RTRS - Malaysia sets March crude palm oil export tax at 4.5 percent

KUALA LUMPUR, Feb 15 (Reuters) - Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for March at 4.5 percent, up from February's zero percent, a government circular showed on Friday.

The Southeast Asian country calculated a reference price of 2,306.11 ringgit per tonne for crude palm oil for March, effectively lifting the export duty for the grade.

RTRS - Palm up on export data; investors wait for tax decision

KUALA LUMPUR, Feb 15 (Reuters) - Malaysian palm oil futures climbed on Friday on positive export data, with investors cautious ahead of the weekend and a lack of cues from overseas markets capping gains.

Prices were still headed for their first weekly loss in five weeks as investors waited for a government decision to determine the crude palm oil export tax in March, due later in the day. The current zero-percent duty has made Malaysia's products cheaper than top producer and biggest rival Indonesia.

Exports of palm oil products in the first half of February grew 18 percent from the first half of January to 673,555 tonnes, cargo surveyor data showed, boosted by strong demand from major edible oil buyers Europe, China and India.

Shipments of the crude grade doubled during the period compared to the previous month's first two weeks.

By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange rose 1.0 percent to 2,521 ringgit ($815) per tonne. Prices were rangebound between 2,503 and 2,521 ringgit.

Total traded volumes stood at 12,050 lots of 25 tonnes each, slightly lower than the average of 12,500 tonnes.

The export data should hold the market above 2,500 ringgit, said a trader with a foreign commodities brokerage in Malaysia, adding that there was a possibility of a small rise in the March export tax.

"The important thing is whether the tax can create demand," he said. "There could be a prompt demand from India and China -- especially from India who buys a lot of crude palm oil."

Technical analysis showed palm oil is expected to hover above a support at 2,493 ringgit per tonne for one trading session before breaking this level and falling more.

Tepid global economic conditions have slowed edible oil demand and kept stockpiles stubbornly high in Malaysia, the world's No.2 palm oil producer, with prices tumbling 23.2 percent last year.

A zero-percent duty tax structure introduced by Malaysia in January provided positive sentiment for investors, but forecasts of bumper soy crops in Latin America, palm's vegetable oil competitor, has weighed on the market and kept prices rangebound.

"For the past few months, high stockpiles and improving weather conditions in Brazil and Argentina have continued to weigh on prices," said Phillip Futures analyst Ker Chung Yang in Singapore. "But on the flip side Malaysia and Indonesia have aggressively engaged in activities to support exports."

Crude palm oil prices will continue to be rangebound between 2,200 and 2,600 ringgit as investors await further cues, he said.

Another cargo surveyor, Societe Generale de Surveillance, was to release its exports data for Feb. 1-15 later in the day.

Brent crude steadied around $118 per barrel, still heading for its first weekly loss in five after disappointing euro zone data revived concerns about the troubled region.

In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 inched down 0.1 percent in early Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

RTRS - Argentina corn output seen at 25 mln tonnes-grains exchange

BUENOS AIRES, Feb 14 (Reuters) - The Buenos Aires Grains Exchange estimated a 2012/13 corn crop of 25 million tonnes in its first forecast for Argentina's corn harvest on Thursday, and held its outlook for soy at 50 million tonnes.

Argentina is the world's No. 3 supplier of corn. The U.S. Department of Agriculture sees Argentine output of 27 million tonnes for the 2012/13 crop year.

The exchange said that if its forecast holds true, corn production will expand by 16 percent from last season's drought-battered harvest. It would also top the record output of the 2010/11 season, estimated by the government at 23.8 million tonnes.

Market hopes for an even bigger corn crop this season were tempered by dry, hot weather in January, which the exchange said reduced yield potential in crops seeded during late October, November and December. Earlier-seeded corn fared better.

It said rain was still needed in many areas, particularly in Argentina's northern regions.

"We hope that weather forecasts predicting rain in the coming days will come to pass so the stress suffered in several farming areas begins to ease," the exchange said.

Farmers have harvested 3.7 percent of the 3.68 million hectares planted with commercial-use corn this season, beating last year's pace by 2.5 percentage points, the grains exchange said in its weekly crop report.

Trader's highlight

DJI - NEW YORK, Feb 14 (Reuters) - Global equity markets fell and the euro slid against the dollar on Thursday after data showed the euro zone slipped deeper into recession in late 2012 than had been expected, but deal-making helped Wall Street close near break-even.

U.S. weekly jobless data and a $23.2 billion bid in cash by Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital for ketchup and baby food maker H.J. Heinz helped turn sentiment about Europe and trim equity losses.

