Trader's Highlight

DJI- NEW YORK, July 19 (Reuters) - Global shares climbed to two-week highs on Thursday as strong corporate earnings offset weak U.S. economic data but concerns about Spain's financial troubles drove the euro broadly lower.

Commodities rallied, with oil prices hitting eight-week highs as Middle East tension stoked supply concern. Corn and soybeans soared to record highs after a worsening U.S. farm-belt drought raised fears about a possible food crisis.

On Wall Street, the S&P 500 index rallied to a fresh 2-1/2-month peak, lifted by a strong full-year outlook from IBM IBM.N, bullish earnings from eBay EBAY.O and Qualcomm's QCOM.O expectations for a strong December quarter. European equities hit four-month highs also on strong corporate results.

The positive sentiment was tempered, however, by weaker-than-expected readings on U.S. manufacturing, housing and labor markets. Adding to investor concern was a spike in Spain's borrowing costs, which intensified fears Madrid may eventually need a full-blown sovereign bailout.

"It is baked into stock prices that growth is going to be slow for a little while," said Giri Cherukuri, head trader at OakBrook Investments in Lisle, Illinois.

"People are focusing on individual stocks after earnings and trying to figure out (through) outlooks how weak the economy really is," he said.

The Dow Jones industrial average .DJI ended up 34.66 points, or 0.27 percent, at 12,943.36. The Standard & Poor's 500 Index .SPX closed up 3.73 points, or 0.27 percent, at 1,376.51. The Nasdaq Composite Index .IXIC rose 23.30 points, or 0.79 percent, to 2,965.90.

NYMEX- NEW YORK, July 19 (Reuters) - U.S. crude futures rose 3 percent on Thursday, up for a seventh straight session and reaching an eight-week peak, as Middle East tensions reinforced concern about potential supply disruptions and strong corporate earnings lifted investor optimism.

 

CBOT SOYBEAN- * Spot soybean futures rose to a record high $17.49, above the previous record of $16.85-1/2 set on Wednesday and up 33 percent in only six weeks.

• Midday weather updates indicate little change in outlooks for a continued spread of the worst drought in a half century through most of the U.S. Midwest crop region for at least the next 10 days, meteorologists said on Thursday.

• "Only minor changes for next week. There is a reduction of rain and warmer for the northern Plains for the 29th and 30th but that's pretty far out, we're taking out rains for the end of the month," said Andy Karst, meteorologist for World Weather Inc. "It's not a better forecast for crops," he said.

• Hotter-than-normal temperatures are expected through October over most of the contiguous 48 U.S. states, with below-average precipitation for Midwest areas already hit by the worst drought in a half century, government forecasters said on Thursday.

FCPO- SINGAPORE, July 19 (Reuters) - Malaysian crude palm oil futures rebounded from a 3-week low on Thursday, as the worst drought in the United States since 1956 threatened to squeeze global oilseed supplies further and offset slower exports and better output in Malaysia.

Oppressive heat and a worsening drought in the U.S. Midwest pushed grain prices near or beyond records this week and raised concerns of a smaller supply of soybean oil, shifting more demand to the cheaper palm oil.

"The market is staged for a rebound as drought concerns are revived. Also, palm oil is now at a discount of over $260 to soyoil, and that will attract arbitrage activity to narrow the spread," said a dealer with a foreign commodities brokerage in Malaysia.

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 1.7 percent to close at 3,045 ringgit ($966) per tonne after touching a low of 2,986 ringgit, a level unseen since June 28.

Traded volumes stood at 31,771 lots of 25 tonnes each, higher than the usual 25,000 lots.

REGIONAL EQUITY- July 19 (Reuters) - Singapore stock market rose to a near one-year closing high on Thursday, helped by improved investor sentiment after strong corporate earnings from U.S. bellweathers such as Intel Corp INTC.O, while Southeast Asia's other markets ended mixed.

Singapore .FTSTI ended 0.4 percent up led by property developer City Developments Ltd's CTDM.SI 1.6 percent gains and Vietnam .VNI, the region's smallest bourse, jumped 2.3 percent to a four-week high in heavy volumes, also on hopes of strong quarterly earnings.

Groundbreaking on new U.S. homes rose in June to its fastest pace in over three years supported the market, after a series of recent reports had pointed to worrying signs that the economy was cooling.

 

Indonesia .JKSE gained 0.4 percent to its highest since May 11, helped by a foreign inflow of $42.7 million while Malaysia .KLSE ended flat amid foreign investors buying $23.67 million in equity.

Thailand .SETI fell 0.6 percent, dragged down by telecom shares on concerns over a possible fresh tax on telecom operators with the biggest operator Advanced Info Service ADVA.BK and Total Access Communication DTAC.BK falling 3.5 percent and 3.4 percent respectively.

RTRS- USDA'S Vilsack say drought will spike prices

WASHINGTON, July 18 (Reuters) - U.S. Agriculture Secretary Tom Vilsack said the worsening Midwest drought will result in sharply higher crop prices, but there is no need yet to seek a reduction in corn-based ethanol production.


Vilsack urged Congress to work with the Obama Administration on ways to improve aid to farmers struggling with a crop that will be sharply reduced from the searing heat and lack of rain.

RTRS- Dry weather to keep Cargill palm output flat in 2012

JAKARTA, July 18 (Reuters) - Crude palm oil output at Cargill will be unchanged at 300,000 tonnes this year, the U.S. agribusiness company said on Wednesday, as dry weather in Indonesia hurts production.

Crude palm oil shipments from the world's top producer have been hit by dry weather this year. For most of the archipelago, the rainy season is from October until April, although this can fluctuate.

"Why no improvement? We've gone through dry spells," said John Hartmann, chief operating officer at Cargill Tropical Palm Holdings, which runs the company's palm oil plantations, all of which are in the archipelago.

"The last two months have been very dry, and it's having an impact on our production," Hartmann told Reuters.

Cargill's plantations are in South Sumatra and West Kalimantan.

"Kalimantan was down and is recovering, and now we're seeing the down cycle go through Sumatra," Hartmann said.

Minneapolis-based Cargill, one of the world's largest privately held corporations, has about 70,000 hectares of palm oil plantations, up 6,000 hectares on 2011, said Hartmann.

"I don't know if it is an El Nino type of impact or not but certainly we went through a three-year cycle of above average rainfall, and now for the last 12 months or so it's been below average," he added.

Indonesia is not the only major commodity producer suffering from dry weather. The U.S. grain belt has been scorched by the worst drought since 1956, cutting estimated output and quality of corn and soybean crops, and bumping up benchmark global prices. (nL2E8IGFYC)

Malaysian crude palm oil futures dropped to a near three-week low on Wednesday, as traders booked profits partly on weaker exports and better production outlook in Malaysia after the U.S. weather-fuelled rally.

