In The News - 29/08/2005
Short-covering
helped Malaysian
palm oil rebound on Friday from two straight days of losses, but gains were
limited by weak U.S. soyoil prices and a
general lack of positive leads.
The third-month crude palm oil futures contract on Bursa Malaysia Derivatives, November <KPOX5>, stood at 1,367 ringgit ($364.53) a tonne by the lunch break, up two ringgit from Thursday.
It has lost 28 ringgit over the last two days on liquidation of long positions, and selling by those fearing more competition from Indonesian palm products as the rupiah weakened.
Thursday's high for November was 1,368 ringgit, while the low was 1,358.
Other traded months were up one to four ringgit <0#KPO:> by the lunch break.
But trade volumes were thin, totalling just 1,291 lots of 25 tonnes each. The market usually sees a transaction of 3,000 lots or more by midday.
"People are waiting to see what the export numbers for the whole of August are like, to decide where to take the market to," said a dealer. "That's why no one's doing anything other than some covering."
Societe Generale de Surveillance (SGS), the leading tracker of Malaysian palm oil shipments, disappointed the market on Thursday by estimating a rise of just 10 percent in exports for August 1 to 25 compared with the same period a month earlier.
SGS had been more optimistic about exports in earlier weeks, estimating a 12 percent rise for August 1 to 20 from the same period a month earlier, 17 percent for August 1 to 15, and 19 percent for August 1 to 10.
The cargo surveyor's estimate for the whole of August is due on Wednesday.
In contrast to exports, production was seen steadily climbing, a Reuters survey showed on Thursday.
Malaysia's August production of palm oil is expected to rise 2.5 percent over July, helped by steady rains and the dispersion of a smog from Indonesian forest fires that briefly hit output, said analysts from five plantations involved in the survey.
Dealers had initially thought production would drop three to five percent in August after the haze enveloped large parts of central Malaysia, forcing the government to declare a brief emergency that stopped or slowed work at plantations.
But with rains and a change in wind direction having scattered the pollution -- and an international firefighting team ready to douse new hotspots on Indonesia's island of Sumatra -- the impact on Malaysia's production has been limited.
The official Malaysian Palm Oil Board will issue official production, export and stock numbers for August on Sept. 12.
Soyoil futures on the Chicago Board of Trade remained soft in Friday's electronic trade <0#ZL:> after closing down on Thursday, with deliveries for September through March showing losses of 0.01 to 0.44 cents a lb.
Soyoil
and palm oil compete for exports and their prices often
move in step.
($1=3.75
ringgit)
CHICAGO, Aug 26 (Reuters) - Soybean futures at the Chicago Board of Trade ended higher on Friday on a technical recovery or bounce from the slide Thursday to six-month lows, traders said.
The
gains led to renewed talk that China might be buying U.S. soybeans.
CBOT
soy closed unchanged to 5 cents per bushel higher. September <SU5> was up
4 at $5.91 per bushel. New-crop November <SX5> was up 4-1/4 at $6.02.
The
new-crop November soy contract closed Thursday well below all key moving
averages and the nine-day relative strength index ended at 24. Chartists view an
RSI of 30 or less as an indication of an oversold market.
Technical
support in November was at $5.94. Resistance at $6.00 was broken, driving the
contract to a session high of $6.03-1/2 per bushel.
Volume
was on the light side, estimated by the exchange at 53,931 futures and 18,527
options.
Gains
were limited by good crop weather in the Midwest and reports from the annual
John Deere Pro Farmer crop tour this week of good soy yield potential in the
Midwest.
Pro
Farmer pegged this year's U.S. soybean crop at 2.783 billion bushels. That's
below USDA's Aug. 12 forecast for 2.791 billion. John Deere Pro Farmer crop
scouts toured the seven major U.S. Midwest crop states this week, an area that
accounts for roughly 75 percent of U.S. corn and soy production.
Hot
and dry weather in July in the eastern Midwest had boosted soy futures, but the
market has been falling because of a turn to crop-friendly weather in August.
Agricultural
research and brokerage firm Allendale Inc. on Friday pegged this year's U.S. soy
crop at 2.77 billion bushels. That's below last year's record crop of 3.1
billion and slightly below the U.S. Agriculture Department's August forecast for
2.79 billion.
Meteorlogix
weather service said showers were likely in parts of the U.S. Midwest on Friday,
with dry weather expected over the weekend. Showers were expected in the eastern
Midwest on Saturday, with dry weather likely on Sunday.
Temperatures
will range normal to above normal Friday through the weekend.
Plentiful
stocks of vegetable oils globally continue to weigh on soybean futures prices.
Statistics
Canada on Friday pegged 2005 Canadian canola production at 8.3 million tonnes,
up 7.7 percent from last year.
Exports
were quiet overnight and cash basis bids for soybeans in the Midwest late on
Thursday were mostly weak amid light farmer selling.
Soymeal
was 50 cents per ton lower to 70 higher with support stemming from the firm tone
in soy. September <SMU5> was unchanged at $183.70 per ton.
Soymeal
volume was estimated at 30,187 futures and 1,618 options.
Soyoil
was up 0.02 to 0.11 cent per lb following soybeans. But gains were limited by a
forecast early Friday from Statistics Canada of a large canola crop this year.
September <BOU5> was up 0.02 at 22.08 cents per lb.
Soyoil
volume was estimated at 30,146 futures and 1,795 options.
Malaysian
palm oil futures closed mixed overnight. Traders in Kuala Lumpur said short
covering helped palm rebound from two straight days of losses, but gains were
limited by weak U.S. soyoil prices and a general lack of positive leads.
(Note:
all prices in Canadian dollars unless noted.)
WINNIPEG, Manitoba, Aug 26 (Reuters) - Winnipeg Commodity Exchange canola futures closed mixed on Friday as a firm tone in allied U.S. soy markets helped nearby contracts overcome early declines, traders said.
Canola ended 50 cents higher to $1.40 lower, with November <RSX5> up 10 cents at $270.60 and January <RSF6> up 10 cents at $279.
The November/January spread traded at a carry of $8.20 to $8.60.
Volume was estimated at 6,353 contracts, down from 7,707 lots on Thursday.
Values rallied after declining early in the session on a government forecast for a bumper Canadian canola crop.
Statistics Canada projected the 2005 crop at 8.325 million tonnes, up 7.7 percent from 7.728 million tonnes in 2004 and near the average trade estimate of 8.4 million.
"It was a knee-jerk reaction lower to the StatsCan report," one trader said of the early declines in futures. "It confirms the second-largest crop in history -- it's tough to find anything bullish in that," he said.
Traders
noted light fund and hedge-related selling. But canola
values rebounded on talk of possible export interest from China, along with
strength in Chicago Board of Trade soybeans.
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