Trader's Highlight

DJI- NEW YORK, Sept 12 (Reuters) - Stocks rose and the euro climbed to a four-month peak against the dollar on Wednesday after Germany's Constitutional Court approved the euro zone's new rescue fund, easing concerns about the region's debt crisis and leaving markets focused on prospective further easing by the U.S. Federal Reserve.

The German court approval also boosted global stocks and cut borrowing costs for Spain and Italy.

"Today's positive ruling from the court solidifies the view that European officials are getting control over the sovereign debt crisis," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.

The euro EUR= climbed as high as $1.2936, its highest since mid-May. The common currency has risen more than 7 percent since it hit a two-year low of around $1.2040 in July, boosted after the European Central Bank's pledge to do whatever it takes to preserve the euro.

More gains are expected if the U.S. central bank implements further monetary easing o n T hursday, since more accommodative U.S. monetary conditions should weaken the dollar against other currencies, including the euro.

U.S. stocks have rallied on expectations the Fed will ease again. In a two-day meeting that concludes on Thursday, the Federal Open Market Committee must decide whether to launch a third round of bond purchases to lower borrowing costs and breathe more life into an economy that is not growing quickly enough to reduce unemployment. (Full Story)

"(It all hinges on) which way the Fed chooses to go," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC.

The Dow Jones industrial average .DJI gained 9.99 points, or 0.07 percent, to 13,333.35. The Standard & Poor's 500 Index .SPX was up 3.00 points, or 0.21 percent, at 1,436.56. The Nasdaq Composite Index .IXIC was up 9.79 points, or 0.32 percent, at 3,114.31.

The S&P 500 index has advanced more than 9 percent since the start of June on hopes for global central bank stimulus.

Another phase of asset purchases by the Fed would likely focus on mortgage-backed securities, strategists said.

With so much expectation built up, action by the Fed that is too cautious would be an unwelcome surprise, they said.

"If the Fed declines to move forward with another round of quantitative easing, support for risk assets may weaken," said Zach Pandl, Columbia Management senior interest rate strategist.

On Wall Street, shares of Facebook Inc FB.O jumped 7.2 percent to $20.83 after Chief Executive Mark Zuckerberg hinted at new growth areas in his first major public appearance since the No. 1 social network's rocky IPO in May. (Full Story)

Brent crude oil prices rose 30 cents to $115.70 a barrel on the German judicial decision, expectations for Fed easing and rising geopolitical risk after militants killed the U.S. ambassador to Libya. O/R

But U.S. October crude CLc1 slipped 16 cents to settle at $97.01 a barrel, after reaching $98.06. It dropped as low as $96.31, below the $96.62 200-day moving average, a technical level closely watched by traders.

"More monetary liquidity plus geopolitical risk equals higher oil prices despite fundamentals like weaker manufacturing and demand," said Kimberly DuBord, director of research at Briefing Research in Chicago.

European stocks touched a 14-month high and the MSCI global share index .MIWD00000PUS, up 6.5 percent since the end of July, hit a five-month high of 332.42 before dipping back to be up 0.4 percent at 331.72 as profit-taking set in.

The German court's ruling damped demand for safe-haven assets like U.S. Treasuries and German bunds, leading to more tepid demand for the U.S. Treasury's $21 billion auction of 10-year notes.

NYMEX- NEW YORK, Sept 12 (Reuters) - U.S. oil slipped in choppy trading on Wednesday as data showing an unexpected rebound in U.S. crude inventories pulled prices back after they received a lift from a German court ruling affirming the legality of the euro zone bailout fund.

U.S. crude oil inventories rose 1.99 million barrels to 359.09 million barrels, the U.S. Energy Information Administration said on Wednesday, against expectations stockpiles would fall 2.6 million barrels.

CBOT SOYBEAN- Sept 12 (Reuters) - Soybean futures on the Chicago Board of Trade climbed 2.6 percent on Wednesday, the biggest rise in three weeks, after the U.S. Department of Agriculture cut its forecasts for U.S. 2012 soybean yield and production, traders said.

• Soybeans bolstered by traders exiting long corn/short soybean spreads.

• Market's rise halted a five-day selloff tied to profit-taking from last week's all-time high and fears that the USDA might raise its soy yield estimate, as a few private forecasts had suggested.

• Technical buying accelerated after benchmark November soybeans SX2 climbed back above the 20-day moving average, a day after closing below that line for the first time in a month.

• The USDA lowered its forecast of U.S. 2012 soybean production to 2.634 billion bushels, from 2.692 billion in August. The USDA cut its soybean yield forecast to 35.3 bushels per acre, from 36.1 last month.

• The USDA cut its estimate of U.S. 2011/12 soybean ending stocks to 130 million bushels, from 145 million in August, reflecting an increased U.S. soybean crush.

• The USDA is scheduled to report at the end of this month on Sept. 1 quarterly soy stocks, and that figure will stand as the final 2011/12 soybean ending stocks figure.

• The USDA left its forecast of 2012/13 soybean ending stocks unchanged at 115 million bushels.

FCPO-KUALA LUMPUR, Sept 12 (Reuters) - Malaysia crude palm oil futures edged up on Wednesday after Germany's top court backed a euro zone bailout fund, raising hopes that the debt crisis will not spread further and hurt global economic growth.

German's top court had earlier ruled in favour of a 700 billion euro bailout fund, lifting global stocks and shoring up Brent crude oil prices.

"I think what happened just now on the German court ruling is something that is quite encouraging for the commodity market although it comes with conditions," said Phillip Futures analyst Ker Chung Yang.

"The approval of the European Stability Mechanism (ESM) is something we have been waiting for. It is a breakthrough for the crisis," he added.

The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to close at 2,930 ringgit ($950) per tonne. Earlier in the day, the market dropped on concerns of higher production fuelling a stock build up.

Total traded volume stood at 46,120 lots of 25 tonnes each, nearly double the usual 25,000 lots as traders piled back into the market to take positions.

Reuters technicals market analyst Wang Tao said palm oil is likely to drop to 2,869 ringgit per tonne, driven by a downward wave. A rebound from the current level will be limited to 2,947 ringgit.

Industry analyst James Fry told an industry seminar earlier in the day that palm oil prices could fall to 2,450 ringgit per tonne in the first quarter of 2013 if Brent crude dropped to $80 a barrel.

Palm oil stocks in August surged to a 10-month high of 2.1 million tonnes, exceeding market expectations, the Malaysian Palm Oil Board (MPOB) said earlier in the week.

While production is expected to be stronger, cargo surveyors have pointed to stronger demand this month. For the first ten days of September, Malaysian palm oil exports jumped 30 percent as the country shipped out more crude to India thanks to a bigger tax free quota of the grade. PALM/SGS PALM/ITS

India's palm oil imports in the new marketing year will rise 7.9 percent to 7.5 million tonnes as the world's top edible oil buyer struggles to meet demand due to faltering local oilseed output, an industry official told Reuters.

Brent crude oil rose for a fifth straight session on Wednesday, lifted by the German court decision on the giant bailout and hopes the Federal Reserve will ease monetary policy this week.

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 rose 1 percent with some traders expecting the U.S. Department of Agriculture to slash soybean production estimates following a crop-damaging historic Midwest drought.

The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange fell 0.2 percent.

REGIONAL EQUITY- Sept 12 (Reuters) - Most Southeast Asian stock markets ended firmer on Wednesday with Thailand rising to a 16-year high as hopes of a global economic recovery due to a new eurozone bailout fund and a possible quantity easing programme by the U.S. Federal Reserve boosted appetite for the region's risky assets.

Thailand .SETI, the region's best performer this year with 22.9 percent gain, rose 0.9 percent to its highest close since July 1996. Banking shares led by a 6.3 percent rise in Bank of Ayudhya Pcl BAY.BK helped boost the overall index.

Just before the market closed, Germany's top court gave its backing to the euro zone's new 700-billion-euro European Stability Mechanism bailout fund, a key requirement for the European Central Bank's new plan to buy the bonds of struggling euro members.

Hopes of the Fed deciding on a third round of bond buying or quantitative easing (QE3) at its two-day meeting starting on Wednesday also boosted sentiment.

