled with bad loans after a property boom collapsed, may need a bailout that would strain Madrid's already stretched finances and possibly require an international bailout regardless of any contagion threat from Greece. [ID:nL5E8GHH59]

"Sentiments are still pretty negative," said Francis Rodilosso, portfolio manager with Market Vectors in New York. "People are definitely seeing the glass half-empty."

Ongoing political and financial turmoil in Greece has kept investors worried about its ability to remain in the euro zone.

A G8 meeting of leaders of major industrial economies this weekend is expected to tackle the crisis in Europe and look for ways to promote growth.

On Wall Street, U.S. stocks fell after a sloppy debut by Facebook spoiled hopes that a spectacular open for the most-anticipated stock sale in years would brighten investors' mood. The benchmark S&P 500 posted a weekly loss of 4.3 percent.

Facebook's debut was hit with glitches, including a delay in initial trading. The stock closed at $38.23, barely above its $38 offering price.

For the day, the Dow Jones industrial average <.DJI> ended down 73.11 points, or 0.59 percent, at 12,369.38. The Standard & Poor's 500 Index <.SPX> was down 9.64 points, or 0.74 percent, at 1,295.22. The Nasdaq Composite Index <.IXIC> was down 34.90 points, or 1.24 percent, at 2,778.79.

The FTSEurofirst 300 <.FTEU3> of leading European shares slid 1.1 percent, falling for a fifth day.

In the foreign exchange market, the euro rose from a four-month low against the dollar. It tumbled to $1.2640, not far from its trough of 2012, before recovering to trade slightly higher.

Europe's woes kept pressure on oil prices.

Safe-haven gold prices rose more than 1 percent, with spot gold at $1,588.96 an ounce.

 

NYMEX- NEW YORK, May 18 (Reuters) - U.S. crude oil futures fell more than 1 percent on Friday, down for the sixth straight session, as worsening problems in Greece and Spain raised worries of contagion in the euro zone.

Oil futures fell on the drumbeat from global stock markets, which erased the year's gains as investors pared holdings for safe-haven assets such as gold, on growing concerns about the euro zone debt crisis.

Oil investors were cautious ahead of the G8 summit this weekend where U.S. President Barack Obama was reported by Japanese news agency Kyodo to be seeking support for tapping the release of emergency oil reserves ahead of the European Union's July embargo of Iranian crude. [ID:nL1E8GGEWR].

Obama will host the G8 meeting at Camp David in Maryland.

Reversal of the Seaway pipeline was completed earlier this week and its first crude oil headed for Houston from Cushing, Oklahoma, is expected to flow by the weekend, according to owners Enterprise Products and Enbridge Inc .

Anticipation of the landmark move, which was expected to help ease the glut in Midwest crude stockpiles, had reduced Brent's spread against U.S. crude in recent days, but on Friday, the spread widened, amid caution from analysts that impact of the reversal could be slow to hit the U.S. oil markets. [ID:nL1E8GH9YX]

* On the New York Mercantile Exchange, crude for June delivery , which expires on Tuesday, settled at $91.48 a barrel, falling $1.08, or 1.17 percent. For the week, it slid $4.65, or 4.84 percent, down for the a third in a row.

* In three weeks, front-month U.S. crude has slumped $13.45, or 12.82 percent, the biggest three-week loss since the week to Aug. 14, 2011, when prices dropped 14.54 percent.

* Hedge funds and big speculators cut their bullish bets on U.S. crude oil and options by 12,789 contracts, to 140,936, in the week to May 15, hitting the lowest level since late 2010, according to a weekly report from the U.S. Commodity Futures Trading Commission. [ID:nL1E8GIH8C]

* The number of oil drilling rigs in the United States rose 10 to 1,382 last week, the highest level in 25 years, according to a weekly report from oil services firm Baker Hughes. [ID:nL1E8GI6DU]

* U.S. petroleum consumption fell 0.3 percent in April from a year ago, to 18.549 million barrels per day and gasoline usage climbed for the third month in a row, the American Petroleum Institute said. [ID:nL1E8GI4RO]

* Iraq's oil exports from is southern ports have slipped by 170,000 bpd so far this month, according to shipping data tracked by Reuters, although Iraq hopes remain it will sustain shipments at April's record rate. [ID:nL5E8GID60]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell 2 percent, halting a three-day advance, as investors took profits by liquidating long positions and unwinding intra-market and inter-market spreads, traders said.