The euro tumbled to a three-week low against the dollar and plunged against the yen after data on gross domestic product in the euro zone painted a dismal picture of the regional economy.

U.S. equities have struggled to break above current levels where they have hovered for almost two weeks. The benchmark S&P 500 is up more than 6 percent so far this year.

"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.

"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.

The Dow Jones industrial average closed down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index rose 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index added 1.78 points, or 0.06 percent, at 3,198.66.

"The only reason a company buys another company is because they see an upside. Even though we are at multiyear highs, this kind of activity shows that there is more room for a rally, feeding optimism to the market," said Randy Frederick, director of trading and derivatives at Charles Schwab.

Economic output in the euro zone fell by 0.6 percent in the fourth quarter, EU statistics office Eurostat said, while Germany contracted by 0.6 percent, marking its worst performance since the global financial crisis was raging in 2009.

The downturn marked the currency bloc's first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, GDP fell by 0.5 percent.

Germany is expected to rebound but the figures suggest the bloc as a whole could remain in recession in the first quarter of this year, despite a recent jump in market sentiment as fears that the currency bloc could fall apart have faded.

"The market has weakened because of the GDP numbers," said Barclays commodities analyst Miswin Mahesh. "It's been a macro sell-off this morning with the GDP numbers coming out, rather than any fundamental move in itself. Most asset classes have sold."

"The jobless claims numbers were solid, and with the European market closing, the news out of Europe is pretty much done for the day," Frederick said.

"A lot of companies, fearing about the systemic risk, have been delaying investments for a long time," said Gilles Guibout, head of euro zone equities at AXA Investment Managers, which has 554 billion euros ($739 billion) under management.

NYMEX - TOKYO, Feb 14 (Reuters) - U.S. crude futures edged up to stay above $97 a barrel on Thursday, paring a 0.5 percent decline a day earlier, helped by hopes for oil demand growth after a Reuters poll showed that the euro zone is slowly starting to emerge from recession.

CBOT Soybean- Soybean futures on the Chicago Board of Trade fell on signs of slowing U.S. export demand and improving crop weather in South America, traders said.

·         Beneficial rains expected over much of Argentina this week and this weekend should help relieve stressed crops, but more rain will be needed to ensure satisfactory crop output, the Commodity Weather Group said.

·         In Brazil, rains in the next two weeks should help soybean crops in southern areas, while a drier pattern for the northwest soy areas next week should boost harvest progress

·         USDA reported export sales of U.S. soybeans in the latest week at 235,900 tonnes (old and new crop years combined), including net cancellations of 109,100 tonnes for 2012/13 and sales of 345,000 tonnes for 2013/14. Trade expectations were for 700,000 to 1.1 million tonnes.

·         USDA reported weekly export sales of soymeal at 132,400 tonnes and soyoil sales at 16,600 tonnes, both below a range of trade expectations.

·         The Buenos Aires Grains Exchange left its outlook for Argentina's 2012/13 soybean harvest at 50 million tonnes, unchanged from its initial estimate a week ago but below USDA's current forecast for 53 million. 

·         Trade awaits monthly U.S. soybean crush data due Friday from the National Oilseed Processors Association. The average estimate for NOPA's January crush among analysts surveyed by Reuters was 159.5 million bushels. 

FCPO - KUALA LUMPUR, Feb 14 (Reuters) - Malaysian palm oil futures edged down to a two-week low on Thursday, as data showed stockpiles in the world's No.2 producer remained high and on improving weather in key soy-growing regions in South America.

Better South American weather would contribute to an expected bumper crop in Brazil, poised to overtake the United States as the No.1 soybean grower, adding pressure to the soybean market tracked by palm oil.

January's palm oil end-stocks eased off record levels and fell to 2.58 million tonnes, according to industry regulator data, but the smaller-than-expected decline triggered some selling pressure in the market.

"While good export news continues to come in, nervousness about the large South American crop (and its effect on prices), as well as the U.S. soybean market facing a seasonal slowdown are pressuring the futures market," said a trader with a local commodities brokerage in Malaysia.

"The end-stocks are still the elephant in the room. Traders could be taking the end-stocks seriously and are looking for opportunities to sell," the trader added.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged down 0.3 percent to close at 2,497 ringgit ($811) per tonne. Prices went as low as 2,490 ringgit, the lowest level since Jan. 30.

Total traded volumes stood at 20,263 lots of 25 tonnes each, slightly lower than the average of 25,000 tonnes.

Cargo surveyor data showed Malaysia's exports of palm oil products rose as much as 25 percent in the first 10 days of February on stronger demand from major buyers India, China, the United States and Europe.

