In The News - 11/07/2005
Malaysian crude palm oil futures rose in thin volume on Friday on expectations that lower production for June would lead to a drop in stocks.
At lunch, the benchmark third-month crude palm oil contract on Bursa Malaysia, September <KPOU5>, was up 7 ringgit at 1,418 ringgit ($373.16) a tonne. It traded a 1,412 to 1,419 ringgit range in the morning session.
July, August and October contracts <0#KPO:> were also stronger at the lunch break.
"There is fear now that the June production could be much lower than what we thought, so this means the stocks could also be much lower so no one wants to go too short on their position," said a trader.
A Reuters survey released on Thursday showed Malaysian palm oil output could fall 5 percent in June from May, reversing earlier expectations of a rise.
The median forecast for closing stocks in June was 1,190,000 tonnes, down 8.1 percent from the 1,295,276 tonnes at end-May.
The government-run Malaysian Palm Oil Board releases official June production, export and stock numbers on Monday.
Two independent surveyors of Malaysian oil palm cargoes, Intertek Testing Services and Societe Generale de Surveillance, will release export estimates for July 1 to 10 on the same day.
Overall market volume was 1,083 lots of 25 tonnes each, lower than the 3,000 lots seen on an active morning.
The higher palm oil market contrasted with lower prices for Chicago soyoil, which often leads moves in Malaysian prices.
At 0430 GMT, August soyoil futures <ZLQ5> were down 0.33 cent at 24.86 cents a pound in the Chicago Board of Trade's electronic session. September futures <ZLU5> were down 0.35 cent.
Soybean
futures at the Chicago Board of Trade closed sharply lower on Friday as
Hurricane Dennis churned toward land, triggering hopes the strong storm might
bring rains to parched cropland in parts of the eastern U.S. Midwest, traders
said.
CBOT
soy closed 3-1/2 to 25 cents per bushel lower. July <SN5> was down 16-1/2
at $6.75-1/2 per bushel. November <SX5> was down 19-1/2 at $6.88.
"It's
going to get really volatile down here if it doesn't rain next week. Illinois
corn and beans could just fade completely away if they don't get a soaker
soon," a pit source said.
Dry
weather has been stressing the soy and corn crops in the eastern Midwest,
especially in top producer Illinois.
Meteorlogix
weather service said on Friday dry and hotter weather would blanket the Midwest
through the weekend. The remnants of Hurricane Dennis may bring much-needed rain
to parts of the eastern Midwest but it may not cover all of the dry areas,
Meteorlogix said.
Temperatures
will not be hot enough to affect soy growth but dry weather over Illinois and
parts of Indiana may continue to cut in to yield potential if Dennis does not
bring much rain, Meteorlogix said.
Memphis-based
analytical firm Informa Economics early Friday was said to have pegged U.S. 2005
soy production at 2.840 billion bushels. That's slightly below the U.S.
Agriculture Department's forecast for 2.895 billion. USDA will release its July
crop production report early Tuesday.
USDA
said early Friday U.S. export sales of soy last week totaled 170,600 tonnes (old
and new crop combined), above estimates for 50,000 to 125,000 tonnes.
Exports
were quiet overnight.
Deliveries
on the July contract remained heavy at 764 lots and there was scattered stopping
of the soy. Registrations with the CBOT increased to 1,645 lots from the
previous 1,634.
Cash
basis bids for soy in the Midwest were steady to firm amid slow farmer selling.
Soymeal
closed $3.30 to $7.00 per ton lower. July <SMN5> was down $3.30 at
$211.30.
Soymeal
followed soybeans in a volatile Midwest weather market.
USDA
said U.S. export sales of soymeal last week totaled 54,700 tonnes (old and new
crop), within the range of estimates for 35,000 to 75,000 tonnes.
There
were no deliveries posted against the July contract
on Friday and registrations with the CBOT were unchanged at 170 lots.
Soyoil
closed 0.32 to 0.62 cent per lb lower with the market taking its cue from the
lower trend in soybeans. July <BON5> was down 0.60 at 24.55 cents per lb.
USDA
said U.S. export sales of soyoil last week totaled 2,200 tonnes (old crop), near
the low end of estimates for 2,000 to 6,000 tonnes.
There
were no deliveries on the July contract and registrations with the CBOT were
unchanged at 1,092 lots.
Volume
in soybeans was estimated by the exchange at 82,230 futures and 46,195 options.
Soymeal
volume was estimated at 29,356 futures and 3,124 options.
Soyoil
volume was estimated at 34,345 futures and 1,530 options.
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