In The News - 27/06/2005

Exports of Malaysian oil palm products for June 1 to 25 stood at 1,051,324 tonnes, down 11.3 percent from the 1,184,884 tonnes for May 1 to 25, cargo surveyor Intertek Testing Services said on Saturday.

Societe Generale de Surveillance, another tracker of Malaysian oil palm cargoes more closely watched by the market, will issue estimates for the same period on Monday.

Malaysian palm oil prices extended gains but trade was light, with players awaiting key export data due between Saturday and next week for clearer market direction.

Intertek Testing Services, one of the two independent surveyors of Malaysian oil palm cargoes, is scheduled to release on Saturday shipment estimates for June 1 to 25 versus the 1.18 million tonnes it put for May 1 to 25.

Societe Generale de Surveillance, the other cargo surveyor more closely watched by the market, will issue June 1 to 25 data on Monday against the 1.16 million tonnes it predicted for May 1 to 25.

"There's talk that the numbers from the two surveyors could be down by about 100,000 tonnes from last month," a palm oil

trader said on Friday. 

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.

In Friday's electronic trade, CBOT soyoil's key July contract <ZLN5> rose as much as 0.26 cent to 25.50 cents. It had closed down 0.08 cents in Thursday's formal trade <BON5>.

In palm oil, the benchmark third-month futures on Bursa Malaysia Derivatives, September <KPOU5>, ended Friday's trade up 4 ringgit at 1,440 ringgit ($378.95) a tonne.

It fell as much as nine ringgit to a low of 1,435 ringgit earlier, before pulling back to an intraday high of 1,442.     Other traded months <0#KPO:> settled morning trade up 2 to 4 ringgit.

Overall volume was a mere 3,225 lots of 25 tonnes each. The market usually sees 6,000 lots or more on a busy day. In physical trade of crude palm oil, the combined months of June and July saw bids closing at 1,442.50 ringgit a tonne in Malaysia's southern region, against offers at 1,447.50.

 The Chicago Board of Trade soybean market exploded on Friday, rallying more than 20 cents in new-crop November amid crop fears of hot, dry weather hitting the U.S. Midwest, traders said.

"We added in some weather premium and we'll see what happens over the weekend, then regroup on Monday," said Shawn McCambridge, analyst with Prudential Securities.

November soy <SX5> closed 20-1/4 cents higher at $7.65-3/4 per bushel, about a dime off its contract top of $7.75 made earlier this week. July beans <SN5> settled 18-3/4 cents higher at $7.44-1/2.

The extra lift late stemmed from moves in the options pit as traders exited July options positions before expiration at the close, traders said.

The worries fueled more buying by commodity funds, with Citigroup, Refco, Rand Financial and Calyon among the featured buyers.

The top soybean state of Illinois remains dry with rainfall about 5 to 6 inches below normal. Some forecasters were calling for a record hot day in northern Illinois, with the high reaching 98 degrees (36.7 Celsius) on Friday in Chicago.

The U.S. Delta soy region also remains dry.

The dry areas of Illinois will probably see only isolated thundershowers during the next five days, said Meteorlogix weather service on Friday. The best chance for rain in Illinois will be next Wednesday and Thursday. Meteorlogix said that for July 4 through July 9 it appears another drier period is in store for the central and eastern Midwest.

Any changes in weather forecasts have spurred volatile price swings in both directions over the past month. Friday's rally came on the heels of a late sell-off Thursday spurred by forecasts for rains July 1-4.

"There was a lot of spread trade. It looks like the weakness in cash markets is really starting to weigh on July," said one CBOT floor broker referring to the weakness in old-crop/new-crop spread.

There was also talk of China either canceling or delaying shipments of South American soy purchases amid declining Chinese crush margins.

The South American July soy <BSN5> settled 14-1/2 cents higher at $7.25, a 19-1/2 cent discount to U.S. July soy.

The soymeal closed $2.70 to $5 per ton higher with July <SMN5> up $2.80 at $231.20, following soybeans in a volatile weather market.

The market was higher despite soft demand of the U.S. cash soymeal due to high prices. End users were turning to cheaper sources of high-protein feed. There was also trade talk of U.S. importers buying one cargo of South American soymeal.

The soyoil market also followed the strength in soybeans, with July <BON5> up 0.91 cent at 26.15 cents per lb and the deferreds 0.57 to 1.04 higher.

Soyoil gained on soymeal as commodity funds extended their longs more in soyoil, the market in which index funds have the most room to extend their longs.

Funds bought roughly 3,000 each of soybeans and soyoil and 1,500 meal, traders said.

Malaysian palm oil futures closed firm overnight. Trading was light, with players awaiting key export data for clearer market direction, traders in Kuala Lumpur said.

Volume was large across the complex, with soybean and soymeal the most active. Estimated soybean trade was 113,488 futures and 34,049 options. Soymeal volume was pegged at 64,440 futures and 2,126 options. Soyoil trade was seen at 25,331 futures and 3,598 options.

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