Traders will be looking out for Feb. 1-15 export data on Friday to further gauge demand trend of the tropical oil.

Analysts say seasonally slowing production could see stockpiles in February easing another 4 percent on the month to 2.48 million tonnes, but inventory levels are unlikely to dip below the 2-million-tonne mark in the first quarter of 2013.

"This should keep crude palm oil prices below 3,000 ringgit per tonne in the first quarter of 2013," said Kenanga Research analyst Alan Lim in Kuala Lumpur.

India's vegetable oil imports soared 27.4 percent from a month earlier to hit an all-time high in January on record purchases of cheap palm oil from southeast Asia, a trade body said on Thursday, despite a hike in import duties mid-month.

Oil prices rose on Thursday as fresh tensions over Iran's nuclear programme revived global supply concerns, offsetting weaker-than-expected growth data from France and Germany.

In competing vegetable oil markets, U.S. soyoil for March delivery dropped 0.3 percent in late Asian trade. The Dalian Commodity Exchange is closed for the Lunar New Year holidays and will resume trading on Monday.

Regional Equities - BANGKOK, Feb 14 (Reuters) - Southeast Asian stock markets ended mixed on Thursday, with the Philippines coming off an intraday record as reports of a landslide hit mining shares and Indonesia closing at a record high, led by PT Bumi Resources Tbk

The Philippine main index ended 0.22 percent down at 6,513.41, hitting a peak of 6,542.51 at one point, with shares in Semirara Mining Corp dropping 8 percent following reports of a landslide at its coal mine in central Philippines.

Manila saw broad buying interest in large caps, with Manila Electric Co and Ayala Corp among the gainers. The Philippines set a record close for the fourth time this month on Wednesday as foreigners led buyers.

Manila saw net foreign buying of $160 million this month to Wednesday, trailing Indonesia's month-to-date net foreign buying of $488 million and Malaysia's $195 million.

Jakarta's Composite Index rose 0.4 percent to 4,588.67, breaching Wednesday's 4,571.57 record finish. Coal exporter Bumi surged 26.4 percent after it requested a takeover panel to expedite inquiry into the creation of parent coal miner Bumi 

The Thai stock market has lagged its peers, seeing net foreign selling of $373 million this month. The benchmark SET index climbed 0.8 percent to a fresh 18-year closing high of 1,526.74.

Trader's Highlight

DJI- NEW YORK, Feb 13 (Reuters) - U.S. stocks drifted in light volume on Wednesday, ending little changed, as investors remained cautious after the S&P 500 index briefly hit its highest intraday level since November 2007.

The S&P 500 was buoyed by General Electric GE.N after cable company Comcast Corp CMCSA.O said it will buy from GE the the part of NBCUniversal it didn't already own for $16.7 billion.

The S&P 500 is up 6.6 percent so far this year, partly due to stronger-than-expected corporate earnings and a better economic outlook. The Dow industrials is about 1 percent away from an all-time intraday high, reached in October 2007.

Volume has been weak in recent days with the S&P moving sideways around 1,520. The index is about 3 percent away from closing at a record high.

A scarcity of sellers after a consistent string of gains is a positive sign and shows the uptrend is intact, King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, said.

"Last year we had double-digit returns in the first quarter. It's fairly possible we can move higher from here," he said.

The Dow Jones industrial average .DJI fell 35.79 points or 0.26 percent, to 13,982.91, the S&P 500 .SPX gained 0.9 point or 0.06 percent, to 1,520.33 and the Nasdaq Composite .IXIC added 10.38 points or 0.33 percent, to 3,196.88.

The S&P gained 12 percent in the first three months of 2012.

According to the latest Thomson Reuters data, of the 364 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average in February last year of 6.94 billion.

On the NYSE, roughly seven issues rose for every five that fell and on Nasdaq more than six rose for every five decliners.

NYMEX- NEW YORK, Feb 13 (Reuters) - Brent crude oil prices rose slightly on Wednesday to close near $119 a barrel and remain close to a nine-month high, though gains were capped by a rise in U.S. crude oil inventories and as the International Energy Agency (IEA) trimmed its demand outlook.

The rise in inventories in the world's largest oil consumer weighed on U.S. crude oil prices, which closed lower and just above $97 a barrel, down more than $1 from the day's peak.

The U.S. Energy Information Administration said crude stocks rose by 560,000 barrels in the week ending Feb. 8, though the gain was slightly less than expected by analysts, while stockpiles of gasoline and distillates fell, according to its weekly report. EIA/S

"The underlying supply and demand fundamental picture really hasn't changed. We have a lot of oil here in the United States," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

March Brent futures LCOH3 settled 6 cents up at $118.72 a barrel, having earlier touched a session high of $119.12. The March Brent futures LCOJ3 contract expires today. The April contract finished up 13 cents at $117.88.