Weather, softening demand and falling oil prices could all play a role in prices for the second half, said Hartmann, who was unable to give an exact forecast.

Trader's Highlight

DJI- NEW YORK, July 18 (Reuters) - The S&P 500 touched its highest level since early May on Wednesday as corporate profits from bellwethers like Intel and Honeywell defied fears of a collapse in earnings.

Based on the latest available data, the Dow Jones industrial average .DJI was up 102.10 points, or 0.80 percent, at 12,907.64. The Standard & Poor's 500 Index .SPX was up 9.07 points, or 0.67 percent, at 1,372.74. The Nasdaq Composite Index .IXIC was up 32.56 points, or 1.12 percent, at 2,942.60.

NYMEX- NEW YORK, July 18 (Reuters) - U.S. crude futures rose a sixth session on Wednesday, reaching a seven-week peak as violence in Syria and tensions with Iran reinforced geopolitical fears and U.S. Federal Reserve Chairman Ben Bernanke downplayed the risk of a double-dip recession.

Gasoline posted the biggest percentage gain of the day in the oil futures complex, receiving lift from the government's inventory report showing gasoline stocks fell last week, against expectations for a rise.

CBOT SOYBEAN- Chicago Board of Trade soybean futures were higher on Wednesday led by strong cash markets, tight stocks, slow farmer selling and strong soymeal, traders said.

* August soymeal SMQ2 soared to a record high $514.00 per ton on strong cash, tight stocks and as traders buy old-crop futures amid fears of a U.S. soy crop shortfall due to the worsening drought.

• Traders were buying old-crop August soybeans on fears of a shortfall of U.S. soybean supplies amid the worst drought in the U.S. Midwest in over 50 years.

• Midday weather updates on Wednesday indicate more hot, dry weather for the U.S. Midwest, where corn and soybean crops are rapidly deteriorating amid the harshest drought in more than half a century.

• "It's a little wetter for next week in the west and southwest but even if the rains fall they would only be 0.50 inch or less so not much relief and confidence is low in that forecast," said Don Keeney, a meteorologist for MDA EarthSat Weather.

• U.S. Agriculture Tom Vilsack said the worsening Midwest drought will result in sharply higher crop prices, but there is no need yet to seek a reduction in corn-based ethanol production. (nL2E8II9EM)

• August is above all key moving averages. The nine-day RSI was at 82.

FCPO- SINGAPORE, July 18 (Reuters) - Malaysian crude palm oil futures slid to a near three-week low on Wednesday, as traders booked profits partly on weaker exports and better production outlook in Malaysia after a recent U.S. weather-fuelled rally.

Malaysia's July 1-15 palm oil exports tumbled more than 20 percent from a month ago at a time when stronger production is expected for the month. Slower exports and higher output could see palm oil stocks climb again after falling to a 14-month low in June.

But some traders kept a bullish outlook as the U.S. drought that damaged soybean crops could still shift demand to refined palm oil that is trading at a discount of above $200 to soyoil.

"I think the market just doesn't have enough push to go up further at the moment," said a Singapore-based trader with a commodities house.

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to close at 2,994 ringgit ($947) per tonne, after going as low as 2,990 ringgit -- a level unseen since June 28.

Traded volumes were high at 39,170 lots of 25 tonnes each, compared to the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, July 18 (Reuters) - The Philippines and Thailand stock markets fell on Wednesday while other markets edged up, but optimism over further stimulus by the U.S. Federal Reserve evaporated after its mixed signals on the global economy.

Fed Chairman Ben Bernanke offered a gloomy view of the U.S. economy at a semi-annual Congressional testimony on Tuesday, but hopes that the central bank is moving closer to more stimulus measures limited the day's losses.

The Philippines .PSI lost 1.2 percent and Thailand .SETI fell 0.3 percent.

All Southeast Asian markets except Thailand saw thin trading volumes compared to their respective 30-day averages after Bernanke's testimony.

Malaysia .KLSE bucked the trend, edging up 0.4 percent to hit a new all-time high close for the third straight session, helped by continuous foreign inflows. On Wednesday, it saw net foreign buying of $21.63 million in equities.

Singapore .FTSTI ended a tad firmer with a 0.1 percent gain, while Indonesia .JKSE closed steady.

Trader's Highlight

DJI- NEW YORK, July 17 (Reuters) - World stocks and oil prices rose in choppy trade on Tuesday after a gloomy economic outlook by Federal Reserve Chairman Ben Bernanke kept alive views that the U.S. central bank may take further steps to stimulate growth.

Shares and oil had come under pressure earlier in the session, while the U.S. dollar rallied after Bernanke dampened hopes the Fed was moving closer to a third round of bond buying to bolster flagging growth.

But markets reversed course as reactions to Bernanke's testimony before Congress changed. Analysts said the Fed chief's comments on the economy, especially on the jobs market, suggested the central bank was leaving the door open for further monetary stimulus. (nW1E8IB007)

Bernanke said policymakers would consider a range of tools to further stimulate growth if it became clear the labor market was not improving or if deflation risks mounted.

"We do expect the Fed to launch QE3 possibly by as early as August," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York. "The only game in town to revive or raise GDP growth is the Fed."

U.S. stocks closed higher. The Dow Jones industrial average .DJI finished up 78.33 points, or 0.62 percent, at 12,805.54. The S&P 500 Index .SPX ended up 10.03 points, or 0.74 percent, at 1,363.67. The Nasdaq Composite Index .IXIC closed up 13.10 points, or 0.45 percent, at 2,910.04.

NYMEX- SINGAPORE, July 17 (Reuters) - U.S. crude slipped toward $88 per barrel early on Tuesday, snapping four days of gains on worries of a slowdown in demand after the International Monetary Fund cut its forecast for global economic growth and warned the outlook could dim further.

• U.S. oil CLc1 slipped 30 cents to $88.13 a barrel by 0009 GMT after settling $1.33 higher. Brent LCOc1 slipped 18 cents to $103.19.