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

* Despite Friday's sell-off, front-month soybeans settled 1 cent higher for the week, halting a two-week slide.

* Traders exited long soybean/short wheat spreads on worries about dry weather hurting wheat yield prospects in the U.S. Plains, Russia and China.

* Soybeans also pressured by news this week that China, the world's top soy importer, will sell 600,000 tonnes of domestic soy from state reserves next week, potentially slowing its purchases on the world market.

* Favorable weather for most of the U.S. Midwest adds pressure. Rains are likely in the northwestern U.S. Midwest this weekend, boosting soil moisture for recently planted crops in Iowa and Minnesota, said John Dee with Global Weather Monitoring.

* As of 1:44 p.m. CDT (1844 GMT), ICE U.S. July soybeans were down 31-1/4 cents at $14.06-3/4 a bushel on volume of 409 contracts.

* CBOT July soybeans fell below support at the 50-day moving average of $14.17-3/4.

* CME Group said it would start nearly around-the-clock trading in CBOT grains and oilseeds on Sunday night after U.S. regulators approved its plan to expand electronic trade to 21 hours per session, from 17 hours. [ID:nL1E8GI7NG]

FCPO- SINGAPORE, May 18 (Reuters) - Malaysian palm oil futures ended almost flat on Friday after hitting a near 5-month low, as lingering worries over Greece's potential exit from the euro zone dampened investors' risk appetite.

Palm oil posted a 5.5 percent weekly loss, the worst since November last year, reflecting the volatility that also dragged down the broader commodities market.

"The sell down has not happened only to palm oil, it also happened to gold, crude oil and the equities market. Sentiment is very bad," said Alan Lim, research analyst with Malaysia's Kenanga Investment Bank.

"Volatility can still be expected in the market as the Greek election is still one month away. Fundamentally palm oil is still good, for instance dry weather in the U.S. could indicate a tighter oilseed supply."

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange gained one ringgit to close at 3,096 ringgit ($976) per tonne, after going as low as 3,034 ringgit, a level last seen on Dec. 21 last year.

Traded volumes stood at 45,218 lots of 25 tonnes each, almost double the usual 25,000 lots.

Traded volumes have been unusually high this week on increased hedging activities, hitting an all-time high of 63,019 lots on Wednesday, surpassing the previous record of 48,741 lots on Nov. 17 last year.

On the demand side, there was no clear direction for Malaysian palm oil exports for the first half of the month as cargo surveyors reported opposite trends.

Traders will be looking out for the next exports data due on Monday, hoping for a better indication of demand trend.

On the technicals front, palm oil will fall to 3,019 ringgit per tonne, with a potential downside at 2,971 ringgit, said Reuters market analyst Wang Tao. [ID:nL4E8GI2NQ]

REGIONAL EQUITY- BANGKOK, May 18 (Reuters) - Southeast Asian stock markets extended their losses on Friday, with Philippine shares sliding almost 3 percent, as escalating problems in Europe made investors head for the exits.

The Philippine index <.PSI> a suffered 5.4 percent loss for the week, its worst weekly loss since September and the second-worst performer in the region, following Vietnam, which posted a weekly loss of 9.4 percent, its worst in a year.

Malaysia <.KLSE> had its worst weekly loss in eight months, falling 3.3 percent on the week, while Singapore <.FTSTI> posted a 3.6 percent fall on the week, its worst in nine months.

Sentiment in the region was expected to remain weak but low valuations, particularly for Malaysian companies, could offer investors a longer-term buying opportunity, said Bharat Joshi, a fund manager for Aberdeen Asset Management in Kuala Lumpur.

"It's still very uncertain and I think markets will remain very volatile," he said.

"But on the ground, companies are still reporting a good set of results, especially Malaysia. So this is an interesting time for stock picking," he said.

RTRS- ECB stops operations with some Greek banks

BERLIN/FRANKFURT, May 16 (Reuters) - The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalised, the ECB said on Wednesday, confirming news earlier reported exclusively by Reuters.

The news sent the euro lower against the dollar , fanning concerns among investors and in Greece that the country may have to leave the euro zone.

