Trader's Highlight

DJI - NEW YORK, May 31 (Reuters) - Stocks ended May with their largest loss in eight months and commodities also took a battering after a spate of worrying U.S. economic data on  Thu rsday hit markets already reeling from  Europe's debt troubles. 

   The euro had its worst performance since September too, repeatedly hitting a near two-year bottom. 

   U.S. bond yields fell to record lows as fears about Spain's troubled banks and Greece's possible exit from the euro zone spurred a global race for safe assets. 

   Many investors braced for another round of risk aversion on Friday should the monthly jobs report from the U.S. government contain weaker numbers than preliminary data issued by a payrolls processor on Thursday. 

   "Europe is the main issue, no question about it, but you have a supporting cast from the U.S. data," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.       

    

   Spain remained the focal point of traders on growing speculation that Madrid would sooner or later ask for outside help to bail out its banks. Wall Street pared some of the day's losses on a report -- later denied -- of possible International Monetary Fund aid. But the European Commission has offered direct aid for a euro zone rescue fund to recapitalize distressed Spanish banks and more time for Spain to reduce its budget deficit. 

   Markets got an inkling of what was to come in Friday's U.S. jobs report after payrolls processor ADP said private employers created 133,000 jobs in May, fewer than the expected 148,000. New claims for unemployment benefits rose by 10,000 for the fourth straight weekly increase, the Labor Department reported.  

   Investors were dismayed by another report on economic growth and manufacturing in the U.S. Midwest that pointed to a slowdown.  

   At the close, the Dow Jones industrial average was down 26.41 points, or 0.21 percent, at 12,393.45. The Standard & Poor's 500 Index lost 2.99 points, or 0.23 percent, at 1,310.33. The Nasdaq Composite Index  fell 10.02 points, or 0.35 percent, to 2,827.34. 

   For the month, the S&P 500 was down 6 percent -- its sharpest loss since September. 

   European stocks closed down 7 percent for May and global equities tumbled 10 percent -- also marking their worst showing since September. 

   Commodities fell even more, with crude oil futures plunging 15 percent for the month both in London and New York for their biggest loss since December 2008. Copper lost 11 percent for the month. 

   "There's a lot of instability in the world, and along with the weak economic signals there's going to be significant volatility that I don't expect to end anytime soon," said Don Steinbrugge, managing partner of Agecroft Partners in Richmond, Virginia.  

   The benchmark 10-year U.S. Treasury note rose 12/32 in price, its yield at 1.578 percent -- down from Wednesday's 1.6 percent levels, which already marked a 60-year bottom. 

        

   NO ECB HELP 

   In Europe, ECB President Mario Draghi ruled out hopes that the central bank would step in to ease the pressure in financial markets as EU leaders grappled with measures to tackle structural problems in the debt crisis.

   "Can the ECB fill the vacuum of lack of action by national governments on fiscal growth? The answer is 'No,'" Draghi told the European Parliament. "Can the ECB fill the vacuum of the lack of action by national governments on the structural problem? The answer is 'No.'"  

   Concerns over Europe's debt crisis and the lack of a clear policy response have been rising since Spain unveiled unconvincing plans to recapitalize nationalized lender Bankia, raising the possibility it could need outside help.   

   Those worries kept Spain's 10-year bond yields at around 6.6 percent, not far from Wednesday's euro-era high of 6.79 percent and close to the crucial 7 percent mark, which has led to troubled nations like Portugal and Ireland needing bailouts.   

   The euro was last at $1.2358 to the dollar, after setting a 23-month low at $1.2335. The single currency was flat on the day and down nearly 7 percent on the month. 

   The flight from Spanish debt and Italian bonds, which are under threat of contagion from Spain, has boosted demand for the safety offered by German government paper. 

   Germany's two-year bonds traded just above zero percent on Thursday, while benchmark 10-year Bund yields hovered around their record low of about 1.25 percent. 

NYMEX - NEWYORK,     NEW YORK, May 31 (Reuters) - U.S. crude futures fell more than 1 percent on Thursday, and dropped 17.49 percent in May, as rising crude oil inventories, disappointing economic data and a deepening euro zone debt crisis pressured oil prices. 

    Crude stocks in the United States rose 2.21 million barrels in the week to May 25, the Energy Information Administration said in its weekly report. The increase exceeded expectations.

    The 10th straight rise in crude stocks reported by EIA was counter to the industry's American Petroleum Institute report released on Tuesday that showed crude stocks fell 353,000 barrels.

    The EIA reported gasoline stocks fell 833,000 barrels and distillate stocks fell 1.71 million barrels. 

    Crude stocks at Cushing, Oklahoma, delivery point for the U.S. light sweet crude contract, rose 54,000 barrels, the EIA said. 

    Crude stocks were expected to be up 600,000 barrels, gasoline stocks down 800,000 barrels and distillate stocks down 100,000 barrels, according to a Reuters survey of analysts taken ahead of the weekly inventory reports. 

    Oil and equities felt pressure from reports showing private payroll growth accelerated only slightly last month and claims for jobless benefits rose last week, indicating the U.S. labor market recovery was.

    A separate report showed factory activity in the Midwest slowed this month and U.S. economic growth in the first quarter was a bit softer than initially estimated. 

    The U.S. May nonfarm payrolls report is due on Friday. The data are expected to show a rise of 150,000, after the economy added 115,000 in April. 

    Crude pared sharp losses of more than 2 percent in afternoon trading, after Dow Jones reported that the International Monetary Fund was considering a rescue loan to Spain.  

    But later, IMF Managing Director Christine Lagarde said there was no such plan.

     

CBOT SOYBEAN - May 31 (Reuters) - Chicago Board of Trade soft red winter wheat futures fell to their session lows at the close of pit trading at 1:15 p.m. CDT (1815 GMT) on Thursday, hitting their lowest level in two weeks due to pressure from the ongoing harvest of this year's U.S. crop, traders said. 

