RTRS- Brazil's new soybean crop seen up 17.8 pct-Celeres

SAO PAULO, Aug 6 (Reuters) - Brazil's new 2012/13 soybean crop, which begins planting in September, will produce a record 78.1 million tonnes, up 17.8 percent from last year's drought-parched harvest, local analyst Celeres said in its first forecast of the season.

Celeres said area dedicated to soybeans would grow by more than 8 percent to 27.14 million hectares from last season. If confirmed, that would be one of the biggest annual increases in planted area in almost a decade.

Dry weather over the past season erased roughly 10 million tonnes from Brazil's 2011/12 soy crop, which, combined with the drought affecting the current U.S. grain crop, has driven soybean futures prices Sc1 into record territory in recent weeks.

Brazil's main grain belt is expected to pass from the drier La Nina weather conditions into a wetter El Nino scenario later this year, which typically favors planting and crop growth in South America.

Early estimates of Brazil's new soy crop are showing one of the biggest jumps in year-to-year output the country has seen in a decade. (nL1E8GVIL2)

Fertilizer, seed and other agricultural input sales have been at record levels ahead of the coming crop. Producers have given early planting indications that they will sow a massive crop, giving up corn, cotton and pasture land to plant soy.

Record high prices in the midst of the U.S. drought and a more favorable exchange rate since the weakening of the real BRBY against the dollar this year are the main drivers of the rush to plant soybeans that will be harvested in early 2013.

Celeres' forecast for an 8 percent increase in planted area over last year -- which was a record planting as well -- would mean the biggest annual expansion since 2004.

This is even more significant given that the total area planted is 5 million hectares bigger, land costs are far higher and environmental restrictions are tougher than eight years ago.

Celeres' output forecast is modest, however, compared with some market views that see the next crop at easily more than 80 million tonnes.

The local analyst put next season's yields at a conservative 2.877 tonnes per hectare. Excluding the horrid 2.640 tonnes per hectare last season due to the drought, Brazil has averaged more than 2.9 tonnes per hectare in past years and harvested a record more than 3 tonnes per hectare in 2010/11.

RTRS- Rains provide some relief to drought-stressed US crops

CHICAGO, Aug 6 (Reuters) - Rains over the weekend across most of the U.S. Midwest corn and soybean growing region, and forecasts for more rain this week, will help relieve stress on crops, an agricultural meteorologist said Monday.

"It's an improved forecast, not a perfect one," said John Dee, meteorologist for Global Weather Monitoring. "I wasn't so surprised about the amounts of rain, but the 85 percent coverage was better than expected."

The midday weather update showed little change in the expected precipitation for this week, while temperatures turned a little cooler for the U.S. Midwest and Plains, said Steve Silver, a meteorologist with Cropcast, a division of MDA EarthSat weather.

The biggest changes in the midday U.S. computer forecasting model came in the 11- to 15-day period, he said.

"It is much warmer than the earlier run, especially in the northern and central Plains and the northwestern Midwest -- and notably drier across the central and southern Plain into much of the southern and eastern Midwest," Silver said.

The worst drought in more than half a century has caused serious harm to the U.S. corn crop, reducing yield and export prospects, and is beginning to cut into soybean production prospects.

Cooler temperatures and showers came too late to help much of the corn crop, crop specialists say, but soybeans -- a later maturing crop -- will benefit from the recent rains.

From 0.20 to 0.80 inch of rain, with locally heavier amounts, fell on about 85 percent of the Midwest over the weekend. More rain was forecast for Wednesday and Thursday.

The Midwest was nearing the end of the extreme heat, while hot weather remained worrisome in the Southwest.

"A good chunk of the Midwest will get a welcome break from the heat late this week and early next week with highs in the 80s degrees Fahrenheit," Dee said. "The rains and cooler temperatures will help but not end the problem," he said.

Chicago Board of Trade corn and soybeans soared to record highs in July due to the drought-related crop reductions. Prices have been falling so far in early August.

Commodity Weather Group on Monday said the weekend rains favored about half of the Midwest, but nearly a third of the soybean growing area would remain dry.

USDA will release its weekly crop condition report later Monday afternoon. This summer's corn and soybean crops are in their worst condition since the last big U.S. drought of 1988.

Nearly two-thirds of the contiguous United States were suffering from some level of drought as of July 31, more than a fifth of it classified as extreme drought or worse, according to the Drought Monitor, a weekly report compiled by U.S. climate experts.

Trader's Highlight

DJI- NEW YORK, Aug 6 (Reuters) - U.S. stocks closed at three-month highs for the second day in a row on Monday, extending last week's rally on the hope for more assistance for the troubled euro zone.

The S&P 500 rose to its highest point since early May, but pared its gains going into the close. The benchmark index also failed to breach 1,400, a level that could spur further buying if convincingly broken. The S&P 500 hasn't closed above the 1,400 level since May 2.

Sentiment in Spanish and Italian bond markets - the forefront of the three-year debt crisis - improved, with two-year Spanish yields falling to 3.42 percent on Monday, less than half of a late July high of over 7 percent. (nL6E8J6ATV)

European Central Bank President Mario Draghi has said the ECB may buy short-dated bonds to lower borrowing costs to help Europe, which has been mired in a debt disaster. European shares closed at four-month highs. (nL6E8J6BIH)

"Nothing has been fixed in Europe, but things seem to be getting better, and it seems unlikely that there will be any kind of real blow-up," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. "I'm worried I may be too bearish."

Manley said he saw the S&P 500 trading in a range between 1,250 and 1,450, "which will likely persist for a while, with continued huge volatility."

Wall Street rallied on Friday with the S&P 500 marking its fourth straight week of gains on a strong U.S. jobs report and renewed hope that European authorities would act to contain the euro zone's debt crisis through ECB purchases of Italian and Spanish bonds.

Meanwhile, a group of investors will rescue embattled market maker Knight Capital Group Inc KCG.N in a $400 million deal that keeps the company in business, Knight said on Monday. But it comes at a huge cost to investors. The stock fell 24.2 percent to $3.07. (nL2E8J60KK) (nL2E8J52HY)

The Dow Jones industrial average .DJI rose 21.34 points, or 0.16 percent, to 13,117.51 at the close. The Standard & Poor's 500 Index .SPX gained 3.24 points, or 0.23 percent, to 1,394.23. The Nasdaq Composite Index .IXIC advanced 22.01 points, or 0.74 percent, to end at 2,989.91.

Of the 411 companies in the S&P 500 that have reported second-quarter earnings through Monday morning, 67.4 percent have reported earnings above analysts' expectations, near the four-quarter average of 68 percent, according to Thomson Reuters data.

About 60 percent of stocks traded on the New York Stock Exchange closed higher while on the Nasdaq, 59 percent of stocks closed higher.

Volume was light, with about 5.33 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 7.84 billion.

NYMEX- NEW YORK, Aug 6 (Reuters) - U.S. crude oil futures ended higher on Monday for a second straight session, lifted by stronger equities and turmoil in the Middle East which raised the geopolitical risk premium.

 

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell nearly 3 percent and most-active November SX2 hit a one-week low as improved weather conditions in the U.S. Midwest boosted yield prospects, traders said.

* Rains over the weekend across most of the U.S. Midwest and forecasts for more rain this week will help relieve stress on drought-hit crops, an agricultural meteorologist said. (nL2E8J6108)

• Benchmark November soybeans SX2 unofficially closed below its 20-day moving average for the first time since June 5.

• CBOT soymeal and soyoil followed soybeans to close lower, but soyoil gained against soymeal on oil/meal spreading.