U.S. crude futures CLc1, which finished lower last week for the first time in nine weeks, were down 50 cents at $97.01.

After narrowing in early trade, Brent's premium over U.S. crude eventually widened to $22.11 a barrel. Brokers pointed to technical resistance at the spread's 100-day moving average around $20.68 as one reason for the reversal during Wednesday's trading.

Brent was also supported by positive economic data as a Reuters poll showed that the euro zone is slowly starting to emerge from recession.

DEMAND FORECASTS

While Brent has risen by almost $10 a barrel since the middle of January, boosted by signs of strong demand from China and Saudi output cuts, the IEA on Wednesday said that the slow pace of economic recovery would keep consumption in check.

In its monthly report, the agency trimmed its demand growth forecast for 2013 by 90,000 barrels per day. That was in contrast to both the EIA and the Organization of the Petroleum Exporting Countries (OPEC), which both raised their demand growth forecasts on Tuesday.

Prices were supported by the IEA report on Wednesday stating that Iranian oil exports will likely fall further this year as the West tightens sanctions on Tehran. Exports from Iran have already fallen to the lowest level in 30 years, the IEA said.

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade halted a five-day slide, posting a higher close on bargain-buying after the spot March contract SH3 fell to a near one-month low, traders said.

* Old-crop soybean contract gained against new-crop months on spreads, resuming last week's trend following two days of spread reversal on Monday and Tuesday.

• Expectations of a bumper South American soy harvest hung over the market, limiting gains.

• Brazil's soybean harvest is 12 percent complete, analyst Celeres said, above the five-year average of 7 percent. Sales of the 2012/13 crop reached 59 percent of the expected harvest, up 1 point from the previous week and up from 42 percent by this time a year ago, Celeres said.

• Ahead of the USDA's weekly export sales report on Thursday, analysts expect soybean sales at 700,000 to 1.1 million tonnes in the latest week.

• Analysts on average expect the National Oilseed Processors Association on Friday to show the U.S. soybean crush for January at 159.5 million bushels, potentially the largest January crush since 2010. Estimates ranged from 157.0 million to 162.3 million bushels.

FCPO- KUALA LUMPUR, Feb 13 (Reuters) - Malaysian palm oil futures fell to a two-week low on Wednesday in light trade after a long holiday weekend, with traders staying cautious as industry data showed stocks remained high despite coming off record levels.

Data from the Malaysian Palm Oil Board, released during the afternoon break, showed that end-stocks in Malaysia, the world's No. 2 producer, had inched down 1.9 percent to 2.58 million tonnes in January, missing expectations of a deeper fall.

Cargo surveyor Intertek Testing Services said Malaysia's shipments had surged 18 percent to 440,830 tonnes in the first 10 days of February from a month ago, but traders said export volumes still needed to rise to "decent" levels.

"Exports in the last five days of January showed an average of 50,000 tonnes shipped per day, which is good. We were expecting that to carry on in February, but obviously that is not the case," said a trader with a foreign commodities brokerage in Malaysia.

"It will need to pick up in the coming days of February. We are at very high stocks here, so if that picks up then things will look a bit more rosy."

Another cargo surveyor Societe Generale de Surveillance reported a steeper 25.1 percent increase to 429,070 tonnes for the same period.

The benchmark April contract FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 2.2 percent to close at 2,504 ringgit ($810) per tonne, also its intraday low - a level unseen since Jan. 30.

Total traded volumes were thin at 18,873 lots of 25 tonnes each, compared with the average 25,000 tonnes, with many investors still on holiday.

Financial markets in Malaysia were closed on Monday and Tuesday for the Lunar New Year holidays while markets in China, the world's No. 2 edible oil importer, remain closed for the rest of the week.

Technical analysis showed palm oil may drop to 2,510 ringgit per tonne as a correction from the Jan. 31 high of 2,593 ringgit has not finished, said Reuters market analyst Wang Tao.

Brent crude steadied on Wednesday, holding just below a nine-month high near $119 per barrel on forecasts for faster-than-expected growth in global oil demand this year, although easing tensions in Iran kept a lid on prices.

In competing vegetable oil markets, U.S. soyoil for March delivery BOH3 fell 0.5 percent in late Asian trade. The Dalian Commodity Exchange will resume trading on Monday.

