In The News - 07/07/2005

Europe's cash vegetable oil market turned lower on Wednesday afternoon, shadowing a downturn in soy prices in Chicago, and dealers said the fresh discounts were enough to trigger a flurry of trade.

"Prices were marked mostly higher from the start after Chicago's strong run (higher) on Wednesday, but they came back today to levels that attracted some business...this was confined mainly to crude palm, olein and rapeoil," said one Dutch broker.

"However, offers for soyoil were difficult to get. I think sellers withdrew their higher prices when Chicago was called lower and they didn't come back," he added.

In afternoon trade, Dutch/EU rapeoil was offered at 528 euros a tonne on an fob exmill basis, a drop of seven euros from Tuesday's close. At Wednesday's open, a flat price of 535 euros was offered.

Nearby Aug/Oct rapeoil traded at 528 euros.

EU sunoil, basis ex-tank, was quoted $5 up at $715 a tonne from Wednesday but down from an early offered price of $720.

Traders said palm oil tended lower on CBOT losses and a weak Malaysian palm oil futures close, with offers for spot crude palm oil on a cif basis falling $5 to $420 a tonne by the close.

However, deals were reported for crude palm oil at $422.50 on an afloat basis, at $420 for Jul/Aug, at $420 for Aug/Sep and at $422.50 for Oct/Dec.

RBD palm olein traded several times at $405 a tonne for Aug/Sep shipment, sources said.

Benchmark CBOT soyoil futures came under fresh pressure on Wednesday as soybeans fell.

Soybean futures on the Chicago Board of Trade closed lower on Wednesday amid profit-taking and hints that Tropical Storm Dennis may leave some beneficial moisture in some drier regions of the eastern U.S. Midwest, traders said.

CBOT soy closed 4 to 18-1/2 cents per bushel lower. July <SN5> was down 16 at $6.96-1/4 per bushel. New-crop November <SX5> was down 18-1/2 at $7.09-1/2.

Traders and analysts said the potential for Dennis to turn into a hurricane and trigger rainfall as far north as drought-stricken Illinois hit the market.

"These storms can be very capricious, but they are showing the potential for substantial release in the Delta, and certainly a break in shower chances for areas of the Midwest that really need it," said Bill Nelson, analyst for A.G. Edwards and Co., St. Louis, Missouri.

Dry weather is expected to continue at least through the weekend in top producer Illinois but everyone should keep a wary eye on Dennis, a private forecaster said on Wednesday.

"It will continue to be dry in Illinois unless the hurricane gets involved. We'll have to keep an eye on that this weekend," said Meteorlogix forecaster Joel Burgio.

Tropical Storm Dennis kept plowing through the central Caribbean and could strengthen into a hurricane later on Wednesday, the U.S. National Hurricane center in Miami said on Wednesday.

The Hurricane center put the storm track toward key oil and natural gas fields off the coast of Louisiana, Mississippi and Alabama before landfall in the Florida panhandle on Monday.

Soybean conditions declined a bit last week because of the dry weather in the east.

The U.S. Agriculture Department said Tuesday 58 percent of the U.S. soybean crop was in good to excellent condition. That's below the 59 percent good to excellent rating of a week ago but better than trade estimates for a drop of 3 to 4 percentage points in condition ratings.

Exports were quiet overnight and deliveries on the July contract totaled 452 lots. The key stopper was a Dorman Trading customer taking 316 lots. Registrations with the CBOT were unchanged at 1,202 lots.

Cash basis bids for soybeans in the Midwest on Wednesday were mostly firm amid slow farmer selling.

Soymeal closed $3.50 to $6.80 per ton lower. July <SMN5> was down $4.60 at $216.20 per ton. Traders said soymeal followed soybeans.

Declines in soymeal were limited amid the posting of no deliveries on the July contract and because of declining soymeal registrations with the CBOT.

There were no deliveries on the July contract and registrations with the CBOT dropped to 170 lots from 246.

Soyoil closed 0.25 to 0.40 cent per lb lower. July <BON5> was down 0.30 at 25.00 cents per lb. Pit sources said soyoil also was weighed down by a profit-taking setback from Tuesday's gains and pressured by soybeans.

Malaysian palm oil futures closed weak overnight. Traders in Kuala Lumpur said dealers took profits after pushing the market higher tracking gains in the Chicago soy market.

There were no soyoil deliveries on the July contract and  registrations with the CBOT were unchanged at 1,092 lots.

Soybean volume was estimated by the exchange at 76,331 futures and 26,030 options.

Soymeal volume was estimated at 27,840 futures and 1,783 options, while soyoil volume was estimated at 22,134 futures and 4,855 options.

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