• Analytics firm Celeres projected Brazil's 2012/13 soybean crop at 78.1 million tonnes, on plantings of a record 27 million hectares. (nL2E8J674S)

• Traders expected USDA in its weekly crop progress report later on Monday to report U.S. soybean ratings at 28 percent good to excellent, down 1 percentage point from the previous week. (nC3E8H101X)

• USDA confirmed sales of 106,000 tonnes of U.S. soybeans to China for 2012/13 delivery. (nW1E8I200A)

• USDA reported export inspections of U.S. soybeans in the latest week at 12.720 million bushels, within trade expectations for 12 million to 16 million.

• CBOT reported no soybean or soymeal deliveries against August futures, while soyoil deliveries totaled 1,296 contracts.

FCPO- SINGAPORE, Aug 6 (Reuters) - Malaysian crude palm oil ended flat on Monday as expectations of higher stocks in No.2 producer Malaysia erased higher risk appetite on better-than-expected U.S. jobs data.

Investor optimism also grew on talks of more stimulus measures by European Central Bank to tackle the region's crisis but caution remained as traders eye stocks data by industry regulator Malaysian Palm Oil Board (MPOB) due later this week.

"In the near term, the upcoming MPOB’s July inventory data could swell above the psychological range of 2 million tonnes," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, in a note.

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange ended flat at 2,918 ringgit ($940) per tonne. Palm oil posted a 0.3 percent loss last week, its fourth straight weekly loss.

Traded volumes stood at 21,893 lots of 25 tonnes each, thinner than the usual 25,000 lots.

Technicals look bearish with Reuters market analyst Wang Tao saying palm oil will fall to 2,880 ringgit as a downtrend from 3,161 ringgit has resumed. (nL4E8J60FU)

Market players are waiting for fresh trading cues from a key supply-demand report from the U.S. Department of Agriculture later this week that will quantify soy crop damage from the worst drought in 56 years. GRA/

A lower quality of soybean crop contributing to a drop in soybean oil supply could shift more vegetable oil demand to the cheaper palm oil.

Weather concerns closer to Southeast Asia are also in focus as El Nino's dry weather pattern could return by end of the year and hurt production for top palm oil producers Indonesia and Malaysia.

Malaysian palm oil exports in July suffered a double-digit fall from a month ago, reflecting slowing demand from top food buyers China and India, according to cargo surveyor data. PALM/ITS PALM/SGS

Oil retreated from last week's gains, easing towards $108 a barrel on Monday as investors took profits and awaited more clues on the health of the global economy and the outlook for oil demand. O/R

REGIONAL EQUITY- Aug 6 (Reuters) - Most Southeast Asian stock market gained on Monday with Singapore hitting a one-year high as investors bought into the region's risky assets after stronger-than-expected U.S. jobs data and emerging optimism for European action on the debt crisis.

Singapore's Straits Times Index .FTSTI ended 0.7 percent firmer to its highest since Aug. 4, last year, led by financials, with DBS Group Holdings Ltd DBSM.SI and Oversea-Chinese Banking Corporation Ltd OCBC.SI gaining more than 1 percent each.

Thailand .SETI and Malaysia .KLSE gained 0.9 percent and 0.3 percent respectively in strong volumes, close to their three-week highs.

Indonesia .JKSE edged up 0.1 percent and Vietnam .VNI, the region's smallest bourse, rose 1.2 percent.

RTRS- China weekly state soy sale exceeds 0.4 mln T

BEIJING, Aug 2 (Reuters) - Crushers in China, the world’s top soy buyer, have raised their purchase of soybean from the government’s weekly cheap offers to 400,907 tonnes, the government said on Thursday.

The strong sales come as crushers seek to offset possible domestic shortages in coming months after dry weather late last year cut supplies from South America and with the United States now suffering one of its worst droughts in years.

The government sold a total of 400,907 tonnes from state reserves on Thursday, the largest volume from a single sale since late 2010 and 10,817 tonnes higher than an auction held on July 12, which was the second-largest level.

Crushers in Heilongjiang and Inner Mongolia bought the beans at an average price of 4,381 yuan per tonne, according to bidding results.

Sales since December 2010 had attracted almost no bidders until May this year, when import prices jumped as a result of the drought in South America.

RTRS- Argentina knocks down rumor of soy tax hike

BUENOS AIRES, Aug 2 (Reuters) - Grains powerhouse Argentina is not studying a possible increase in soy export taxes for now, an Economy Ministry source with direct knowledge of the situation said on Thursday, knocking down market rumors of an imminent increase.

"It's not a subject on the agenda," said the source, who asked not to be named. "It's not a possibility for now."

The South American country is the world's No. 3 soybean exporter and its top supplier of derivatives like soyoil, used in the booming biofuels sector, and meal, used in cattle feed.

"The news is bearish for the U.S. bean market. There may have been a little support yesterday because of the rumor but it was hard to define since we're in a hot weather market," a floor source at the Chicago Board of Trade said, referring to the U.S. drought that has propelled grains prices higher in recent weeks.

Chicago August soy was down nearly 2 percent near midday while September, the next contract for 2012 delivery, was down only 0.66 percent.

The levy is a constant complaint among growers who have feuded for years with President Cristina Fernandez over her policies. She was re-elected last year on promises of increasing the government's role in Latin America's third biggest economy.

An increase in export taxes would have to be approved by Congress, where Fernandez and her allies have a majority.

Argentina has seen an explosion in soybean cultivation over the past 15 years. The government already has a 35 percent tax on exports, with a lower rate for soyoil and meal.

Argentine Agriculture Deputy Minister Lorenzo Basso said late on Wednesday that the farm ministry was not developing any tax increase plans, leaving speculation open that the Economy Ministry might be planning to propose an increase on its own. (nL2E8J1IZ8)

Trading companies with major operations in Argentina include Bunge Ltd BG.N, Cargill Inc CARG.UL, Louis Dreyfus, Molinos Rio de la Plata MOL.BA and Noble Group Ltd NOBG.SI.

RTRS- INTL FC Stone sees US 2012 corn yield at 124.3 bu/acre

CHICAGO, Aug 1 (Reuters) - Commodity brokerage firm INTL FC Stone on Wednesday estimated U.S. 2012 corn production at 11.043 billion bushels, with an average yield of 124.3 bushels per acre (bpa).

The firm projected the U.S. 2012 soybean harvest at 2.730 billion bushels, with an average yield of 36.2 bpa.

The estimates are INTL FC Stone's first for the 2012 U.S. crop season and are based on a survey of the firm's customers, among other factors.

The figures compare with the U.S. Department of Agriculture's current U.S. corn production forecast of 12.970 billion bushels, with an average yield of 146.0 bpa.

Stone's soybean output figure was below USDA's soybean production forecast of 3.050 billion bushels, with an average yield of 40.5 bpa.

USDA is scheduled to release updated crop forecasts on Aug. 10, its first estimates of the season based on field surveys.

INTL FC Stone said its production figures relied on USDA's current estimates of harvested acreage.

RTRS- Light rain for US as weather system shifts

CHICAGO, Aug 2 (Reuters) - The drought-hit U.S. Midwest will be left high and dry as fresh weather updates indicate a tropical weather system now at the edge of the Caribbean Sea will not bring any moisture to the area when it makes landfall in about 10 days, an agricultural meteorologist said on Thursday.

Known as tropical depression 5, the system initially was expected to reach landfall on Aug. 11-12 near Beaumont, Texas near the Texas-Louisiana border and potentially bring rain into the drought-stricken U.S. Plains and Midwest, according to Drew Lerner, meteorologist for World Weather Inc.