The development highlights the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European single currency despite the declared determination of EU powers Germany and France to keep Athens in the monetary union. [ID:nL5E8GGASZ]�

"As recapitalisation wasn't in place, the ECB stopped monetary policy operations," a euro zone central bank source told Reuters, declining to be identified. "They are now in the ELA of the Greek central bank."

The ECB only conducts its refinancing operations with solvent banks. Banks which fail to meet strict ECB rules but are deemed solvent by the national central bank (NCB) concerned can nonetheless go to their NCB for emergency liquidity assistance (ELA).

The sources did not name the banks concerned.

An ECB official later added: "Pending the recapitalisation of Greek banks that are severely undercapitalised as a result of the recent PSI (debt restructuring) operation, some of the Greek banks have been moved to Emergency Liquidity Assistance."

"Once the recapitalisation process is finalised, and we expect this to be finalised soon, the banks will regain access to standard Eurosystem refinancing operations," the official added. "The ECB/Eurosystem (of euro zone central banks) continues to support Greek banks."

It was unclear exactly how many lenders were affected but the development marked a increase in the number of Greek banks depending on emergency borrowing from the Bank of Greece.

One person familiar with the matter said four Greek banks' capital was so depleted they were operating with negative equity capital. According to its own rules, the ECB cannot provide liquidity to banks in such a situation.

ECB policymaker Luc Coene told the Financial Times in an interview released earlier this week Greek banks on ELA were still solvent.

Greece's cabinet on April 27 agreed a state bank support fund (HFSF) would provide the country's four big banks with 18 billion euros worth of European bonds as an interim solution until they are recapitalised later in the year.

The fund will allocate the 18 billion euros by next week to the country's four biggest lenders as an interim recapitalisation, its chief said on Wednesday. [ID:nA8E8E500T]

"Procedures to allocate the funds should be concluded by next week," the head of the Hellenic Financial Stability Fund (HFSF), Panagiotis Thomopoulos, told Reuters.

Athens is working with EU/IMF officials on technical aspects of a recapitalisation plan for its banks, likely to be unveiled after the national election.

About 50 billion euros ($66 billion) have been earmarked in Greece's second bailout to prop up its struggling banking sector.

ECB President Mario Draghi said earlier the central bank wanted Greece to remain in the currency bloc.

"I want to state that our strong preference is that Greece will continue to stay in the euro zone," he said in a speech, adding: "Since the treaty does not foresee anything on exit (from euro), this is not a matter for the ECB to decide."

RTRS- China 2012 corn output seen at record 197.5 mln T, soy down -CNGOIC

BEIJING, May 16 (Reuters) - China, the world's second largest corn consumer, will reap another record harvest of the grain this year as it planted more acres to meet surging demand at home, while soy output is set to drop again, according to estimates from an official think-tank.

China, traditionally a net corn exporter, has become a major importer of the grain in recent years as Beijing strives to supply livestock feed to meet fast-growing demand for meat amid near-record domestic corn prices.

China is expected to see a corn output of 197.5 million tonnes in 2012, up 3 percent from last year, the China National Grain and Oils Information Center (CNGOIC) said on Wednesday.

China's corn imports in the year to September 2013 are expected to jump almost 60 percent to 7.9 million tonnes, according to a Reuters' poll.[ID:nL4E8G75B5]

CNGOIC projected a 7 percent drop in soy production this year to 13 million tonnes, after a 10.5 percent fall in 2011, as farmers shift to grow corn due to higher returns.

The lower soy forecast would continue to boost imports by China, the world's top buyer of the oilseed.

The center expects the country's wheat output in 2012 to grow 2 percent on year, while paddy output is likely to rise 2.1 percent to a record high of 205 million tonnes.

Despite increases in output in 2011, China's wheat imports in the first quarter of 2012 jumped 347 percent on year to 1.12 million tonnes, which is almost as much as it imported in 2011.

RTRS- Indonesian palm oil markets shut for long weekend

    SINGAPORE, May 16 (Reuters) - Indonesian palm oil markets will be shut on May 17 and May 18 for a public holiday and will reopen on May 21 (Monday). 

Trader's Highlight

DJI- NEW YORK, May 16 (Reuters) - U.S. stocks and the euro slid on Wednesday on news that some Greek banks face emergency funding needs, while minutes from the Federal Reserve's April meeting showed U.S. economic prospects remain sobering.

