In The News - 12/08/2005
Malaysian crude palm oil futures closed higher on Thursday after the government declared an emergency in two areas of a major oil palm growing state due to worsening haze resulting from Indonesian forest fires.
In an emergency, the government will order the closure of estates and factories, among others, in the two areas in central Selangor state.
"There's some short covering although we are unsure how much this will affect supply," said a trader.
Officials have also said that a prolonged haze could hit output by the world's biggest palm oil producer.
The benchmark third-month crude palm oil contract on Bursa Malaysia Derivatives, October <KPOV5>, ended up 10 ringgit at 1,367 ringgit ($364.53) a tonne despite a drop in prices of rival U.S. soyoil.
Soyoil and palm oil compete for export destinations and the two markets often move in step.
Other
traded months settled up 7 to 12 ringgit <0#KPO:>.
Overall volume stood at 4,899 lots of 25 tonnes each, little changed from Wednesday's 4,827 lots.
($1=3.75
ringgit)
Soybean
futures at the Chicago Board of Trade closed lower on Thursday, reacting to
prospects that U.S. soybeans benefited from recent Midwest rains and hopes that
crops will benefit more by additional rains, traders said.
August
soybeans <SQ5> settled 2-1/2 cents lower at $6.41 per bushel and new-crop
November <SX5> was down 2-1/2 cents at $6.50-1/4.
Soybeans
lost ground to corn, which closed about 1-2 cents higher. August rains were seen
benefiting corn less than soybeans, as corn went through July pollination during
one of the hottest, driest summers in the eastern Midwest since 1988.
However,
August is the critical yield-determining month for the soybean crop as it sets
and fills pods.
"The
markets are reacting to the weather. The weather comes a little too late to help
corn, maybe," said Roy Huckabay, analyst with The Linn Group in Chicago.
During
most of the session, prices were range-bound as traders evened positions before
the USDA released its monthly crop reports.
The
trade expects the government to cut its U.S. 2005 soy crop estimate after this
summer's drought in the eastern Midwest, but estimates were wide-ranging on how
much the government will cut its projection.
On
average, analysts expect the government to trim 86 million bushels from its July
forecast of 2.89 billion.
U.S.
weekly export sales tally was disappointing but within trade expectations.
USDA
early Thursday reported that 154,000 tonnes (old-crop and new-crop combined) of
U.S. soy were sold for export last week, compared with trade estimates for
100,000 to 250,000 tonnes.
Old-crop
net sales of 92,000 tonnes were 21 percent below last week's tally but 55
percent above the four-week average. China remained off the list of buyers.
U.S.
Midwest basis bids for soybeans were mixed early Thursday amid quiet farmer
sales, dealers said.
There
were 68 deliveries on the August soy contract early Thursday. Customers of First
Options and ABN AMRO stopped all of the soy.
Registrations
with the CBOT unchanged at 1,124 lots.
The
soy-product markets kept range-bound ahead of USDA crop reports. The soymeal
gained on soyoil with the oil market under pressure from technical sales,
traders said.
August
soymeal <SMQ5> settled 40 cents lower at $207.60 per ton, while the
deferreds were steady to up $1. August soyoil <BOQ5> was down 0.05 cent
per lb at 22.67 cents, with the back months mostly lower.
U.S.
weekly export sales data was bearish for soymeal and supportive for soyoil,
traders said. USDA reported that 43,300 tonnes (old-crop and new-crop combined)
of U.S. soymeal were sold for export last week. That was below the range of
estimates for 50,000 to 110,000 tonnes.
U.S.
soyoil sales reached 13,300 tonnes (old-crop) of U.S. soyoil, compared with
exports for 1,000 to 5,000 tonnes.
There
were no August soymeal deliveries and CBOT meal registrations remained at zero.
Soyoil
deliveries against the August totaled 165 lots and there was scattered stopping
of the soyoil with the Bunge house account taking 58 lots.
Soyoil
registrations with the CBOT were unchanged at 2,934 lots.
Malaysian
palm oil futures closed firm overnight. Palm gained after the government
declared an emergency in two areas of a major oil palm growing state due to
worsening haze resulting from Indonesian forest fires, traders in Kuala Lumpur
said.
Soybean
futures volume was light estimated at 36,802 futures. Options soy trade was seen
at 25,921 lots. Estimated soymeal trade was pegged at 24,090 lots and 1,761
options. In soyoil an estimated 24,236 futures and 3,516 options traded.
(Note:
all prices in Canadian dollars unless noted.)
Winnipeg
Commodity Exchange
canola futures ended higher on Thursday amid commercial shortcovering ahead of a
U.S. crop report on Friday,
but gains were capped by hedge pressure and fund selling.
The U.S. Agriculture Department will release its August production forecast for the 2005 corn and soybean crops.
November canola <RSX5> settled $1.90 per tonne higher at $285.70 and January <RSF6> was up $2.00 at $293.90.
"There was shortcovering before the USDA report," a trader said. There was light hedge pressure and fund selling."
Traders said strengthening of the Canadian dollar against the greenback capped gains as it would limit exports.
There was no confirmation of talk on Wednesday of export sales, possibly to China, but traders said there had been some pricing of sales to Japan in the futures market.
In
spreading, 426 November/January contracts traded at $7.40
to $7.90.
For More Inquiries:
Our e-mail
: [email protected]