• The IMF on Monday cut its forecast for global economic growth and warned that the outlook could dim further if policymakers in the euro zone do not act with enough force and speed to quell their region's debt crisis. (nL2E8IG4SF)

• U.S. retail sales fell in June for the third straight month, the longest run of consecutive drops since 2008 when the country was mired in recession. (nL2E8IGB85)

• Moody's cut the credit ratings of a string of Italian banks on Monday, bringing the country's top lenders in line with a downgrade to Italy's sovereign rating last week, as well as lowering ratings for companies and local government authorities. (nL6E8IGGIK)

• A security team aboard a U.S. Navy refueling vessel fired upon an approaching motor boat off the United Arab Emirates on Monday after it ignored warnings, a U.S. defense official told Reuters, speaking on condition of anonymity. (nL2E8IG7LD)

• U.S. Secretary of State Hillary Clinton said in Jerusalem on Monday that Iran's proposals made in world power talks on its nuclear programme were "non-starters." (nL6E8IGGBQ)

• Policymakers in emerging Asia are stepping up efforts to stimulate growth, and with government debt low and public savings high, chances are good they can spare the region the worst of the rich world's woes. (nL4E8IG1UV)

CBOT SOYBEAN- * Hot and dry weather for the next two weeks will continue to stress corn and soybean crops in the western and northern U.S. Midwest while rainfall in the East will provide some relief to the struggling soybean, an agricultural meteorologist said on Tuesday.

• "The rains will be too late for corn but it will help soybeans. We see upwards to an inch to 1-1/2 inches this week and again next week for Indiana, Ohio and Kentucky," said Don Keeney, meteorologist for MDA EarthSat Weather.

• USDA on Monday said 31 percent of the U.S. corn crop was in good-to-excellent conditions, down from 40 percent in that category a week ago and below an average of analysts' estimates for 35 percent.

• A Reuters poll showed U.S. corn yields at 137.2 bushels per acre,down 6 percent from USDA's current forecast and production at 12.077 billion, down 6.9 percent from USDA's outlook released less than a week ago.

• September is above all key moving averages. The nine-day RSI was at 82.

FCPO- SINGAPORE, July 17 (Reuters) - Malaysian crude palm oil futures ended lower on Tuesday as traders booked profits from the previous day's rally, and the market could resume its advance as persistent hot and dry weather in the United States reduced global oilseeds supply.

Heat from the worst drought seen since 1956 has severely damaged soybeans, with the U.S. Department of Agriculture rating the crop at 34 percent good-to-excellent, down 6 percentage points from the previous week. (nL2E8IGF7P)

A lower quality soybean crop may lead to less soybean oil, which would shift demand to refined palm oil especially as it is trading at a discount of above $200.

"The market is caught between weak internals and strong externals," said a trader with a local commodities brokerage in Malaysia.

"On the domestic front, we have better production for July and the export numbers are shrinking. But externally, the stronger grain prices have made palm attractive in the international market."

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 1.9 percent to close at 3,062 ringgit ($968) per tonne, pressured by last-minute selling.

Traded volumes stood at 24,317 lots of 25 tonnes each, a tad lower than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, July 17 (Reuters) - Most Southeast Asian stock markets rose on Tuesday, extending their gains for a third day with Malaysia hitting an all-time high on hopes of a further monetary stimulus from the U.S. Federal Reserve.

Malaysia .KLSE closed up 0.2 percent after hitting an all-time high of 1,646.97 points, helped by foreign inflows of $16.62 million. Thailand .SETI gained 0.8 percent, rising to its highest since May 8.

Singapore .FTSTI gained 0.5 percent to touch its highest since April 2.

Trading volumes in Bangkok, Singapore, and Kuala Lumpur were higher than their respective 30-day averages due to bargain hunting as investors expected further stimulus from the Federal Reserve, while awaiting its Chairman Ben Bernanke's view on the U.S. economy expected later in the day.

Weak U.S. retail sales and a lower International Monetary Fund global growth forecast on Monday raised hopes of more monetary stimulus from the Fed, as Bernanke was set to give his semi-annual Congressional testimony on Tuesday and Wednesday.

Indonesia .JKSE gained 0.8 percent to hit an over two-month high. Bucking the trend, the Philippines .PSI edged down 0.2 percent after outperforming the region in the previous session.

RTRS- High soyoil prices to spur demand for palm oil

AMSTERDAM, July 16 (Reuters) - A sharp increase in soyoil prices will spur demand for cheaper palm oil in Europe, lifting prices, but any deepening of the euro zone debt crisis could cap gains, traders said.


Soyoil prices on the European vegetable oil market rose 15 percent over the past month to 1,055 euros a tonne on Monday from 916 euros a tonne on June 16.

In the same period crude palm oil prices rose 7 percent to $1,037 a tonne from $967.

"The spread with soybean oil is getting bigger and that could be the demand driver (for palm oil), but the economic downturn in Europe could pressure down prices," one trader said.

"If the crisis deepens, people could panic and pull out of the market, going to safe havens such as gold."

"It is a very difficult market these days," another trader said.

The Dutch Board for Margarine Fats and Oils said in February it saw p alm oil d emand i n the European Union f lat this year as the main consumers - the food-processing industry and biodiesel producers - faced difficulties including higher raw material costs and a fall in demand due to economic crisis.(nL5E8D75VT)

Soybean futures on the Chicago Board of Trade reached new highs on Monday as the worst drought since 1988 hit key growing areas in the United States, the world's top exporter. GRA/

Unfavourable weather in the Black Sea region, one of the world's top exporters, supported prices of all grains and oilseeds as well.

Higher prices of oilseeds, including soybean and rapeseed, lifted prices of palm oil, but at a slower pace as production is forecast to rise this year.

"We expect this will encourage increased end-user demand (for palm oil) as the prospect for oilseed production in the U.S. and India has declined due to adverse weather," Rabobank said in a research note.

"We maintain our view that vegetable oil prices will maintain their historically low valuation relative to meal in the short term, but will remain bullish across the entire oilseed complex on the deteriorating supply outlook."

Trader's Highlight

DJI- NEW YORK, July 16 (Reuters) - A surprise decline in June retail sales was the latest worrying sign from the economy, pushing stocks slightly lower on Monday, but Citigroup's earnings limited losses.

The S&P 500 has fallen in seven of the past eight sessions, pressured by concerns about economic growth. Still, in a sign of resilience, the index is up roughly 7 percent from a low hit early in June despite the worsening economic data.

Trading volume at 5.06 billion shares on the NYSE, Amex and Nasdaq was the second lightest day this year, according to preliminary data from Reuters.

The drop in retail sales in June, the third consecutive monthly decline, contrasted with economists' expectations for a small increase and was the latest sign the recovery is flagging. (nL2E8IDGH1)

Citigroup's earnings, which exceeded estimates, followed JPMorgan Chase's JPM.N forecast-beating earnings on Friday, which sparked a rally and broke a six-day streak of losses by the Dow industrials.

Shares of Citigroup C.N gained around 0.6 percent to $26.81. Although the third largest U.S. bank by assets reported stronger-than-expected earnings, its profit fell 12 percent due to losses from credit crisis-era assets.

Giri Cherukuri, head trader at OakBrook Investments, which oversees $1.3 billion in Lisle, Illinois, said there was a tug-of-war between better-than-expected earnings in the financial sector and worries about the economy.

