In The News - 21/06/2005

Malaysian exports of oil palm products for June 1 to 20 could fall 9.3 percent to 867,479 tonnes from the 956,238 tonnes tracked for May 1 to 20, Societe Generale de Surveillance, a cargo surveyor, said on Monday.

But compared with estimates from a year ago, the figure should be up 37.9 percent from SGS's estimate of 629,233 tonnes for June 1 to 20, 2004.

SGS said its latest estimate comprised 761,953 tonnes of palm oils and 105,526 tonnes of oleochemicals and lauric oils.

In the palm oil category, 94,749 tonnes were made up of RBD palm oil, 415,231 tonnes of RBD palm olein, 97,382 tonnes of RBD palm stearin and 56,580 tonnes of crude palm oil.

China was the biggest buyer of Malaysian oil palm products for June 1-20, taking 227,318 tonnes, followed by the United States with 76,153 tonnes, and Turkey with 72,826 tonnes.

European Union countries, another major destination, accounted for 88,995 tonnes of the export total.

Soybean futures at the Chicago Board of Trade closed higher on Monday, but below 11-month highs reached earlier amid weather concerns and technical fund buying, traders said.

CBOT soybeans closed 5 to 18-1/2 cents per bushel higher. July <SN5> was up 15 at $7.39 per bushel. November <SX5> was up 16 at $7.57-1/2.

Volume was heavy, estimated by the exchange at 128,662 futures and 58,091 options.

Soy ended higher yet below the day's highs as profit-taking in addition to commercial hedge selling limited the advances and soy futures are expected to remain volatile, traders and analysts said.

"We're putting risk premium into the market before the July Fourth weekend, and quite often after the fourth we have significant weather changes," said Don Roose, president of U.S. Commodities, Des Moines, Iowa. But "this market is now historically what you have to characterize for new-crop beans as a lofty area."

Drier-than-desired weather remains a concern for the corn and soy crops in the eastern U.S. Midwest, a private forecaster said Monday.

"In the eastern Midwest the whole ballgame is lack of rainfall, and I'm not sure there will be much rain in the east to provide much benefit to the crops," said Meteorlogix forecaster Joel Burgio.

Only scattered showers were likely in the eastern Midwest this week and crops in the western Midwest were expected to receive from 0.25 to 1.00 inch of rain at midweek, Burgio said.

"I don't see anything for the next 10 days to stress the western corn belt," he said.

Exports were quiet over the weekend and cash basis bids for soybeans in the Midwest early Monday were weak, cash merchandisers said.

Pit sources said the rally in soy was slowed by commercial selling, tied to hedge sales of soy purchased from farmers.

"We're seeing good hedging selling on everything: wheat, corn and beans," Roose said.

USDA on Monday said U.S. soy inspected for export last week totaled 8.5 million bushels. That's within the range of estimates for 5.0 million to 9.0 million bushels.

Friday's CFTC commitments of traders report showed that large speculators further boosted their net long position in CBOT soybean futures to a 3-to-1 ratio in the week ended June 14. Funds were long 81,562 lots, up 3,707 contracts, and short 23,957 lots, down 3,533 contracts, from the week before.

Technical support in the July contract was pegged at $7.10-1/2 per bushel. Resistance at $7.27-1/2 was broken, driving the contract to a session high of $7.52. The nine-day relative strength index for July stood at 79. Chartists view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.

Soymeal closed 40 cents to $5.30 per ton higher. July <SMN5> was up $3.40 at $232.40 per ton.

Soymeal volume was estimated at 45,632 futures and 7,116 options.

Traders said soymeal followed soy with Midwest weather the overriding fundamental factor.

Friday's CFTC commitments of traders report showed that large speculators boosted their net long stance in CBOT soymeal futures to a more than four-to-one ratio in the week ended Tuesday, June 14. Funds were long 47,678 futures contracts, up 3,369 from the prior week, and short 10,660, down 2,942.

Soyoil futures closed 0.05 to 0.50 cent per lb higher with soyoil also boosted by spillover speculative buying from surging soybeans. July <BON5> was up 0.50 at 25.58 cents per lb.

Soyoil volume was estimated at 46,309 futures and 5,751 options.

Malaysian palm oil futures closed higher overnight. Traders in Kuala Lumpur said palm rallied for the third straight day, chasing a fresh run-up in U.S. soyoil.

Friday's CFTC commitments of traders report showed that large speculators expanded their net long position in CBOT soyoil futures to more than 2-to-1 in the week ended Tuesday, June 14. Funds were long 29,723 futures contracts, up 3,599, and short 11,095 contracts, up 235.

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