In The News - 17/08/2005
Malaysia's palm oil futures fell on Tuesday, erasing some of previous day's gains as U.S. soybean complex tumbled following weekend rains across the Midwest.
The third-month November crude palm oil contract <KPOX5> on Bursa Malaysia Derivatives last traded at 1,377 ringgit a tonne ($366.22) a tonne, down 11 ringgit.
Overall volume was moderate at 3,088 lots.
The contract settled up 9 ringgit at 1,389 ringgit on Monday after data showed strong Malaysian palm oil exports during the first 15 days of August. Dealers expected the market to trade within a 1,370 to 1,380 ringgit range this week.
"There's not much going on, and I think the market is consolidating," said one Kuala Lumpur dealer.
"I also think basic support remains at around 1,350 to 1,360 ringgit," he said.
In Tuesday's electronic session <0#ZL:>, September soyoil shed 0.10 cents an lb at 22.20 cents, extending losses in U.S. trading.
Dealers said the U.S. soybean crop was soaking up August rains, improving yield potential. August is the critical time for soybeans as they set and fill pods.
Meteorlogix weather service said beneficial rain for filling corn and soy pod-setting was received over the southern portion of the western Midwest and in central and eastern areas of the eastern belt.
($1=3.76
ringgit)
Soybean futures on the Chicago Board of Trade closed firm Tuesday on a mild recovery from a big sell-off Monday, when commodity funds liquidated long positions on lessening worries about the U.S. soy crop after weekend rains, traders said.
The
September contract <SU5> closed 4 cents higher at $6.16-3/4 per bushel.
New-crop November <SX5> settled 5-1/4 cents up at $6.25.
"A
nickel up after the 30-cent drop yesterday is a pretty limited recovery,"
said one floor trader. "Stabilization of the product markets helped more
than anything. Meal was a black hole yesterday."
September
soymeal <SMU5> closed $1.10 per ton lower at $192.70 and deferreds settled
$1.20 to $3 higher. The meal market suffered from funds liquidating long
positions on Monday, with prices falling below $200 for the first time since mid
May.
Open
interest in soymeal fell by 2,611 lots after Monday's slide. But U.S. cash meal
markets were soft Tuesday, despite an increase in demand after the drop in CBOT
soymeal this week.
September
soyoil <BOU5> closed 0.01 cent down at 22.29 cents per lb., with the back
months steady to up 0.07 cent.
The
soy market was due for a technical bounce going into the session, after falling
to a three-month low on Monday. The nine-day relative strength index for
November soy closed at 25, still below the 30 level viewed as a technically
oversold market but above the 20 on Monday.
Weather
was receding as a market factor but continued to impact prices, traders said.
Much of the recent weakness and limited recovery on Tuesday stemmed from
improving crop weather. August rains enhance soybean yields as the crop sets and
fills pods.
Missouri,
Illinois and Indiana saw scattered showers of 0.25 to 1 inch on Monday,
Meteorlogix weather service said. The rest of the Midwest was mostly dry, with
highs in the mid-70s to low-80s (Fahrenheit). Scattered showers were forecast
for Tuesday in the western belt and on Thursday in eastern Midwest. Highs should
be mild with highs in 80s.
The
U.S. Department of Agriculture said Monday it rated 51 percent of the U.S.
soybean crop good to excellent, unchanged from the week before. The ratings came
in within trade expectations for soybeans to be unchanged to down 2 points after
last week's heat spell.
USDA
also said 89 percent of the soy crop was setting pods.
"We
will need more rainfall before the end of the month to continue to stabilize
crop production, particularly for soybeans," Meteorlogix forecaster Joel
Burgio said Tuesday.
There
was floor talk of fresh interest for U.S. soybeans in China. U.S. prices were
competitive with Brazil and Argentina, especially for fall shipments. There also
were concerns that ocean freight would be rising, traders said.
U.S.
Midwest basis bids for soybeans were steady to firm as cash dealers tried to
shake loose some beans from farmers who held tight to supplies.
Soyoil
futures spent most of the session slightly firmer on a rebound, but lost ground
to soymeal, a reverse of the recent trend.
Malaysian
palm oil futures closed weak overnight. Palm erased some of the previous day's
gains as the U.S. soy complex tumbled following weekend rains across the
Midwest, traders in Kuala Lumpur said.
Funds
were net buyers of roughly 1,000 to 2,000 contracts and were about even in
soymeal and soyoil, traders said.
(All
prices in Canadian dollars unless noted)
Canola
futures on the
Winnipeg Commodity Exchange settled higher on Tuesday, supported by a bounce in
U.S. soy futures, a lack of farmer
selling and light Japanese export buying, traders said.
"Everybody's waiting for the farmer to sell before we do new business," a canola trader said.
Canola
ended 10 cents to $1 per tonne higher, with November <RSX5>
up $1 at $279.50 and January <RSF6> up $1.40 at $288.10.
Volume was estimated at 2,945 contracts, down from a total of 4,849 on Monday.
Chicago Board of Trade soy futures rebounded on short covering after hitting three-month lows on Monday.
Canola futures followed suit, supported by routine export buying. Light fund and commercial selling kept gains in check, traders said.
Late commercial selling triggered commission house sell stops, but was filled by exporter buying.
Farmer selling has stepped back because of the recent slide in prices and because of concerns about low temperatures later this week.
Farmers had swathed or were ready to combine about 10 percent of the canola crop in Saskatchewan, the largest canola-growing province, the province's crop report said.
That's
slightly behind the 5-year average of 14 percent.
Overnight temperatures could touch lows of 4 degrees Celsius (39 F) on Friday, raising some concerns about the risk of early frost.
An early frost last year on Aug. 20 hurt the quality of the canola crop and affected some yields.
But traders noted there would be ample supplies of canola with or without a frost, and said the risk of lower temperatures had no impact on the market.
An estimated 305 November/January spread traded mainly at $8.30.
($1
= $1.20 Canadian)
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