In The News - 08/09/2005
Malaysian
palm oil closed higher
on Wednesday, helped by gains in rival U.S. soyoil, but trading was thin ahead
of export data for September 1-10.
The
benchmark third-month crude palm oil contract, November, ended
up five ringgit at 1,388 ringgit ($368.37) a tonne, after trading as high as
1,391.
Overall volume in crude palm oil futures on Bursa Malaysia Derivatives was a light 2,605 lots of 25 tonnes each,compared with the 6,000 lots usually seen on a busy day.
Tuesday's
volume was 1,998 lots.
Soyoil futures for September closed up 0.32 cent per lb on the Chicago Board of Trade on Tuesday, buoyed by strength in soybean futures.
Soyoil is palm oil's main export rival and prices of the two commodities often move in step.
Dealers said they expected trade in palm oil to remain thin until export estimates due next Monday for the first 10 days of September, and the official Malaysian Palm Oil Board's July production, export and closing stocks data.
The market's leading exports surveyor, Societe Generale de Surveillance, last week estimated growth in August shipments of Malaysian palm oil at just 8.1 percent versus July, well short of investors' hopes for growth of 15-20 percent.
($1=3.7680
ringgit)
Chicago
Board of Trade soybean futures closed nearly 10 cents per bushel lower in the
front months on Wednesday, on a technical setback as prices flip-flopped from
Tuesday's rally, traders said.
There
was little news to give the market direction, traders said. They were waiting
for the U.S. Agriculture Department to release its September crop estimates on
Monday and for the U.S. Gulf coast ports to resume more normal shipping after
Hurricane Katrina ravaged the area last week.
"Until
the report comes out and with the uncertainty over the Gulf situation we're
going to be trading very haphazardly like we have the past three days. We can't
seem to find a direction," said one-cash connected trader.
September
soybeans <SU5> closed 9-3/4 cents weaker at $5.95 per bushel. November soy
<SX5> was down 8 at $6.06-1/4, after rallying 15-1/4 cents on Tuesday.
Selling escalated past midday when November slipped through nearby support at
$6.05.
Commodity
funds were net sellers of 4,000 lots but commercial pricing surfaced as November
dipped to the $6.05-$6.06 range, traders said.
Volume
was light, estimated by the exchange at 48,621 futures and 21,503 options.
The
U.S. main grain export area at the Gulf was stirring to life this week as ships
were beginning to load grain. The port of New Orleans is set to resume export
loadings as early as Friday in the aftermath of Hurricane Katrina.
But
there was a scarcity of barges to move grain to the Gulf, with at least 100
vessels lost after last week's storms. Shippers were also booking freight ahead
of the Midwest harvest. The combination drove barge costs on the Mississippi
River to over 700 percent of tariff -- up 100 points in one day.
The
market got off to a weak start, pressured by weakness in soymeal following
larger-than-expected meal deliveries posted before the open, traders said.
September
soymeal <SMU5> closed $3.30 per ton lower at $184.80, with the deferreds
20 cents to $2.30 weaker.
Soymeal
volume was estimated at 25,910 futures and 1,713 options.
There
were 114 deliveries on the September soymeal contract on Wednesday after CBOT
registrations jumped by 100 lots to 200 contracts late Tuesday. A Goldenberg
Hehmeyer customer stopped them all.
USDA
said late Tuesday that 54 percent of the U.S. soy crop was in good to excellent
condition, up from 53 percent the week before. That was contrary to traders'
expectations for soybeans to deteriorate by 1-2 points.
Maturity
of the crop was on par with the five-year average, with 15 percent of U.S.
soybeans dropping leaves. But in Iowa, slated to be the top soy state in 2005,
the crop maturity was ahead of the five-year pace -- one indication that
soybeans were dying early which could limit yield potential.
Twelve
percent of Iowa soybeans were dropping leaves as of Sunday, compared to 2
percent a year ago and 8 percent for the five-year average.
U.S.
analysts were mixed in their outlooks of whether the government will cut or
raise its 2005 U.S. soy crop estimate in Monday's report. Estimates ranged from
2.768 billion to 2.895 billion, compared to USDA's August estimate for 2.791
billion.
Firms
continued to post deliveries against the September soybean contract amid the
weakness in Midwest cash markets. But deliveries were on the lighter side.
There
42 soybean lots issued on Wednesday. The Term Commodities house account was a
key stopper of 29 lots.
Registrations
with the CBOT sagged to 963 lots from the previous 980 late Tuesday.
Overnight
export business featured Taiwan buying 58,000 tonnes of U.S. soy.
CBOT
soyoil futures followed soymeal and soybeans lower, with September <BOU5>
closing 0.23 down at 22.62 cents per lb. The back months were 0.25 to 0.32 cent
lower.
Soyoil
volume was estimated at 22,558 futures and 1,010 options.
Deliveries
on the September soyoil contract totaled 320 lots and the ADM house account was
the key stopper of 239 lots.
Registrations
with the CBOT were unchanged at 3,828 lots.
Malaysian palm oil futures closed firm overnight, helped by the climb in rival U.S. soyoil. But trading was thin ahead of export data for the first half of
September,
traders said.
(Note:
all prices in Canadian dollars unless noted.)
Winnipeg Commodity Exchange canola futures settled lower on Wednesday after U.S. soy futures slipped and on good harvest progress in the largest canola-growing province, traders said.
Canola ended $2.40 to $4.60 per tonne lower, with November <RSX5> down $3.00 at $268.40 and January <RSF6> down $3.20 at $276.70.
Volume was estimated at 3,084 contracts, up from a total of 3,017 on Tuesday.
Hedges and commercial selling picked up as harvest advanced, traders said. Speculative selling of canola was also a factor as Chicago Board of Trade November soybeans <SX5> touched lows of U.S.$6.01-1/2 per bushel.
But short covering, scale-down Japanese buying and other export demand lifted canola off lows of $266.30 per tonne, basis November.
Canola harvest was 11 percent complete in Saskatchewan, the provincial crop report said, with another 63 percent of the crop swathed or ready to combine.
That's up from last week's progress of 4 percent combined and 44 percent ready to harvest, but behind the five-year average of 29 percent combined and 44 percent ready to harvest.
"This time next week, harvest should be way over 50 percent completed, as long as the weather is good," a canola trader said.
Forecasts were for mainly warm and sunny weather in Saskatchewan until the weekend, when Environment Canada said there could be rain in the southern part of the province.
An
estimated 180 November/January canola spread traded between
$8.20 and $8.50 with 37 November/March between $15.50 and $15.70 and 47
January/March at $7.10.
($1=$1.19
Canadian)
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