The European Central Bank stopped funding operations for some Greek banks as they are undercapitalized, the ECB said, confirming a Reuters report that had fanned concerns about Greece's financial difficulties. [ID:nL5E8GGJDT]

The funding needs highlighted the weak state of the banking sector in Greece, where many Greeks are withdrawing money out of fear their country may soon leave the euro zone.

The euro slid and shares in Europe closed lower in choppy trading as worries mounted over the stability of the euro zone.

Greece plans to hold fresh elections in mid-June that likely will determine whether it remains in the common currency area.

"All eyes continue to be trained on Europe, what is going to happen in Greece, what the potential fallout from that is going to be," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

The Dow Jones industrial average <.DJI> closed down 33.45 points, or 0.26 percent, at 12,598.55. The Standard & Poor's 500 Index <.SPX> fell 5.86 points, or 0.44 percent, at 1,324.80. The Nasdaq Composite Index <.IXIC> shed 19.72 points, or 0.68 percent, at 2,874.04.

Efforts by German Chancellor Angela Merkel and new French President Francois Hollande to quell talk of a possible Greek exit from the euro zone bolstered sentiment for much of the day.

But U.S. stocks retreated on the ECB news and the Fed minutes, which showed several members of the U.S. central bank's policy-setting committee had indicated that additional monetary policy accommodation could still be necessary. [ID:nW1E8FB04P]

Data showing U.S. industrial production posted its fastest growth in over a year in April and a surge in groundbreaking for new homes that suggested a rebound in U.S. housing was gaining some traction had spurred early U.S. stock market gains. [ID:nL1E8GG2R8]

Investors have also turned to Treasuries and other perceived safe-haven assets, however, on signs of slowing growth in China and jitters about banking in the wake of the $2 billion trading loss at JPMorgan Chase & Co , traders and analysts said.

"The (Treasuries) market is long and traders see the mess in Europe won't be resolved for a long time," said Thomas Roth, executive director of U.S. government bond trading at Mitsubishi UFJ Securities USA in New York. "The market is priced for Armageddon."

The euro slid for a fourth straight session, dropping to a four-month low against the U.S. dollar.

The euro was down 0.13 percent at $1.2713. The dollar index <.DXY>, a basket measuring the greenback's strength against other major currencies, rose 0.23 percent to 81.405.

NYMEX- NEW YORK, May 16 (Reuters) - U.S. crude futures fell a fourth straight session on Wednesday as political turmoil and banking problems in Greece raised new concerns about the euro zone's debt crisis.

Oil and Wall Street equities were pressured after the European Central Bank said it had stopped providing liquidity to some Greek banks as they have not been successfully recapitalized. [ID:nL5E8GGJDT]

The development highlighted the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European currency. [ID:nL5E8GGASZ]

Earlier, U.S. crude briefly turned higher after Energy Information Administration data showed a smaller increase than that in an industry report earlier in the week. The increase was more than expected at 2.13 million barrels, but less than the 6.6-million-barrel jump reported on Tuesday by industry group the American Petroleum Institute. [EIA/S] [API/S]

U.S. crude stocks had been forecast to rise by 1.7 million barrels, a Reuters survey of analysts taken ahead of the weekly reports showed. Distillate stocks were pegged to be down 600,000 barrels and gasoline stocks to have fallen 500,000 barrels.

* On the New York Mercantile Exchange, June crude fell $1.17, or 1.24 percent, to settle at $92.81 a barrel after dropping to $91.81 to set the lowest intraday price since Nov. 3. It traded up to $94.16.

* U.S. President Barack Obama will seek support for tapping strategic oil reserves from other Group of Eight leaders at a summit this weekend before the European Union's July embargo of Iranian crude, Kyodo news agency reported. [ID:nL1E8GGEWR]

* Oil prices remain a threat to the fragile global economic recovery despite a recent fall, the International Energy Agency's chief economist said, adding the IEA remained ready to release emergency oil stocks if needed. [ID:nL5E8GGJZM]

CBOT SOYBEAN- Nearby soybean futures on the Chicago Board of Trade ended higher, gaining sharply against back months on firm cash markets and rumors of Chinese export demand for U.S. old-crop supplies, traders said.

* The premium for spot July soybeans over new-crop November rose to $1.18-1/2 by the closing bell, gaining 10-1/2 cents for the day and surging from 84-3/4 cents at the end of last week.

* Soymeal posted the biggest gains in the soy complex, while soyoil tumbled more than 2 percent on meal/oil spreading.