    * CBOT wheat fell 0.3 percent in May, its fourth straight monthly decline. Prices have dropped 3.1 percent during the past four months. CBOT wheat's last four-month losing streak ended in October 2008. 

   * The benchmark CBOT July wheat contract has fallen for three straight days. Kansas City Board of Trade hard red winter wheat futures and MGEX spring wheat also were lower on Thursday, with KCBT July off 1.6 percent. 

    * Analysts were expecting a weekly U.S. Agriculture Department report on Friday morning to show wheat export sales ranging from 350,000 to 500,000 tonnes, down from 827,000 a week earlier. 

    * Spot basis bids for hard red winter wheat in the U.S. Plains were steady to weaker on Thursday morning as the advancing harvest boosted the the supply available to the market.  

    * Rainfall during the past week in key grain-growing areas of Russia and Ukraine raised hopes that drought damage to crops in those areas will not get any worse.

FCPO - JAKARTA, May 31 (Reuters) - Malaysian palm oil futures slipped to near a one-week low on Thursday and notched their biggest monthly loss since September 2009 as they tracked a wide sell-off in commodities due to worries over the effect of the euro zone debt crisis on the global economy.

    The hunt for safe-haven assets in Europe spread to Austrian and French bonds, although European shares and the euro regained some stability, as worries over Spain and its troubled banks weighed on market sentiment.

    The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended down 0.3 percent at 3,101 Malaysian ringgit ($980) per tonne. Prices, which earlier hit a low at 3,083 ringgit, have slipped more than 10 percent this month. 

    "Macro again," said a Jakarta-based palm trader. "Last night all European stock markets were much lower and the soybean complex was also lower. 

    "But the downside is limited due to a weaker ringgit."
 

    Traded volumes stood at 15,106 lots of 25 tonnes each, compared with Wednesday's total at 17,601 lots.

 

    Last week when no significant breakthrough was made in resolving Europe's debt crisis, the benchmark fell to its lowest this year at 2,993 ringgit per tonne. 

    Palm oil is set to revisit its May 23 low of 2,993 ringgit per tonne, driven by a wave (5), said Reuters market analyst Wang Tao based on technical analysis.

    In related markets, oil edged up near $104 as buyers moved back in after Wednesday's heavy sell-off, but continuing nervousness around the demand outlook and the euro zone crisis kept oil on course for its biggest monthly percentage drop in two years.

    Chicago corn and soybeans inched lower and were headed for their biggest monthly decline since September amid the deepening euro zone debt crisis. 

    Earlier this week, benchmark palm prices had risen to their highest in almost two weeks, buoyed by weather conditions in the United States. 

    Helping to stem losses in palm oil were expectations of a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening. 

    Indonesia kept its export tax for crude palm oil at 19.5 percent for June.

    In Malaysia, the world's second-biggest palm oil producer after Indonesia, Prime Minister Najib Razak unveiled the $3.3 billion listing of palm oil giant Felda Global.

    Data from Malaysia also showed palm oil product exports during May rose 2.4 percent to 1,382,091 tonnes from 1,349,642 tonnes shipped from April.

    "Exports were within expectations," said a Kuala Lumpur-based trader. "But many are still hopeful of an improvement in shipments due to Ramadan." 

    Cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products for May fell 0.2 percent to 1,333,869 tonnes.

    In other vegetable oil markets, the most active Dalian soyoil September contract eased 1 percent.  

Trader's Highlight

DJI - NEW YORK,    NEW YORK, May 30 (Reuters) - Benchmark U.S. Treasury yields fell to their lowest levels in at least 60 years on Wednesday, while stocks and commodities sold off as fear of the euro zone's debt crisis gripped investors.  

   The euro fell below $1.24 to a fresh 23-month low against the dollar after Italian borrowing costs soared, and concerns mounted over Spain's banking sector following a caution by its central banker that Madrid will miss deficit targets for this year. Crude oil prices fell 3 percent. 

   In equity markets, the three major indexes on Wall Street closed down more than 1 percent each. Pan-European and global share indexes also lost more than 1 percent apiece. 

   Spain's stock market hit a nine-year low as the country's borrowing costs rose to near the 7 percent level that had forced other euro-zone nations to seek bailouts. 

   "You're seeing the deterioration in Spain gain magnitude and that is worrisome because it involves a larger bailout (than Greece's) and far more capital to alleviate banking problems," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.   

   "Traders and long-term investors believe Europeans are working on solutions. But the ultimate question is, 'Will capital markets give them the time before a liquidity issue becomes a solvency issue?'" 

    

   GREEK POLLS CLOUDY; SPANISH STOCKS LANGUISH   

   In Greece, the outcome of an election next month that may decide whether it remains in the euro was still uncertain as polls showed parties for and against a bailout neck-and-neck.  

   At the close, the Dow Jones industrial average <.DJI> was down 160.83 points, or 1.28 percent, at 12,419.86. The Standard & Poor's 500 Index <.SPX> was down 19.10 points, or 1.43 percent, at 1,313.32. The Nasdaq Composite Index <.IXIC> was down 33.63 points, or 1.17 percent, at 2,837.36. 

   The benchmark 10-year U.S. Treasury note was up 7/32 in price, with its yield of 1.620 percent falling to its lowest in at least 60 years, based on monthly figures gathered by Reuters. 

   European stocks, tracked by the FTSEurofirst 300 index <.FTEU3>, fell 1.5 percent to close at 975.74, after trading 105 percent of its 90-day volume average. The blue-chip Euro STOXX 50 <.STOXX50E>, which fell 2 percent, traded 70 percent of its volume average.   

   Spain's Ibex 35 index fell as much as 2.9 percent to a session low at 6,073.70, its lowest since 2003. 