It now appears the system will make land fall further south in Texas thus keeping rain from the Midwest, Lerner said.

"It won't be a tropical storm until tomorrow when it gets into the Caribbean. At 2:00 p.m. EDT (1800 GMT) it was 385 miles east of the Windward Islands," Lerner said.

Lerner and other meteorologists said little improvement in the drought-stricken U.S. Midwest is expected for the next two weeks with occasional downpours bringing relief in isolated areas. But no widespread soaking rains are expected in significant corn and soybean growing regions.

Light showers with some locally heavier amounts fell on the U.S. Midwest crop belt overnight, which will provide some relief to crops and livestock from the worst drought in a half century, Lerner and World Weather's meteorologist Andy Karst said.

"There were some one-inch rains in areas of Nebraska, Kansas and southern Minnesota, and the usual 0.10 to 0.50 inch elsewhere," Karst said.

Another buildup of heat was expected next week in the central and western Midwest, with highs in the 90s to 100 degrees Fahrenheit, which will add further stress to crops.

Weather forecasting models that meteorologists use to make their predictions were in agreement on Thursday, in contrast to some days when the European and U.S. models showed divergent patterns.

"There isn't a striking difference today. The GFS (U.S.) model has a stronger ridge of high pressure than the European model, but unlike some days they're aligned pretty well today," Karst said.

An atmospheric high pressure ridge centered over the Plains and Midwest has been blocking moisture from moving from the Gulf into the Midwest, leading to a buildup of heat and drought.

Commodity Weather Group (CWG) on Thursday said temperatures would warm into the 90s F for all but the northwestern corner of the Midwest by Friday and Saturday, with 100s F most likely in Missouri and Kansas.

The extended outlook for later next week remained near to above normal for temperatures with the severe heat retreating to mainly the Plains.

The spreading drought has been cutting into crop conditions and analysts have been slashing production prospects for corn and soybeans almost daily.

The worst U.S. drought in 56 years intensified over the past week as above-normal temperatures and scant rainfall parched corn and soybean crops across the Midwest and central Plains, a report from climate experts said on Thursday.

The drought became more severe in the southern United States as well, just a year removed from a record-breaking dry spell that ruined crops and wilted grazing pastures across Texas and Oklahoma enough to force an unprecedented northward migration of cattle.

Nearly two-thirds of the contiguous United States was under some level of drought as of July 31, more than a fifth of it classified as extreme drought or worse, according to the Drought Monitor, a weekly report compiled by U.S. climate experts.

RTRS- US Grain Exports-Soy sales at 9-month low; China cancels new-crop

Aug 2 (Reuters) - U.S. soybean export sales plunged last week to a nine-month low due to a large cancellation of new-crop purchases by top importer China, government data on Thursday showed.

Net corn export sales were in line with low trade expectations after net negative sales the previous week, capped by uncompetitive prices on the world market, while wheat sales rose 42 percent from the prior week but were within trade forecasts.

Soybean export sales in the week that ended July 26 totaled 194,000 tonnes for shipment in the current marketing year, which ends Aug. 31, and a net 52,400 tonnes for shipment in the next marketing year, according to the U.S. Department of Agriculture's weekly export sales report.

New-crop sales were dented by a net cancellation of purchases by China of 163,500 tonnes.

Combined marketing year sales were the lowest since the week of Oct. 27, 2011, and net soybean sales to China were the lowest in nearly 14 months, USDA data showed.

Net corn export sales last week totaled 178,400 tonnes for 2011/12 marketing year shipment and just 23,000 tonnes for 2012/13, USDA said. Sales were expected to be between zero and 200,000 tonnes.

Japan, the No. 1 importer of U.S. corn, was the week's top buyer with 150,900 tonnes of old-crop purchases and 45,000 tonnes of new-crop purchases.

Net export sales of all classes of U.S. wheat totaled 520,700 tonnes last week, most of it for shipment in the current marketing year which runs through May 2013, USDA said. Traders had expected sales from 400,000 to 600,000 tonnes.



Trader's Highlight

DJI-NEW YORK, Aug 2 (Reuters) - U.S. stocks fell for a fourth day on Thursday after European Central Bank President Mario Draghi disappointed investors hoping for immediate action to contain the euro zone debt crisis.

One of Wall Street's top market makers, Knight Capital Group KCG.N, was fighting for its survival after a trading glitch that roiled markets on Wednesday wiped out $440 million of the firm's capital.

However, the market focused mostly on the ECB, though traders were also looking ahead to Friday's closely watched U.S. jobs report which could bring a volatile end to an eventful week.

Draghi said the ECB would gear up to buy Italian and Spanish bonds on the open market but would only act after euro zone governments have activated bailout funds to do the same, disappointing traders after his pledge last week to do "whatever it takes" to save the euro left many thinking action was imminent. (nL6E8J2BUX) (nL6E8J1JXK)

"Today people were looking for concrete steps and an outline of exactly what path the ECB would take to do that, and there weren't any," said Brian Gendreau, market strategist with Cetera Financial Group in Gainesville, Florida.

"Just as the market went up on the 'whatever it takes' comments it is coming down on the lack of specificity."

Markets rallied late last week in part on hopes for stimulus from the Federal Reserve but mostly as expectations grew the ECB would take action to protect the euro. Friday's jobs report could give a stronger indication whether the Fed, which has a freer hand than the ECB, will act shortly.

Data showed the number of Americans filing new claims for jobless benefits rose last week and manufacturers suffered an unexpected drop in orders in June, suggesting the economy is struggling to break out of a soft patch. (nL2E8J23AO)

The Dow Jones industrial average .DJI fell 92.18 points, or 0.71 percent, to 12,878.88. The S&P 500 Index .SPX dropped 10.14 points, or 0.74 percent, to 1,365.00. The Nasdaq Composite .IXIC lost 10.44 points, or 0.36 percent, to 2,909.77.

Major indexes fell for a fourth day running, totaling weekly losses so far of more than 1.5 percent.

Knight Capital shares fell after Wednesday's trading error forced the company to seek new funding. The stock closed down 62.8 percent at $2.58, their lowest since early October 1998. (nL2E8J27QE)

According to Thomson Reuters data, 67 percent of the 385 S&P 500 components that have reported results so far this quarter have beat earnings estimates. In the past four quarters, the average beat rate has been 68 percent.

General Motors Co GM.N posted a smaller-than-expected loss in Europe that helped the No. 1 U.S. automaker post a better-than-expected second-quarter profit. Shares slipped 2.6 percent to $19.14. (nL2E8J2263)

U.S. retailers reported stronger-than-expected sales for July but the gains were largely due to discounting and do not necessarily signal vigorous consumer spending for the rest of the year. (nL2E8J1JM5)

About 7.1 billion shares exchanged hands on the New York Stock Exchange, NYSE MKT and Nasdaq, above the year-to-date daily average of 6.75 billion.

About 8 issues fell for every 5 that rose on the NYSE and on Nasdaq the decline/advance ratio was roughly 7 to 5.

NYMEX- NEW YORK, Aug 2 (Reuters) - U.S. crude futures fell 2 percent on Thursday, pressured by reports showing a rise in jobless claims and a drop in factory activity in the United States, along with disappointment that the European Central Bank did not offer more concrete steps to boost economic growth.

CBOT SOYBEAN-Soybean futures on the Chicago Board of Trade fell for a third day on Thursday on profit-taking and signs of slowing demand for U.S. soy, traders said.

