In The News - 12/09/2005

KUALA LUMPUR, Sept 10 (Reuters) - Exports of Malaysian oil palm products for Sept. 1 to 10 stood at 376,306 tonnes, down 6.4 percent from the 401,967 tonnes shipped between Aug. 1 and 10, cargo surveyor Intertek Testing Services said in a shipment estimated released on Saturday.

(Note: all prices in Canadian dollars unless noted.)

Winnipeg Commodity Exchange canola futures ended mixed on Friday, with commercial buying fueling talk of fresh export sales, traders said.

Canola settled $4.20 per tonne higher to 20 cents lower, with November <RSX5> up 20 cents at $265.90 and January <RSF6> down 20 cents at $274.

The U.S. Agriculture Department will issue its September crop report on Monday. It will be followed by a report on Tuesday from Statistics Canada, which is expected to show a large carry-over of supplies from last year, traders said.

"We are going to be flooded with grain," a trader said.

Traders expect StatsCan to report canola ending stocks at the end of the 2004/2005 marketing year on July 31 at 1.5 million to 1.8 million tonnes, the second-largest on record.

Canola futures were supported by active scale-down commercial buying. Traders said there was talk of fresh canola sales to Japan or Mexico. It could not be confirmed.

There was light pressure on futures from hedge selling, a sign of farmer selling in cash markets. 

Traders said scattered rain over the weekend could slow harvest progress.

The Canadian dollar rose to its best level against the U.S. dollar since November, which would raise export prices.

Traders said an estimated 416 November/January canola spreads traded at between $8.10 and $8.60.

($1=$1.18 Canadian)

The Chicago Board of Trade soy market spiraled downward late Friday, falling to a six-month low when stops were in a technical sell-off, traders said.

"It got below $5.95 and just collapsed. Stops were hit all the way down," said one floor broker referring to November soybeans, the most actively traded contract.

The move surprised traders as the market was firm most of the session amid a short-covering rebound before the government issued its monthly crop report on Monday.

November soybeans <SX5> sank to $5.89 per bushel -- its lowest point since late February -- before closing 10-1/2 cents lower at $5.90.

The other months closed 6-1/4 to 9-3/4 cents weaker, with front-month September <SU5> down 10 at $5.80-1/2.

Commodity funds were net sellers of 3,000-4,000 contracts after buying the market early. Refco, O'Connor, Cargill Investor Services were among the sellers.

Early support stemmed from larger-than-expected weekly export sales data released before the open. USDA said last week's soy export sales totaled 436,900 tonnes (423,600 tonnes was for the new marketing year that began Sept. 1). That compared to trade estimates for 200,000 to 400,000 tonnes.

China, the world's biggest soybean buyer, booked the most -- 228,000 tonnes.

The general outlook is for the government to raise its forecast for the U.S. soybean crop from its August estimate of 2.791 billion bushels in Monday's report. But analysts' estimates were wide ranging, from 2.768 billion to to 2.895 billion due to variability of this year's crop.

Early Midwest harvest reports were also widely varied, with yields ranging from 20 to 60 bushels per acre. USDA's national yield estimate for soy is 38.7 bushels/acre.

Crop weather in the Midwest was getting mixed reviews with some traders citing unseasonably warm temperatures and dry weather was pushing the crop to maturity early, thus limiting yield potential. But Iowa saw beneficial rains overnight that could help late pod fill.

U.S. soybean basis bids were mixed early Friday, with some places weaken their levels further amid harvest pressure, dealers said. The disruption in U.S. grain exports after Hurricane Katrina added to the weakness in cash markets as grain backed up into Midwest. The firmness in CIF values at the Gulf was largely tied to high freight rates.

"Harvest hasn't really even started and we're already cheap. With the Gulf disaster, it just happened at the wrong possible time," said Greg Johnson, an Illinois merchandiser with The Andersons.

The barge market remains hot as shippers scramble for vessels not stranded by the hurricane. Spot shipment on the Mississippi River traded at 800 percent of tariff on Friday.

Deliveries against the September contract were the lightest since the delivery period started last week at five lots. A customer of First Options stopped all of the soy. Soybean registrations with the CBOT sagged to 1,148 lots from the previous 1,163.

The soy product markets turned lower late, following soybeans. However, September soymeal <SU5> and the Sep/Oct spread were pressured throughout the session by 200 deliveries on the September contract on Friday. An R.J. O'Brien customer was the key stopper of 111 lots. Meal registrations with the CBOT were unchanged at 200 lots late Thursday.

Soymeal was underpinned early by strong weekly export sales and firmer Chinese soymeal values. Chinese crushers raised soymeal prices for the first time in months amid fears of shipment delays after Katrina, Hong Kong traders said Friday.

September soymeal closed $4 lower at $180.40 per ton, with the deferreds down 50 cents to $3.20.

USDA on Friday said U.S. soymeal export sales reached 269,100 tonnes (old-crop and new-crop combined) last week. That was above estimates for 50,000 to 100,000 tonnes.

CBOT September soyoil <BOU5> closed 0.23 cent per lb lower at 22.17 cents, the deferreds down 0.05 to 0.22.

Weekly export sales for soyoil were within expectations but the market continued to see deliveries against the September contract, which cast a bearish tone.

USDA reported U.S. soyoil exports for last week at 6,200 tonnes (old-crop), within estimates for 2,000 to 8,000 tonnes.

Deliveries on the September contract totaled 492 lots and an LBS customer was the main stopper of 288 lots. CBOT soyoil registrations with the CBOT were unchanged at 3,828 lots late Thursday.

Malaysian palm oil futures closed mostly firm overnight.

Volume was on the lighter side. Estimated soybean volume was 43,127 futures and 18,888 options. Soymeal trade was pegged at 20,435 futures and 1,266 options. In soyoil, an estimated 20,208 futures and 2,304 options traded.

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