"The next week or so the market will be driven more by earnings than economic numbers," he said, noting that recent cautious outlooks from U.S. corporations could translate into disappointing earnings as reporting season unfolds.

Many companies have warned on profits in recent weeks. Negative to positive earnings guidance for the second quarter is 3.3 to 1, the worst since 2008, Thomson Reuters data showed.

The Dow Jones industrial average .DJI dropped 49.88 points, or 0.39 percent, to 12,727.21. The Standard & Poor's 500 Index .SPX fell 3.14 points, or 0.23 percent, to 1,353.64. The Nasdaq Composite Index .IXIC lost 11.53 points, or 0.40 percent, to 2,896.94.

"Three months in a row of lower retail sales is pretty concerning. People are going to have to lower their GDP estimates," said Paul Zemsky, head of asset allocation at ING Investment Management in New York. "Given that, I'm surprised the market is holding so well."

Zemsky said expectations that earnings turn out better than feared could be one reason. Record low U.S. Treasury bond yields and expectations that the Federal Reserve could support the economy have also helped prop up stocks.

The IMF shaved its 2013 forecast for global growth to 3.9 percent from the 4.1 percent it projected in April, trimming projections for most advanced and emerging economies. It left its 2012 forecast unchanged at 3.5 percent.

The World Trade Organization ruled in favor of the United States, finding that China discriminates against foreign bank cards. The decision could help U.S. credit card companies like Visa, Mastercard and American Express AXP.N.

In another credit card development, Visa Inc V.N and MasterCard Inc MA.N and banks reached a $7.25 billion settlement with U.S. retailers in a lawsuit late on Friday. (nL2E8IDJVK)

Visa rose 2.5 percent to $127.15 and MasterCard shares gained 1.7 percent to $436.89. American Express shares rose 1.2 percent to $58.64.

In mergers and acquisitions news, GlaxoSmithKline GSK.L is to acquire its long-time partner Human Genome Sciences Inc HGSI.O for $3 billion, ending a three-month hostile pursuit of the U.S. biotech company on friendly terms after sweetening its offer. (nL6E8IGCB9) Shares of Human Genome HGSI.O rose 4.5 percent to $14.19.

In another healthcare deal, private equity firm TPG said it would buy U.S.-based Par Pharmaceutical PRX.N for $1.9 billion, sending Par shares up 36.7 percent to $50. (nL2E8IG1AN)

NYMEX- NEW YORK, July 16 (Reuters) - U.S. crude futures rose for a fourth straight session on Monday, lifted by hopes for economic stimulus, especially in China, a weak dollar and news a U.S. Navy vessel offshore the United Arab Emirates fired on a small boat that failed to heed warnings.

 

CBOT SOYBEAN- Chicago Board of Trade soybean futures were higher as heat and dryness kept eating away at U.S. 2012 crop prospects.

* Small amounts of rain this week and early next week in about 70 to 75 percent of the U.S. Midwest crop belt will provide minor relief to withering corn and soybeans, meteorologists said on Monday.

• "There's no huge change in the forecast today, maybe a little more favorable for crops but we couldn't have gotten much worse," John Dee, a meteorologist for Global Weather Monitoring, said.

• A Reuters poll of 12 analysts showed an estimate for U.S. soybean conditions in Monday's USDA weekly crop progress report at 35 percent good-to-excellent, down from 40 percent a week ago.

• Trade sources said Informa Economics cut its estimate for 2012 U.S. soybean yield to 40.0 bushels per acre from the previous 42.0 and dropped production to 3.012 billion bushels from the previous 3.161 billion.

• USDA said U.S. soybeans inspected for export last week totaled 14.271 million bushels, down from 19.175 million a week ago.

• August was above all key moving averages. The nine-day RSI was at 78.

FCPO- SINGAPORE, July 16 (Reuters) - Malaysian crude palm oil futures ended Monday higher, as demand prospects brightened after forecasts of more harsh weather in the United States threatened to tighten global oilseed supply further.

Unfavourable weather that could hurt the soybean crop may lead to a smaller supply of soybean oil, shifting demand to the cheaper refined palm oil.

"One reason for the market rally today is the U.S. weather. Another reason is the big spread between soybean oil and palm oil that is more than $200 per tonne," said a trader with a foreign commodities brokerage in Malaysia.

Benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 1.7 percent to close at 3,122 ringgit ($981) per tonne, after going as high as 3,161 ringgit.

Traded volumes stood at 29,738 lots of 25 tonnes each, higher than the usual 25,000 lots.

Technicals are also bullish. Reuters market analyst Wang Tao said palm oil might break above a resistance at 3,168 ringgit, and rise further to 3,208 ringgit. (nL4E8IG0XK)

Traders appeared unfazed by a 21 percent drop in Malaysian exports for the first 15 days of the month as weather fears remained in focus. PALM/ITS

"I don't think exports will affect the market temporarily, plus the month is not over yet so the market is still waiting for demand to pick up," the Malaysian trader said.

Demand is expected to be supported ahead of a slew of Asian festivals starting with Ramadan this week and with China and India celebrating key holidays from September to November.

Another cargo surveyor, Societe Generale de Surveillance, will issue export data later on Monday. PALM/SGS

Drought stress has already dragged soy crop condition ratings to the lowest point for this time of year since 1988, and traders are expecting further downgrades in the U.S. Department of Agriculture's weekly report on Monday. GRA/

Traders said weather-driven rallies in other vegetable oil markets also supported palm oil prices. By 1003 GMT, the most active U.S. soyoil for December BOZ2 delivery gained 1.2 percent. Th e most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed up 2.8 percent.

"Supportive factors such as the U.S. dry weather pushed prices to new highs. It's hard to say now if prices will continue to go higher, but declines last week have provided good upside for Dalian soybean oil," said Huang Zhi Qiang, an analyst with Guotai Junan Futures in Shanghai.

Crude oil prices held steady above $102 a barrel on Monday, supported by weekend comments from China's Premier Wen Jiabao that the government would step up efforts to boost the economy of the world's second-largest oil consumer. O/R

REGIONAL EQUITY-BANGKOK, July 16 (Reuters) - Southeast Asian stock markets extended gains on Monday with Malaysian shares hitting a record high as fears of an economic hard-landing in China subsided, but trading volumes were low as investors waited for a U.S. Federal Reserve meeting.

Malaysia .KLSE hit an all-time high of 1,635.96 points with a 0.6 percent gain, while the Philippines .PSI outperformed the region with a 1.6 percent jump.

Indonesia .JKSE gained 0.7 percent to a more-than one-week high with, Thailand .SETI edged up 0.3 percent to its highest since May 8.

Singapore .FTSTI closed 0.1 percent firmer at 2-1/2-month high.