Indonesia .JKSE gained 0.5 percent to a four-month closing high, Singapore .FTSTI rose 0.4 percent to its highest close since Aug. 28, the Philippines .PSI added 0.4 percent, and Vietnam .VNI ended 0.5 percent firmer.

Malaysia .KLSE ended a tad weaker with a 0.03 percent fall as it suffered a foreign outflow of $45.60 million on Wednesday.

U.S. exports to keep soybean prices high - Oil World

HAMBURG, Sept 11 (Reuters) - Strong global demand for U.S. soybeans will keep soybean prices firm in the coming months despite the recent fall from early September's record highs, Hamburg-based oilseeds analysts Oil World said on Tuesday.

Global importers will have little choice but to compete for scarce U.S. supplies after poor crops in Brazil and Argentina in early 2012, it said.

“Soybean prices have only limited downward scope as long as U.S. exporters face outstanding demand, primarily from China,” Oil World said. “The bullishness may be dampened somewhat by rapid marketing of the U.S. crop as farmer selling is encouraged by huge premiums for nearby delivery.”

U.S. soybeans set a record high of $17.94-3/4 on Sept. 4 as the worst drought in half a century ravaged crops in the U.S. Midwest after drought also damaged crops in Brazil and Argentina this year. But prices fell from their peaks on hopes that rain last month had helped the U.S. soybean crop, with a key U.S. Department of Agriculture report on Wednesday keenly awaited for the latest indication of the harvest size.

Soymeal prices have also slipped back from record highs seen this summer.

“Prices seem to have met upward resistance as demand for soymeal is suffering from the eroded profitability in the livestock sector,” Oil World said.

There are increasing signs that livestock farmers are cutting production as the surge in soybean and corn prices this summer raises animal feed costs.

“Like soybeans, soymeal has only limited downward potential, at least until early 2013, given the unusually low global soymeal production shaping up in coming months,” Oil World said.

Brazil’s Sept./Dec. 2012 soybean exports are likely to fall to only 2.5 million tonnes from 7.4 million tonnes in the same period last year, Oil World said.

Export restrictions in some form cannot be ruled out in Brazil to conserve domestic supplies, it added.

The United States and Brazil are rivals for the position as the world’s largest soybean exporter.

Brazil has started to import soybeans from neighbouring Bolivia and Oil World estimates that 250,000 tonnes of Bolivian soybeans and 340,000 tonnes of Bolivian soymeal will be imported by Brazil between Aug. 2012 and Feb. 2013.

Trader's Highlight

DJI- NEW YORK, Sept 11 (Reuters) - The Dow industrials closed at the highest level in nearly five years on Tuesday in a lightly traded session before key decisions in Germany and the United States that could give markets a further boost.

Energy, industrial and financial firms led the advance. Contributing to gains by the Dow industrials, shares of International Business Machines Corp IBM.N rose 1.15 percent to $203.27. Heavy equipment manufacturer Caterpillar CAT.N added 1.72 percent to $88.60.

Equities have rallied in recent weeks on hopes for monetary stimulus by central banks. The Federal Reserve could announce Thursday additional steps to support low interest rates. On Wednesday, Germany's highest court will decide on the legality of the euro zone's new bailout fund.

The Nasdaq erased most of its gains in the afternoon as shares of Apple AAPL.O dropped in heavy volume. The stock slipped 0.32 percent to $660.59.

Economists forecast a 60 percent chance the U.S. central bank will announce another round of quantitative easing at the end of its two-day meeting. Disappointing U.S. August jobs data released last Friday bolstered that view. (Full Story)

"I do expect the Fed to (announce) an additional quantitative easing program. I don't think it's a good idea. I don't think it's warranted," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia.

Some investors have concerns that a lot of the good news has already been priced in, exposing markets to a decline should the Fed disappoint. They also argue that the Fed's actions have already distorted market prices.

"We're in a technically overbought situation, so those traders are going to take their profits going into the Fed meeting," Cox said. "The Nasdaq has run up so much over the last couple of days, any disappointment by the Fed could cause a reversal."

The Dow Jones industrial average .DJI ended up 69.07 points, or 0.52 percent, to 13,323.36. The Standard & Poor's 500 Index .SPX closed up 4.48 points, or 0.31 percent, to 1,433.56. The Nasdaq Composite Index .IXIC gained 0.50 point, or 0.02 percent, to 3,104.53.

Expectations Germany's Constitutional Court would approve the European Stability Mechanism -- the euro zone's new bailout fund -- also boosted sentiment. But legal experts believe it will impose tough conditions limiting Berlin's flexibility on future rescues, which could be seen as a negative by markets.(Full Story)

Another event which could cause turbulence in markets is a Dutch general election on Wednesday, with voters divided between bailouts for troubled euro zone economies and austerity measures. (Full Story)

Investors are keeping an eye on big-cap bellwether technology names because of their role in global business spending. Techs fell on Monday following Intel's INTC.O warning last week that reduced demand will hurt its third-quarter results. Shares were up 0.34 percent to $23.34 Tuesday.

Shares of Bank of America BAC.N rallied 5.24 percent to $9.03, leading bank stocks higher.

Knight Capital Group Inc KCG.N said it has hired IBM to look into the Aug. 1 trading glitch that cost the trading firm $440. (Full Story) The stock rose 1.12 percent.

Zynga Inc's ZNGA.O chief marketing officer resigned on Monday, becoming the latest senior executive to depart the struggling social games company behind popular Facebook Inc FB.O games such as Farmville. Zynga shares dropped 1.06 percent to $2.79. (Full Story)

On the New York Stock Exchange, two stocks rose for every one that fell. On the Nasdaq, three stocks rose for every one that fell.

Volume was light, with about 5.91 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion.

NYMEX- NEW YORK, Sept 11 (Reuters) - U.S. crude futures rose on Tuesday as expectations that the U.S. Federal Reserve will act to bolster the economy and that a German court will approve a euro zone rescue plan put pressure on the dollar and boosted crude futures.

 

FCPO SOYBEAN- Sept 11 (Reuters) - Soybean futures on the Chicago Board of Trade fell to a three-week low Tuesday, extending a five-day setback from last week's record highs as traders positioned for USDA's Sept. 12 supply/demand reports.

• Sell-stops triggered as the benchmark November soybean contract SX2 fell below its 20-day moving average for the first time since Aug. 15. The contract also dipped below psychological support at $17 for the first time since Aug. 21.

• Ahead of USDA's monthly report, the average analyst estimate pegged U.S. soybean production at 2.657 billion bushels, just below USDA's August forecast of 2.692 billion, but some analysts predicted an increase on ideas that August rains may have boosted soy yield prospects.

• Analysts expected USDA to lower its forecasts of U.S. 2011/12 and 2012/13 soybean ending stocks.

• USDA late Monday said 32 percent of the U.S. soybean crop was rated good to excellent, an improvement from 30 percent a week earlier. US/SOY

• Some traders noted anecdotal yield reports from the early U.S. soybean harvest that were not as bad as feared after this summer's historic drought.

• Strong export demand for U.S. soybeans will keep CBOT prices firm in the coming months, despite a setback from record highs hit this month, due to poor 2012 harvests in South America - analysts Oil World.

• CBOT has yet to report any deliveries of soybeans or soymeal against September futures, but soyoil deliveries for Tuesday totaled 534 contracts.

FCPO- SINGAPORE, Sept 11 (Reuters) - Malaysian crude palm oil futures slipped on Tuesday to their lowest in nearly a month, as traders turned cautious about high stocks and ahead of key reports by the U.S. Department of Agriculture (USDA) due this week.

The Malaysian Palm Oil Board (MPOB) reported August stocks at a 10-month high of 2.1 million tonnes, erasing some gains in palm oil futures that are trading 8 percent lower this year. (Full Story)

Traders also avoided taking risky positions ahead of the USDA's monthly supply-demand and crop production reports on Wednesday that could give insight into the extent of drought damage to soybean crops. GRA/

"Today's selloff is purely technical," said a trader with a foreign commodities brokerage in Malaysia. "Basically we saw long liquidation coming in early in the morning. After the market broke below 2,900 ringgit, further selling came in."