REGIONAL EQUITY- BANGKOK, Feb 13 (Reuters) - Southeast Asian markets rose to new highs on Wednesday amid selective buying in the reporting season, with Singapore Telecommunications STEL.SI lifting the city-state's share market and Ayala Land Inc ALI.PS leading a rally in the Philippines.

The region broadly saw light trading volume as major markets in Asia such as China, Taiwan and Hong Kong remain closed for the Lunar New Year holiday.

Singapore's Straits Times Index .FTSTI ended up 0.9 percent at 3,301.04, the highest close since November 2010. SingTel ended up 0.8 percent, gaining as much as 1.4 percent at one point, ahead of its third quarter earnings on Thursday.

The Philippine index .PSI rose 1.1 percent to 6,527.99, marking an all-time closing high for the fourth time this month. Developer Ayala Land jumped 4.6 percent after it reported a 27 percent rise in 2012 profit to a record level.

Jakarta's Composite Index .JKSE was up 0.5 percent at 4,571.57, also a record high. Malaysia's index .KLSE rose 0.5 percent to a week high of 1,631.16, with foreigners buying shares worth a net $65.84 million, stock exchange data showed.

Bangkok's SET index .SETI climbed 1.7 percent to 1,514.11, the highest close in more than 18 years. It was among the overbought markets in the region, with a 14-day relative strength index (RSI) at 73.57 at the close. A level higher than 70 indicates an overbought market.

Trader's highlight

DJI - NEW YORK, Feb 7 (Reuters) - U.S. stocks declined on Thursday, taking a step back from their recent advance, prompted by comments by the ECB president on the euro and Europe's outlook.

The euro currency dropped against the safe-haven dollar and yen, spurring a retreat from risky assets such as stocks, after European Central Bank President Mario Draghi said the exchange rate was important to growth and price stability. Investors took that as a sign the bank is concerned about the euro's advance and its effect on the region's economy.

Growth sectors were among the weakest performers on the S&P 500: the S&P 500 materials index  was down 0.6 percent while the S&P energy index was down 0.5 percent. Housing stocks also declined, with a housing sector index off 1.4 percent.

Despite the day's decline and weakness earlier this week, the stock market has been in an almost uninterrupted up trend for most of the year, with the S&P 500 up 5.8 percent so far for 2013.

Many analysts say some weakness at this point is no surprise.

"Given the amount the market moved in January, having a little bit of a pullback and some consolidation where the market goes sideways for a little while, we think would be a healthy sign," said Eric Marshall, director of research at Hodges Capital Management in Dallas.

Top U.S. retailers reported strong January sales after offering compelling merchandise that drew in shoppers facing a hit to their take-home pay from higher payroll taxes.

The Dow Jones industrial average was down 42.47 points, or 0.30 percent, at 13,944.05. The Standard & Poor's 500 Index was down 2.73 points, or 0.18 percent, at 1,509.39. The Nasdaq Composite Index was down 3.34 points, or 0.11 percent, at 3,165.13.

Though the earnings season is winding down, results continue to boost growth estimates for the fourth quarter. According to Thomson Reuters data through Thursday morning, of 317 companies in the S&P 500 that have reported earnings, 69 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Economic data was mixed. Initial jobless claims dipped last week, with the four-week moving average falling to its lowest level since March 2008, signaling the economy continues to recover slowly.

A separate report said fourth-quarter productivity registered its biggest drop in nearly two years, while unit labor costs jumped 4.5 percent, more than economists expected. 

Roughly 6.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

NYMEX - SINGAPORE Feb 7 (Reuters) - U.S. crude steadied near $97 per barrel on Thursday as investors took a breather after the past few weeks of gains, ahead of a European Central Bank meeting later in the day and China's trade numbers due on Friday.

CBOT Soybean -  Nearby soybean futures on the Chicago Board of Trade edged lower on Thursday as spillover weakness from corn and positioning ahead of a monthly U.S. government crop report offset support from strong weekly soybean export sales, traders said. 

·         Market pressured by expectations of a massive Brazilian soy harvest. Brazil's government supply agency, Conab, raised  its estimate of the country's soybean crop to a record 83.4  million tonnes, from 82.7 million in January. 

·         Argentina's 2012/13 soy harvest is seen at 50 million  tonnes, below some initial expectations due to dry weather, the Buenos Aires Grains Exchange said in its first output forecast. The figure is below USDA's current Argentina forecast of 54 million tonnes.

·         USDA reported export sales of U.S. soybeans in the latest week at 1.667 million tonnes, above a range of trade estimates for 900,000 to 1.3 million. The figure included 896,100 tonnes of old-crop sales, also above expectations.