Regional analysts said investors cautiously bought into equities ahead of Federal Reserve Chairman Ben Bernanke's semi-annual testimony to the U.S. Congress on the economy set for Tuesday and Wednesday.

Please be informed that Options on CPO futures contracts (OCPO) will launch today (16 July 2012).



RTRS- Top palm oil producer Indonesia wants to be more refined

JAKARTA/KUALA LUMPUR, July 16 (Reuters) - For decades, Indonesia has shipped out tanker loads of raw palm oil for processing into higher value cooking oil and margarine in Rotterdam, Mumbai and Kuala Lumpur.

Now, the world's No. 1 producer of the edible oil is seeing a more than $2.5 billion wave of investment to build a refining industry that will double its capacity and mean it could supply the entire needs of Asia's top food consumers - India and China.

The transformation - driven by Indonesia's move to slash export duties for processed oil last October - will heat up competition with rivals such as Malaysia and send ripples through the palm oil market as new supply pressures prices of traded refined products such as palm olein, used as cooking oil.

A Reuters survey of 30 firms operating in Indonesia - from the world's biggest listed palm oil firm Wilmar WLIL.SI to conglomerate Unilever ULVR.L - shows plans to nearly double refining capacity to 43 million tonnes of palm oil, or 80 percent of total world output.

"The government is sending a clear message - to survive, you need a refinery. So the palm oil firms are putting their money out and following the big guys in the industry who have already done so," said Thomas Mielke, an analyst at industry publication Oil World.

"There is the threat of over capacity. But palm oil firms with the whole supply chain behind them, we are talking about having plantations to mills and ports, will be the kings."

Trader's Highlight

DJI- NEW YORK, July 13 (Reuters) - U.S. stocks shed the sour tone that plagued equities all week on Friday, with a rally that broke a six-day losing streak.

Major indexes surged more than 1 percent, lifted by Chinese growth figures that eased concerns about a slowdown and earnings from JPMorgan Chase & Co JPM.N that assuaged fears about the long-term impact of trading losses that cost the bank $5.8 billion for the year.

"The market was very oversold, so with China looking better than we previously thought, and JPMorgan looking like it has healed itself, things appear contained for the moment," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.

"We're putting in a bottom, not a top," he added.

Banking shares led the gains following results from JPMorgan and mortgage giant Wells Fargo & Co WFC.N. JPMorgan was the Dow's top gainer, rising 6 percent to $36.07 while Wells Fargo rose 3.2 percent to $33.91.

Data showed growth in China slowed for a sixth straight quarter to 7.6 percent, but the result was better than some in the market had feared. It also kept open the possibility that more stimulus may be forthcoming from China's policymakers.

After the market fell every day this week until Friday, the gains lifted the S&P into positive territory for the week. Stocks also ended lower last Thursday and Friday.

With a full slate of corporate earnings next week, some investors believe the market may see more upside after the recent run of pessimistic earnings outlooks.

The Dow Jones industrial average .DJI was up 203.82 points, or 1.62 percent, at 12,777.09. The Standard & Poor's 500 Index .SPX was up 22.01 points, or 1.65 percent, at 1,356.77. The Nasdaq Composite Index .IXIC was up 42.28 points, or 1.48 percent, at 2,908.47.

NYMEX- NEW YORK, July 13 (Reuters) - U.S. crude oil futures rose for a third day in a row on Friday, and gained more than 3 percent for the week as China's second quarter GDP turned out not as bad as some predicted, easing global growth worries.

CBOT SOYBEAN- Chicago Board of Trade soybean futures were higher as heat and drought continued to eat away at U.S. 2012 crop prospects.

• Very warm temperatures accompanied by only light "teaser" rains over the next week may slow deterioration of corn and soybean crops, but there will not be enough rain to end the drought, an agricultural meteorologist said on Friday.

• "There is not much change, about the same forecast, with very warm weather and restrictive rains over the next week," said Drew Lerner, meteorologist for World Weather Inc.

• The NOPA crush report will be released on Monday, and an average of analysts' estimates pegged the U.S. June soybean crush at 133.075 million bushels and June U.S. soyoil stocks at 2.281 billion lbs.

• USDA said private exporters reported the sale of 150,200 tonnes of U.S. soybeans to an unknown destination.

• Brazil's 2012/13 soybean output could surpass U.S. production of the oilseed for the first time in history due to the drought in the U.S. Midwest growing areas, Sao Paulo analyst Agroconsult said on Friday.

• August was above all key moving averages. The nine-day RSI was at 72.

FCPO- SINGAPORE, July 13 (Reuters) - Malaysian crude palm oil futures ended higher on Friday as concerns over tighter global oilseed supply came back into play, while traders were mostly relieved that China's gross domestic product data landed in line with forecasts.

The market shrugged off forecasts of weekend rain in parts of the U.S. Midwest, investors betting on lower soybean output after the U.S. Department of Agriculture cut yield estimates in its Thursday report. (nL2E8IB261)

China's economy grew 7.6 percent in the second quarter of 2012 from a year earlier, its slowest pace in three years and in line with a Reuters poll. Market players are now on the lookout for possible stimulus measures that could spur growth and commodity demand. (nL3E8I52QD)

Benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange gained 1.8 percent to close at 3,065 ringgit ($963) per tonne.

Traded volumes stood at 33,372 lots of 25 tonnes each, higher than the usual 25,000 lots.

REGIONAL EQUITY- BANGKOK, July 13 (Reuters) - Southeast Asian stock markets rose on Friday amid optimism over China's second-quarter GDP data, with stronger oil prices lifting commodities and energy-linked counters such as Golden Agri Resources Ltd GAGR.SI and Bumi Resources Tbk BUMI.JK.

Singapore's benchmark Straits Times Index .FTSTI ended up 0.8 percent at 2,995.56, edging up 0.6 percent on the week, its fifth consecutive week of gain.

Thai SET index .SETI climbed 1.4 percent on Friday to a two-month closing high, gaining 0.9 percent this week, its third. Buying came after a court dismissed petitions against the government's proposed constitutional changes, easing concerns about political uncertainty.

RTRS- Barclays raises Q3 corn, wheat and soybean price views

July 12 (Reuters) - Barclays on Thursday raised its corn, wheat and soybean price forecasts for the third quarter, citing the ongoing U.S. Midwest drought.

The bank raised its third-quarter corn price forecast to $6.80 from $5.74 per bushel, wheat forecasts to $7.40 from $6.35 a bushel, and soybean forecasts to $14.80 from $14.25 a bushel.

"Weather remains the key risk as continued drought conditions could impact soybean yields further while corn yields could fall to the 140 to low 140’s bushels per acre level," Barclays said in a note.