• USDA reported export sales of U.S. soybeans in the week ended July 26 at 246,400 tonnes for old and new crop years combined, the smallest combined-year total in nine months. New-crop sales were dented by a net cancellation of purchases by China of 163,500 tonnes. (nL2E8J24UP)

• USDA reported weekly U.S. soymeal sales at 270,800 tonnes (old and new crop years combined) and soyoil sales at 10,200 tonnes.

• Light showers with some locally heavier amounts fell on the U.S. Midwest crop belt overnight, providing some relief from the worst drought in a half century, meteorologists said.

• But updated midday forecasts indicated a tropical weather system now at the edge of the Caribbean Sea will not bring any moisture to the area when it makes landfall in about 10 days. (nL2E8J24RL)

• Argentina is not studying a possible increase in soy export taxes for now, an Economy Ministry source with direct knowledge of the situation said, knocking down market rumors of an imminent increase. (nL2E8J29LO)

• Market underpinned by concerns about the size of the U.S. soy crop. Brokerage INTL FC Stone late Wednesday projected 2012 U.S. soybean production at 2.730 billion bushels, with an average yield of 36.2 bushels per acre. (nC3E8GM02B)

• Crushers in top global soy buyer China raised their purchase of soybean from the government’s weekly cheap offers to 400,907 tonnes, the government said on Thursday. (nL4E8J23JM)

• CBOT reported no deliveries of soybeans or soymeal deliveries against August contracts. Soyoil deliveries totaled 2,445 contracts, with no strong commercial stoppers.

FCPO- SINGAPORE, Aug 2 (Reuters) - Malaysian crude palm oil ended flat after touching its lowest in the week on Thursday as wet weather forecast in the U.S. Midwest brought relief to drought-hit soy crop, easing some concerns of tighter oilseed supplies.

Investors were also left disappointed after the U.S. Federal Reserve stopped short of signalling fresh monetary stimulus, and are now looking ahead to the European Central Bank meeting later in the day for major policy action. MKTS/GLOB

"The market is pretty much disappointed that so far there's no promise coming from the Fed," said Ker Chung Yang, commodities analyst with Phillip Futures in Singapore.

"Also, we have been talking about the U.S. dry weather for so long. The weather effect is no longer a bull factor for oilseeds but when the weather changes it becomes a bear factor."

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange ended one ringgit higher at 2,946 ringgit ($944) per tonne, supported by last-minute buying. Prices earlier touched a low at 2,905 ringgit, a level last seen on July 27.

Traded volumes stood at 23,869 lots of 25 tonnes each, slightly lower than the usual 25,000 lots.

A better chance of rain was expected late this week in portions of the drought-stricken U.S. Midwest, bringing some relief to the struggling soybean crops, an agricultural meteorologist said on Wednesday. (nL2E8J1276)

Market players have been pricing in the damage done by the relentless drought on soybean crops in the United States that squeezed soybean oil supply.

A drop in soybean oil supply could shift more vegetable oil demand to the cheaper palm oil.

Traders are looking out for July stock figures in No.2 producer Malaysia, which could climb on slowing exports and better production.

Malaysian palm oil exports fell by 15 percent and 19 percent in July from a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance respectively. PALM/ITS PALM/SGS

While the U.S crop scares appear to be receding, traders are eyeing El Nino's dry weather pattern which could return to Southeast Asia by end of this year and hurt production for top exporters Indonesia and Malaysia.

REGIONAL EQUITY- Aug 2 (Reuters) - Most Southeast Asian stock markets ended weaker on Thursday with Singapore falling from a near one-year high after the U.S. Federal Reserve stopped short of signaling fresh stimulus measures, disappointing investors.

Investors were also cautious ahead of a European Central Bank meeting which is expected to discuss policy actions, including resuming its bond-buying programme, to help drive down borrowing costs for Italy and Spain, which have soared to levels considered unsustainable for their economies.

Jakarta's Composite Index .JKSE fell 0.9 percent despite a foreign inflow of $16.6 million, Singapore's Straits Times Index .FTSTI lost 0.5 percent from its highest close since Aug. 4 last year, and the Philippines .PSI edged down 0.1 percent.

Bucking the trend, Malaysia .KLSE added 0.1 percent with a net foreign buying of $11.59 million, while Vietnam .VNI, the region's smallest bourse, added 0.9 percent.

Thailand .SETI was closed for a national holiday

Trader's Highlight

DJI- NEW YORK, Aug 1 (Reuters) - Global share prices and the euro held steady on Wednesday as investors waited to see if central banks in the United States and Europe would take fresh actions to ease the euro-zone debt crisis and rejuvenate the global economy.

U.S. stocks pared early gains after unusual trading that roiled seemingly unrelated shares on the New York Stock Exchange raised concerns.

The Federal Reserve, which concludes its two-day policy meeting later in the day, is likely to show it is ready to act to support a weakening U.S. economy but stop short of aggressive measures for now. (nL2E8J10MO)

The Fed's policy decision will come a day before a key meeting of the European Central Bank. ECB President Mario Draghi heightened speculation of further bank purchases of Italian and Spanish bonds when he said last week that he would do "whatever it takes to preserve the euro."

The risk of disappointment, however, is high. Spanish bond yields could jump again and stocks and the euro could sell off if the ECB does not deliver. Uncertainty ahead of the ECB meeting drove investors to safe-haven German bonds, allowing Berlin to sell five-year debt at a record low cost.

"Everybody is waiting on central bank policy. Right now the equity markets are being held together by easy money, and if we don't get more of it soon we are likely to be disappointed," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

"We are going to need a monetary booster shot both from Europe and the U.S. to keep this party going."

But on Wall Street, traders appeared more concerned with unusually volatile trading in a number of shares listed on the NYSE, which resulted in the halt of several stocks that appear to be unrelated.

"I think that has disrupted all the normal activities. Stocks are moving all over the place, they are weird, they are trading like millions of shares, 100 shares at a time, so something went haywire somewhere," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

The trading sparked unusual activity in stocks such as Molycorp MCP.N, which traded more than 5.7 million shares in the first 45 minutes of trading. The stock usually averages about 2.65 million shares daily, and it was one of the stocks halted due to excessive volatility.

The Dow Jones industrial average .DJI was up 43.29 points, or 0.33 percent, at 13,051.97. The Standard & Poor's 500 Index .SPX was up 4.23 points, or 0.31 percent, at 1,383.55. The Nasdaq Composite Index .IXIC was up 4.26 points, or 0.14 percent, at 2,943.78.

Investors shrugged off economic data on the U.S. labor market and manufacturing activity worldwide.

The U.S. private sector added 163,000 new jobs in July, topping economists' expectations of 120,000 new jobs. The report from payrolls processor ADP came two days ahead of Friday's more important government monthly, non-farm payrolls report. (nEAPA10EH0)

Also on Wednesday, surveys showed U.S. and euro zone factory activity struggled again in July while Chinese manufacturing fell to an eight-month low, as economies around the world showed signs of slowing.

"The manufacturing numbers are pretty dismal. There's really no good way to read them," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "I think they bolster the case for more Federal Reserve action, and globally, the argument is pretty much the same."

The malaise was worst in the 17-country euro zone, where output plummeted and the manufacturing sector contracted for an 11th straight month in July as a downturn that began in smaller countries continued to spread into core economies.

The euro EUR= slipped 0.1 percent to $1.2297.

Bundesbank President Jens Weidmann said in an interview published on the bank's website that governments overestimated the central bank's capacities and placed too many demands on it. He did not spell out whether he was referring to the Bundesbank or the ECB, though he was talking about the euro zone.