   MSCI's all-country world equity index shed 1.66 percent. 

   The yield on Spain's 10-year benchmark note was at 6.675 percent. Italy's funding costs rose sharply at a bond sale, with 10-year yields topping 6 percent for the first time since January.

   The euro was last down 1 percent at $1.2367 after touching $1.2360 earlier, its lowest level since early July 2010. The euro also fell against the safe-haven yen, losing nearly 1.5 percent to trade near 97.82 yen, a four-month low.    

    

   ONLY "BAND-AID" SOLUTIONS FROM EUROPE 

   "Uncertainty remains high and headline risk is likely the key driver," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto. "The fear is that we only have Band-Aid solutions, and we still don't have a medium-term plan for Europe." 

   The European Commission threw Spain two potential lifelines, offering more time to reduce its budget deficit and offering direct aid from a euro-zone rescue fund to recapitalize distressed banks.  

   The euro's weakness underpinned the dollar index <.DXY>, which measures the dollar against a basket of major currencies. The index hit a session high above 83.1, its highest level since September 2010. 

   The rise in the dollar, as well as fears about the European debt crisis, dragged down commodities. Copper and platinum both sank to 4-1/2-month lows as investors piled into safe havens. [MET/L] 

   "As we've seen during other periods of extreme risk aversion, investors go into Treasury bonds, which are yielding record lows, or they stay in cash. It's preservation of capital," said analyst Robin Bhar at Societe Generale in London.

NYMEX - NEWYORK,     NEW YORK, May 30 (Reuters) - U.S. crude futures tumbled more than 3 percent o n W ednesday, falling to a seven-month low on the threat to petroleum demand from a spreading euro zone debt crisis and China's signal that it is not planning a large economic stimulus.  

    Rising borrowing costs for Spain and Italy and the latest poll showing a lead for Greece's left-leaning, anti-austerity parties ahead of next month's elections added to concerns about the region's economy being enveloped in the debt turmoil. 

    U.S. crude was headed for a monthly decline of more than 17 percent for May. Equities and other commodities, like industrial feedstocks platinum and copper, also felt pressure from the mounting crisis in the euro zone economy. 

    Expectations that China would act to counter slowing growth were dimmed after influential academics said Beijing should shun aggressive fiscal stimulus, in remarks published in leading state-backed newspapers.

    U.S. crude inventories fell by 353,000 barrels last week, according to industry group the American Petroleum Institute's weekly report.

    Gasoline stocks rose 2.1 million barrels and distillate stocks fell 1.3 million barrels, the API said. 

    Crude stocks had been forecast to be up, by 600,000 barrels. Gasoline stocks were expected to be down 800,000 barrels, with distillate stocks seen near flat, down 100,000 barrels.     

    

    MARKETS NEWS 

   

    * London copper fell more than 2 percent, turning negative for the year and coming within $20 of its 2012 low on fears of a widening European debt crisis and fading hopes for a Chinese stimulus. 

CBOT SOYBEAN - May 30 (Reuters) - Nearby soybean futures on the Chicago Board of Trade fell, halting a three-day rally, as mounting concerns over Europe's debt crisis prompted investors to exit risky assets including commodities. 

    * U.S. crude oil futures fell about $3 per barrel, adding pressure on soybeans and soyoil.  

    * But new-crop November soybeans were higher at the end of pit trading at 1:15 p.m. CDT (1815 GMT), buoyed by worries about dryness in parts of the U.S. Midwest crop belt, and updated forecasts that scaled back rains that had been expected this week.     

    * USDA late Tuesday said the U.S. soybean crop was 89 percent seeded, up from 76 percent a week earlier and well ahead of the five-year average of 61 percent. 

    * USDA said the crop was 61 percent emerged, ahead of the five-year average of 30 percent. [US/SOY] 

    * Stevedores at Brazil's largest port, Santos, went on strike on Wednesday, threatening delays to shipments of soy, coffee, sugar and other commodities, the port authority said.

    * CIF soybean basis bids for soybeans shipped to the U.S. Gulf were mostly steady as moderate demand from exporters was met by limited farmer sales. 

    * Front-month July soybeans fell to a one-week low before paring losses. The contract traded between support at the 100-day average of $13.48-1/2 and resistance at the 50-day average of $14.22.  

FCPO- JAKARTA,  May 30 (Reuters) - Malaysian palm oil futures snapped a four-day rally on Wednesday, falling more than 2 percent as euro zone debt jitters weighed on prices, although losses were capped by expected demand ahead of the Muslim fasting month of Ramadan in July. 

    European shares slipped and the euro touched a 23-month low on Wednesday as investors worried that Spain's banking problems would push its borrowing costs to unsustainable levels and after China signalled it is not planning a large stimulus package. 

    The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended 2.1 percent lower at 3,111 Malaysian ringgit ($990) per tonne. Prices, which earlier hit a low at 3,106 ringgit, have slipped more than 10 percent this month. 

    Traded volumes stood at 17,601 lots of 25 tonnes each, compared with Tuesday's total at 15,689 lots. 

    Palm oil is "taking its cue from macro uncertainties," said a Kuala Lumpur-based trader. "If Europe fail to provide the much needed simulation, it will have more downside."

    Last week, palm prices were weighed down as no significant breakthrough was made in resolving Europe's debt crisis, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne. 

    Palm oil will drop to 3,069 ringgit per tonne, driven by a wave (5), the fifth wave of a five-wave cycle, said Reuters market analyst Wang Tao based on technical analysis.

    "The market fundamentals are still bullish because of slower production and exports not being too bad, but outside factors really scared buyers," said a Jakarta-based buyer. 

    But highlighting how jittery investors are, benchmark palm prices rose to their highest peak in almost two weeks earlier this week as investors keep a close eye on weather conditions in the United States. 

