Reuters Daily Agriculture Brief 120509

China, Japan struggle; EU banks face test
* China April exports tumble sharply
* Bank of America sells $7.3 bln of shares in China bank
* EU to stress test its banking sector - sources
* Bank of France, Bernanke less downbeat
* Nissan, Hitachi and Daiichi Sankyo all post big losses

BEIJING/BRUSSELS May 12 (Reuters) - Chinese exports dropped sharply and a clutch of Japanese companies registered hefty losses on Tuesday, while central banks expressed some optimism that the worst was over for the world economy.
Banks, the epicentre of the financial crisis, continued to hold the markets' focus with Bank of America rising over $7 billion and the European Union saying it would follow Washington's lead and conduct tests on its banking sector.
A bigger than expected 22.6 percent annual fall in Chinese April exports showed global demand remained subdued at best, with Japanese exporters continuing to suffer.

GRAINS:

Soy, corn unchanged ahead of USDA stocks report
SINGAPORE, May 12 (Reuters) - Chicago soy and corn futures were almost flat in thin trade as investors awaited a crucial U.S. supply and demand report.
Analysts said the soy market could come under some pressure on talk that China is slowing imports of the oilseed after buying record quantities in recent months that propelled prices to a seven-month top last week.

Western Australia rules out bumper grains crop-CBH
SYDNEY, May 12 (Reuters) - An unseasonally dry autumn so far has ruled out a bumper grains crop in Australia's top exporting state of Western Australia, grains handler CBH Group said on Tuesday.
"The long-range forecast is not very good, it's still very hot in Western Australia," CBH's general manager of operations Colin Tutt told Reuters.

India revises up grains output forecast by 0.9 pct
NEW DELHI, May 12 (Reuters) - India has revised up its expected grains output in the crop year ending June by 0.9 percent to 229.85 million tonnes from a February forecast of 227.88 million tonnes, a government website showed on Tuesday.
Wheat output in India, the world's second-biggest producer, was expected at 77.63 million tonnes, down slightly from 77.78 million tonnes estimated in February.

EDIBLE OIL/OILSEEDS:

Palm futures at one-week top on hot weather
KUALA LUMPUR, May 12 (Reuters) - Malaysian palm futures surged 2.4 percent to a one-week top on fears of hot dry weather cutting into production and traders taking positions ahead of a crucial U.S. soy report.
"Output is a worry, it might be due to the current hot weather," said a trader with a local commodities brokerage.

China May soy imports seen at 3.66 mln T-MOFCOM
BEIJING, May 12 (Reuters) - China expects soybean imports in May to reach 3.66 million tonnes, the latest estimate by China's commerce ministry showed on Tuesday. The figure was lower than estimated by traders at between 4 to 5 million tonnes.
The ministry's estimate was in line with actual arrivals for April, which rose 55.2 percent on year to 3.71 million tonnes, according to China's customs. Beijing's stockpiling of domestic soybean had led crushers to shift to cheap imports.

Dry weather hurting Malaysian palm output for 2009
KUALA LUMPUR, May 12 (Reuters) - Palm oil output in Malaysia will struggle to rise in the next few months and may not even hit strong double-digit peaks this year as the current hot and dry weather hurts yields, plantation officials said on Tuesday.
Production in the world's second-largest supplier of the vegetable oil will register marginal growth until September or October where the increase may only be above 5 percent compared to double-digit growth in previous years.

Europe may ban Indian groundnut imports -report
NEW DELHI, May 12 (Reuters) - The European Union may ban groundnut imports from India due to the presence of aflatoxin, a fungus, the Business Standard reported on Tuesday, citing the head of an industry body.
A European delegation would visit India in September to check quality standards and if processing units fail to meet European standards, imports from India might be banned, Sanjay Shah, chairman of the Indian Oilseeds and Produce Export Promotion Council told the newspaper.

SOFTS:

Sugar, coffee rise, weak dollar helps
LONDON, May 12 (Reuters) - Raw sugar futures touched another near three-year high on investor buying, and coffee edged up, helped a weaker dollar, with arabica traders focused on a Colombian supply shortage, dealers said.
A global sugar deficit of 7.5 million to 7.8 million tonnes is expected in 2008/09, up from a previous estimate of a 4.3 million tonne shortfall, the International Sugar Organization said on Monday.

Heavy rain threatens Ivorian cocoa mid crop
ABIDJAN, May 12 (Reuters) - Persistent heavy rainfall in some Ivorian cocoa growing regions last week, after several weeks of humid conditions, increased the risk of black pod disease outbreaks in cocoa plantations, farmers and analysts said on Tuesday.
Black pod disease, which thrives in the wet, blighted the October-March main crop in the world's biggest grower.

Indonesia cocoa output seen below 500,000 T -ICCO
KUALA LUMPUR, May 12 (Reuters) - The International Cocoa Organization (ICCO) revised down Indonesia's cocoa output to "well below" 500,000 tonnes in the crop year to September 2009 due to poor maintenance, its chief Jan Vingerhoets told Reuters on Tuesday.
The ICCO had pegged Indonesia's output at 510,000 tonnes in its February estimates.

Malaysian cocoa powder sold at 8-yr high -trade
KUALA LUMPUR, May 12 (Reuters) - Cocoa powder from Malaysia was sold at $3,000 a tonne for nearby shipment, its highest level since 2001, suggesting that demand for the product was steady even while grinders in Asia struggle to sell butter during the economic meltdown, industry sources said on Tuesday.
Indonesian cocoa powder was also traded recently at above $2,000 a tonne to buyers in South America, but there were no details on quantity. Powder is used in coating in chocolate manufacturing and beverages, while butter is the key ingredient for making chocolates.

BEYOND THE HEADLINES:

Indonesia to cut soybean purchases on local output
JAKARTA, May 12 (Reuters) - Indonesia, the world's sixth-biggest soybean importer, may buy 1.16 million tonnes of soybean this year, down about 6 percent from 2008, on higher domestic output, an industry official said on Tuesday.
"Indonesia's soybean demand may grow 2-3 percent this year but we don't expect imports to rise because of higher domestic harvests," Ali Basry, director of the Indonesian representative office of the American Soybean Association - International Marketing, said in an interview with Reuters.