* Trade expects USDA on Thursday to report U.S. soybean export sales in the latest week at 1 million to 1.4 million tonnes, including 400,000 to 500,000 tonnes of old-crop soybeans. [ID:nL1E8GGF5D]

* Worries about the euro zone's debt crisis pressured back months. U.S. crude oil fell for a fourth session as political turmoil and banking problems in Greece reinforced concerns about

the euro zone. [O/R]

* As of 1:45 p.m. CDT (1845 GMT), ICE July soybean futures were up 9 cents at $14.22 a bushel, on volume of 1,078 contracts.

* ICE Futures Canada said it would raise margins for trading canola futures by about 16 percent, effective at the close of business on Thursday. [ID:nL4E8GGAES]

* The China National Grain and Oils Information Center projected a 7 percent drop in China's 2012 soy production to 13 million tonnes, after a 10.5 percent fall in 2011, as farmers shift to growing corn due to higher returns. [ID:nL4E8GG12H]

* Trade sources said CNGOIC raised its estimate of 2011/12 Chinese soy imports to 58 million tonnes, up 3 million from its previous estimate and up 2 million from USDA's current estimate.

FCPO- SINGAPORE, May 16 (Reuters) - Malaysian palm oil futures tumbled to their lowest in more than three months on Wednesday, as traders feared a prolonged political crisis in Greece could slow the global growth momentum and dampen commodity demand.

 

Greece's warring parties have refused to form a viable coalition, triggering new elections that could potentially result in a euro zone exit. [ID:nL5E8GG0S1]

The political uncertainty that dragged down global stocks and commodities also sent palm oil futures to a 2.8 percent year-to-date loss, compared to a more-than-5-percent gain just a week ago.

"Palm is not spared from the broad-based selling as commodities including crude oil, gold, silver, soybeans and soybean oil are all dropping," said a trader with a foreign commodities brokerage in Malaysia.

"People are just getting out the market. External factors are putting on a lot of pressure."

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 3.9 percent or 124 ringgit to close at 3,085 ringgit ($990) per tonne. Prices earlier hit a low at 3,052 ringgit, a level last seen on Feb. 2.

Traded volumes stood at 63,019 lots of 25 tonnes each, more than double the usual 25,000 lots as traders rushed in to liquidate their positions.

In the latest development of an upcoming listing of Malaysian palm oil firm Felda Global Venture Holdings (FGVH), Fidelity Investments and Hong Kong's Value Partners have agreed to be cornerstone investors. [ID:nL4E8GG12W]

Commodities group Louis Dreyfus said on Monday it agreed to take a minority stake in Felda, conditional on a successful June stock market float. [ID:nL5E8GEHGX]

REGIONAL EQUITY- BANGKOK, May 16 (Reuters) - Shares in Philippines and Malaysia suffered their biggest daily loss in seven months on Wednesday as equity markets in southeast Asia followed a broad global selloff, touched off by worries that the euro zone's debt crisis would worsen.

The Philippine index <.PSI> finished down 2.3 percent at 4,864.23 while Malaysia's main share index <.KLSE> ended down 1.6 percent at 1,536.04.

Fears of a Greek exit from the euro zone gripped financial markets and traders warned of further weakness ahead.

"Our base case is that, we think it's a short term risk, we expect euro to be supported later on and you will still see weakness for a few weeks on the global market," said CIMB regional strategist Chang Chiou Yi.

"Southeast Asia had outperformed, especially for markets like the Philippines and Thailand. So these markets tend to see more fallout ... This short term risk aversion could continue for a week or so," she said.

RTRS- Oil World cuts forecast of EU 2012 rapeseed crop

HAMBURG, May 15 (Reuters) - Hamburg-based oilseeds analysts Oil World said on Tuesday it has again cut its forecast of the European Union's 2012 rapeseed crop because of bad weather, this time by 0.1 million tonnes.

The EU crop will fall to a six-year low of 18.10 million tonnes from 19.12 million tonnes in 2011 after poor autumn sowing weather and a bitterly cold winter which damaged plants, Oil World said.

This follows a cut of 0.27 million tonnes in Oil World's harvest forecast on May 1. [ID:nL5E8FUBZY] Rapeseed oil is the EU's main edible oil and rapeoil is also widely used for biodiesel output.