RTRS- Goldman cuts U.S. corn yield forecast, ups price view

July 12 (Reuters) - Investment bank Goldman Sachs cut its U.S. corn yield forecast for the second time in less than two weeks to 143.5 bushels per acre from 153.5 bushels per acre and raised its price forecasts for corn, soybean and wheat due to a drought in the U.S. Midwest.

The worst Midwest drought in a quarter century is doing more damage to U.S. crops than previously expected with the U.S. Department of Agriculture (USDA) slashing its estimate for what was supposed to be a record harvest.

"Weather in the U.S. Midwest ended the month of June hotter and drier than expected, with current forecasts for July also pointing to above-average temperatures and more importantly, below-average precipitation," Goldman said in a note to clients.

Goldman's updated yield forecast is below the U.S. Department of Agriculture's (USDA) forecast of 146 bushels an acre. The USDA slashed its forecast on Wednesday, citing the Midwest drought. (nL2E8IB261)

"Our updated yield forecast is 16.5 bushels an acre below what we believe the U.S. corn yield would have been under average weather conditions this summer," the bank said.

"On this metric, it would be the second largest yield loss since 1950 if we exclude 1983 and 1993, years with major floods."

Goldman also forecast a deficit in the U.S. corn balance in 2012/13 for the third consecutive year.

Goldman raised its three-, six- and 12-month price forecasts for Chicago Board of Trade corn futures to $6.90 per bushel, from $6.30 previously.

For CBOT wheat, Goldman raised its price forecasts for the same three time periods to $7.70 a bushel, from $7.15.

For CBOT soybeans, the investment bank raised its three- and six-month price forecasts to $16.25 per bushel from $15.50.

RTRS- Palm oil futures curve points to severe El Nino: Clyde Russell

LAUNCESTON, Australia, July 12 (Reuters) - The curve for Malaysian palm oil futures has moved into a rare contango as the market frets over the possible re-emergence of the El Nino weather pattern and lower soy oil supplies in the United States.

But the curve may have steepened too quickly and appears to be factoring in a worse El Nino than the last major occurrence in 1997-98 and a fairly disastrous soybean harvest in the Americas.

Palm oil futures FCPOc3 traded in Kuala Lumpur now have a steeper curve than soy oil BOc3 contracts in Chicago.

However, the steepening of the curve doesn't necessarily mean that prices for palm oil won't rise, with the benchmark 3-month contract at its widest discount to its soy oil equivalent since October last year.

Given that palm oil has a fairly close correlation to soy oil, it's possible that the prompt month contract could still gain even as the curve flattens out.

To justify the curve steepening in palm oil, there will have to be a significant reduction in future supplies, but this means the threat of El Nino has to become reality, and it has to be a strong event.

The El Nino phenomenon is a warming of sea-surface temperatures in the Pacific that typically leads to wetter weather in the Americas but brings drought to Australia, Southeast Asia and India.

Japan's weather bureau said this week its climate models indicate El Nino will emerge in the northern hemisphere summer, while the U.S. Climate Prediction Center said last week El Nino may strike as early as the third quarter of 2012.

However, the severity of a possible El Nino has yet to be determined. A mild event will have minimal impact on agricultural output and if this turns out to be the case, the curve steepening in palm oil will have been overdone.

The palm oil futures curve was in backwardation, where front-month contracts are more expensive than those for later delivery, as recently as three months ago, when the nine-month future was 3 percent cheaper than the three-month, while the six-month was at a discount of 1.6 percent.

By Wednesday, the curve was in contango with the six-month future at 3,099 ringgit ($973) a tonne, 0.6 percent premium to the three-month, and the nine-month at a 1.2 percent premium.

Given that these futures, which are quite liquid with an open interest of more than 35,000 contracts in the three-month and 5,000 in the nine-month, rarely trade in contango, the switch from backwardation is significant.

If you go back to the last severe El Nino, the nine-month contract traded at a premium of 2.5 percent to the three-month in July 1996, before the event, but by the time it was full-blown in January 1997, it was back to a discount of 3.9 percent.

The curve reverted to contango by July 1997, but returned to backwardation by January 1998.

It is also worth noting that the three-month contract gained 24 percent between July 1996 and January 1997, and then rose a further 97 percent up to July 1998.

This indicates that a severe El Nino will boost the prices of the futures, but that moves into contango along the curve are infrequent and not long-lasting.

There are reasons to be bullish on palm oil, given a slowing in output in major producer Malaysia coupled with strong demand from top buyer India.

Malaysia's production dropped almost 18 percent in the second quarter from the same period last year, while exports rose in June.

This has reduced inventories by 5 percent at the end of June from a month earlier, thereby tightening the market.

Palm oil is also being boosted by soy oil, with the U.S. Department of Agriculture lowering its yield and production estimates in its latest report on the outlook for the world's largest soy bean producer.

But while outright prices may rise in the next few months, it will take confirmation of a strong El Nino to justify the current steepness of the palm oil futures curve.

Trader's Highlight

DJI- NEW YORK, July 12 (Reuters) - U.S. stocks fell on Thursday, hit by more warnings in the technology sector, while a rally in Procter & Gamble PG.N helped the blue-chip Dow cut its loss.

Shares of consumer products giant Procter & Gamble PG.N rose 3.7 percent to $63.70 after a source said activist investor William Ackman appears to be building a stake in the U.S. household products company. (nL2E8IC7Z) Despite the support, the Dow ended lower for a sixth day.

Tech shares remained under pressure, with the S&P technology sector index down 3.5 percent for the month so far. Indian IT heavyweight Infosys Ltd INFY.NS INFY.O became the latest big tech company to warn of sluggish sales, saying global economic uncertainty was hitting technology spending. (nL3E8IC0P5)

U.S.-listed shares of Infosys slid 11.2 percent to $38.75, after earlier dropping to an all-time low of $38.12.

"I think it is the fear that technology companies are going to miss estimates" this earnings period, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

Profit warnings from companies such as Advanced Micro Devices Inc AMD.N have hurt the sector in recent days. The S&P tech sector index .GSPT ended Thursday down 1.1 percent.

All three major U.S. stock indexes recovered from their lows of the day, with the S&P 500 bouncing off its 50-day moving average at 1,334 and the Dow briefly trading higher after hitting technical support at 12,500, analysts said.

The Dow Jones industrial average .DJI shed 31.26 points, or 0.25 percent, to 12,573.27 at the close. The Standard & Poor's 500 Index .SPX shed 6.69 points, or 0.50 percent, to 1,334.76. The Nasdaq Composite Index .IXIC lost 21.79 points, or 0.75 percent, to close at 2,866.19.

The Dow has lost 2.9 percent since its close on July 3.