"On the ECB, the uncertainty is very high," said Jens Nordvig, global head of FX strategy at Nomura Securities in New York. "Some additional commitment to support sovereign bond markets is highly likely, but how firm and how conditional this commitment will be is far from clear."

In government debt trading, the benchmark 10-year U.S. Treasury note was down 11/32 in price, with the yield at 1.5052 percent US10YT=RR

NYMEX- NEW YORK, Aug 1 (Reuters) - U.S. crude futures rose Wednesday after the government reported a surprisingly large drop in crude oil inventories, but pared gains late in the session after a Federal Reserve policy statement offered no new monetary stimulus.

U.S. crude stocks fell 6.52 million barrels last week, the Energy Information Administration said in a weekly report, a much bigger drop than expected.

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell for a second day on profit-taking and forecasts for much-needed rain in the U.S. Midwest next week, traders said, although the market pared losses toward the closing bell.

* The thinly traded August soybean SQ2 and soymeal SMQ2 contracts, which are in delivery, posted the biggest declines on profit-taking, spread liquidation and weakening cash markets.

• Rain is forecast for next week in western portions of the drought-stressed U.S. Midwest but midday updates indicated lighter quantities than originally expected, an agricultural meteorologist said. (nL2E8J14DR)

• CBOT reported no deliveries against August for soybeans or soymeal, while soyoil deliveries totaled 2,656 contracts.

• CIF soybean basis bids at the U.S. Gulf steadied after falling sharply over the past three days. Demand from domestic processors and from exporters was minimal. (nL2E8J17QC)

• CBOT November soybeans SX2 rallied late to close above the 10-day moving average near $16.22, after trading below it for most of the open-outcry session. The nine-day relative strength index for the contract ended at 60, in technically neutral territory.

FCPO- SINGAPORE, Aug 1 (Reuters) - Malaysian crude palm oil ended lower on Wednesday, as market caution and expectations of higher stocks in No.2 producer Malaysia trumped lingering weather fears in the U.S. Midwest.

The U.S. soy-growing region received little relief from the persistent dryness, with the damage being reflected by the U.S. Department of Agriculture's downgrade of the soybean crop condition by 2 percentage points from the previous week. (nL2E8IU493)

But cautious sentiment dominated ahead of the European Central Bank's Thursday meeting and as markets waited to see if there is any fresh monetary stimulus from the U.S. Federal Reserve at the end of its two-day meeting later on Wednesday. MKTS/GLOB

Palm oil traders were also looking for further clues to Malaysia's July stock levels after exports showed some signs of slowing.

"A few months back, stocks were above 2 million tonnes and last month stocks were surprisingly a little weak, so this month stock levels should pull up a little bit," said a trader with a foreign commodities brokerage in Kuala Lumpur.

The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 1.2 percent to close at 2,945 ringgit ($946) per tonne.

Traded volumes picked up to 27,269 lots of 25 tonnes each, compared to the usual 25,000 lots after a quiet morning trading session.

Malaysian palm oil exports fell from a month ago as festival demand eased. Cargo surveyor Intertek Testing Services reported a decline of 15 percent and another cargo surveyor, Societe Generale de Surveillance, reported a steeper drop of 19 percent. PALM/ITS PALM/SGS

Slower exports could ease pressure on tightening stocks in Malaysia, which fell to a 14-month low in June.

Traders are also looking out for the possibility of El Nino returning to Southeast Asia as the adverse weather condition could hurt production for top producers Malaysia and Indonesia. (nL4E8J10RX)

Major vegetable oil importer India has set a new base import price on refined palmolein at $1,053 per tonne, the government said in a statement on Wednesday, making imports of the refined palm oil costlier in a bid to protect domestic refiners from cheap Indonesian exports. (nL4E8J12BF)

In related news, global commodities trading giant Cargill Inc said on Tuesday a group of employees at its vegetable oils trading desk in Singapore had left the company but daily business operations remained unaffected. (nL2E8IVD2R)

REGIONAL EQUITY- BANGKOK, Aug 1 (Reuters) - Most Southeast Asian stock markets were nearly flat to lower on Wednesday as investors cashed in on recent gains in the region, cautious ahead of U.S. Federal Reserve's policy decision and the European Central Bank's meeting.

Jakarta's Composite Index .JKSE fell 0.3 percent, with Bank Rakyat BBRI.JK down 0.7 percent after Tuesday's 2.9 percent gain. The Philippine index .PSI was down 0.2 percent, reversing a 1.9 percent gain over the past two sessions.

Bucking the trend, Singapore's Straits Times Index .FTSTI finished up 0.5 percent at 3,051.08, the highest close in nearly a year, building on a 5.5 percent climb in July, the region's best performer.

RTRS- Soy price to stay high despite U.S. rain-Oil World

HAMBURG, July 31 (Reuters) - Soybean prices are likely to stay high in coming months even if rain relieves drought-stricken U.S. crops as U.S. suppliers keep soy sales slow, Hamburg-based oilseeds analysts Oil World said on Tuesday.

Global soybean buyers have little choice but continue to purchase U.S. soybeans following poor crops in Brazil and Argentina this year, Oil World said.

"A cautious management of U.S. soybean disposals will still be required in the next five to six months, even if the last-minute rainfall prevents the worst for the U.S. crop,” Oil World said. “This will limit the downward (price) potential for soybeans, at least until there is some certainty that South America will indeed produce record crops in early 2013.”

Rain last week may have helped crops suffering from the worst drought in 56 years in the U.S. Midwest. (nL2E8IRCR4) GRA/ It is now hoped the record soybean prices reached in July will encourage South American farmers to plant more soy for their 2013 harvests, so relieving tight global supplies.

Soybean prices are likely to remain volatile in the near to medium term despite support from scarce supplies because of profit-taking and weakness provided by demand destruction, Oil World said.

“By the end of February 2013, U.S. soybean stocks will be reduced to a level at which domestic demand for soybeans and products will be difficult to satisfy in March/August 2013,” Oil World said.

“This already sparked a debate on whether the U.S. will need to import soybeans from Brazil next year to bridge the looming supply gap.

“But for the time being, this represents only a theoretical option and the market will probably try to enforce the necessary worldwide demand rationing via prices in the first half of next season in order not to run out of supplies.”

RTRS- US soy yields risk further fall if no rain -FCStone

MELBOURNE, July 31 (Reuters) - U.S. soybean yields may fall to as low as 34-35 bushels per acre if no rains fall on the drought-stricken crop in the next two weeks, an official at New-York based trading firm INTL FCStone said on Tuesday.

U.S. soybean yields were currently forecast at between 37-38 bushels per acre, Peter Nessler Jr., executive vice president commodities, told Reuters at a grains conference in Melbourne.

"If we don't get much rain between July and August, yields could fall as low 34-35 bushels per acre," he said.

New crop U.S. corn yields were probably around 132-138 bushels per acre, he added.

"Though there are some people who think we could go as low as 125, which would be fairly catastrophic," Nessler said.

The U.S. Department of Agriculture lowered its corn yield estimate to 146 bushels per acre in June, while forecasting soybean yields at 40.5 bushels per acre.

The U.S. drought has fired up grains markets over the past six weeks, lifting corn and soybean prices to record highs earlier this month.

Corn and soybean conditions in the U.S. Midwest deteriorated further last week as the most expansive drought in more than 50 years ate away at crop yields in major producing states including Iowa and Illinois, the U.S. Department of Agriculture said in a report after the market closed on Monday.