·         USDA reported weekly soymeal sales at 196,300 tonnes, above estimates for 75,000 to 175,000, and soyoil sales a  25,600 tonnes, within expectations for 10,000 to 30,000 tonnes.

·         Trade expects USDA to lower its forecast of U.S. 2012/13 soybean ending stocks in a monthly supply/demand report due out Friday. 

SINGAPORE, Feb 7 (Reuters) - Malaysian palm oil futures edged up on Thursday, as investors expect a marginal drop in January stocks, although cautious sentiment ahead of the upcoming long holiday capped gains.

Lower production is likely to have helped Malaysian palm oil stocks ease in January from a record high in the previous month, a Reuters survey of five plantation companies showed on Thursday.

Inventory levels most likely dropped 2.9 percent to 2.55 million tonnes in January from December's all-time high, the first decline since last June, according to the survey.

Stronger export demand seen in the last week of January may have helped cut stocks and the trend could persist, given palm oil's attractive discount to soybean oil and as worries eased over China's stricter quality regulation.

"Stocks are expected to drop, due to exports picking up towards end-January," said a dealer with a foreign commodities brokerage in Malaysia.

At the close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had gained 0.2 percent to 2,552 ringgit ($826) per tonne. Prices were rangebound between 2,530 and 2,567 ringgit.

Total traded volumes stood at 30,443 lots of 25 tonnes each, higher than the average 25,000 tonnes.

The Malaysian financial markets will be closed next Monday and Tuesday for the Lunar New Year holiday. Industry regulator the Malaysian Palm Oil Board will release January inventory and output data after the market resumes trading on Wednesday.

Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will issue export data for Feb. 1-10 also on Wednesday.

The market will be looking for trading direction from Friday's U.S. Department of Agriculture monthly supply and demand reports, which may be bullish for palm oil due to tighter soybean stocks.

In other markets, oil rose above $117 a barrel on Thursday as traders awaited word from the European Central Bank that could confirm speculation the region's troubled economy was turning a corner.

In competing vegetable oil markets, U.S. soyoil for March delivery eased 0.5 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange hit a one-week low.

Regional Equities - BANGKOK, Feb 7 (Reuters) - Most Southeast Asian stock markets eked out slim gains on Thursday as investors awaited the European Central Bank's policy meeting due later in the day, with Thai stocks recouping most early losses, led by gains in Advanced Info Service.

Bangkok's SET index closed at 1,499.81, down 0.04 percent, rebounding from its day low of 1,482.64. Telecommunications company Advanced Info Service Pcl rose 3 percent after it reported a 131 percent increase in quarterly earnings and set a higher-than-expected dividend.

UBS Investment Research told a press briefing the strength of domestic consumption remained supportive to Thai stock market, with its end-year SET index target set at 1,530 and energy, real estate and telecoms among its 'overweight' lists.

"Consumer credit as a percentage of household income stands at 47 percent; we believe 60 percent could be reached by 2015/16, at which point the Bank of Thailand could reign in credit," the broker said in a report.

Weak earnings weighed on broader market in Singapore, with the Straits Times Index  down 0.45 percent at 3261.77, weighed by a fall in CapitaMalls Asia Ltd  shares, following weak quarterly earnings.

Foreign investors sold Thai shares worth a net 3.04 billion baht ($102.15 million) and offloaded a net 33.07 million ringgit ($10.67 million) worth of Malaysian shares, stock exchange data showed.

RTRS - USDA seen trimming U.S., global soy stocks forecasts

CHICAGO, Feb 5 (Reuters) - Stressful crop weather has eroded soybean production prospects in Argentina and should prompt the U.S. Department of Agriculture to tighten its forecast of global soy inventories this week, analysts said.

Domestically, analysts expect USDA to raise its estimate of the U.S. 2012/13 soybean crush, an adjustment that should cause a 4.4 percent drop in soybean ending stocks that are already projected to hit a nine-year low at 135 million bushels by the end of August 2013.

With U.S. supplies so tight, the trade is counting on South America to replenish world soybean inventories. The early harvest is under way in parts of Brazil, which the USDA has projected will surpass the United States as the world's top soy exporter.

However, warm and dry weather has stressed developing crops in Argentina, the No. 3 soybean supplier after Brazil and the United States. The dry conditions represent a sharp turnabout for Argentina, after excessive rains delayed planting in December.

"We are dropping a bit (on production estimates) from Argentina, both from the later plantings as well as the slight dryness beginning to show," Allendale Inc. analyst Rich Nelson said.