The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange slipped 0.6 percent to close at 2,919 ringgit ($945) per tonne. Prices had earlier fallen to 2,874 ringgit, the lowest level since Aug. 15.

Total traded volume stood at 52,583 lots of 25 tonnes each, more than double the usual 25,000 lots.

Technicals will remain neutral until palm oil falls out of the range of 2,895 to 2,943 ringgit, said Reuters market analyst Wang Tao, adding that a drop below 2,895 ringgit would extend to 2,867 ringgit. (Full Story)

Demand strengthened as Malaysia's palm oil exports rose as much as 30 percent for the Sept. 1-10 period from a month ago, cargo surveyor data showed on Monday. PALM/ITS PALM/SGS

"Though the latest data shows optimism on the export side on the back of higher tax-free crude palm oil quota, a growing concern is on the stockholding level, which has now spiralled to more than 2 million tonnes," Malaysia-based TA Securities said in a note to clients.

"This would adversely impact the price of crude palm oil moving forward. To aggravate further, Indonesia's stock level appears to be higher than consensus expectations."

In a bullish sign for palm oil, oil rose above $115 a barrel on Tuesday, lifted by expectations the U.S. Federal Reserve would unveil further steps to stimulate its economy this week. O/R

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 fell 0.2 percent by 1004 GMT. The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed 0.5 percent lower.

REGIONAL EQUITY- Sept 11 (Reuters) - Most Southeast Asian stock markets edged down for a second day on Tuesday with Malaysia falling to a more than two-month closing low as investors waited for cues from a U.S. Federal Reserve meeting and a German ruling on the euro zone's new bailout fund.

Malaysia .KLSE fell 0.4 percent to its lowest close since July 4, led by financials with large-cap CIMB Group Holdings Bhd CIMB.KL losing 1.6 percent.

"Investors are still waiting to see what is happening outside and they are not really keen to rush back to the market," said Song Seng Wun, an economist at CIMB, based in Singapore.

The Fed may decide on a third round of bond buying or quantitative easing (QE3) at its two-day meeting starting on Wednesday, while Europe faces another testing week as it seeks to pull itself out from its debt woes.

On Wednesday, Dutch voters will go to the polls and Germany's constitutional court is set to rule on new powers for the European Stability Mechanism, the euro zone's new bailout fund.

Thailand .SETI lost 0.2 percent, while Indonesia .JKSE and the Philippines .PSI eased 0.1 percent each. Vietnam .VNI , the region's smallest bourse, fell 0.6 percent to a two-week low.

Bucking the trend, Singapore .FTSTI gained 0.3 percent.

Trader's Highlight

DJI- NEW YORK, Sept 10 (Reuters) - U.S. stocks slipped on Monday while the euro dipped below four-month highs before potential new stimulus from the U.S. Federal Reserve and the European Central Bank.

Markets are awaiting the Fed's decision at the end of its two-day policy meeting on Thursday and, a day earlier, a German constitutional court ruling on whether Germany may contribute to the euro zone's rescue fund. The ruling is crucial to the ECB's plan to contain the borrowing costs of Spain and Italy.

"After some significant moves last week, Monday was more of a waiting game as the markets looked toward the news coming out of the Fed and the German constitutional court later this week," said Michael Cloherty, head of U.S. rates strategy at RBC Capital Markets.

The Dow Jones industrial average .DJI fell 52.35 points, or 0.39 percent, to 13,254.29. The Standard & Poor's 500 Index .SPX fell 8.84 points, or 0.61 percent, to 1,429.08. The Nasdaq Composite Index .IXIC slid 32.40 points, or 1.03 percent, to 3,104.02.

NYMEX- NEW YORK, Sept 10 (Reuters) - U.S. crude futures edged up on Monday in choppy trading as supportive expectations that the U.S. Federal Reserve will act to stimulate the economy countered pressure from weak Chinese data that raised concerns about demand for petroleum.

 

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell for a fourth straight session on technical selling and profit-taking after last week's all-time highs, and on positioning ahead of monthly

U.S. crop data due Sept. 12, traders said.

* Most-active November soybeans SX2 neared a two-week low, dipping to $17.16, but held above the 20-day moving average near $17.06.

• Soymeal and soyoil futures also fell, with soymeal losing ground to soyoil as traders unwound meal/oil spreads.

• Weak Chinese economic data adds pressure. China imported 4.42 million tonnes of soybeans in August, the lowest monthly level in 6 months, as record-high prices and reduced global supplies cut demand in the world's top soy importer.

• The European Union will impose a limit on the use of crop-based biofuels over fears they are less climate-friendly than initially thought and compete with food production, draft EU legislation seen by Reuters showed.

• Traders expected USDA to report the U.S. soybean harvest at 3 percent complete in its weekly crop progress report later on Monday. It would be the USDA's first national soybean harvest figure of the season.

• USDA reported export inspections of U.S. soybeans in the latest week at 12.933 million bushels, below a range of trade estimates for 13 million to 17 million.

• CBOT reported no deliveries of soybeans or soymeal against September futures, while soyoil deliveries totaled 624 contracts.

• Weekly supplemental data from the U.S. CFTC late Friday showed non-commercial traders expanded their net long position in CBOT soybeans in the week ended Sept. 4.

 

FCPO- SINGAPORE, Sept 10 (Reuters) - Malaysian crude palm oil futures edged up on Monday, buoyed by rising exports, although gains were limited by high stock levels that have risen above 2 million tonnes in the No.2 producer.

The Malaysian Palm Oil Board (MPOB) reported a 5.8 percent increase in August palm oil stocks from a month earlier, putting pressure on palm oil futures. (Full Story)

But a report from cargo surveyor Societe Generale de Surveillance (SGS) showing exports rose as much as 30 percent drove the bulls back into the market and helped palm oil prices close higher, after four straight sessions of losses.

"The SGS numbers were better," said a palm oil trader based in Singapore. "But MPOB dimmed the mood a bit so the market was not up as much as we expected."

The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange edged up 0.3 percent to close at 2,937 ringgit ($947) per tonne.

Total traded volume stood at 35,017 lots of 25 tonnes each, much higher than the usual 25,000 lots.

REGIONAL EQUITY- Sept 10 (Reuters) - Most Southeast Asian stock markets eased on Monday with Vietnam falling to a two-week low, as investors waited for direction from a U.S. Federal Reserve meeting and a German ruling on the euro zone's new bailout fund later this week.

Vietnam .VNI, the region's smallest bourse, fell 2.2 percent to its lowest close since Aug. 28 as investors dumped risky assets to switch to gold.

The Fed may decide on a third round of bond buying or quantitative easing (QE3) at its Sept. 12-13 meeting, while Europe faces another testing week, with Dutch voters going to the polls and Germany's constitutional court set to rule on new powers for the European Stability Mechanism, the euro zone's new bailout fund, both on Wednesday.

Trader's Highlight

DJI-NEW YORK, Sept 7 (Reuters) - U.S. stocks were little changed on Friday as investors weighed the chances that a weaker-than-expected jobs report would spur the Federal Reserve to launch another round of economic stimulus.

The report came a day after the S&P closed at its highest level since January 2008 - months before the collapse of Lehman Brothers - and the Nasdaq hit a 12-year high.

Nonfarm payrolls increased only 96,000 last month, the Labor Department said on Friday. While the unemployment rate dropped to 8.1 percent from 8.3 percent in July, it was largely due to Americans giving up the search for work.

The weak figures potentially set the stage for the Fed, which meets next week, to pump additional money into the sluggish economy. The job numbers also dealt a blow to President Barack Obama as he seeks re-election in November.

"The real question is what does the Fed do with this report?" said Steve Blitz, chief economist at ITG Investment Research, adding that the report may not be enough for the Fed to introduce more stimulus.

"As for the drop in the labor force and labor participation rate, it is troubling for the Fed, no question, but some part of that number relates to the retirement of the baby boomers," he said.