Nessler said that if dry weather in the U.S. Midwest persisted further, "$20 per bushel soybeans, are not out of the question."

The most actively traded November soy SX2 contract was trading at $16.40 a bushel in Asian trade on Tuesday.

RTRS- Lion's share of US crops to swelter into August

CHICAGO, July 31 (Reuters) - The midday weather model suggested a slightly wetter pattern for the U.S. Midwest where corn and soybean crops have withered under an extensive drought, but rainfall will be only scattered and light, agricultural meteorologists forecast Tuesday.

"There's going to be rain, but it's just not going to be heavy enough to dramatically improve the situation in very many areas. There's no general soaking over the next two weeks," said Andy Karst of World Weather Inc.

The midday computer model pointed to wetter weather in parts of the eastern and central Corn Belt over the next 5 days, and more rain than earlier models had suggested in the 5- to 10-day period for portions of the northern Midwest, he said.

High temperatures in the triple-digits Fahrenheit were expected to persist in southwestern areas of the Midwest, but the rest of the region could be slightly cooler, he said.

More than half of the U.S. corn and soybean growing region will see little change from the heat and drought that have withered and degraded crops.

"We still see it as over half of the belt will be struggling with ongoing concerns over the next couple of weeks. The American model suggests there's relief in the forecast, but it's not very likely," said meteorologist Joel Widenor of Commodity Weather Group.

Corn and soybean conditions in the U.S. Midwest deteriorated further last week as the most expansive drought in more than 50 years ate away at crops in major producing states including Iowa and Illinois, government data released on Monday showed.

The U.S. Department of Agriculture rated 24 percent of the corn crop in good-to-excellent condition as of Sunday, and 29 percent of the soybean crop in good-to-excellent shape, both down 2 percentage points from the previous week.

The ratings for each were the worst since the comparable week in 1988, another year of severe drought in the nation's crop-growing mid-section.

A Reuters poll of 10 analysts had expected a 3-percentage-point drop in the corn rating and a 2-point drop in soybeans.

Analysts and crop experts also said further declines in condition ratings could be expected next week because weather is still stressful to each crop.

Commodity Weather Group on Tuesday said the driest areas in the Midwest for the next two weeks would include top corn and soy producing states Illinois and southern Iowa. Major crop producing states Kansas, Missouri and eastern Nebraska also would remain under pressure from the relentless drought.

The southwestern part of the Midwest will continue to be affected not only by dryness but by extreme heat, with highs of 100 F, CWG stated in a note to clients. Additionally, nearly two-thirds of the Delta would see expanding drought, causing losses to soybean, cotton and rice production.

RTRS- US corn crop shrinks further; bottom may be near

CHICAGO, July 31 (Reuters) - The U.S. corn crop has shrunk another 2.5 percent over the past week, but the modest decline suggests damage from the worst drought in half a century may be nearing an end, a Reuters poll of analysts showed on Tuesday.

The soybean crop is also getting smaller, and hot, dry weather forecast for the Midwest farm belt for the next two weeks could do more damage to the crop, according to the analysts.

The poll of 13 analysts found the U.S. corn crop will be the smallest in six years at 11.2 billion bushels, down 2.5 percent from a Reuters poll last week. Yield was pegged at 129 bushels per acre, the lowest in 14 years and down 1.5 percent from last week.

The analysts expect soybean yield per acre to be 38.1 bushels, down 1.2 percent from last week and the lowest figure in nine years. They see soy production at 2.834 billion bushels, down 2.2 percent from last week and a four-year low.

"It's going down, headed for the bottom. The worst-case scenario would be the '88 analog, which would put current corn yields at 118 (bushels per acre), but we don't think we're there yet," said Tim Emslie, director of research for Country Hedging.

"Corn pollination was a real problem and it's difficult to quantify yet how much didn't get pollinated and the degree of poor pollination," he said.

Expansion of the drought and relentless heat in the central and western Midwest is beginning to eat away at soybean production prospects as that crop moves into its critical pod-setting stage of development.

Crop conditions have been declining daily as 90 to 100 degree (Fahrenheit) temperatures in America's breadbasket bake crops that have received miniscule amounts of rain.

A U.S. government report on Monday showed the worst conditions for corn and soybeans since the disastrous drought of 1988.

In addition to dropping their yield forecasts due to the drought's impact, the analysts were beginning to measure the potential acreage that will not be harvested as farmers abandon crops that are not worth garnering.

"At this point, the condition ratings don't mean all that much. The real debate now is how much will be harvested. The number of abandoned acres is the big question," said Chris Manns, analyst for Traders Group Inc.

USDA in its July crop report estimated corn acreage for harvest at 88.9 million, but analysts are slashing their forecasts. Sid Love of Kropf-Love Consulting sees harvested acreage at only 86.9 million.

"The next big question is abandonment, just how bad is that going to be," said Sterling Smith, analyst for Citigroup.

Current weather forecasts indicate further crop losses for corn and soy growing in the central and western U.S. Midwest and in the Delta, or roughly two-thirds of the U.S. crop belt.

Corn prospects have been plunging rapidly and soybeans are now likely to suffer big losses, the analysts said.

"The market remains somewhat optimistic that soybean yield potential in the Delta and eastern Corn Belt will compensate for yield losses in the west," said Ken Smithmier, analyst for The Hightower Report.

"However, the next two weeks will be the most critical period for the U.S. soybean crop, and the August forecast remains troublesome," he said.

RTRS- .S. corn and soy ratings slip 2 pts, worst since 1988

CHICAGO, July 30 (Reuters) - Corn and soybean conditions in the U.S. Midwest deteriorated further last week as the most expansive drought in more than 50 years ate away at crop prospects in major producing states including Iowa and Illinois, government data on Monday showed.

The U.S. Department of Agriculture rated 24 percent of the U.S. corn crop in good-to-excellent condition as of Sunday and 29 percent of the soybean crop in good-to-excellent shape, both down 2 percentage points from the previous week.

The ratings for each were the worst since the comparable week in 1988, another year of severe drought in the nation's crop-growing mid-section.

Crops improved marginally in Ohio and Indiana where condition ratings were already among the poorest in the country and in smaller-producing states such as Wisconsin and Michigan, but those improvements were overshadowed by eroding ratings in the top producing states in the central and western Midwest.

Concerns that the most expansive U.S. drought since 1956 was intensifying in areas that had not been as severely impacted earlier in the season propelled U.S. corn and soybean prices to all-time highs this month.

Much of the U.S. corn crop was largely beyond repair, but soybeans were moving into their critical flowering and pod-setting phase of development when heat and moisture stress can be devastating to yields.

In Iowa, Illinois, Nebraska and Minnesota, the top 4 corn and soybean producing states, corn crop ratings fell by 2 to 5 points and soybean ratings dropped 3 to 4 points.

A Reuters poll of 10 analysts had expected a 3 percentage point drop in the corn rating and a 2 point drop in soybeans.

The U.S. corn crop was rated 41 percentage points below the five-year average and 5 points above the 19 percent good-to-excellent rating in the comparable week during the drought of 1988.

The soybean rating was 34 points below the five-year average and 10 points above the same week in 1988.

Analysts and crop experts also said further declines in condition ratings could be expected next week as weather remained stressful to each crop.

Dry and hot weather in the U.S. Midwest for the next week or two will further erode crop conditions, trimming this year's corn and soybean production, an agricultural meteorologist forecast on Monday.

"It looks like a continued trend of below-average precipitation in the Midwest for the next week to 10 days," said John Dee, meteorologist for Global Weather Monitoring.

