In The News - 02/09/2005

Malaysian crude palm oil futures ignored a sharp fall in rival U.S. soyoil to stay firm on Thursday, but dealers said investors were probably setting

the stage for profit-taking.

Export estimates from leading cargo surveyor Societe Generale de Surveillance showed a rise of only 8.1 percent for August, against the market's hopes of a 15 to 20 percent expansion.

But futures remained strong, avoiding a much-anticipated beating after the weak soy prices and lukewarm export numbers.

"The market has held surprisingly well. People covered on paper and there was also follow-through buying in physicals," said a trader.

Another said a sell-off could be on the cards.

"There should be some profit-taking, maybe as early as tomorrow," he said. "The fundamentals don't justify the market to be at this level."

The benchmark third-month crude palm oil Bursa Malaysia Derivatives, November <KPOX5>, settled at 1,377 ringgit ($365.25) a tonne, up 7 ringgit from Tuesday.

 The market was closed on Wednesday for a holiday.

Other traded months <0#KPO:> were up 4 to 9 ringgit.

Overall volume was 3,745 lots of 25 tonnes each -- about half from the 6,000 lots seen in a typically busy day.

U.S. soyoil fell by up to 0.52 cent a pound at Wednesday's lose on the Chicago Board of Trade and remained weak in Thursday's electronic session, which is conducted during Asian trading hours <0#ZL:>.

Soyoil and palm oil compete for exports and their prices often move in step.

A weaker ringgit (MYR=), standing at around 3.77 to the dollar on Thursday compared to the 3.75 level in earlier weeks, also made dollar-denominated trade of palm oil more attractive, dealers said.

($1=3.77 ringgit)

CHICAGO, Sept 1 (Reuters) - Soybean futures on the Chicago Board of Trade rebounded Thursday from the previous session's sell-off that was sparked by worries about U.S. export business as Gulf export terminals were shut after Hurricane Katrina, traders said.

"What is often the case is we overreact to a disaster. The market today got a bit of rebound after yesterday's overreaction. It started off with a bit of enthusiasm about the Gulf," said Roy Huckabay, an analyst with The Linn Group in Chicago.

There were hopes that major exporters would soon resume shipping out of some Gulf ports, traders said. Roughly 70 percent of U.S. exports are shipped out of the Gulf.

The port of Mobile in Alabama reopened after being shut due to Hurricane Katrina, but only to vessels with a draft of 12 feet or less, the U.S. Coast Guard said.

There also was industry talk that southbound barges will move along Midwest rivers by early next week. And top exporters were bringing in portable power to service grain elevators in the Gulf.

September soy <SU5> closed 9 cents higher at $5.95-3/4 per bushel and new-crop November <SX5> was up 8-1/4 at $6.07, rebounding from its close below $6 on Wednesday.

Commodity funds were net buyers of roughly 1,000 contracts. Citigroup was the featured buyer of roughly 500 lots, traders said.

U.S. Midwest cash markets were weak early Thursday amid logistic tie-ups at export terminals. That weakness was underscored by the second day of heavy deliveries against the September contract and weakness in the September/November spread.

But river bids were firming late Thursday amid prospects of exports out of the Gulf resuming earlier than first thought.

There was also talk of fresh Chinese business late Wednesday -- buying one to two cargoes of U.S. soybeans out of the Pacific Northwest.

September closed at roughly an 11-cent discount to November but gained about a penny on November.

There were 1,101 deliveries posted against the September contract on Thursday. A customer of O'Connor and Co. stopped 400 lots and the Term Commodities house account stopped 327.

CBOT soybean registrations late Wednesday increased to 1,326 lots from 1,260 on Tuesday.

The U.S. Agriculture Department reported export sales of U.S. soybeans at 625,400 tonnes (old and new crop), near the low end of trade expectations for 600,000 to 900,000 tonnes.

After the close, FC Stone pegged the U.S. soybean crop at 2.835 billion bushels -- above USDA August estimate of 2.791 billion.

South American soybean futures settled 8 cents higher to 5 cents lower. November <BSX5> was up 8 at $6.63 per bushel.

The soymeal market followed the technical rebound in soybeans. Higher-than-expected weekly export sales of soymeal added support.

September soymeal <SMU5> closed up $2.10 at $184.50 per ton, with the deferreds up $1.60 to down 20 cents.

USDA reported export sales of U.S. soymeal last week at 162,700 tonnes (old and new crop), above the range of trade estimates for 50,000 to 100,000 tonnes.

There were 81 soymeal deliveries posted against the September contract on Thursday. A customer of Cargill Investor Services issued 75, and a Prudential customer stopped 46.

CBOT soymeal registrations were at 100 lots late on Wednesday, unchanged from the previous day.

The soyoil market got off to weak start after heavy September deliveries. But it rallied late when soybeans hit their highs.

September soyoil <BOU5> closed up 0.41 cent per lb. at 22.82 cents, with the back months up 0.25 to 0.60 cent.

There were 493 September soyoil deliveries. A customer of Refco's Century Group was the biggest stopper at 265 lots.

Registrations with the CBOT late on Wednesday were at 3,828 lots, unchanged from late on Tuesday.

USDA reported export sales of U.S. soyoil for last week at 2,200 tonnes, near the low end of trade expectations for 2,000 to 8,000 tonnes.

Malaysian crude palm oil futures closed firm on Thursday, ignoring a sharp fall in rival U.S. soyoil.

Volume was moderate to light. In soybeans, an estimated 55,021 futures and 16,099 options traded. Soymeal trade was pegged at 26,589 futures and 1,308 options. Estimated soyoil trade was 28,383 futures and 299 options.

Back

For More Inquiries:
Our e-mail : [email protected]