    Soybeans rose for a fourth straight session, supported by dryness in parts of the U.S. Midwest, tight supplies from South America and strong Chinese demand. 

    "Palm oil today is down a bit," a second Kuala Lumpur-based trader said. "With the euro zone crisis dragging ... everything is uncertain." 

    "So far so good," he added on the U.S. weather patterns. "But it's only the initial part of the planting season." 

    Also helping to boost palm prices, according to traders, was a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening. 

    "We are moving into the fasting season, where demand is going to come in and pick up," the second trader added. 

    In other vegetable oil markets, the most active Dalian soyoil September contract eased slightly. 

REGIONAL EQUITY - May 30 (Reuters) - Thailand's stock market ended Wednesday 1.3 percent weaker, while other southeast Asian markets closed mixed as fears over Spain's bank crisis and the possibility of China taking a cautious stance on economic stimulus measures damped investor appetite for risky assets.  

    Concerns over Spain's borrowing costs rising to unsustainable levels hit hopes for the recovery of the euro zone.  

    Thailand <.SETI> snapped a four-session rising streak, but Bangkok-based Viwat Techapoonphol, senior strategist of Tisco Securities, said the fall would help boost buying in the Bangkok market, where foreigners have been net sellers only for one month so far this year. 

    "There will be buying opportunities, especially for local investors, in this market at the lower prices. If you look at the domestic economy in the second half, I think it's a good story," Techapoonphol said. 

    Shares in Singapore <.FTSTI> lost 0.6 percent, and the Philippines benchmark <.PSI> edged down 0.1 percent.  

    Indonesian stocks <.JKSE>, recovering from early losses, closed steady with foreign inflows of $12.36 million, while Malaysian shares <.KLSE> gained 0.6 percent with net foreign buying of $29.80 million and Vietnam's benchmark <.VNI> added 0.9 percent.   

  

RTRS- India seen ending veg oil base import price freeze

NEW DELHI, May 28 (Reuters) - India is likely to end its freeze on the base import price of refined vegetable oils, government sources said on Monday, to protect its refineries from cheaper imports of palm oil from Indonesia, the world's top producer of the cooking oil.

Edible oil refineries in India, the world's top vegetable oil importer, have been complaining about cheaper imports after Indonesia cut export tax on refined varieties and raised the duty on crude palm oil.

India has kept the base import price, used to calculate import tax irrespective of the purchase price, unchanged since 2006 when the government was battling high food prices.

"There has been a freeze on base import price for some years now but there is a need to do away with the freeze on tariff value on refined vegetable oils. We also need to protect our domestic units," one of the sources said.

Importers are currently taxed 7.5 percent duties based on the tariff value set at $484 a tonne - a low price to pay and bring in processed edible oils.

RTRS- China to raise soybean imports again - Oil World

HAMBURG, May 29 (Reuters) - China is likely to raise soybean imports in the 2011/2012 season despite recent shipment cancellations as the country has harvested a smaller soy crop and faces continued high demand, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.

China is likely to import 56.8 million tonnes of soybeans in Oct. 2011/Sept. 2012 against 52.3 million tonnes in 2010/11, Oil World said.

"With the recent purchases and vessel lineups this quantity may actually turn out on the low side," it said. "Additional sizeable increases in imports will be required next season in view of the prospective further decline in Chinese oilseed production under the lead of soybeans and rising domestic requirements."

China's own 2011/12 soybean crop fell to 13.6 million tonnes from 15.08 million tonnes in the previous year, it said.

Global markets were surprised on May 24 when a Chinese trading house cancelled four soybean shipments, generating concern about possible falling demand from China, the world's largest soybean buyer. [ID:nL4E8GP0HB]

Oil World stressed such shipments were bought at previously high soybean prices which have since fallen back. [ID:nL4E8GN0M2]

"Of course China needs these quantities but is going to buy them at lower prices," it said.

RTRS- ARGENTINE 2012 SOYBEAN CROP MAY FALL TO 39 MLN T FROM 49.2 MLN T IN 2011- OIL WORLD

HAMBURG, May 29 (Reuters) - Argentina's 2012 soybean crop could fall as low as 39-40 million tonnes from 49.2 million tonnes in 2011 as drought and flooding continue to force farmers to abandon soy crops, Hamburg-based oilseeds analysts Oil World said on Tuesday.

"The Argentine soybean crop remains in trouble as acreage abandonment is exceeding expectations as a result of severe drought in the northern states as well as the latest flooding in parts of the Buenos Aires province," Oil World said.

"It is thus possible that the soybean crop plunges to only 39-40 million tonnes compared with our current estimate of 40.5 million tonnes and last year's 49.2 million tonnes."

Argentina is the world's third-largest soybean producer after the United States and Brazil. Estimates of South American soybean production continue to shrink as farmers harvest the remainder of the southern hemisphere crop, a factor driving down forecasts for U.S. and global inventories and supporting prices.

Drought and then flooding in Argentine crop areas prompted the Buenos Aires Grains Exchange on May 24 to cut its estimate for the country's 2011/12 soybean crop to 39.9 million tonnes from a previous estimate of 41 million tonnes. [ID:nL1E8GOD38] Brazil is also suffering a poor soybean crop. [ID:nL1E8GM8IP]

"This year's soybean crop failure in South America is additionally weighing on this season's tight soyoil supplies," Oil World said.

Global 2011/12 season soyoil output is likely to rise only 0.3 million tonnes on the year to 41.7 million tonnes following a 2.5 million tonne rise in 2010/11, it forecast.

"We expect world consumption of soyoil to exceed production by 0.5-0.6 million tonnes this season, representing an imbalance which can persist only temporarily."

This will result in a "pronounced reduction" in global soyoil stocks to 3.8 million tonnes at the end of the 2011/12 season against 4.4 million tonnes a year previously, it forecast.

