In The News - 14/07/2005

Malaysian crude palm oil futures retraced slightly on Wednesday, snapping a four-day gain, after CBOT soyoil fell in Asian trade on profit-taking.

Soy and palm compete for export destinations and their prices often move in step.

July soyoil <ZLN5> on the CBOT, or Chicago Board of Trade, was down 0.56 cent at 24.45 cents per lb in Wednesday's electronic session which runs before formal trading which begins at 1400 GMT. The contract closed up 0.24 cent on Tuesday.

By Wednesday's midsession, September palm oil <KPOU5> was down 6 ringgit at 1,417 ringgit ($372.89) a tonne. Its morning high was 1,420 ringgit.

Other traded months were down between 5 and 14 ringgit <0#KPO:>.

Overall volume was a scant 625 lots of 25 tonnes each, as players took to the sidelines awaiting fresh leads.

Soybean futures at the Chicago Board of Trade closed sharply higher on Wednesday amid weather jitters, with drought in key producer Illinois the main market factor, traders said.

CBOT soy closed 1 to 13 cents per bushel higher. July <SN5> was up 13 at $7.11-1/2 per bushel. New-crop November <SX5> was up 12-1/2 at $7.25.

Volume was estimated by the exchange at 68,569 futures and 35,317 options.

"Right now weather is stressing corn more than beans but obviously if it stays dry, beans are going to get hit too," a trader said.

Showers and cooler weather in the eastern U.S. Corn Belt this week should relieve some drought damage, but Illinois crops remain in peril, a private forecaster said Wednesday.

Central and northern Illinois will experience only a few sprinkles this week with temperature ranging from the upper 70s to near 90s degrees Fahrenheit, Meteorlogix forecaster Joel Burgio said.

Illinois, one of the leading U.S. crop states, was in desperate need of rain after one of the driest springs on record.

"In the western Corn Belt, conditions are mostly favorable with not very hot weather and adequate soil moisture. But there is some concern that it will be gradually drying out over the next two or three weeks," Burgio said.

The Meteorlogix six-to-10-day forecast for the Midwest for Wednesday through Saturday called for above-normal temperatures with rainfall near to below normal.

The export front included news Taiwan bypassed the United States and bought 58,000 tonnes of soy from Brazil.

Deliveries on the July contract remained heavy at 791 lots and there was scattered stopping of the soy with the Term Commodities house account taking 207 lots. Registrations with the CBOT were unchanged at 1,645 lots.

Cash basis bids for soy in the Midwest were mixed and selling was quiet as producers waited to see if the eastern U.S. Midwest received much rain.

Soymeal futures closed $2.10 to $6.00 per ton higher with the market taking its cue from strong gains in soy. July <SMN5> was up $2.80 at $222.00 per ton.

Soymeal volume was estimated at 28,283 futures and 6,616 options.

Deliveries on the July contract totaled 10 lots. A Rand  Financial customer stopped 8 lots and a CIS customer took 2. Registrations with the CBOT were unchanged at 170 lots.

Soyoil futures were up from 0.20 to 0.48 cent per lb, led by the surging soy. July <BON5> was up 0.34 at 25.35 cents per lb.

Soyoil volume was estimated at 23,406 futures and 2,369 options.

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

Malaysian palm oil futures closed weak overnight. Traders in Kuala Lumpur said palm fell, snapping a four-day gain, after CBOT soyoil fell in the e-cbot overnight trade.

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