France's crop will fall to 5.15 million tonnes from 5.37 million tonnes in 2011 and Poland's will fall to 1.60 million tonnes from 1.87 million tonnes, it said.

Germany's harvest will rise to 4.45 million tonnes against 3.78 million tonnes last year. Britain's 2.72 million tonnes will be close to the record 2.76 million tonne harvest last year, Oil World said.

"The reduced production will raise EU import requirements of rapeseed and canola," Oil World said.

Oil World also warned of a poor crop in Ukraine, a major rapeseed supplier to the EU.

Ukraine's 2012 rapeseed crop will fall to 0.95 million tonnes from 1.32 million tonnes last year, Oil World estimates.

"Ukrainian exports will decline sharply owing to the very small crop next season," it said. "This will raise the global dependence on Canadian and Australian rapeseed and canola export supplies and will keep prices of rapeseed and canola well supported."

RTRS- Soybean prices to remain well supported -Oil World

HAMBURG, May 15 (Reuters) - The sharp fall in soybean prices in recent days is premature and tight supply fundamentals are likely to keep prices well supported in coming months, Hamburg-based oilseeds analysts Oil World said on Tuesday.

"We see only limited downward potential for soybean prices in the near to medium term," Oil World said.

U.S. soybean futures fell to six-week lows on Monday, dragged down by continued selling of long positions by funds and by concerns over the strength of the global economy. [GRA/]

The fall from highs reached on May 2 is "premature and mainly based on technical factors rather than fundamentals," Oil World said.

Global soybean harvests in the current 2011/12 season will fall to 116.07 million tonnes from 137.68 million tonnes in 2010/11, it said.

This is likely to be caused by expected poor crops in Argentina and Brazil. [ID:nL5E8G85U2]

"With South American supplies significantly reduced as of end-August 2012, there will be a run on U.S. export supplies - soybeans, soymeal and oil - for shipment in Sept./Feb. 2012/13," it said.

Near-record soymeal prices will also be required to ration available soymeal supplies, it added.

"Vegetable oil prices are seen appreciating in the near to medium term owing to insufficient world soybean supplies in the next few months, the prospective palm oil deficit in Malaysia...and insufficient world supplies of rapeseed and canola oils," it added.

Trader's Highlight

DJI- NEW YORK, May 15 (Reuters) - The euro fell to a four-month low against the dollar and global stocks dropped o n T uesday as Greece's decision to hold new elections added to uncertainty about its future and a possible exit from the euro zone.

Gold hit a 4-1/2-month low with the euro's retreat.

The political turmoil in Greece kept pressure on markets. Investors have been concerned that long-lasting problems in the euro zone and a likely recession will hit global growth.

Greek politicians again failed to agree on a new government, nine days after an inconclusive election. After Greece's president said the country will hold new elections, the euro slumped and investors fled to the safe-haven dollar.

"They are running out of money ahead of elections, so expect European leaders in the next few days to put enormous pressure on them to come up with a workable government along with some sort of extended schedule for the bailout," said Boris Schlossberg, director of FX Research at GFT in Jersey City, New Jersey.

The euro fell for the fifth of the last six sessions on chances left-wing politicians opposed to Greece's international bailout could win the June elections. A report showing the Greek economy slid deep in recession added to worries.

The euro last traded down 0.7 percent at $1.2732, with the session trough at $1.2720, the lowest since Jan. 18.

Wall Street stocks fell for a third straight day on the shaky situation in Greece.

The Dow Jones industrial average <.DJI> fell 63.35 points, or 0.50 percent, to close at 12,632.00. The Standard & Poor's 500 Index <.SPX> was down 7.69 points, or 0.57 percent, at 1,330.66. The Nasdaq Composite Index <.IXIC> was down 8.82 points, or 0.30 percent, at 2,893.76.

Economic data on U.S. regional manufacturing and national homebuilder sentiment was positive, however. A gauge of homebuilder sentiment rose to the highest in five years this month. [ID:nN9E8FH00R] Separately, the pace of growth in New York state manufacturing rebounded, the New York Federal Reserve said. [ID:L1E8GF2YM]

Data also showed U.S. retail sales rose 0.1 percent in April, coming in under expectations.