The Dow Jones industrial average .DJI was up 3.95 points, or 0.03 percent, to 13,295.95. The Standard & Poor's 500 Index .SPX was up 2.84 points, or 0.20 percent, to 1,434.96. The Nasdaq Composite Index .IXIC dropped 3.07 points, or 0.10 percent, to 3,132.74.

Shares of Pandora Media Inc P.N fell 18 percent to $10.34 following media reports that Apple Inc AAPL.O was in talks to license music for a radio service like the one Pandora operates.

The Wall Street Journal, citing people familiar with the matter, reported that Apple wants to license music for a custom-radio service that would work on its hardware, such as the iPhone, iPads and Mac computers, in a bid to expand its dominance in online music. Apple's iTunes is the largest music retailer.

Intel Corp INTC.O cut its third-quarter revenue estimate and withdrew its full-year forecast, saying demand for its chips declined as customers reduced inventory and businesses bought fewer personal computers. The revenue warning sent shares of the world's largest chipmaker down more than 3 percent to near $24.

NYMEX- NEW YORK, Sept 7 (Reuters) - U.S. crude futures rose on Friday in volatile trading after a disappointing U.S. August jobs report weakened the dollar and bolstered expectations for stimulus from the U.S. Federal Reserve, even while denting the outlook for petroleum demand.

CBOT- Soybean futures on the Chicago Board of Trade fell for a third day on Friday on profit-taking after the front contract Sc1 surged to an all-time high near $18 a bushel early in the week, traders said.

* Benchmark November soybeans SX2 ended the week down 1.1 percent, retreating after setting a life-of-contract high at $17.89 on Tuesday.

• Market pressure stemmed from some private forecasts, notably INTL FC Stone on Wednesday, that called for a larger U.S. soybean crop than USDA projected in August.

• However, the average U.S. 2012 soybean production estimate among 20 analysts surveyed by Reuters ahead of USDA's Sept. 12 report was 2.657 billion bushels, below USDA's August forecast of 2.692 billion.

• Informa Economics lowered its U.S. soy production forecast to 2.639 billion bushels, from 2.791 billion previously, and cut its projection for the U.S. soybean yield to 35.4 bushels per acre, from 37.2 previously.

• USDA reported export sales of U.S. soybeans in the latest week at 525,800 tonnes (old and new crop years combined), below trade expectations for 700,000 to 900,000 tonnes.

• USDA reported weekly export sales of U.S. soymeal at 111,600 tonnes and soyoil sales at 3,700 tonnes, both below trade expectations.

• Canadian stocks of canola fell to 788,000 tonnes by July 31, an eight-year low, and down from 2.2 million tonnes a year ago, Statistics Canada said.

• CBOT reported no deliveries against September futures of soybeans, soymeal or soyoil.

FCPO- SINGAPORE, Sept 7 (Reuters) - Malaysian crude palm oil futures fell on Friday, posting their worst weekly performance since late July, with traders made cautious by the prospect that data next week could show rising inventories in the Southeast Asian country.

Improving crop prospects in parts of the U.S. grain belt weighed on soybeans, which in turn hurt palm oil futures, down more than 3 percent this week, marking its second straight weekly loss. GRA/

"Lately palm oil has been rangebound and immediate support is at 2,900 ringgit," said a trader with a global commodity house in Singapore. "Now everyone's looking for demand, only that can confirm the next firm direction for palm."

The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange closed 0.7 percent lower at 2,927 ringgit ($941) per tonne, ending down for the fourth session in a row. The contract dropped to 2,913 ringgit on Thursday, its lowest level since Aug. 16.

Total traded volume stood at 44,575 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Technicals remained weak as Reuters analyst Wang Tao said that palm oil looked likely to drop to 2,867 ringgit per tonne based on a wave analysis.

Market players are focusing on a slew of data on Monday including the Malaysian Palm Oil Board's figures on August stocks, which could hit a 9-month peak as high production offsets demand growth.

Record southeast Asian palm oil stocks may weigh on prices, leading industry analyst Dorab Mistry said this week.

Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance also report Sept. 1-10 exports numbers on Monday after a strong showing in August. PALM/ITS PALM/SGS

Weather concerns have eased a little as a weak El Nino predicted by the U.S. government forecaster provided relief to Southeast Asian planters.

In a bullish signal for palm oil, crude rose on Friday ahead of a U.S. jobs report which could strengthen the case for more economic stimulus in the world's biggest oil consumer. O/R

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 fell 0.6 percent and the most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange had lost 0.5 percent by 1006 GMT.

REGIONAL EQUITY- BANGKOK, Sept 7 (Reuters) - Southeast Asian stock markets rose on Friday, taking their cues from strong overseas markets after the European Central Bank's latest bond-buying plan to help troubled countries in the region revived appetite for risk.

Jakarta's Composite Index .JKSE gained 1 percent to the highest close in almost two weeks. It posted a 2.1 percent gain for the week, its best in two months and the region's best performer for the week.

Malaysia's benchmark index .KLSE recovered from the day's lows to end up 0.4 percent but finished the week down 1.3 percent, its worst weekly performance in over 3 months.

RTRS- High stocks may rein in palm oil's soy-linked rally-Mistry

KUALA LUMPUR, Sept 6 (Reuters) - Record southeast Asian palm oil stocks could rein in benchmark Malaysian futures FCPOc3 that gained on the back of U.S. drought crimping soy production and boosting prices of competing soyoil, a leading industry analyst said.


Dorab Mistry, head of vegetable oil trading with Indian conglomerate Godrej Industries GODI.NS, pegged palm oil futures at 2,900-3,300 ringgit ($930-$1,059) per tonne in September and October. Current prices stand at around 3,000 ringgit.

A shorter-than-usual low cycle for palm oil output in No.2 supplier Malaysia and a record stock build in top producer Indonesia due to infrastructure bottlenecks have started to weigh on palm oil prices, the analyst said.

While this might suggest that higher supplies of palm oil could offset the shortfall in soyoil after drought hurt the U.S. soybean crop, demand could start to weaken as the northern hemisphere winter approaches, Mistry said.

Palm oil becomes unusable in colder temperatures as it crystallises.

"It is difficult to be bullish on palm oil prices. These prices are shining on the reflected glory of soyoil," Mistry told an industry conference in Singapore on Thursday.

"Analysts have been talking about the compelling bullish outlook for palm oil as a result of its discount to soyoil. But we are on the threshold of winter and there is only so much substitution that can be done," he added.

Malaysian refined palm olein, used in cooking oil, could widen its discount to crude Argentine soyoil to $300 on weather concerns before narrowing again, Mistry said. The discount now stands at about $250 a tonne.

IGNORED INDONESIAN STOCKS

Mistry predicted a supply glut was looming in Malaysia, which would cause palm oil prices, which have lost 6.7 percent so far this year, to decline further.

Mistry said the low cycle for yields only lasted for six months as oil palm trees needed a few months to "rest and recharge their batteries" after strong growth last year.

He expected output to hit a record 2 million tonnes each in September and October, leading to historically high stocks in Malaysia.

"I am told that Indonesian production is shaping very well from September onwards and we could have a late peak in November," Mistry said.

Mistry said current stocks of Indonesia are almost at 4 million tonnes, almost double Malaysian levels. This is due in part to "tardy logistics" in the country where it can take two months for fruits to be converted into exportable refined palm oil when the process should take, at most, half that amount of time.

"Normal stocks of palm products in Indonesia in the last two years have been in the order if 3.5 to 4 million tonnes as against the normal conventional guesstimate of 1.5 to 2million tonnes," he said.

"These hidden palm oil stocks in Indonesia are the key reason for the dismal performance of palm oil prices," he added. ($1 =3.1170 ringgit)

Trader's Highlight

DJI- NEW YORK, Sept 6 (Reuters) - U.S. stocks closed at multi-year highs on Thursday, with the S&P 500 ending at its highest level since before the collapse of Lehman Brothers as investors hailed a new European bond-buying program aimed at stemming the region's debt crisis.

Sentiment was also boosted by stronger-than-expected data on the U.S. services sector and labor market, which was especially notable ahead of Friday's non-farm August payrolls report.