Overall market sentiment was weak, especially after the lack of any monetary easing by the Bank of Japan on Thursday, and few clues on Wednesday in the minutes from the Federal Reserve's June policy meeting. The lack of policy moves suggested major central banks were still cautious about the need for further easing.

On the earnings front, Bank of America Merrill Lynch Global Research lowered its forecast on the S&P 500's 2012 earnings per share to $102 from $103.50, and for 2013, to $109 from $110.50.

The forecasts were cut "to reflect the impact of lower commodity prices and slower global growth on corporate profits," BofA Merrill Lynch Global Research analysts said in a note.

Data on the economy showed some promising signs, however. Initial claims for state unemployment benefits in the United States dropped to the lowest in four years.

Other economic data showed U.S. June import prices fell 2.7 percent, the most in more than three years, due to a plunge in the cost of imported oil, further icing inflation pressures. (nOATCIE85L)

Volume was a bit lighter than average. About 6.46 billion shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, compared with the year-to-date daily average of 6.85 billion shares.

Decliners beat advancers by a ratio of about 19 to 11 on the NYSE and on the Nasdaq, by about 3 to 2.

NYMEX- NEW YORK, July 12 (Reuters) - U.S. crude futures edged up on Thursday in choppy trade, rallying after the United States announced new sanctions on Iran, said fronts for Iran's tanker companies had been exposed and as a North Sea production problem added to a tight supply outlook.

 

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade unofficially ended higher on worries that mostly dry weather in the U.S. Midwest would further reduce crop yields, traders said.

* A 3 percent rise in CBOT corn added support.

* But rain, while welcome, limited gains in the Mississippi

River Delta and the mid-South crop regions.

* Nearly two-thirds of the Midwest region was in some stage of drought in the week ended July 10, up from just over 50 percent a week earlier, according to the U.S. Drought Monitor. (nL2E8ICBZM)

• The U.S. Midwest should see only minor rains over the next week to 10 days, forecasters said. The updated midday run of the U.S. weather model was drier than the previous one, moving closer toward the European model's outlook. (nL2E8IC96M)

• Investment bank Goldman Sachs cut its U.S. corn yield forecast for the second time in less than two weeks and raised its price forecasts for corn, soybean and wheat due to dry U.S. weather. Goldman raised its three- and six-month price soybean forecasts to $16.25 per bushel, from $15.50. (nL3E8IC2B6)

• Barclays raised its third-quarter soybean price forecast to $14.80 per bushel, from $14.25, citing the ongoing U.S. drought. (nL3E8IC3FA)

• USDA reported export sales of U.S. soybeans in the latest week at 759,200 tonnes (old and new crop years combined), above trade expectations for 375,000 to 650,000 tonnes.

• USDA reported weekly export sales of U.S. soymeal at 169,600 tonnes and soyoil sales at 33,900 tonnes, both in line with trade expectations.

FCPO- SINGAPORE, July 12 (Reuters) - Malaysian crude palm oil futures tumbled on Thursday, as traders took profit, prompted partly by a forecast for rain over the weekend in the drought-hit, soy-producing U.S. Midwest that could ease concerns of tight oilseed supply.

Lower Malaysian palm oil exports for the first 10 days of July also fuelled some of the declines, as the market had largely priced in lower ending stocks in June and strong Asian festival demand for the past few weeks.

"All the bullish factors have already been laid on the table, so traders just have to take profit and decide on what to do next," said a trader with a foreign commodities brokerage in Malaysia.

"The rain in a way helped ease the market because it was on a bullish weather run. But if the rain doesn't materialise, traders will put their money back into the market."

Benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 2.3 percent to close at 3,012 ringgit ($944) per tonne.

Traded volumes stood at 45,851 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Technicals were bearish as palm oil is expected to drop to a support at 2,970 ringgit, a break below which will open the way towards 2,919 ringgit, said Reuters market analyst Wang Tao. (nL3E8IC0DY)

The weather is expected to turn wetter for parts of the U.S. Midwest, Commodity Weather Group said in a note to clients on Wednesday, offering some relief on the tight global oilseed supply situation. (nL2E8IB9HN)

But the U.S. Department of Agriculture (USDA) cut soybean yields due to the persistent drought and analysts said that could be supportive for palm oil prices. (nL2E8IB261)

Market players are also on the lookout for the possibility of El Nino returning to the region as dry weather could cut palm oil output, further eating into 14-month-low palm oil stocks in June.

While cargo surveyors said Malaysia's palm oil exports fell sharply from July 1 to 10, the market was expecting more orders to come in as the Asian festival season gets underway with China and India celebrating key holidays from September to November. PALM/ITS PALM/SGS

REGIONAL EQUITY- BANGKOK, July 12 (Reuters) - Southeast Asian stock markets closed mostly lower on Thursday as concerns over global growth outlook prompted selling in large caps such as telecoms and a drop in oil prices weighed on energy linked shares.

Thai SET index .SETI slid 1.3 percent, retreating after notching up a 1.8 percent gain over the past two sessions. Telecoms group Shin Corp Pcl INTUCH.BK dropped 4.2 percent after Wednesday's 4.3 percent gain.

Malaysia .KLSE, Singapore .FTSTI and Indonesia .JKSE also ended their two-day gains. Malaysia's benchmark index .KLSE finished down 0.24 percent at 1,625.49, climbing at one point to 1,632.94, its intraday record high.

RTRS- China soy importers await softer U.S. prices as shortage looms

BEIJING, July 11 (Reuters) - China's soy buyers are holding off on placing new orders while U.S. prices hover near record highs, hoping prices will ease before they are forced to return to the market to meet potential supply shortages later this year, traders said.

China, the world's biggest soy buyer, is expecting imports to fall short of demand in September and October after a drought in South America late last year reduced supplies of the oilseed. China's imports account for more than 60 percent of globally traded oilseed volumes.

A drop in supplies from Brazil and Argentina, the world's second- and third-biggest exporters, means crushers have only been able to source about 6 million tonnes of soy for September and October. Crushers need at least 10 million tonnes during the peak consumption season.

China's supply deficit could also deepen late this year or early next year if the recent drought in the United States cuts output again, traders said.

While Chicago Board of Trade 0#C: soy prices retreated from an all-time high on Tuesday, they remain unattractive to Chinese buyers, with the market still concerned about a possible reduction in the autumn harvest following weeks of hot, dry weather across most of the U.S. Midwest.GRA/

"At current (Chicago) prices, crushers have no intention to buy as the beans would give negative crushing margins," said a soy trading manager.

Purchases of old U.S. crop over recent weeks had helped redress the shortfall for August and September, traders said.

But buyers are still waiting for prices to drop.