Trader's Highlight

DJI- NEW YORK, May 29 (Reuters) - The euro neared a two-year low o n T uesday as investors fretted about Spain's troubled banking system, but global stocks jumped on speculation Greece would stay in the euro zone and news that China would take new measures to stem an economic slowdown.

The euro fell further below $1.25 after Egan-Jones Ratings cut Spain's credit score for the third time in less than a month, saying the need to support the country's banks was putting new strains on Spanish public finances.

The euro fell to lows versus the U.S. dollar last seen in since July 2010, as Spain's 10-year borrowing costs rose to 6.54 percent. The euro traded down 0.3 percent to $1.2503.

Spanish stocks also fell and Spain's borrowing costs held near six-month highs after a source said the government would issue new debt to recapitalize troubled lender Bankia.

European Central Bank officials declined to comment on speculation of further action to bolster banks in the euro zone.

"The rumor mill has been busy, with talk of an ECB press conference about bank recapitalization, supporting the euro and giving euro zone stocks upside momentum," said Saxo Bank Chief Economist Steen Jakobsen, in Copenhagen. "We do not believe in it, for the record."

Stocks on Wall Street rose on renewed hopes Greece will stay in the euro zone after Greek election polls pointed to support for pro-bailout parties in elections next month.

The major U.S. indices were up more than 1 percent even though Facebook Inc hit a new low of $28.65, with losses accelerating after falling through the $30 per share barrier.

The Dow Jones industrial average <.DJI> added 125.86 points, or 1.01 percent, to end at 12,580.69. The Standard & Poor's 500 Index <.SPX> was up 14.60 points, or 1.11 percent, at 1,332.42. The Nasdaq Composite Index <.IXIC> was up 33.46 points, or 1.18 percent, at 2,870.99.

Investors took heart from polls showing a party that backs Greece's international bailout was leading ahead of a June 17 election. If the New Democracy Party can form a government, Greece would be less likely to quit the euro. [ID:nL5E8GTCHN]

"There's increasing hope that the more conservative party will win out in Greece, which is enough to spur some buying today," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Reports that China was planning a new round of stimulus spending to boost lending and growth also cheered stock markets and briefly boosted oil prices, which later slipped on the Spain downgrade and Middle East supply worries. [ID:nL4E8GT0AU]

Traders also appear to be anticipating better-than-expected economic news this week. U.S. May jobs and Institute for Supply Management reports are due on Fr iday, noted Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Still, a high degree of caution marked trading in the bond markets.

U.S. government debt prices slipped in late trade and the yield on Germany's 10-year bond hit a record low as doubts grew over Spain's plan to recapitalize its banks and obtain financing for its struggling regional governments.

"It's mostly how you solve the Spanish bank problem, so there's a bit of safe-haven buying," said David Keeble, global head of interest rates strategy at Credit Agricole Corporate & Investment Banking in New York.

Spanish debt rose within 46 basis points of the 7 percent threshold that was the tipping point that forced other euro zone countries such as Portugal and Ireland to seek emergency rescues.

NYMEX- NEW YORK, May 29 (Reuters) - U.S. crude edged lower on Tuesday, retreating after a downgrade of Spain's credit rating sent the euro reeling against the dollar, while hopes that Greece will remain in the euro zone and China will move to stimulate growth limited oil's losses.

Egan-Jones Ratings cut Spain's credit rating for the third time in less than a month, pressuring the single currency and rekindling fears of a spreading debt crisis in the euro zone. [ID:nL1E8GT7HY] [USD/]

Before the downgrade, oil and equities rose on optimism about polls showing leads for Greek political parties in favor of austerity and a report that China's biggest banks have accelerated lending. [ID:nL5E8GQ2CK] [ID:nL4E8GT0AU]

Also supportive for oil were revived concerns about supply disruptions because Iran's dispute with the West over Tehran's nuclear program remains unresolved.

* On the New York Mercantile Exchange, July crude fell 10 cents, or 0.11 percent, to settle at $90.76 a barrel, having traded from $90.25 to $92.21.

* China's biggest banks appeared to have accelerated lending toward the end of this month, the official Shanghai Securities News reported on Tuesday, citing unidentified sources. [ID:nL4E8GT0AU]

* OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained output at high rates and Iranian shipments did not fall substantially more ahead of a European Union embargo set for July, a Reuters survey found on Tuesday. [ID:nL9E8CA01M]

CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade ended higher for a third straight session, supported by soybean/corn spreading and concerns about dry weather limiting the early growth of the U.S. soy crop, traders said.

* However, soybean values backed off the day's highs by the close of pit trading at 1:15 p.m. CDT (1815 GMT) as a downgrade of Spain's sovereign rating prompted traders to exit risky assets such as commodities.

* Soymeal and soyoil followed soybeans higher but soymeal gained relative to soyoil on meal/oil spreading.

* Dry weather was a worry for soybeans in much of the Midwest, especially southern areas, following a hot and windy U.S. holiday weekend. But showers were crossing parts of Ohio, southern Indiana and Kentucky at midday Tuesday.

* MDA EarthSat Weather said much-needed rains were expected in the southern Midwest and northern Delta over the next few days, and more rains were expected in the Midwest next week. The showers should replenish moisture supplies and improve conditions for corn and soybean growth.

* Oilseed crushers in Argentina's main grains hub Rosario will go on strike over wages on Wednesday, the general secretary of the local union Pablo Reguera said. [ID:nL1E8GT56K]

* China is likely to raise soybean imports to 56.8 million tonnes in 2011/2012, despite recent shipment cancellations, as the country has harvested a smaller soy crop and faces continued high demand - oilseed analysts Oil World. [ID:nL5E8GTAS5]

* Argentina's 2012 soybean crop could fall as low as 39 million to 40 million tonnes, from 49.2 million tonnes in 2011, as drought and flooding continue to force farmers to abandon soy crops - Oil World. [ID:nL5E8GT5RI]

* USDA reported export inspections of U.S. soybeans in the latest week at 12.414 million bushels, near the low end of estimates for 11 million to 15 million bushels.