The rally was broad, with more than three-fourths of stocks listed on both the New York Stock Exchange and Nasdaq ending higher. Materials, financials and industrials - groups tied to the pace of economic growth - led with gains of more than 2 percent, giving the Dow index its biggest daily gain in two months and helping the Nasdaq advance to its highest since 2000.

"As clouds related to Europe start to drift off, there's no question that there's still juice left from here," said Richard Weiss, a Mountain View, California-based senior money manager at American Century Investments, which has about $120 billion in assets under management. "That equities are up double digits year-to-date doesn't deter us from remaining overweight on them for the foreseeable future."

Tech shares helped lift the Nasdaq in its best daily performance since July 27. SanDisk Corp SNDK.O climbed 8.4 percent to $44.01 and Micron Technology Inc MU.O added 7.8 percent to $6.68. The Dow was lifted by Walt Disney Co DIS.N, which advanced 2.1 percent to an all-time closing high of $51.86.

ECB President Mario Draghi, backing up his July pledge to do whatever it takes to preserve the euro, said the central bank's plan for potentially unlimited bond-buying would address bond market distortions and "unfounded" fears of investors about the survival of the euro.

"We think this is a credible plan to addressing the issue, and while there are still political hurdles, we expect those will be addressed," said Alec Young, global equity strategist at S&P Equity Research in New York.

U.S. companies added staff in August at the fastest clip in five months, according to the better-than-expected ADP report, while a gauge of employment in the service sector also improved more than had been anticipated. New weekly claims for jobless benefits fell to the lowest level in a month.

Even with Thursday's encouraging numbers, economists think the payroll report will show only modest hiring, at 125,000 new jobs, and the unemployment rate holding steady at 8.3 percent.

"ADP doesn't correlate perfectly with payrolls, but people are feeling better about the jobs market these days," Young said. "There was confidence we would see jobs in the mid-100's even before this."

The Dow Jones industrial average .DJI rose 244.52 points, or 1.87 percent, to 13,292.00. The Standard & Poor's 500 Index .SPX was up 28.68 points, or 2.04 percent, at 1,432.12-- its highest level since May 2008, before the financial crisis began to gather steam. The Nasdaq Composite Index .IXIC was up 65.12 points, or 2.12 percent, at 3,134.39.

Equities have rallied in recent months on growing expectations for ECB action. The S&P is up about 8 percent since the start of July.

The ECB's program, which Germany's Bundesbank is known to have opposed, would focus on bonds maturing within three years and was strictly within the ECB's mandate. Draghi said only one member of the ECB Governing Council had dissented.

The ECB also announced that it will keep its main interest rate at a record low 0.75 percent, holding fire after a pick-up in inflation last month offset pressure to breathe life into the flagging euro zone economy by easing borrowing costs.

In company news, Supervalu Inc SVU.N said it would close about five dozen stores as it works to turn around its grocery business, which lags Kroger Co KR.N and Wal-Mart Stores Inc WMT.N. Supervalu shares rose 3.5 percent to $2.36.

Realty Income Corp O.N plans to acquire American Realty Capital Trust Inc ARCT.O for about $1.93 billion as it looks to diversify its portfolio outside the retail industry. Shares of Realty Income slipped 0.6 percent to $42.21 and Capital Trust rose 2 percent to $12.20.

Volume was stronger than in recent sessions, with about 6.98 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq. However, it remained below last year's daily average of 7.84 billion.

NYMEX- NEW YORK, Sept 6 (Reuters) - U.S. crude futures rose on Thursday following a U.S. government report showing a drop in domestic crude stockpiles and on optimism following the European Central Bank's announcement of a bond buying program.

 

CBOT- Soybean futures on the Chicago Board of Trade ended modestly lower on profit-taking from this week's record highs and ideas that rain may have stabilized the U.S. soybean crop, traders said.

* But losses were limited by a nearly 3 percent rise in CBOT wheat and a 1 percent rise in CBOT corn, along with higher U.S. equity markets and a weaker dollar. The European Central Bank's decision to embark on a new bond buying program boosted investor appetite for risk. MKTS/GLOB

• Commodity brokerage INTL FC Stone late Wednesday raised its 2012 U.S. soybean production forecast to 2.739 billion bushels, with an average yield of 36.7 bushels per acre. In August, the firm pegged the soy crop at 2.730 billion bushels with an average yield of 36.2 bushels per acre. (Full Story)

• China's Dalian soybeans fell, with the most-active Dalian May soybean contract DSAK3 down about 2 percent, its biggest daily drop in more than a month. (Full Story)

• Brazil's main grain belt remains dry and there are no immediate forecasts for rain, just nine days before farmers can legally start planting what is expected to be a record soybean crop - local weather forecaster. (Full Story)

• CBOT reported no soybean or soymeal deliveries against September futures, while soyoil deliveries totaled 783 contracts.

FCPO- KUALA LUMPUR, Sept 6 (Reuters) - Malaysian crude palm oil futures fell to a 3-week low on Thursday, as traders booked profits after U.S. soybeans dropped from a record high and a leading industry analyst warned of a looming supply glut of the tropical oil.

Soybeans touched a 1-week low in Asian trading hours as traders locked in profits with expectations of supply coming in with the Midwest harvest kicking off, a sentiment that spread to palm oil futures. GRA/

The market turned more bearish after Dorab Mistry, head of vegetable oil trading with Indian conglomerate Godrej Industries, said record southeast Asian palm oil stocks may weigh on prices that have fallen more than 7 percent this year.

"The Dalian and Chicago Board of Trade this morning is already under pressure. Definitely, palm is following up with the external pressure," said a trader with foreign commodities brokerage in Malaysia.

The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange tumbled as much as 2.6 percent to 2,913 ringgit ($935) per tonne, its lowest level since Aug. 16, before closing at 2,948 ringgit.

Total traded volume stood at 45,071 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Technicals were also bearish. Malaysian palm oil is expected to drop further to 2,901 ringgit, as it has broken below a support at 2,956 ringgit per tonne, according to Reuters analyst Wang Tao. (Full Story)

In the palm oil physical market, sellers are now holding back after the futures prices fell sharply, although buyers are keen to strike deals at lower levels, traders said.

"Those who have sold earlier are looking to take some profit and buy back," said the Malaysian trader. "I feel that if the market goes a bit lower, they will see more physical buying support coming in, either to take profit or to build positions."

In a bullish signal for palm oil, crude oil futures rose above $114 per barrel on Thursday, buoyed by expectations that the European Central Bank will manage to ease its debt crisis with a new programme of bond purchases. O/R

But edible oil prices were still under pressure from profit-taking.

By 1008 GMT, U.S. soyoil for December delivery BOZ2 fell 0.7 percent. The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed 1.3 percent lower.

REGIONAL EQUITY- BANGKOK, Sept 6 (Reuters) - Malaysian shares fell to a two-month low on Thursday, led by index heavyweights such as CIMB Group Holdings CIMB.KL and Axiata Group AXIA.KL, as traders turned cautious after a recent report by rating agency Standard & Poor's.

Malaysia's main index .KLSE lost 1.4 percent, its biggest one-day fall since mid-May, ending at 1,617.99.

The fall followed Wednesday's 0.8 percent decline, trimming its gain since the start of this year to 5.7 percent, the smallest in Southeast Asia.

Singapore's Straits Times Index .FTSTI fell for a fourth session, finishing 0.2 percent lower at 2,989.26, the lowest close since July 23. The Ho Chi Minh Stock Exchange's VN Index .VNI fell 1.4 percent to a one-week closing low of 393.41.

Stocks in Indonesia .JKSE and Thailand .SETI bucked the trend amid selective buying in banking stocks. Among actively traded stocks, Bank Rakyat Indonesia BBRI.JK rose 2.1 percent and Kasikornbank KBAN.BK gained 2.6 percent.

RTRS- Malaysia's August palm oil stocks likely hit 9-month high

SINGAPORE, Sept 5 (Reuters) - Malaysia's August palm oil stocks likely climbed to their highest in nine months as still-high production offset a strong rise in exports, a Reuters survey showed on Wednesday.

Stocks in the world's second largest palm oil producer most probably climbed 4.5 percent to 2.09 million tonnes, the highest since November and crossing the two-million-tonne mark for the first time since February, the survey of six planters showed.