"They think prices will retreat on a possible expansion of soy acreage in South America, but this time the U.S. drought seems serious," said another soy trader. "There could be a supply problem for six months from September to February before the new South American crop reaches the market."

"If the U.S. crop is cut, there could be a global soy deficit of more than 14 million tonnes, and it is not easy to cut demand by that much, particularly in China," said the trader, adding that China may need to boost imports of canola from Canada later in the year to make up for meal shortages.

STATE RESERVES, PORT STOCKS

In the face of high Chicago prices, some crushers have been sourcing supplies from stockpiles of imported soybeans at Chinese ports, which were as high as 6.5 million tonnes at the end of June.

"In the short term, there will be no supply problem. Port inventories are still at a record high level following months of large import volumes," said Wang Ping, an analyst with Dong Wu Futures.

Analysts also expect crushers in the north to buy more from weekly state soy reserve auctions, which Beijing is offering at more competitive prices than imports.

"Crushers in the north are showing more interest in buying from state reserves. They can ship the cheap soymeal to the south, and they have started doing this," said one industry analyst.

At its weekly state reserve auction last week, Beijing sold 154,334 tonnes of soy at an average of 3,956 yuan ($620)per tonne, up from 40,634 tonnes the week earlier.

Prices at the weekly auctions were lower than the 4,500 yuan per tonne offered for imported soy at the ports. Current Chicago prices would put imports of soy at more than 5,000 yuan per tonne.

RTRS- Forecast turns wetter for US Midwest; temps seen rising

CHICAGO, July 11 (Reuters) - The forecast turned wetter for parts of the U.S. Midwest, with rain expected in Illinois and other areas east of the Mississippi River this weekend, Commodity Weather Group stated in a note to clients on Wednesday.

Some showers were predicted for North and South Dakota and western Minnesota by Friday.

"This could trim down dry spots a bit, but about half of the Midwest would maintain significant moisture deficits," the note said.

An upper air disturbance boosted the chance for rain late this week and into the weekend, the forecaster stated.

The midday run of a major U.S. weather forecasting model, the Global Forecast System (GFS), indicated additional rain for the Corn Belt next week, a factor that helped pressure corn and soybean futures on the Chicago Board of Trade.

"The latest idea from GFS is for amounts of 0.5 to 1 inch (1 to 2.5 cm) w idespread, with some inch-plus amounts scattered in as well," said John Dee of Global Weather Monitoring.

T he model suggested the showers would cover 85 percent of the Midwest in the six- to 10-day period, said Dee, adding, "I t's the six- to-10 day, so it's not something you would etch in stone."

Corn and soybean crops throughout the Midwest suffered a drought during the past month that has severely cut harvest expectations.

Futures prices have soared as crop conditions have worsened, with corn up 37 percent and soybeans up 23 percent since the start of June.

The U.S. Department of Agriculture on Wednesday slashed its forecast of the U.S. 2012 corn yield to 146 bushels per acre, from 166 in June, and cut its 2012 soybean yield estimate to 40.5 bushels per acre, from 43.9 bu shels per acres pr eviously.

CBOT corn and soybeans initially rose on the news but later fell on profit-taking and ideas traders had already factored steep yield cuts into the market.

Temperatures were expected to rise during the next few days, topping out in the upper 90s to low 100s degrees Fahrenheit in western growing areas during the weekend. Cooler conditions were expected in the 11- to 15-day forecast, with temperatures in the mid-80s to mid-90s.

Commodity Weather Group also said some showers were expected in Ohio and Indiana during the 6- to 15-day period.

The region remained mostly dry on Tuesday, but some isolated showers were reported in central Illinois overnight.

RTRS- India's June refined palm oil imports seen down

NEW DELHI, July 11 (Reuters) - India's refined palm oil imports fell in June as the world's biggest vegetable oil importer looked likely to raise taxes to cut cheap supplies from Indonesia, traders surveyed by Reuters said.

India's refined vegetable oil imports have been rising since October 2011 when Indonesia, the world's No. 1 palm oil producer, tweaked its export duties to make refined oils more attractive than crude palm oil to promote its own refineries.

Traders' forecasts for refined palm oil imports in June ranged between 110,000 and 150,000 tonnes, with the average at 128,333 tonnes, down 22.4 percent from May.

Stung by Indonesia's move, many Indian refiners have been requesting the government to take steps to protect local refineries, with some units facing closure.

On Thursday, ministers are likely to review the demand of domestic processors to make refined palm oil imports costlier by raising taxes. (nD8E8I3005)

Expectations of a possible increase in import taxes in June led to lower purchases of refined palm oils. In May, imports rose in the run up to the Muslim holy month of Ramadan when fasting in the day is followed by an elaborate feast at night. (nL4E8GS276)

In the first seven months of the current year from November, India's refined palm oil imports almost doubled to 1.1 million tonnes from the year-ago period, stoking fears of falling margins for domestic refineries.

Traders said refined palm oil imports were likely to stay over last year's average of 90,000-100,000 tonnes per month if the government did not introduce protective measures.

Imported palm oils were about $40-50 per tonne more expensive in June than in the previous month due to worries over supplies of soyoil when dry weather conditions hit the soybean crop in the United States.

Imported refined palm oil was quoted at around $1,050 per tonne on a cost and freight basis on India's west coast, while imported crude palm oil was quoted at $990 per tonne.

Higher prices cut total palm oil imports by 15.5 percent last month to 583,125 tonnes, according to the average of a survey of eight traders.

On Wednesday, benchmark September palm oil futures FCPOc3 on the Bursa Malaysia slipped 1.5 percent to close at 3,082 ringgit ($970) per tonne. (nL3E8IB1AO)

The Solvent Extractors' Association of India, a leading trade body, is scheduled to release June import figures later this week.

India, the world's leading vegetable oil importer, mainly buys palm oils from Indonesia and Malaysia, and small quantities of soyoil from Argentina and Brazil. About half of India's 15-16 million tonnes of annual demand is met through imports.

Traders said imports of soyoil rose in June due to the arrival of some delayed vessels from South America, while sunflower fell, reflecting lower demand for fried food stuffs during the summer.

Soyoil imports in June are seen more than doubling from May to 151,875 tonnes, while the monthly sunflower oil imports were down by about a quarter to 94,375 tonnes in June, the survey showed.

Lower domestic demand and higher imports in April and May pushed up June stocks at Indian ports by 21.5 percent to 708,750 tonnes, it showed.

Total June vegetable oil imports, including small amounts of non-edible oils, are likely to have fallen by 4.7 percent to 854,375 tonnes from May.

"Imports will be around 800,000-850,000 tonnes in July," said Sadeep Bajoria, chief executive of Mumbai-based Sunvin Group.

About 80 percent of India's total cooking oil imports are palm oils, while the rest are soft oils.