In The News - 13/07/2005

Europe's vegetable oils market made a quiet start to the week with only substantial trade in crude palm oil and palm olein, dealers said on Monday.

Prices were generally little changed against Friday and buyers were waiting for a clearer trend in Chicago soyoil before commiting themselves.

Crude palm oil for July delivery traded at $417.50 a tonne, the same level as traded on Friday.

RBD palm olein for August/September delivery traded several times at $400 a tonne fob Malaysia and October/December also traded at $400. Neither position was reported as trading on Friday.

Price of July/September crude palm oil edged up $2.50 a tonne against Friday to $420 a tonne cif.

"There was little impulse in the palm market today with bullish news of a decline in Malaysian stocks offset by a fall in Malaysian exports," a Dutch trader said. "I have seen very few buyers in the market today."

Rapeoil for August/October delivery slipped one euro a tone against Friday to 520 euros a tonne in the face of low demand.

The intial weak trend in Chicago soyoil also braked European business. "Some buyers think European prices could be down on Tuesday," a trader said.

Many buyers are awaiting the U.S. Department of Agriculture's July crop production and supply/demand reports on Tuesday, traders said.

"As buyers are unwilling to commit themselves before the supply/demand report tomorrow, it may well be that purchasing will be pretty low until Wednesday," one German trader said.

Soybean futures at the Chicago Board of Trade closed higher on Tuesday after a topsy-turvy session, with weather inputs rallying the market near the close after driving prices lower on the open, traders said.

"They're trading weather as much as anything ... still not putting much rain in Illinois. I think people are getting nervous that the hurricane moisture isn't going to happen here," said Dan Cekander, analyst with Fimat Futures in Chicago.

July soybeans <SN5> closed 10-1/2 cents higher at $6.98-1/2, while new-crop November <SX5> settled 11 cents stronger at $7.12-1/2 -- after falling 14-1/2 cents earlier.

Prices tumbled on the open and remained under pressure amid rains moving across Illinois, a leading crop state, and forecasts for more. But the amounts were light over a large portion of the parched state, helping prices turn around late.

Illinois, the No. 1 soy state in 2004, was in desperate need of rain to help revive crops. The U.S. Department of Agriculture reported late Monday that 54 percent of the U.S. soy crop was in good to excellent condition, down from 58 percent a week ago. Illinois soybeans were rated 16 percent good to excellent, while 75 percent of Iowa's crop made the good to excellent rating.

About 1 to 1.5 inches of rain were forecast for the southern and eastern parts of Illinois through Indiana and Ohio following the remnants of Hurricane Dennis, Meteorlogix forecaster Joel Burgio said Tuesday.

"In central and northern Illinois there will not be enough rain to replenish soil moisture, but it might help stabilize the situation a little bit during the next five days," he said.

Overnight, southern Illinois saw 0.50 to 2.0 inches of rain and 0.10 to 0.50 inch fell across central Illinois. Northern Illinois was dry.

USDA monthly stocks data released before the open had little impact on prices. Traders quickly brushed aside supportive stocks data, turning their attention to weather.

The government trimmed 30 million bushels off its old-crop carryout figure and 45 million off its new-crop estimate, reflecting good demand for soybeans. The new-crop projection also showed a 5 million bushel drop in production as the eastern crop belt continues to suffer from a lack of rain.

"They are a little constructive for the old crop. New-crop is not bearish, they reduced their carry-over projection by 45 million bushels but I don't think it was dramatic," said Anne Frick, oilseed analyst with Prudential Securities.

The July contract was under added pressure early after large deliveries of 1,138 lots on early Tuesday. Stopping was scattered among firms.

CBOT soy registrations were unchanged at 1,645 lots.

Midwest cash basis bids for soybeans early Tuesday were mixed with sales light, dealers said.

South American soybean futures settled steady to 11 cents higher, with July <BSN5> unchanged at $6.73 per bushel.

The soymeal and soyoil markets followed the fall and rise of soybeans. Underpinning meal prices was supportive USDA data while soyoil numbers were viewed bearish.

July soymeal <SMN5> closed $4.60 per ton weaker at $219.20, with the deferreds down $1.50 to $7.50. July soyoil <BON5> settled 0.24 cent per lb higher at 25.01 cents, with the back months 0.28 higher to 0.15 lower.

USDA estimated U.S. 2005/06 soymeal stocks at 250,000 tons, unchanged from last month's estimate despite a 10 million bushel increase in the expected U.S. soy crush. However, U.S. 2005/06 soyoil stocks were pegged at 1.67 billion lbs vs. 1.54 billion last month.

There were 78 soymeal deliveries on the July contract but no soyoil deliveries.

Commercials were net buyers of soybeans, soymeal and soyoil, traders said. Commodity funds were about even in soybeans, with Refco the featured player -- selling early and buying late. In soymeal and soyoil they were net sellers of roughly 500 lots, traders said.

Estimated volume was moderate. In soybeans, an estimated 73,585 futures and 31,176 options traded. Soymeal trade was seen at 31,017 futures and 1,879 options. Estimated soyoil volume was seen at 20,570 futures and 1,511 options.

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