The rise was capped by strong exports, which jumped almost 12 percent from a month ago to 1.45 million tonnes, thanks to higher shipments of crude products and a demand recovery from major food buyers China and India.

Higher crude palm oil exports were in part due to the extra 2 million tonnes of tax-free quota issued late July, a move to cut stocks that had been building up as buyers snap up cheaper Indonesian cargoes of refined palm. (Full Story)

Palm oil output probably fell 3 percent to 1.64 million tonnes from a year-high of 1.69 million tonnes in July as harvesting slowed in August owing to a slew of public holidays.

However, production levels remained higher than demand, especially as average output for the first half of the year stood at just 1.3 million tonnes.

Imports of crude palm oil from top producer Indonesia were expected to reach 74,591 tonnes in August, respondents said.

FACTORS TO WATCH:

Weather concerns are in focus as the brewing El Nino bringing drier weather to Southeast Asia, leading to the development of male flowers at the expense of oil-yielding female ones that crimps production and could support prices.

Benchmark Malaysian palm oil futures FCPOc3 fell 4 percent so far this year, although the drought in the soy-exporting U.S. Midwest and weaker production in South America could crimp global edible oil supply and lift prices.

Palm oil may have to meet more Asian demand owing to a slew of major public holidays coming up in China and India in October and November. The tropical oil currently trades at a discount at more than $250 per tonne to soyoil.

Yet there could be further build-up in Malaysian palm oil stocks, with Indonesia capturing more market shares after it cut its September export tax rate for crude and refined grades that improve margins.

RTRS- STOCKS NEWS ASEAN-Weak palm oil prices likely in medium term-HSBC

HSBC expects a medium-term direction of palm oil prices to be underpinned by soft demand, with weak economic growth expectations for major consumers -- China, India and Europe -- capping industrial demand.

The broker cut its fiscal year 2012 average palm oil price forecast by 5 percent to $1,032 per tonne. For fiscal year 2013, it raised the average palm oil price forecast by 2 percent to $994 per tonne.

"Unlike consensus, we believe negative price momentum will prevail going forward," HSBC said in its Asian Palm Oil report.

Extreme weather conditions in major agricultural regions are being reflected in commodities such as soybeans prices, up 46 percent year to date, but palm oil – the closest substitute – has been absent from this rally, falling 5 percent year to date.

"Now with pricing spreads well above normal levels, palm oil will likely see near-term price support. We believe this presents an opportunity to reduce weightings in the sector," it said.

HSBC downgraded Indonesia-listed Astra Agro Lestari AALI.JK to 'underweight' from 'neutral', cutting the target price to 22,000 rupiah from 25,200 rupiah versus Wednesday's stock close of 20,200 rupiah.

Astra Agro had fallen 6.9 percent in 2012, underperforming a 6.6 percent gain of the broader Jakarta's Composite Index .JKSE.

HSBC's key underweight-rated stocks included Singapore-listed Wilmar International Ltd WLIL.SI and Malaysia-listed IOI Corporation Ltd IOIB.KL.

For long-term exposure to emerging market consumption, the broker said it preferred plantations with structural growth, with First Resources Ltd FRLD.SI and Genting Plantations GENP.KL among its overweight-rated stocks.

Trader's Highlight

DJI- NEW YORK, Sept 5 (Reuters) - U.S. stocks closed out a second straight session of thin trading on Wednesday, with investors reluctant to make big bets ahead of a crucial meeting of the European Central Bank, which could announce new policies to help contain the euro zone's debt crisis.

Media reports that European policymakers would unveil a bond-buying plan to bring down crippling borrowing costs in euro zone economies boosted sentiment, but it wasn't enough to drive gains in stocks.

Shares opened lower, hurt by FedEx Corp FDX.N, which late Tuesday cut its quarterly profit outlook on weakness in the global economy. FedEx is considered an economic bellwether because of its role as the No. 2 world shipping company. The stock fell 2 percent to $85.80, United Parcel Service UPS.N fell 2.4 percent to $71.94 and the Dow Jones Transportation index .DJT lost 1.1 percent.

"While FedEx is only one company, it's one whose warning is indicative of the global economic slowdown we’re dealing with," said Leo Grohowski, chief information officer at BNY Mellon Wealth Management in New York.

Equities seesawed between positive and negative territory throughout the session. About 5.49 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 in a sign of investor caution.

Central Bank sources told Reuters the ECB was ready to waive seniority status on government bonds it buys under a new program which it is set to agree on at Thursday's Governing Council meeting.

Bloomberg earlier reported that the ECB would, with broad support from its council members, unveil an unlimited, sterilized program of bond purchases. The ECB has been expected to be cautious about disclosing the size of its bond-buying, given opposition from Germany’s central bank.

Further details of the plan will be revealed by ECB President Mario Draghi after Thursday's meeting, but some analysts cautioned the ECB may opt to wait until after the German constitutional court rules on the region's bailout funds on Sept. 12 to announce any new steps.

"While some of the rhetoric coming out of Europe has been positive, we'll need to see follow-through in actions now," said Grohowski, who helps oversee $171 billion in client assets.

The Dow Jones industrial average .DJI was up 11.54 points, or 0.09 percent, at 13,047.48. The Standard & Poor's 500 Index .SPX was down 1.51 points, or 0.11 percent, at 1,403.43. The Nasdaq Composite Index .IXIC was down 5.79 points, or 0.19 percent, at 3,069.27.

Equities have received a boost in recent months on expectations the ECB would start buying Spanish and Italian government bonds to ease the pressure on those countries' bond markets and that the Federal Reserve will adopt new stimulus to prop up the economy. The S&P is up about 7 percent since the start of June.

Nokia NOK1V.HE NOK.N and Microsoft Corp MSFT.O took the wraps off their most powerful smartphone on Wednesday, but the new Lumia failed to impress investors in what may have been the last major shot at winning back a market dominated by Apple AAPL.O, Samsung 005930.KS and Google GOOG.O. U.S.-listed shares of Nokia slumped 16 percent to $2.38 while Microsoft was little changed.

Shares of Facebook Inc FB.O rebounded almost 5 percent off an all-time low after the company promised not to sell stock to cover a nearly $2 billion tax bill and said it will allow employees to cash in their stock weeks ahead of schedule, moving to soothe nervous investors and its own staff as its share price spiraled downward from its $38 IPO price.

About 55 percent of companies traded on the New York Stock Exchange closed lower while 53 percent of Nasdaq-listed shares closed lower.

NYMEX- NEW YORK, Sept 5 (Reuters) - U.S. crude futures inched up in choppy trade on Wednesday, ahead of a European Central Bank meeting and a U.S. August payrolls report and as investors await central bank action in the face of slowing economic growth.

 

CBOT- Sept 5 (Reuters) - Soybean futures on the Chicago Board of Trade fell on Wednesday as weak cash markets amid an accelerating harvest triggered profit-taking a day after prices hit all-time highs near $18 a bushel, traders said.

• Actively traded November SX2 dropped 1.2 percent in the steepest decline in 3-1/2 weeks, settling 20-3/4 cents lower at $17.47-1/2 a bushel.

• Spot September soybeans SU2 dropped 23 cents, or 1.3 percent, to $17.48 a bushel after hitting a record high price of $17.94-3/4 per bushel on Tuesday.

• The rapidly approaching U.S. Midwest soybean harvest weighed on cash basis bids as grain merchants prepared for an influx of new-crop supplies. Bids fell by as much as 25 cents a bushel in the central Corn Belt. GRA/M

• The U.S. Agriculture Department on Tuesday said 30 percent of the U.S. soybean crop as of Sunday was in good to excellent condition, unchanged from the prior week and the lowest since 1988.

• Rain across the Midwest this week seen too late to help much of the soy crop recover from the worst U.S. drought in 56 years.

• Prices range-bound as traders look ahead to USDA monthly crop report next week.

FCPO- KUALA LUMPUR, Sept 5 (Reuters) - Malaysian crude palm oil prices slipped on Wednesday to a one-week low on market expectations of rising stockpiles in the world's second biggest producer.