The average estimate for Argentina's 2012/13 soybean production among 19 analysts surveyed by Reuters was 53.095 million tonnes, down from USDA's January estimate of 54 million. Estimates ranged from 51 million to 55.7 million.

A 53 million-tonne soybean crop would still represent Argentina's second-largest on record, following its 2009/2010 crop that totaled 54.5 million tonnes.

The average analyst estimate for Brazilian soybean production was 82.645 million tonnes, up slightly from USDA's January estimate for a record-large crop of 82.5 million tonnes. Estimates ranged from 80.9 million to 84 million.

Weather in Brazil has been largely favorable, although excessive rains have slowed the soybean harvest in a few areas and raised questions about crop quality. Brazil's government, which previously estimated the crop at 82.7 million tonnes, will update its official forecast on Thursday.

The expected drop in Argentine production, coupled with forecasts for a smaller U.S. soybean carry-out, should lead USDA to tighten its outlook for global soybean stocks at the end of the 2012/13 marketing year.

The average analyst estimate for world soybean ending stocks was 59.19 million tonnes, down from USDA's January forecast of 59.46 million.

U.S. SOYBEAN STOCKS SEEN SHRINKING

USDA in January projected U.S. soybean stocks at the end of the 2012/13 marketing year at 135 million bushels, the smallest since 2003/04. But several analysts said the government's figure undercounts usage from domestic soy crushers.

These processors have been earning historically high margins by aggressively crushing soybeans into soymeal, a critical source of protein in animal feed, and soyoil, used in foods and biodiesel fuel.

"The real glaring thing on their balance sheets, to me, is that it looks like they have underestimated the crush," said Anne Frick, oilseeds analyst with Jefferies Bache in New York. She predicted USDA would raise its soy crush estimate and lower soybean ending stocks to 120 million bushels.

The average analyst estimate of U.S. 2012/13 soybean ending stocks was 129 million bushels.

However, others said robust U.S. soybean exports are likely to stall in the coming months as the South American harvest hits the market, keeping ending stocks fairly stable.

"Even though we are ahead on export pace, USDA could easily make the assumption that we are going export next to nothing, starting in about three or four weeks," said Jack Scoville, vice president of the Price Futures Group in Chicago.

Trader's highlight

DJI - NEW YORK, Feb 5 (Reuters) - Global equity markets and oil prices bounced back on Tuesday after data showed the vast U.S. services sector extended a three-year expansion in January, while business activity in the euro zone showed signs of recovery.

U.S. and European stocks rallied, with the S&P 500 and Nasdaq gaining more than 1 percent, recouping most of their losses after a sharp sell-off the previous session that was sparked by renewed worries about the euro zone crisis.

A measure of world equity markets also was higher, though only slightly, because of a decline in emerging market shares.

Strong fourth-quarter earnings and signs of improving economic growth suggested the trend for equities remains higher.

"Yesterday was the first real down day of the year, which shows that we are in this strong bull market. Today we are back to the normal pattern. People are realizing that we've over-reacted to Europe yesterday," said Uri Landesman, president of hedge fund Platinum Partners in New York.

The Institute for Supply Management said its U.S. services sector index eased slightly, to 55.2 last month from 55.7 in December. The reading was in line with economists' forecasts, according to a Reuters survey.

In Europe, Markit's Eurozone Composite PMI, based on business activity across thousands of companies and a good gauge of economic growth, rose in January to a 10-month high of 48.6 from 47.2 the previous month.

The day's data bolstered the view that the world economy was improving, a sentiment that has lifted stock markets around the globe and pushed the benchmark U.S. S&P 500 to a fresh five-year intraday high on Tuesday.

Corporate results also helped the rally. With 56 percent of S&P 500 companies reporting, 68.7 percent posted earnings that beat expectations, or better than the 65 percent rate over the past four quarters or the 62 percent pace since 1994.

The Dow Jones industrial average closed up 99.22 points, or 0.71 percent, at 13,979.30. The Standard & Poor's 500 Index rose 15.58 points, or 1.04 percent, at 1,511.29. The Nasdaq Composite Index gained 40.41 points, or 1.29 percent, at 3,171.58.

"We do not envisage prices receding for any great length of time," said Carsten Fritsch, an analyst at Commerzbank. "The supply-side risks still prevailing, shrinking OPEC supplies and the brightening global economic outlook all suggest that such a retreat is unlikely."

The euro rose against the dollar and yen, returning to its months-long trend of appreciation, as better-than-expected euro zone data affirmed expectations that the European Central Bank will keep policy steady when it meets this week.