FCPO- JAKARTA, May 29 (Reuters) - Malaysian palm oil futures climbed to a near two-week high on Tuesday as investors cited a rebound from a sell-off on the euro zone debt crisis, while expectations of dry weather conditions in soybean-growing regions in the United States also supported prices.

The euro hovered near a two-year low as investors worried about Spain's banking problems, the outcome of the Greek elections and the health of the global economy. [MKTS/GLOB]

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange closed 1.1 percent higher at 3,178 ringgit ($1,000) per tonne. Prices have slipped about 8 percent this month.

Traded volumes stood at 15,689 lots of 25 tonnes each, compared with Monday's total at 14,730 lots.

"It was over-sold to begin with," said a Singapore-based analyst. "If you look at soybean prices, it has been quite resilient, so palm has been over-shooting to the downside.

"If you have a world (economic) crisis, you still need people to eat ... if there is no supplier, then prices will shoot up regardless."

Last week, the lack of any significant breakthrough in resolving the debt crisis in Europe weighed on palm prices, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne.

Prices rose as high as 3,193 ringgit on Tuesday, the highest level since May 16, and traders say they are likely to hit 3,200 before the end of May.

In related markets, corn and soybeans firmed as some weather models forecast crop-stressing heat in the U.S. Midwest this week. [GRA/]

"It was over-sold," said a Kuala Lumpur-based trader. "The fundamentals have been positive, even when we fell to 2,993. On the technical side, we have posted a bottom, so sentiment has shifted back to positive."

Traders also said there was some buying after leading palm oil buyer India, looked likely to end its freeze on the base import price of refined vegetable oils. [ID:nL4E8GS276]

"There is also some talk about India wanting to raise import products' base prices. Maybe some buying or covering before India raises base prices," said a second Kuala Lumpur-based trader. "Palm oil is more in consolidation mode after last week's sharp falls.

"There is not as much concern and fear about Europe. Maybe we can see some light at the end of the tunnel."

Also helping boost palm prices, according to traders, was a rise in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening.

REGIONAL EQUITY- May 29 (Reuters) - Most Southeast Asian stocks ended firmer on Tuesday on hopes that China might launch spending measures to boost growth, but trading volumes and gains were capped asconcerns over a euro zone recovery flared after a surge in Spanish borrowing.

Investors were still cautious, waiting for clues from the euro zone, which is struggling to overcome its debt crisis, though an opinion poll pointed to the possibility of the formation of a Greek government committed to keeping the country in the euro zone in a June 17 election. [ID:nL5E8GQ2CK]

"China spending more is always welcome news for equities," said Song Seng Wun, an economist at CIMB, based in Singapore.

"Optimism has returned at least for now. But a long wobbly road is ahead," he said referring to the euro zone crisis.

Stocks in the Philippines <.PSI> rose 1.4 percent to hit a two-week high after Moody's Investor Service revised the country's rating outlook to positive from stable.

Energy shares lifted Thailand's benchmark <.SETI> by 1.2 percent in heavy trading, extending gains for the fourth session, while Singapore <.FTSTI> shares closed 0.5 percent firmer.

Malaysian shares <.KLSE> ended up 0.7 percent and the Indonesian benchmark <.JKSE> closed steady though the two countries saw net foreign selling of $2.13 million and $44.18 million respectively.

Trader's Highlight

FCPO- JAKARTA, May 28 (Reuters) - Malaysian palm oil futures rose to a near two-week high on Monday, as investor worries about the euro zone debt crisis eased and demand showed signs of improving ahead of the Muslim fasting month of Ramadan in July.

European stocks rose for a third straight session on Monday and the euro edged up, as Greek polls showed growing support for pro-bailout parties, yet Spain's debt yields hit a record high as the government worked on plan to fund troubled lender Bankia . [MKTS/GLOB]

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended 0.5 percent higher at 3,144 ringgit ($1,000) per tonne. Prices have slipped about 9 percent this month.

Traded volumes stood at 14,730 lots of 25 tonnes each, compared to Friday's total at 21,931 lots.

"Euro zone concerns and macro fears are easing," said a Kuala Lumpur-based trader. "Demand is also a tad better."

After peaking at 3,158 ringgit on Monday, traders said prices could peak at about 3,200 ringgit by the end of this month.

Last week, a failure by European policymakers to make any significant breakthrough in resolving the debt crisis weighed on palm prices, sending the benchmark down to its lowest level this year at 2,993 ringgit per tonne.

Palm oil will end its current rebound around resistance at 3,192 ringgit as indicated by a Fibonacci retracement analysis and a falling channel, said Reuters market analyst Wang Tao based on technical analysis. [ID:nL4E8GS159]

"Not much news in the market to move the price in a big way," said a second Kuala Lumpur-based trader. "Just a technical rebound -- markets are oversold. My guess is the down side is not over yet ... it's too early to say the market has bottomed out."

Also offering support to palm was crude oil, which edged above $107 per barrel on euro zone hopes and the lack of progress in talks over Iran's nuclear programme. [O/R]

The demand outlook was still uncertain however, and traders were looking for more news on Europe.

"In the 19th century we were worried about their invasion," the Kuala Lumpur trader said on Europe. "Today we're worried about their economies."

Another positive for edible oils was an upturn in demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening.

"It is fair for the market to go higher, after being heavily oversold," said a Jakarta-based trader. "Fundamentals are still supportive - production is not really high and demand not too bad.