Among gains, JPMorgan Chase & Co shares rose 1.3 percent to $36.24 after falling more than 11 percent last week after the bank disclosed a trading loss of at least $2 billion. Pressure mounted on the bank to reclaim some of the millions of dollars it paid to the executives who oversaw the wrong-way trades. [ID:nL1E8GF0VL]

On the down side were Chesapeake Energy Corp shares, which fell as low as $14.31, their lowest since March 2009, after a credit rating downgrade and news that the natural gas producer will increase its borrowing to $4 billion from the planned $3 billion as it faces a liquidity crunch. Chesapeake shares finished the session down 5.6 percent at $14.65. [ID:nL1E8GF4RS]

Germany kept hopes for growth alive when it reported that strong exports helped its economy grow 0.5 percent in the first three months of the year, ahead of market forecasts. Germany's performance offset zero growth in France and recession in Italy and Spain, leaving the whole 17-member euro zone economy stagnating but not in recession. [ID:nL5E8GF4FA]

The upbeat German data helped support the price of Brent crude, which snapped three days of declines. In London, ICE Brent crude for June delivery settled at $112.24 a barrel, rising 67 cents, or 0.60 percent.

NYMEX crude for June delivery settled at $93.88 a barrel, down 80 cents, or 0.84 percent.

In the precious metals market, spot gold was off 0.88 percent at $1,542.60 an ounce and hit its lowest level since Dec. 29 at $1,541.10 on heightened concerns over Europe's financial crisis.

"The euro has done very poorly against the dollar because of everything going on predominantly in Greece. Gold has gotten sold off quite hard in the last couple of sessions. I think people are unwinding and getting into cash and a little bit of Treasuries, German bunds, and that's about it," said Fred Schoenstein, metals trader at Heraeus in New York.

U.S. Treasuries prices eased as traders booked profits from an eight-week run-up primed by worries over the outcome of the European debt crisis.

The benchmark 10-year U.S. Treasury note was down 1/32, the yield at 1.7705 percent.

While U.S. yields rose slightly, benchmark rates remain below the technically important 1.8 percent level and not far off the seven-month low of 1.76 percent touched in overnight trade. Last week Treasuries yields fell for the eighth consecutive week.

NYMEX- NEW YORK, May 15 (Reuters) - U.S. crude futures extended losses in post-settlement trading on Tuesday after industry data showed that domestic crude inventories rose sharply last week, dwarfing the forecast in a Reuters poll and adding to oil demand worries.

Crude futures earlier settled lower for a third straight day as political turmoil in Greece stoked worries that it might exit the euro zone, outweighing upbeat German GDP data and a mixed set of U.S. economic reports pointing to continued, through slower, growth.

The euro slumped on worries about Greece while the dollar rose, prompting investors to spurn trades in riskier assets such as equities and major commodities such as oil and metals.

Euro zone worries persisted even though data showed that the region narrowly avoided recession in early 2012, official data showed. However, the bloc's debt crisis had weakened the French and Italian economies. [ID:nL538GF4FA]

This added to concerns about bleaker prospects for oil demand, a problem that has already kept investors queasy following weak industrial production data from China last week.

The industry group Amerian Petrioleum Institute said that in the week to May 11, domestic crude stocks shot up by 6.6 million barrels, far above the forecast for a 1.7 million barrel increase. [API/S] [EIA/S]

Crude stocks in Cushing, Oklahoma, the delivery hub for U.S.-traded crude oil futures, jumped 2.8 million barrels, the API said.

* On the New York Mercantile Exchange, June crude settled at $93.88 a barrel, down 80 cents, or 0.84 percent, after trading between $93.78 and $95.48. Since the beginning of the month, the contract has fallen $12.18, or 11.5 percent.

* In post-settlement trading, June crude extended the day's low to $93.18 and further fell to $93.02, the lowest since Dec. 19's intraday low of $92.54, after issuance of the API data.

* The euro zone's gross domestic product stagnated in the first quarter, according to official data. It was a touch better than forecasts of a 0.2 percent dip and dodged a technical recession following a 0.3 percent contraction in the last quarter of 2011. [ID:nL5E8GF4FA]

* A jump in exports pushed Germany to a surprisingly strong economic growth of 0.5 percent in the first quarter, beating forecasts and bouncing back from a contraction of 0.2 percent in the fourth quarter of 2011. [ID: nL5E8GF1SE]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade ended nearly 2 percent higher, staging a technical recovery from recent sharp losses amid rumors of Chinese export interest for U.S. soy, traders said.