Temperatures this week will warm into the upper 80s to low 90s degrees Fahrenheit (30-35 degrees Celsius), with only a few light showers in the east on Monday and some rainfall later in the week, he said.

"There are no widespread soaking rains in sight. Thursday and Friday there could be scattered showers, and by the weekend from 0.30 to 0.80 inch (0.8-2 cm) with coverage of about 75 to 80 percent," Dee said.

"There won't be as much stress as recently, but crops will continue to deteriorate," Dee said.

Analysts have rapidly been lowering their outlooks for this year's corn and soybean crops, boosting the price of each to record highs.

Trader's Highlight

DJI- NEW YORK, July 31 (Reuters) - U.S. stocks fell on Tuesday with traders' sights set again on Wednesday's Federal Reserve statement on the economy and a possible new round of stimulus.

The Nasdaq Composite, which underperformed on Monday, was the smallest decliner among the three major U.S. stock indexes in Tuesday's session, thanks in part to Apple AAPL.O shares' gain of 2.6 percent after a source said a new product will makes its debut at an event in September. (Full Story) Apple closed at $610.76.

Volume was below average as Wall Street wrapped up its second consecutive positive month, with most of the monthly gains accumulated last week on hopes for more action from both the Fed and the European Central Bank. The ECB will meet on Thursday.

"Markets seem to be moving on talk, but I don't think that's going to be enough in the next few days," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto. "I think the market risks being disappointed in terms of substance."

For the month of July, the Dow rose 1 percent, while the S&P 500 climbed 1.3 percent and the Nasdaq added 0.2 percent. After seven months, the S&P 500 has gained nearly 10 percent for the year, despite a slowing world economy.

In Tuesday's session, the Dow Jones industrial average .DJI fell 64.33 points, or 0.49 percent, to 13,008.68 at the close. The S&P 500 Index .SPX dropped 5.98 points, or 0.43 percent, to 1,379.32. The Nasdaq Composite .IXIC lost 6.32 points, or 0.21 percent, to 2,939.52.

About 6.5 billion shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, below the 2012 daily average of 6.74 billion through Monday's close.

Roughly seven issues fell for every five that rose on both the New York Stock Exchange and the Nasdaq.

Facebook FB.O shares slid 6.2 percent to $21.71, their third consecutive record closing low, after a lackluster quarterly report last week showed decelerating user growth.

According to Thomson Reuters data through Tuesday morning, of the 321 companies in the S&P 500 that have reported second-quarter earnings to date, 67.3 percent have reported earnings above analysts' expectations. Over the past four quarters, the average beat rate is 68 percent.

U.S. home prices rose for the fourth month in a row in May, suggesting the housing market's recovery kept gaining traction, even as the broader economy is still struggling. Other data showed consumer confidence unexpectedly rose in July but spending fell in June for the first time in nearly a year as Americans saved more.

NYMEX- NEW YORK, July 31 (Reuters) - U.S. crude oil futures fell for a second straight session Tuesday as investor hopes were fading that potential stimulus measures from the U.S. and Europe would be enough to lift economic growth.

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade ended mixed after a choppy session, with the front four contracts down on profit-taking at the end of the month, traders said.

* Front-month soymeal SMc1 set an all-time high at $554.20 per ton before paring gains.

• For the month, CBOT soybeans Sc1 unofficially rose 13.7 percent. Soymeal SMc1 rose 25 percent -- its biggest monthly gain in four years -- while soyoil trailed, gaining 0.7 percent.

• Soybeans were underpinned by worries about declining U.S. crop prospects. USDA on Monday said 29 percent of the U.S. soybean crop was rated good/excellent, down two points from the previous week and the lowest rating in 24 years. (nL2E8IU493)

• A Reuters poll of 13 analysts pegged the U.S. 2012 soybean yield at 38.1 bushels per acre, down 1.2 percent from last week and the lowest figure in nine years. They poll projected soybean production at 2.834 billion bushels, down 2.2 percent from last week and a four-year low. (nL2E8IVA2J)

• Updated midday weather models suggested a slightly wetter pattern for the U.S. Midwest where crops have withered under an extensive drought, but rainfall will be only scattered and light - agricultural meteorologists. (nL2E8IV33Q)

• An official with trading firm INTL FCStone said U.S. soybean yields may fall to as low as 34-35 bushels per acre without rain in the next two weeks, below the firm's current forecast of 37-38 bushels per acre. (nL4E8IV2ED)

• Soybean prices are likely to stay high in coming months even if rain relieves drought-stricken U.S. crops as U.S. suppliers limit sales to manage supplies - analysts Oil World. (nL6E8IU7LI)

• India, facing drought, took steps to cut irrigation costs and increase fodder supplies for livestock farmers but held off from imposing any curb on exports of agricultural products or a ban of futures trading in them. India is the world's No. 4 soymeal exporter, after Argentina, Brazil and the United States.

• CBOT reported no deliveries of soybeans or soymeal on first notice day for August futures contracts, as traders expected. Soyoil deliveries totaled 3,052 contracts, above trade expectations for 1,000 to 2,000 lots.

FCPO- SINGAPORE, July 31 (Reuters) - Malaysian crude palm oil edged lower on Tuesday, posting its third successive monthly loss, as weak July exports offset a downgrade of soy crop conditions by the U.S. Department of Agriculture that fed fears of tighter global oilseed supplies.

The USDA rated 29 percent of the soybean crop as good-to-excellent on Monday, down 2 percentage points from the previous week, reflecting damage from persistent drought in the U.S. Midwest. (nL2E8IU493)

But palm oil futures retreated from a one-week high hit the previous day as traders priced in a monthly decline in Malaysian palm oil exports that could ease stocks.

"Exports are worse than expected," said a dealer with a foreign commodities brokerage in Kuala Lumpur. "Hopefully crude palm oil exports will pick up after the release of the tax-free quota or else stocks might climb back up to the 2-million-tonne mark."

Benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 0.8 percent to close at 2,980 ringgit ($953) per tonne. Prices touched 3,007 ringgit on Monday, the highest level since July 23.

Crude palm oil futures lost 1.3 percent in July, marking their third monthly loss in a row.

Traded volumes stood at 34,609 lots of 25 tonnes each, higher than the usual 25,000 lots.

On the technicals front, palm oil will retrace to 2,930 ringgit as it has completed a rebound from 2,880 ringgit, Reuters market analyst Wang Tao said. (nL4E8IV1FE)

Cargo surveyor Intertek Testing Services reported July export numbers at 1.23 million tonnes, down 15 percent from 1.45 million in June. Another cargo surveyor, Societe Generale de Surveillance, reported a 19 percent decline for the same period. PALM/ITS PALM/SGS

Reuters reported on Monday that Malaysia would increase shipping quotas for tax free crude palm oil by up to 2 million tonnes this year to help planters cope with higher output in the next few months as the world's No.2 supplier struggles to maintain its export momentum. (nL4E8IU1CT)

In response, industry body the Palm Oil Refiners Association of Malaysia (PORAM) said late on Monday that Malaysian palm oil refining capacity use will fall to less than 60 percent if the government continues with the plans, and the move will jeopardise the refining industry's competitiveness.

REGIONAL EQUITY- BANGKOK, July 31 (Reuters) - Singapore stocks hit their highest in almost a year on Tuesday, posting the best monthly gain since January while Indonesian shares climbed to a nearly three-month high, racking up the biggest monthly gain in nine months amid foreign buying.