Palm oil prices have been treading water even though the U.S. soy market hit a record high the previous day, as traders expect the Malaysian August data, due next Monday, to show stocks had climbed to their highest in nine months as still-high production offset strong exports. PALM/POLL

"The upside will be capped by the coming Malaysian Palm Oil Board inventory data, which we expect will remain above the psychological range of 2 million tonnes," Kenanga Investment's analyst Alan Lim Seong Chun said in a note.

"On the other hand, the downside will be supported by crude palm oil's above-average discount of $290 per tonne against soybean oil," he added.

Higher soybean and soybean oil prices mean consumers are likely to turn to substitutes such as palm oil.

The benchmark November contract FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to 2,990 ringgit ($959) per tonne, its lowest level since Aug. 29.

Total traded volume picked up to 32,372 lots of 25 tonnes each, higher than the usual 25,000 lots.

Reuters analyst Wang Tao said technicals for palm oil looked neutral with a range of 3,032 to 3,093 ringgit per tonne, and an escape from the range will point a future direction.

Higher palm oil stocks would help Malaysia cope with an anticipated increase in demand. Hamburg-based oilseeds analysts Oil World said global dependence on palm oil is expected to rise significantly in the next 12 months to compensate for insufficient supplies of other vegetable oils.

But some fear that a sluggish global economy could weigh on consumption of the tropical oil. HSBC expects prices in the medium-term to be underpinned by weak industrial demand from major consumers China, India and Europe.

In other vegetable oil markets, U.S. soyoil for December delivery BOZ2 fell 0.7 percent in late Asian trade and the most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed 0.7 percent lower.

REGIONAL EQUITY- BANGKOK, Sept 5 (Reuters) - Southeast Asian stock markets were lower on Wednesday, with Singapore ending at a six-week low and Malaysia falling to a four-week closing low, as investors cut risk asset exposure ahead of a European Central Bank meeting and a U.S. jobs report.

Singapore's Straits Times Index .FTSTI fell for a third session, finishing 0.5 percent lower at 2,995.90, the lowest since July 25. Malaysia's main index .KLSE slid 0.8 percent to 1,641.01, the lowest close since Aug. 8, halting a three-day rise.

The Ho Chi Minh Stock Exchange's VN Index .VNI fell 0.8 percent, reversing Tuesday's 1.5 percent gain, amid broadly-based sell-offs following the detention of the former chairman of the troubled Vietnam National Shipping Lines (Vinalines), analysts said.

RTRS- High soy prices cutting livestock output-Oil World

HAMBURG, Sept 4 (Reuters) - Signs are intensifying that livestock farmers are cutting production as the surge in soybean and corn prices to record levels this summer raises animal feed costs, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“Livestock producers have started to react to the high costs of soymeal, corn and other ingredients,” Oil World said. “(Profit) Margins have become negative, leading to increased animal slaughtering.”

U.S. soybean and corn futures hit record highs this summer as scorching temperatures and drought ravaged crops in the U.S., while drought also severely cut soybean harvests in major exporters Brazil and Argentina. Both soybeans and corn are key animal feed ingredients.

“These high prices are painful for livestock producers and will initiate a cutback in production, primarily in poultry and pig industries,” Oil World said.

In Brazil, production costs for poultry have increased by 25 percent following the soybean and corn price rises, it said. “As a result, poultry production has started to decline and it is now expected to fall to only around 12 million tonnes in calendar year 2012, down 7 percent from last year,” it said.

“Poultry production has also started to decline in the U.S. and other countries.”

Global soymeal consumption is likely to fall in Oct./Dec. 2012 as the high prices reduce livestock output, it said. The trend is likely to continue in the early months of 2013 until new crop soybean supplies arrive from South America, it said.

RTRS- Allendale survey pegs U.S. corn crop at 10.326 bln bushels

CHICAGO, Sept 4 (Reuters) - This year's U.S. corn harvest was estimated at 10.326 billion bushels in an annual producer survey by research and brokerage firm Allendale Inc, which is down 4.2 percent from the latest U.S. Department of Agriculture forecast.

The survey, released on Tuesday and based on responses from farmers in 32 states, put the corn yield at 118.2 bushels per acre (bpa), also 4.2 percent below USDA's Aug. 10 figure of 123.4 bpa.

The Allendale survey's corn figures also fell below the consensus estimate of 11 analysts surveyed by Reuters on Aug. 22, which put the corn crop at 10.46 billion bushels with an average yield of 121.5 bpa. (Full Story)

Allendale's survey projected U.S. soybean production at 2.602 billion bushels, down 3.3 percent from USDA's forecast and below the last Reuters analyst poll. The survey forecast a soy yield of 34.9 bpa.

USDA on Aug. 10 projected the U.S. soybean harvest at 2.692 billion bushels with an average yield of 36.1 bpa.

Analysts surveyed by Reuters on Aug. 22 pegged the soybean crop at 2.713 billion bushels with an average yield of 36.6 bpa.

Editors of the Pro Farmer newsletter, following a week-long crop tour, on Aug. 24 estimated U.S. corn production at 10.478 billion bushels with a yield of 120.25 bpa. Pro Farmer pegged the soybean crop at 2.60 billion bushels with a yield of 34.8 bpa. (Full Story)

Allendale's survey used USDA's latest harvested acreage estimates of 87.4 million acres for corn and 74.6 million acres for soybeans. Allendale did not release the number of participants in the survey, which was conducted from Aug. 20-31.

In Allendale's survey producer price expectations for corn ranged from $7.35 to $8.85 per bushel and for soybeans $15.35 to $18.25 per bushel.

At the Chicago Board of Trade as of 10:13 a.m. CDT (1513 GMT), benchmark December corn futures CZ2 were trading at $8.13-1/2 per bushel. New-crop November soybean futures SX2 were trading at $17.81 per bushel after setting a life-of-contract high at $17.89.

RTRS- Malaysia's August palm oil exports up 19.6 pct -SGS

SINGAPORE, Sept 4 (Reuters) - Exports of Malaysian palm oil products for August rose 19.6 percent to 1,427,052 tonnes compared with 1,193,227 tonnes shipped during July, cargo surveyor Societe Generale de Surveillance said on Tuesday.

RTRS- Low soy crop to push palm oil price up -Oil World

HAMBURG, Sept 4 (Reuters) - Record soybean prices will cause a major swing in demand towards cheaper palm oil in coming months which in turn will push palm prices up, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“Global dependence on palm oil will rise significantly in the next 12 months to compensate (for) insufficient supplies of other vegetable oils,” Oil World said. “We expect palm oil prices to recover owing to increased export demand.”

Soybean prices remain close to a record high hit on Aug. 30 caused by concerns about drought devastation to the U.S. crop, following similar drought damage earlier this year to major exporters Brazil and Argentina.

But palm oil did not achieve the same price rises as seen in soyoil in August, Oil World said.

“Palm oil prices are undervalued,” it said.

The price discount of refined, bleached and deodorised (RBD) palm olein oil fob Malaysia against Argentine soyoil widened by around $100 a tonne fob in the past four weeks and in recent days touched $280 to $290 a tonne, Oil World said.

This price difference will transfer demand from soyoil to the leading palm oil exporters Indonesia and Malaysia but palm output is also likely to rise in Thailand, Central America and South America, it said.

“We now expect world palm oil production to reach around 54.0 million tonnes in Oct. 2012/Sept. 2013 compared with around 50.8 million tonnes in 2011/12,” it said.

Indonesia’s Oct. 2012/Sept. 2013 palm oil output will rise to 26.60 million tonnes from 25.02 million tonnes in 2011/12 and Malaysia’s 2012/13 output will rise to 19.36 million tonnes from 18.06 million tonnes, Oil World estimates.

Trader's Highlight

DJI- NEW YORK, Sept 4 (Reuters) - The S&P 500 closed slightly lower on Tuesday as investors continued to await clarity on European Central Bank plans to shore up heavily indebted countries, but the market ended off its lows on a rally in Apple Inc AAPL.O.

Equities were lower for much of the session, with industrial and material shares weak after a report showing manufacturing contracted by its fastest pace in more than three years in August.

