In The News - 22/08/2005
Malaysian
palm oil extended gains
on Friday on fears haze from Indonesian forest fires, which disrupted production
last week, could return soon.
But volumes remained light as some players turned cautious about going long.
The benchmark third-month crude palm oil contract on Bursa Malaysia Derivatives, November <KPOX5>, closed up 4 ringgit at 1,391 ringgit ($369.95) a tonne, despite losses in rival Chicago soyoil.
The contract hit an intraday high of 1,396 ringgit, closer to the key 1,400 barrier, which traders had initially thought would take longer to reach.
Other
traded contracts were up 5-6 ringgit <0#KPO:>.
Volume was 4,636 lots of 25 tonnes each, below the 6,000 lots or more typically seen on a busy day.
Soyoil futures on the Chicago Board of Trade <0#ZL:> were mostly down at Thursday's close, after rebounding a day before.
Palm oil prices often shadow those of soyoil as they compete for exports.
"The fundamentals for palm oil have improved again because of the fear over haze," said an analyst at a plantation company.
The local Star newspaper said on Friday that Kuala Lumpur and its surrounding areas could be hit again by haze from Indonesian forest fires as early as Monday as wind patterns changed.
Noxious haze forced the government to declare an emergency in two areas in Selangor, a key oil palm producing state, last week.
A
rebound in palm oil exports had lent support to prices.
Societe Generale de Surveillance (SGS), the leading surveyor of Malaysian palm oil exports, said this week it had tracked a shipment of 571,006 tonnes for August 1 to 15, up 17 percent from what it had monitored for July 1 to 15.
The cargo surveyor had reported steep declines in estimates for last month.
Production of palm oil itself rose 7 percent in July due to higher yields, but dealers expect it to drop 3 to 5 percent in August.
($1=3.75
ringgit)
Soybean futures at the Chicago Board of Trade fell to near six-month lows on Friday, pressured by the recent improvement in U.S. Midwest crop weather and forecasts for more rain this weekend, traders said.
"We're dialing in this moisture. We got a favorable weather pattern since the 11th. I think now we've reached a level of support in November soybeans," said Don Roose, an analyst with U.S. Commodities.
September soybeans <SU5> fell below $6 per bushel for the first time since late February to close 12-1/2 cents weaker at $5.97-1/4. New-crop November <SX5> settled 12-3/4 cents lower at $6.07-1/2 -- dropping below its 200-day moving average of $6.15-3/4 to $6.04-1/4.
Funds were liquidating longs, selling roughly 6,500 contracts. Cargill Investor Services, SAK Trading, Fimat Futures, R.J. O'Brien and Refco were among the sellers of November, traders said.
Soybeans
benefit from August rains as they set and fill pods, enhancing yield potential.
Scattered
showers moved through the Midwest on Thursday and additional rainfall was
expected in parts of the crop region on Friday and Saturday, said Meteorlogix
weather. Rainfall of 0.25 to 0.75 inch was forecast for much of the belt.
"This
is probably the most favorable forecast we have had for the dry areas of the
Midwest for most of the summer," Meteorlogix forecaster Mike Palmerino
said. "This will improve soybean conditions."
The
annual U.S. Midwest crop tour begins Monday and U.S. grain traders and analysts
said they will be monitoring the results to get a clearer picture of whether
August rains improved yield potential.
Some
underpinning stemmed from technically oversold conditions, with the nine-day
relative strength index for November closing near 20 on Friday. An RSI of 30 or
below is one indicator of a technically oversold market.
Also
supportive were firm Midwest cash markets as farmer sales have dried up this
week due to the drop in futures prices, dealers said.
There
were also hopes this week's fall in futures may
stimulate fresh export business, especially as some traders believe that
ocean freight has hit a bottom.
The
soymeal and soyoil markets were pressured by the weakness in soybeans. September
soymeal <SMU5> closed down $4.10 per ton at $186.80, with the deferreds
down $2.60 to $4.10. September soyoil <BOU5> was down 0.23 cent at 22.28
cents per lb, with the back months 0.25 to 0.37 weaker.
The
September crush was up 0.95 cent at 58.79 cents per bushel.
Softer
U.S. cash soymeal markets were also bearish. Soymeal supplies were seen
increasing after several U.S. processors in the western belt resumed crushing
this week after recent downtime time.
Malaysian
palm oil futures closed firm overnight. Palm extended a climb on Friday amid
fears that haze from Indonesian forest fires, which disrupted production last
week, could return soon, traders in Kuala Lumpur said.
Export
news featured the Commodity Credit Corp. seeking 2,000 tonnes of soyoil for
Guatemala.
CBOT
volume was moderate in the soy complex. In soybeans, an estimated 64,001 futures
and 42,088 options traded. Soymeal volume was pegged at 31,360 futures and 3,110
options. Estimated soyoil trade was 20,416 futures and 811 options.
(Note:
all prices in Canadian dollars unless noted.)
Winnipeg Commodity Exchange canola futures settled lower on Friday, pressured by weak U.S. soy futures, pre-harvest commercial selling and the stronger Canadian dollar, traders said.
Canola ended $4.00 to $5.30 per tonne lower, with November <RSX5> down $4.30 at $276.50 and January <RSF6> down $4.30 at $284.80.
Volume was estimated at 3,210 contracts, up from 2,788 on Thursday.
Chicago Board of Trade soy futures were lower after rains in the U.S. Midwest and forecasts for more rain, along with fund liquidation.
The market shrugged off reports of patchy frost overnight in Alberta.
"All the elevator companies don't think it's a big deal at all," a canola trader said.
"Not a lot of people are putting any stock in damage being done by the frost," another trader said.
Traders noted forecasts are for excellent harvest weather over the weekend and early next week.
Lack of farmer selling provided some support underneath the market, as did light, unaggressive exporter buying, traders said.
Commercials were steady sellers, and funds and small speculators were light sellers.
An estimated 720 November/January spread traded from $7.60 to $8.30.
($1=$1.21
Canadian)
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