Singapore's benchmark Straits Times Index .FTSTI edged up 0.12 percent to 3,036.40, the highest close since August 4. For the month, the index was up 5.5 percent, Southeast Asia's best performer.

Jakarta's Composite Index .JKSE ended up 1.05 percent at 4,142.34, the highest close since May 9. It gained 4.7 percent in July, the second best. This compares with 2 percent, 2.3 percent and 1.2 percent monthly gain for Malaysia, Thailand and the Philippines, respectively.

Indonesia showed a net foreign purchase of $355 million so far in the month to July 30, after two consecutive months of net foreign selling for a combined $1 billion, according to Thomson Reuters data.

The Philippines recorded $551 million worth of net foreign purchase in the month to July 30, including a number of block trades while Thailand posted $38 million worth of net foreign selling for the same period, adding to $650 million of net foreign selling of the past two months, data showed.

RTRS- U.S. corn and soy ratings slip 2 pts, worst since 1988

CHICAGO, July 30 (Reuters) - Corn and soybean conditions in the U.S. Midwest deteriorated further last week as the most expansive drought in more than 50 years ate away at crop prospects in major producing states including Iowa and Illinois, government data on Monday showed.

The U.S. Department of Agriculture rated 24 percent of the U.S. corn crop in good-to-excellent condition as of Sunday and 29 percent of the soybean crop in good-to-excellent shape, both down 2 percentage points from the previous week.

The ratings for each were the worst since the comparable week in 1988, another year of severe drought in the nation's crop-growing mid-section.

Crops improved marginally in Ohio and Indiana where condition ratings were already among the poorest in the country and in smaller-producing states such as Wisconsin and Michigan, but those improvements were overshadowed by eroding ratings in the top producing states in the central and western Midwest.

Concerns that the most expansive U.S. drought since 1956 was intensifying in areas that had not been as severely impacted earlier in the season propelled U.S. corn and soybean prices to all-time highs this month.

Much of the U.S. corn crop was largely beyond repair, but soybeans were moving into their critical flowering and pod-setting phase of development when heat and moisture stress can be devastating to yields.

In Iowa, Illinois, Nebraska and Minnesota, the top 4 corn and soybean producing states, corn crop ratings fell by 2 to 5 points and soybean ratings dropped 3 to 4 points.

A Reuters poll of 10 analysts had expected a 3 percentage point drop in the corn rating and a 2 point drop in soybeans.

The U.S. corn crop was rated 41 percentage points below the five-year average and 5 points above the 19 percent good-to-excellent rating in the comparable week during the drought of 1988.

The soybean rating was 34 points below the five-year average and 10 points above the same week in 1988.

Analysts and crop experts also said further declines in condition ratings could be expected next week as weather remained stressful to each crop.

Dry and hot weather in the U.S. Midwest for the next week or two will further erode crop conditions, trimming this year's corn and soybean production, an agricultural meteorologist forecast on Monday.

"It looks like a continued trend of below-average precipitation in the Midwest for the next week to 10 days," said John Dee, meteorologist for Global Weather Monitoring.

Temperatures this week will warm into the upper 80s to low 90s degrees Fahrenheit (30-35 degrees Celsius), with only a few light showers in the east on Monday and some rainfall later in the week, he said.

"There are no widespread soaking rains in sight. Thursday and Friday there could be scattered showers, and by the weekend from 0.30 to 0.80 inch (0.8-2 cm) with coverage of about 75 to 80 percent," Dee said.

"There won't be as much stress as recently, but crops will continue to deteriorate," Dee said.

Analysts have rapidly been lowering their outlooks for this year's corn and soybean crops, boosting the price of each to record highs.

RTRS- Brazil forward soy sales climb, physical biz stalls-Celeres

SAO PAULO, July 30 (Reuters) - Strong Brazilian soybeans prices were driving aggressive forward sales of next crop, but volatile markets have paralyzed sales in physical, old-crop beans, local grains analysts Celeres said on Monday.

Brazilian soybean producers are selling the 2012/13 crop earlier than ever before with 41 percent of next season's output already sold, two months before planting starts. That is up from the 39 percent last week. Celeres said 10 percent of the then-new crop was sold by the week of July 27, 2011.

Record high soybean prices due to drought in the United States, the world's largest producer, and the weak real against the dollar have induced local growers to lock in forward sales of the current and future crops at record volumes, Celeres said.

The current crop that ended harvest in May is well advanced historically in sales. Producers sold 97 percent of the 65 million tonnes crop by last week, up from 79 percent last year at this time, but unchanged from the week before.

Celeres said the sharp decline in futures prices over the past week, after rains returned to parts of the U.S. grain belt, chilled the sale by local producers of their few remaining old crop beans.

Conditions appear almost perfect for the soy belt to reclaim territory lost to corn and cotton in past years, while extending its reach into untapped pasture land. (nL1E8GVIL2)

Celeres said that returns on corn versus soybeans in important grain states were not as attractive as in 2011 and the early part of this year, which would induce farmers to sow as much soy as possible this planting season starting in September.

The analysts estimate potential returns from a bag of soy were almost three times those of corn for the coming crop. The bumper winter corn harvest would keep local prices contained for the coming weeks and favor planting of soy during the main summer crop season.

Brazil is the world's second-biggest soybean producer after the United States.

RTRS- Midday US weather updates drier than before

CHICAGO, July 30 (Reuters) - Midday weather updates indicated even drier weather than earlier forecasts in the U.S. Midwest for the next week or two which will increase stress on corn and soybean crops that already have been slashed due to the worst drought in over 50 years, an agricultural meteorologist said on Monday.

"It doesn't look good for crops at all, now it's a matter of just how bad it's going to get," said Andy Karst, meteorologist for World Weather Inc.

Karst said the updated forecast showed less rain late this week and early next week for South Dakota and southwest Minnesota than earlier expected.

And, "for next week there is less rain for Nebraska and northwest Iowa. The midday's showed some showers for the eastern Corn Belt on Aug. 7-8, but that is pretty suspect," he said.

"It looks like a continued trend of below-average precipitation in the Midwest for the next week to 10 days," said John Dee, meteorologist for Global Weather Monitoring.

Temperatures this week will warm into the upper 80s to low 90s degrees Fahrenheit, with only a few light showers in the east on Monday and some rainfall later in the week, he said.

"There are no widespread soaking rains in sight. Thursday and Friday there could be scattered showers, and by the weekend from 0.30 to 0.80 inch with coverage of about 75 to 80 percent," Dee said. "There won't be as much stress as recently, but crops will continue to deteriorate."

Recent rains brought some relief from drought in the northern and eastern Midwest, but overall crops will continue to suffer, especially in the central and southern Corn Belt.

A lessened U.S. harvest was raising worries about the ability of the world's largest food exporter to meet the needs of food processors, livestock producers and ethanol makers. The lack of rain was also drying up waterways and slowing river shipments of commodities to export ports on the Gulf of Mexico.

Corn and soybean conditions have been on a rapid skid this summer, falling to their worst conditions since the last U.S. drought of 1988. Crop specialists expect the U.S. Department of Agriculture to report another drop in conditions in its weekly crop report released later on Monday.

Commodity Weather Group (CWG) on Monday said recent rains had scaled down the driest areas to about 40 percent of the Midwest soybeans for much of this week.

But "the return of drier conditions to the central and southwestern belt will allow concerns to quickly return to at least half of the belt," CWG said.

Chicago Board of Trade (CBOT) corn futures were up more than 20 cents per bushel, or nearly 3 percent, and soybeans up 35 cents, or 2 percent, on Monday as investors bought on fears of a crop shortfall in the U.S. this year.