"Only the macro picture was behind the recent downtrend."

Data last week showed that palm oil exports rose slightly in May. [PALM/ITS] [PALM/SGS]

Investors are also keeping a close eye on weather patterns, where dry conditions in the United States could hurt the soybean crop, and a possible return of the El Nino weather pattern that may curb palm oil output in Southeast Asia. [GRA/]

U.S. markets will be closed most of Monday for the U.S. Memorial Day holiday.

In other vegetable oil markets, the most active Dalian soyoil September contract rose 1 percent.

REGIONAL EQUITY- May 28 (Reuters) - Southeast Asian stocks were higher on Monday on a slight easing of fears over Greece after surveys showed support for pro-bailout political parties ahead of next month's elections.

But trading volumes were below the 30-day moving average, reflecting investors' limited appetite for risk.

Singapore <.FTSTI> and the Philippines <.PSI> rose 0.5 percent each, while Indonesia <.JKSE> edged up 0.4 percent despite a foreign outflow of $45.82 million.

Shares on the Thai stock exchange <.SETI> advanced 0.6 percent to their highest level since May 18, while Malaysia <.KLSE> gained 0.3 percent to a near two-week high. The bourse recorded net foreign selling of $18.17 million.

Vietnam <.VNI> bucked the trend, losing 0.4 percent on investors' concerns about companies' access to loans despite a cut in key rates.

RTRS- CBOT grain pits to open earlier on USDA report days

CHICAGO, May 25 (Reuters) - The Chicago Board of Trade's iconic grain trading pits will open for business more than two hours earlier on mornings when the U.S. government issues price-sensitive crop reports, CME Group said on Fri day, aiming to appease floor traders after electronic hours were expanded.

The massive exchange this week made the transition to nearly non-stop electronic trading of commodities like corn, wheat and soybeans in a bid to defend market share against rival IntercontinentalExchange .

CME said the markets will keep their existing trading schedule on days that the U.S Department of Agriculture does not issue key crop reports, maintaining a 45-minute split between the end of pit and electronic trading.

However, later in the day, a spokesman for the exchange said CME was "still considering extending open-outcry hours" to 2 p.m. CDT from the current 1:15 p.m. close.

The increase in morning trading hours could ultimately be a stop-gap measure for CME, as USDA is considering pushing back the time that it releases crop reports in response to the increase in electronic trading hours.

"They're trying to accommodate everybody," said Tom Uhlmann an independent floor trader, about CME. "It's either open early or have USDA change their release times.

CME, which owns the Chicago Board of Trade, the world's largest grain exchange, said that starting on June 12 open outcry trading will begin at 7:20 a.m. CDT ( 1220 GMT) on days that the USDA issues key crop reports, instead of at 9:30 a.m.

Trading will close as usual at 1:15 p.m.

Crop reports are released at 7:30 a.m.

RTRS- CME Group to modify grains settlements on June 25

CHICAGO, May 25 (Reuters) - CME Group will change the methodology for determining end-of-day settlement prices for its grain and oilseed futures starting June 25, pending U.S. regulatory approval, the parent of the Chicago Board of Trade said on Friday.

CME said the new procedure for settling CBOT corn, wheat, oats, rough rice, soybeans, soybean meal and soybean oil futures would include activity from both the open-outcry and electronic trading pits.

The bulk of trade in CBOT grains is already done electronically, but settlement prices for corn, soybeans, soymeal and soyoil are currently set in the open-outcry pits.

Those opposed to incorporating electronic trading into the settlements see the change as a threat to the livelihood of floor traders.

CME Group initially planned a springtime transition to the new settlements for both grains and livestock futures. That plan met with strong opposition from floor traders when it was announced in December.

In March, the exchange delayed changes to grain settlements until June and said it had not finalized its plans for livestock futures.

Trader's Highlight

DJI- NEW YORK, May 25 (Reuters) - U.S. stocks and the euro slipped o n F riday as Spain's deteriorating finances and a possible Greek exit from the euro overshadowed an upbeat report on U.S. consumer confidence.

Oil prices edged higher due to a lack of progress in talks with Iran over its disputed nuclear program and the rise in U.S. consumer confidence.

European equities rose for a second straight day, but gains were driven by defensive plays like utilities and drugmakers. A tough economic outlook in Europe dampened investors' appetite for riskier assets.

After notching some gains earlier in the day, U.S. equities fell as the afternoon progressed ahead of the 3-day Memorial Day holiday weekend, as uncertainty continued to swirl over Europe.

"The market is drifting and cautious ahead of the holiday. There's no consistency, though we do seem to be digging in after some bad weeks," said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management. "Still, we have the overhang of Europe and just have to hope things don't get worse over there."

The Dow Jones industrial average <.DJI> closed down 74.92 points, or 0.60 percent, at 12,454.83. The Standard & Poor's 500 Index <.SPX> fell 2.86 points, or 0.22 percent, to 1,317.82. The Nasdaq Composite Index <.IXIC> lost 1.85 points, or 0.07 percent, at 2,837.53.

The euro plumbed a 22-month low against the U.S. dollar after the president of Catalonia, Spain's wealthiest autonomous region, said it is running out of options for refinancing more than 13 billion euros in debt that comes due this year. [ID:nL5E8GP73Z]

Catalonia's troubles came as Spain's Bankia SA was set to ask the state for a bailout valued at more than 15 billion euros ($19 billion), marking another rise in the cost of rescuing the country's fourth-biggest bank. [ID:nL5E8GP3ZF]

"The Catalonia news was a big deal because it implies that the Spanish government may have to take on more debt, and it cannot afford to do so," said Richard Franulovich, senior currency strategist at Westpac Securities in New York.

NYMEX- NEW YORK, May 25 (Reuters) - U.S. crude futures rose a second day in a row on Friday as uncertainty about Iran's talks with world powers continued to stir supply-disruption worries and data showed a rise in U.S. consumer confidence.

