In The News - 19/07/2005

Malaysia's crude palm oil futures fell across the board on Monday on persistent worrries about slow demand from main consumers in coming months.

Benchmark third-month crude palm oil on Bursa Malaysia Derivatives for October <KPOV5> ended two ringgit lower at 1,417 ringgit ($372.89) a tonne. It had fallen to a low of 1,413 ringgit.

Overall volume was moderate at 2,003 lots.

Some dealers said the market was likely to trade in a range of 1,410 to 1,430 ringgit this week, with movements on the Chicago soyoil futures providing direction amid worries about slow exports.

"But I don't think the market is going to crash. It will hold at around 1,400 ringgit," said one Kuala Lumpur dealer, referring to a level which will trigger more buying interest.

August soyoil <BOQ5> on the Chicago Board of Trade (CBOT) was up 0.02 cent at 25.50 U.S. cents per lb, having traded as high as 25.62 cents.

Freight brokers and dealers said China was awash with cooking oil and was cutting down on imports, while top edible oil buyer India shows more interest in soyoil because of lower taxes.

China bought around 480,000 tonnes of RBD palm olein and other products such as stearin from main producers Malaysia and Indonesia in June but imports could fall to around 350,000 tonnes this month due to ample stocks, they said.

Freight brokers said China had so far booked around 270,000 tonnes of palm oil from both suppliers for July shipments. Current stocks were estimated at around 300,000 tonnes in the main cities in China, such as Guangzhou and Tianjin.

Dealers said India was seen buying around 300,000 tonnes of palm oil in July and up to 200,000 tonnes of South American soyoil.

India purchased around 100,000 tonnes of soyoil in June, and around 320,000 tonnes of palm oil from main Malaysia and Indonesia, said dealers.

Soybean futures at the Chicago Board of Trade closed lower on Monday after a volatile session, as the consensus was scattered weekend rains that moved through the U.S. Midwest would improve soy prospects, traders said.

August is the critical yield determining month for soybeans. But the window was closing for corn, which gained on soybeans again on Monday. July is the crucial yield making time for corn as it pollinates.

August soy <SQ5> closed 3-3/4 cents lower at $7.17-1/4 per bushel, and new-crop November <SX5> was 3-3/4 weaker at $7.27-3/4 -- keeping between nearby support at $7.16 and resistance at $7.50.

Scattered showers fell across the western Corn Belt over the weekend, including the top crop state of Iowa. Some rains also moved through the eastern Midwest states of Indiana and Ohio. Illinois was mostly dry.

The U.S. Department of Agriculture late Monday said U.S. soy conditions dropped one percentage point, with 53 percent of the crop rated good to excellent as of Sunday. That was within traders' expectations.

Exports remained subdued as importers look to cheaper supplies out of South America.

U.S. weekly soy export inspections were disappointing. USDA reported that 2.5 million bushels of soybeans were inspected for export last week, compared to trade estimates for 5 million to 9 million. Top buyer China did not ship any soybeans last week.

Midwest cash basis bids for soybeans were steady to weaker on Monday, with soybean sales light.

The soymeal market followed the weakness in soybeans. August soymeal <SMQ5> closed $2.50 per ton lower at $224.20, while the deferreds were down 90 cents to $4.50.

The soyoil closed firm amid light volume. The oil market followed the ups and downs in soybeans most of the session, with little fresh inputs to stir much interest.

August soybean oil <BOQ5> settled 0.06 cent firmer at 25.54 cents per lb, with the back months down 0.20 to up 0.09.

Fresh export business featured South Korea buying 55,000 tonnes of South American soymeal.

Malaysian crude palm oil futures declined overnight on persistent worries about slow demand from main consumers in coming months.

There were no deliveries against the expired July soybean, soymeal and soyoil contracts on Monday. Monday was the last delivery day for soybeans and meal, while firms can deliver soyoil until July 29.

The Commodity Futures Trading Commission said late Friday that large speculators trimmed their net long positions in CBOT soybeans and soymeal during the week ended July 12 and held their net long position in soyoil.

Estimated volume was moderate to light. In soybeans, an estimated 60,701 futures and 32,935 options traded. Soymeal trade was pegged at 21,122 futures and 1,983 options. Estimated soyoil volume was 18,116 futures and 2,781 options.

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