FedEx Corp FDX.N, the world's second-largest package delivery company, cut its fiscal first-quarter forecast after the market's close, saying the global economy is weaker than thought and harming sales. The company is seen as a window on the economy because of the wide range of industries it serves. The shares fell 4 percent in extended trade.

Markets remain skittish ahead of the ECB's meeting on Thursday, where ECB President Mario Draghi is expected to unveil plans to lower borrowing costs for countries such as heavily indebted Spain and Italy.

"We're not going to get any definitive direction so long as everyone is waiting around on the Fed and ECB," said Michael Vogelzang, who helps oversee $2.2 billion as president at Boston Advisors. "Things seem very soft right now, and until that changes the market may have a hard time getting out of the range we've been in."

On Friday, Federal Reserve Chairman Ben Bernanke disappointed investors by declining to signal any imminent stimulative action to boost sluggish U.S. growth, though he kept the door open for further easing in the future.

While investors have been disappointed by past euro zone efforts to solve the debt crisis, some are positioning optimistically. Bill Gross, co-founder of asset-management giant PIMCO, tweeted that Draghi appeared willing to write two- to three-year checks to peripheral nations and recommended investors buy gold and Treasury Inflation Protected Securities.

Apple, which as the largest U.S. company has an outsized impact on indexes, rose 1.5 percent to $674.97 and helped erode broader losses. The tech giant distributed invitations to an event in San Francisco on Sept. 12, setting the stage for what is widely expected to be the release of the iPhone 5. (Full Story)

The Dow Jones industrial average .DJI ended down 54.90 points, or 0.42 percent, at 13,035.94. The Standard & Poor's 500 Index .SPX was down 1.64 points, or 0.12 percent, at 1,404.94. The Nasdaq Composite Index .IXIC was up 8.09 points, or 0.26 percent, at 3,075.06.

U.S. manufacturing contracted for a third straight month in August while firms in the sector hired the fewest workers since late 2009, according to an Institute for Supply Management survey. The data followed similar disappointing readings on manufacturing elsewhere in the world.

The Morgan Stanley cyclical index .CYC fell 0.9 percent. The S&P materials sector index .GSPM lost 1.5 percent while industrial stocks .GSPI fell 0.9 percent. Both were off the lows of their sessions. Cliffs Natural Resources Inc CLF.N fell 6 percent to $33.68 and U.S. Steel Corp X.N lost 3.4 percent to $18.78.

Separate data showed U.S. construction spending in July fell by the most in a year as both the private and public sectors cut back on investment, according to a report that could dampen hopes of a pick-up in economic activity in the third quarter. (Full Story) (Full Story)

The all-important payrolls report due Friday will also be closely watched. The employment report will be the final major economic report before the Federal Open Market Committee meets on Sept. 12-13.

Equities had risen lately on hopes the Fed will launch a third round of stimulus to boost the economy and that the ECB will soon start buying bonds of troubled euro zone economies to contain the debt crisis.

In company news, Valeant Pharmaceuticals International Inc VRX.TO VRX.N agreed to buy Medicis Pharmaceutical Corp MRX.N for $2.6 billion in cash. Valeant shares climbed 15 percent to $58.78 on the New York Stock Exchange while Medicis surged 38 percent to $43.65. (Full Story)

About 57 percent of companies traded on the New York Stock Exchange closed higher, while almost three-fifths of Nasdaq-listed shares ended in positive territory.

Volume was light, with about 5.53 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion. Volume tends to be anemic during the summer but it has been especially low lately as investors await clarity on central bank action and many market participants were out for the Labor Day holiday.

NYMEX- NEW YORK, Sept 4 (Reuters) - U.S. crude futures fell on Tuesday as weak manufacturing and construction spending data added to concerns about slowing economic growth and resulting curbs on demand for petroleum, countered hopes for more monetary stimulus from central banks.

 

CBOT- Soybean futures on the Chicago Board of Trade set a fresh all-time high approaching $18 a bushel on worries about tight U.S. supplies and unrelenting demand, traders said.

* Front-month soybeans Sc1 hit a record high price of $17.94-3/4 per bushel while most-active November SX2 set a contract high at $17.89.

• Spot soymeal SMc1 set a record high at $554.40 a ton and spot soyoil BOc1 set a one-year top at 57.78 cents per lb.

• But the market pared gains by the close on fund-driven profit-taking, especially in nearby soybeans and soymeal.

• Bear-spreading noted, with deferred contracts gaining more than the front months, due in part to weakening cash soy values in the interior Midwest as well as the U.S. Gulf.

• Allendale Inc producer survey puts the U.S. soybean crop at 2.602 billion bushels, down 3.3 percent from USDA's latest forecast. The survey of farmers in 32 states forecast a soy yield of 34.9 bushels per acre.

• Signs are intensifying that livestock farmers are cutting production as the surge in soybean and corn prices to record levels this summer raises animal feed costs - analysts Oil World.

• Record soybean prices will cause a major swing in demand towards cheaper palm oil in coming months which in turn will push palm prices up - analysts Oil World.

• USDA reported export inspections of U.S. soybeans in the latest week at 15.126 million bushels, just above trade expectations for 10 million to 15 million bushels.

FCPO- KUALA LUMPUR, Sept 4 (Reuters) - Malaysia palm oil futures closed lower on Tuesday after rising to their highest level in a week, as traders booked profits from a rally triggered by record high soybean prices.

Prices also fell after traders priced in a rise in stocks in Malaysia due to higher production, although strong palm oil exports could help reduce inventories.

"I think palm oil is rising on the back of soybeans and that's the main reason of the strength in palm oil," said a trader with a foreign commodities brokerage in Malaysia.

"The unexpectedly high palm oil exports in August also provided some friendly sentiment. Previously we were expecting stocks at 2.3 million tonnes, now everybody has cut back stocks by 200,000-250,000 tonnes based on exports alone."

The benchmark November 2012 contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 0.5 percent to close at 3,058 ringgit ($985) per tonne after touching 3,100 ringgit, a level last seen on Aug. 27.

Total traded volume stood at 42,611 lots, much higher than the usual 25,000 lots.

U.S. soybean futures climbed to a record high on Tuesday as falling exports from Brazil highlighted the decline in global supplies after poor production in South America and a historic drought in the United States. GRA/

Higher soybean and soybean oil prices mean consumers are likely to turn to substitutes such as palm oil.

Technicals remain bearish as palm oil faces a resistance at 3,093 ringgit per tonne, and will retrace to 3,049 ringgit, said Reuters analyst Wang Tao.

But demand is likely to remain firm: Malaysia's palm oil exports surged 17.7 percent in August from a month ago, according to cargo surveyor Intertek Testing Services. PALM/ITS

Another cargo surveyor Societe Generale de Surveillance reported a steeper 19.6 percent increase for the same period, thanks to higher shipments of crude products and a demand recovery from major food buyers China and India. PALM/SGS

The El Nino weather conditions will likely be weak and short-lived, New Zealand scientists said on Tuesday, providing some relief to plantation owners in Southeast Asia.

Oil prices rose for a fourth day to around $116 per barrel, supported by hopes for further stimulus measures from central banks in the United States and Europe, and a slow restart in the Gulf of Mexico after Hurricane Isaac. O/R

The tight global supply of soybeans also pushed other vegetable oil markets higher.

By 1004 GMT, the most active U.S. soyoil contract for December delivery BOZ2 was 1.6 percent higher after touching the highest level since September 2011.

The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed 1 percent higher after touching a fresh contract high.

REGIONAL EQUITY- BANGKOK, Sept 4 (Reuters) - Southeast Asian stock markets ended mostly flat-to-weaker on Tuesday amid rising risk aversion over the global economic outlook, with losses in large caps such as Philippine Long Distance Telephone Co TEL.PS leading the Manila bourse lower.

Sharemarket investors waited to see what the European Central Bank and the U.S. Federal Reserve would do to tackle slowing global growth.

Bucking the trend, the Ho Chi Minh Stock Exchange's VN Index .VNI rose 1.5 percent to the highest close in almost two weeks. Vietnam resumed trading after a market holiday on Monday.