Europe's economic problems signaled weaker prospects for oil demand, capping the gain in prices.

For the week, front-month crude futures fell slightly, extending losses for the fourth straight week, posting the biggest four week drop for since the period to Aug. 19, 2011.

Market focus on Iran remained after this week's talks between Tehran and world powers did not result in any agreement, with negotiations continuing next month at another meeting in Moscow. That has kept investors worried about a possible new conflict in the Middle East and disruption of supplies from Iran.

The U.N.'s International Atomic Energy Agency have found uranium particles refined to a higher-than-expected level than what Iran has disclosed, raising further concerns among oil investors. This has led to short-coverings ahead of the three-day Memorial Day holiday in the United States. [ID:nV9E8DF01E]

* On the New York Mercantile Exchange, July crude settled at $90.86 a barrel, up 20 cents, after trading between $90.20 to $91.32, an "inside day," in which the day's high and low are within the previous day's trading range.

* For the week, front-month crude fell 62 cents, or 0.68 percent, dropping for a fourth straight week, during which losses hit $14.07, or 13.4 percent, the biggest four-week drop since the period to Aug. 19, 2011.

CBOT SOYBEAN-Soybean futures on the Chicago Board of Trade ended higher for a second day on short-covering and worries about stressful heat in the U.S. Midwest crop belt during a three-day weekend, traders said.

* A Commodity Weather Group forecaster said rains this weekend will favor the northwestern Midwest, while the central and southern Midwest and Delta will see dry weather continue. Temperatures in those areas may reach the mid 90s to near 100 degrees Fahrenheit this weekend.

* Yet soybeans unofficially ended the week down 1.6 percent on continuous price charts, the third weekly drop out of the last four, as funds reduced a record-large net long position in CBOT soybeans amid worries about the global economy.

* CBOT June options expired at 1:15 p.m. CDT (1815 GMT), the first expiration under the newly expanded 21-hour trading cycle that began this week. [ID:nL1E8GP98Y]

* CME Group said it will change the methodology for determining end-of-day settlement prices for its grain and oilseed futures starting June 25, pending U.S. regulatory approval. The new settlements will incorporate trade from screens as well as the pit. [ID:nL1E8GP5Y9]

* U.S. markets will be closed on Monday for the U.S. Memorial Day holiday. Electronic trade in CBOT grains will resume Monday at 7 p.m. CDT (0000 GMT).

* China's commerce ministry raised its estimate for the country's May soy imports to a record 7.22 million tonnes, from a previous projection of 5.63 million. [ID:nL4E8GP11N]

* Taiwan purchased 115,000 tonnes of soybeans from Brazil in a tender for 120,000 tonnes which closed on Friday, European traders said. [ID:nL5E8GP2M4]

* Temperatures dipped slightly below freezing on parts of the Canadian Prairies overnight, with similar conditions expected Friday night, but damage to newly emerged crops looked to be minor, an agricultural meteorologist said. [ID:nL1E8GP34N]

FCPO- SINGAPORE, May 25 (Reuters) - Malaysian palm oil futures edged up on Friday on rising exports ahead of the Muslim fasting month of Ramadan in July, although investors were still cautious on lingering fear over the euro zone debt crisis.

Concern about global growth and a failure by European policymakers to make any significant breakthroughs in resolving the debt crisis have weighed on palm oil this week, which hit its lowest in 2012 on Wednesday. [MKTS/GLOB]

But firm demand from India and Pakistan for Ramadan, where fasting in the day is followed by feasting in the evening, lifted palm futures to erase losses and post a 1.1 percent gain this week.

"The market is consolidating after the excellent export numbers on festival buying and most of the negative news has already been priced in," said a trader with a commodities brokerage in Malaysia.

"The market is anticipating a pull-back in the 3,090-3,130 ringgit range in the near term."

The benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange gained 2 percent to close at 3,130 ringgit ($993) per tonne. Prices touched 2,993 ringgit on Wednesday, the lowest in 2012.

Traded volumes stood at 35,239 lots of 25 tonnes each, higher than the usual 25,000 lots.

Palm oil will revisit a low of 2,993 ringgit as a downtrend from 3,514 ringgit has not ended, said Reuters market analyst Wang Tao based on technical analysis. [ID:nL4E8GP117]

Cargo surveyor Intertek Testing Services reported a 10.5 percent jump in Malaysian palm oil exports for May 1-25 to 1,146,406 tonnes, compared with just slightly over a million tonnes a month ago. [PALM/ITS]

Another cargo surveyor, Societe Generale de Surveillance, also reported higher exports for the first 25 days of the month. [PALM/SGS]

On the supply side, traders are watching dry U.S weather that could hurt the soybean crop and the possibility of a return of the El Nino weather pattern that could curb palm oil output in Southeast Asia.

REGIONAL EQUITY- May 25 (Reuters) - Most Southeast Asian markets closed a touch higher on Friday but volumes were thin as an uncertain global economic outlook and debt woes in the euro zone weighed on investors.

Thailand <.SETI> rose 0.6 percent, the Philippines <.PSI> added 0.4 percent, Malaysia <.KLSE> edged up 0.2 percent despite a $29.72 million foreign outflow, and Vietnam <.VNI>, the region's smallest bourse, gained 2.5 percent.

Indonesia <.JKSE> however was 2.1 percent lower with a foreign outflow of $104.7 million led by financials.

The country's sixth biggest lender PT Bank Danamon closed 6.3 percent down on a possible failure of a $7.3 billion takeover bid by Singapore's DBS due to new ownership restrictions being planned by the central. [ID:nL1E8GP1WP]

Singapore <.FTSTI> also fell 0.2 percent, extending the losses for a third straight session.

Trader's Highlight

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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