In The News - 24/06/2005

Malaysian crude palm oil futures recouped early losses as buyers returned to the market, drawn by a rebound in rival U.S. soyoil.

Dealers described 1,420-ringgit-a-tonne as a good support level and 1,450 as the psychological resistance.

"It's very much a CBOT-driven market now, but I'd say 1,420 looks all right as the immediate support," said a trader.

Soyoil futures on the CBOT, or Chicago Board of Trade, have been up for most of the last week, pulling along prices of its key rival, Malaysian palm oil.

At Wednesday's close, the key July contract <BON5> in CBOT soyoil ended down 0.12 cent down at 25.32 cents a pound. In Thursday morning's electronic trade, July soyoil <ZLN5> fell a further 0.07 cent to a low of 25.25 cents.

But it pulled back by the evening, posting a gain of 0.8 cent over Wednesday's close by 1000 GMT.

In palm oil, the benchmark third-month futures on Bursa Malaysia Derivatives, September <KPOU5>, ended Thursday's trade up 3 ringgit at 1,436 ringgit ($375.53) a tonne, off the day's high of 1,440.

The contract was weighed down by CBOT in the morning, hitting a low of 1,419.

Other traded months <0#KPO:> closed up 3 to 6 ringgit. Overall volume was 4,408 lots of 25 tonnes each. The market usually sees 6,000 lots or more on a busy day.

Chicago Board of Trade soybean futures plummeted on Thursday on outlooks for beneficial rains moving through the parched eastern U.S. Midwest crop states next week, traders said.

"The midday weather maps were hot and wetter, which has got to be good for corn and beans," said one CBOT floor broker.

That spurred active selling by commodity funds.

July soybeans <SN5> closed 11-1/4 cents lower at $7.25-3/4 per bushel, with the deferreds down 10 cents to up 3 cents. July found added pressure as firms rolled long positions before the start of futures deliveries next week.

New-crop November <SX5> settled 8-1/2 cents weaker at $7.45-1/2.

"The midday maps showed Kansas, Nebraska, Missouri, Illinois, Indiana and Ohio getting 1 to 3 inch rains from July 1-4. The heaviest rains are from Illinois westward," said Drew Lerner, meteorologist for World Weather Inc.

Illinois, the top soybean state in 2004 and a leading corn producer, was in desperate need of rain after one of the driest springs since the Dust Bowl of the 1930s, said Illinois climatologist Jim Angel on Wednesday. Rainfall is down about 5 to 6 inches from normal levels in parts of the state.

Earlier, the soy market was choppy partially in response to mediocre export sales data and slightly bigger-than-expected May U.S. soy crush data.

The U.S. Department of Agriculture said on Thursday that 148,600 tonnes (old-crop) of U.S. soybeans were sold for export last week. That was within trade estimates for 50,000 to 150,000 tonnes but far below levels seen earlier in the year. Also, the world's top soy buyer, China, did not purchase or ship any U.S. soybeans last week.

U.S. Census Bureau reported the May U.S. crush at 142.81 million bushels, slightly above the average trade estimate of 142.2 million.

Fresh Canadian crop estimates were also released Thursday.

Statistics Canada Thursday said 2005 Canadian canola acreage was 13.8 million, up 5.1 percent from last year.

U.S. cash markets remain weak amid sluggish demand, traders said.

The July South American contract settled 8 cents lower at $7.10-1/2. Volume was thin estimated at five contracts.

The soymeal market closed mixed, hitting the lows as  soybeans dived. July <SMN5> was down $2.30 at $228.40 per ton, with deferreds down $2.20 to up $1.80.

The market was underpinned early by a bounce in soybeans and bigger-than-expected weekly soymeal sales. USDA said 123,200 tonnes (old-crop and new-crop combined) of U.S. soymeal were sold for export last week, compared to estimates for 35,000 to 70,000 tonnes.

But Census data showed U.S. meal stocks building, casting a bearish note. Census Bureau said U.S. soymeal stocks at the end of May totaled 349,027 tons, above April stocks at 307,503 tons and trade estimates for May at 324,000 tons.

The soyoil market was also mixed after recent volatile price swings. Early support stemmed from USDA's weekly export sales report that was released Thursday. However, reminders of ample U.S. soyoil stocks amid fresh Census data weighed on the market.

July oil <BON5> was down 0.08 cent at 25.24 cents per lb.

USDA Thursday said 6,100 tonnes (old-crop) of U.S.

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