NYMEX - SINGAPORE, Feb 5 (Reuters) - U.S. crude slipped on Tuesday to trade near $96 per barrel as traders booked profits on renewed euro zone worries following signs of political uncertainty in the troubled region, while a slightly firmer dollar also hurt prices.

CBOT Soybean - Soybean futures on the Chicago Board of Trade rose for a third

session on Tuesday, buoyed by uncertainty about crop weather in

Argentina, traders said.

·         Some midday weather forecasts for Argentina's crop belt looked warmer and drier, raising concern about crop stress in the world's No. 3 soy producer.

·         Crop weather in Brazil remains mostly favorable but rains are expected to slow the harvest in Mato Grosso this week.

·         Brazil's vegetable oils association Abiove raised its soy crop forecast to a record 82.3 million tonnes from 81.6 million in December. The adjustment came a day after Brazilian analytical firms AgRural and Celeres both lowered their forecasts for the crop.

 

·         Canadian canola supplies dropped to a six-year low as of Dec. 31, highlighting a disappointing crop and strong demand for oilseeds, a Statistics Canada report said.

 

·         A group of Paraguayan farmers asked the courts to stop U.S. biotech company Monsanto from charging royalties for use of its genetically modified soybeans in the world's No. 4 soy exporter. The farmers were inspired by a similar case in neighboring Brazil. 

FCPO  - SINGAPORE, Feb 5 (Reuters) - Malaysian palm oil futures eased on Tuesday on profit-taking after four straight sessions of gains, but hopes of better-than-expected inventory and export data next week limited losses.

Persistent concerns over dry weather in South America and its impact on the soy crop there also kept a floor under palm oil prices. Lower soybean oil production could shift some demand to the cheaper palm oil, which in turn may help ease record stocks for the tropical oil.

"We are revising our January inventory forecast to 2.57 million tonnes from 2.66 million tonnes as we believe that exports in the month may have turned out better than expected at a 7 percent decline as compared to our earlier estimate of an 11 percent decline," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, said in a note.

"Although we believe the overall data will be positive on prices, the upside should still be limited in view of the still high inventory level at way above 2 million tonnes."

January palm oil stocks data from the Malaysian Palm Oil Board is due on Feb. 13. Inventory levels in the world's No.2 producer hit an all-time high of 2.63 million tonnes in December.

Traders are also eyeing Feb. 1-10 export data after a better-than-expected performance in January.

By the close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had shed 0.7 percent to 2,549 ringgit ($826) per tonne, after adding almost 5 percent in the last four sessions.

It rose to 2,592 ringgit the previous day, just slightly off a 3-month high touched on Thursday.

Total traded volumes stood at 25,536 lots of 25 tonnes each, slightly higher than the average 25,000 tonnes.

In other markets, oil edged higher above $115 a barrel on Tuesday as investor concerns faded about political risks in the euro zone, although ample supply could hinder its chances of extending a three-week rally.

In competing vegetable oil markets, U.S. soyoil for March delivery eased 0.1 percent in late Asian trade, giving up some gains from the previous sessions.

The most active September soybean oil contract on the Dalian Commodity Exchange also edged lower, coming off the previous day's three-month high.

Regional Equities - BANGKOK, Feb 5 (Reuters) - Southeast Asian stock markets ended mostly lower on Tuesday as weaknesses in broader Asia prompted profit-taking, with Singapore falling to a one-week low while Indonesia ending off record high after weaker-than-expected fourth quarter GDP data.

Singapore's Straits Times Index  was down 0.8 percent at 3,272.66, the lowest close since Jan. 29, matching a 0.9 percent fall in the MSCI's broadest index of Asia-Pacific shares outside Japan

Jakarta's Composite index eased 0.3 percent to 4,479.44, climbing at one point to an intraday record of 4,492.53 and after Monday's record finish of 4,490.57.

Stocks in Malaysia and Thailand recouped most of their early losses amid late buying into battered energy names such as PTT Pcl and Petronas Gas Bhd 

Malaysia's index edged down 0.07 percent to 1,633.35 and Thai index eased 0.04 percent to 1,505.72. The Philippines pared early losses to rise 0.5 percent to 6,470.49, topping Monday's record finish of 6,435.98.

Valuations of some Southeast Asian blue chips has recently increased amid optimism about 2013 earnings growth.

"Last week, MSCI Thailand 2013 consensus earnings growth estimates were revised up the most by 35 basis points, followed by MSCI Singapore by 3 bps," Morgan Stanley Research said in its ASEAN weekly chartbook dated Feb. 1.

"During the last one month, PER for Indonesia has increased the most, by 3 percent... MSCI Thailand is currently trading at 16 percent premium to its 7-year average at 12.0x," it said.