* Nearby soybean and soymeal contracts gained against back months amid rumors that China was seeking old-crop U.S. soy, traders said. They noted that analytical firm Celeres on Monday said Brazilian farmers had sold 83 percent of their 2011/12 harvest. [ID:nL1E8GE7Q2]

* CBOT soybeans seen as due for a bounce after a two-week sell-off drove the market to a six-week low by Monday, a sharp setback from the near-four-year high set in late April.

* Soymeal posted the biggest gains in the soy complex on a percentage basis. Market supported by concerns about crop losses in South America, including fears of further losses in Argentina, the world's biggest exporter of soymeal.

* Hamburg-based oilseeds analysts Oil World cut its forecast of the European Union's 2012 rapeseed crop because of bad weather. The EU crop will fall to a six-year low of 18.10 million tonnes, from 19.12 million tonnes in 2011, Oil World said. [ID:nL5E8GE9OX]

* The sharp fall in CBOT soybean prices in recent days is premature and tight supply fundamentals are likely to keep prices well supported in coming months - Oil World. [ID:nL5E8GEECF]

* USDA said the U.S. soybean crop was 46 percent seeded as of Sunday, up from 24 percent a week earlier and ahead of the five-year average of 24 percent. The crop was 16 percent emerged. [US/SOY]

* Dry, mild weather expected this week in the U.S. Midwest should help farmers to wrap up corn planting and move ahead with soybeans, said Andy Karst, meteorologist with World Weather Inc. Soil moisture is adequate in most areas but rising temperatures will speed the drying of the ground. Rain expected by the weekend, Karst said.

FCPO- SINGAPORE, May 15 (Reuters) - Malaysian palm oil futures rebounded on Tuesday, supported by bargain hunting after prices fell to a three-month low in the previous session, although concerns remained that demand could be hit if Greece exits the euro zone.

Buying interest picked up as some traders felt that the market was oversold. Malaysian exports for the first 15 days showed a slight improvement, reinforcing the view that palm oil fundamentals remained solid despite global economic uncertainty.

"We see a small recovery today because selling was a bit overdone yesterday and exports were also slightly better," said a trader with a foreign commodities brokerage in Malaysia.

"But sentiment is still weak because of external factors, especially when we talk about Greece and the revival of uncertainty in Europe."

Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange gained 2.4 percent to close at 3,226 ringgit ($1,048) per tonne. Prices closed at 3,150 ringgit on Monday, the weakest since Feb. 13.

Traded volumes stood at 34,697 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Malaysian palm oil exports for first 15 days of May picked up by a slight 0.7 percent to 599,044 tonnes, according to cargo surveyor Intertek Testing Services, reflecting a still-healthy demand for the edible oil. [PALM/ITS]

Another cargo surveyor Societe Generale de Surveillance meanwhile reported a 7 percent drop in exports to 564,477 tonnes, thanks to lower shipments to China and India. [PALM/SGS]

But traders said the lower exports did not weigh on prices much as they do not necessarily indicate weaker demand and especially in an already-oversold market. In the latest development of an upcoming listing of

Malaysian palm oil firm Felda Global Venture Holdings (FGVH), commodities group Louis Dreyfus has agreed to take a minority stake in Felda, it said on Monday. [ID:nL5E8GEHGX]

REGIONAL EQUITY- BANGKOK, May 15 (Reuters) - Stocks in Singapore and Thailand pushed higher on Tuesday, with beaten down commmodities-related shares rebounding, as strong growth in Germany spurred late buying and eased worries over the political turmoil in Greece and the euro debt problems.

Singapore's main index <.FTSTI> edged up 0.44 percent at 2,876.70, bouncing back from an intraday low of 2,850.61 and reversing losses of the past two sessions. The Thai SET index <.SETI> climbed 1.63 percent after Monday's 2.1 percent drop.

A flurry of foreign selling activity pulled Thai shares off their 16-year highs hit early this month.

The Thai stock market saw around $182 million worth of net foreign outflows so far in May to Monday, after a combined $2.7 billion of net foreign inflows for the first four months, according to Thomson Reuters data.

Indonesia <.JKSE> also posted net foreign outflows of $146 million for the period, but Vietnamese stocks <.VNI> had $19.9 million worth of inflows, the data showed. The Malaysian bourse said it took in around $160 million of inflows during the period.