In The News - 13/09/2005
Malaysia's benchmark palm oil contract ended down half a percent on Monday on bearish crop and export numbers.
But dealers said fundamental support could keep the market above the key psychological level of 1,350 ringgit a tonne.
The third-month crude palm oil contract on Bursa Malaysia Derivatives, November <KPOX5>, closed down seven ringgit at 1,377 ($365.35).
Its low for the day was 1,373.
Other traded contracts ended down six to 15 ringgit <0#KPO:>.
The market's open interest level was up just one lot from Friday to 30,350 lots at Monday's open. But volume for the day closed at 4,813 lots, against Friday's 3,369 lots.
"I think the market will remain well supported at 1,350 ringgit for now, although the supply-demand factors aren't really great," said a trader.
The third-month contract last dipped below 1,350 on Aug. 4, when it touched 1,343.
Exports of palm oil for Sept. 1 to 10 were almost flat compared with Aug. 1 to 10, cargo surveyor Societe Generale de Surveillance said in a shipment estimate on Monday.
MPOB, the official crop agency, said in a separate report that output of palm oil grew 5.6 percent in August from July.
The market had been expecting monthly output to grow below 4 percent.
MPOB
said exports were up 8.31 percent -- in line with market
forecasts -- but stocks jumped 4.72 percent -- against expectations of about 3.7
percent.
"The August stock level of 1.33 million tonnes is particularly worrying," said another futures trader.
"With the way September exports are going, we could add another 100,000 to stocks by the end of this month," he said. "A stock of 1.43 million is high."
($1=3.7685
ringgit)
Soybean
futures at the Chicago Board of Trade sank to a near seven-month low on Monday
as traders were rattled by the U.S. Agriculture Department's
bigger-than-expected soy crop estimate issued before the open.
September
soy <SU5> closed 5-1/2 cents per bushel lower at $5.75 and new-crop
November <SX5> was down 5 at $5.85 -- after sliding 15 cents to a near
seven-month low of $5.75 early.
"The
crop is bigger than what most people were expecting. Now it's going to be a
matter of just how big does the market think the crop is," said Randy
Mittelstaedt, analyst with R.J. O'Brien, a Chicago trade house.
"We
could see the market move down here over the next couple weeks. Today is the
shock value. With that new line of thinking in place, you'd probably see the $6
level provide overhead resistance," Mittelstaedt added.
November
found support around $6 over the past week, but slipped below that level during
Friday's late sell-off. That continued on Monday on USDA data viewed bearish.
USDA
projected the 2005 U.S. soy crop at 2.856 billion bushels, above the
government's August estimate for 2.791 billion and an average of analysts'
estimates for 2.814 billion. The bigger crop spilled over to a larger U.S.
2005/06 soy end stocks estimate, now projected at 205 million bushels. In
August, USDA forecast new-crop end stocks at 180 million bushels.
But
U.S. 2004/05 end stocks fell 5 million bushels to 295 million. Analysts expected
the drop to reflect a strong U.S. crush pace.
Late
short covering helped bring the market off its lows near the close on Monday.
USDA's cut of 2005/06 world soybean end stocks by 3.35 million tonnes to 44.92
million was supportive. The cut included a 2 million-tonne reduction in the
government's Brazilian soy crop forecast.
Midwest
soy cash basis bids were mostly steady to weaker early Monday. A slowed export
pace due to the problems with shipping supplies out of Gulf Coast ports after
Hurricane Katrina and a step-up in harvest movement pressured basis levels at
several locations, dealers said.
USDA
reported on Monday that 3.971 million bushels of U.S. soybeans were inspected
for export last week, down significantly from a year ago when 10.6 million
bushels were inspected during the first week in September. Most of the soybeans,
or 2.2 million bushels, were shipped out of the Pacific Northwest.
Deliveries
on the September contract totaled 49 lots on Monday and the Term Commodities
house account stopped them.
Registrations
with the CBOT sagged to 1,020 lots from the previous 1,148 late Friday.
The
soymeal market followed the weakness in soybeans. Added pressure stemmed from
another 91 futures deliveries posted against the September contract on Monday. A
Henning customer was the key stopper of 82 lots.
The
futures deliveries underscored soft U.S. cash markets amid weak demand.
Soymeal
registrations with the CBOT were unchanged at 200 lots late Friday.
USDA
left its 2005/06 U.S. soymeal stocks estimate unchanged at 250,000 tons.
CBOT
September soymeal <SMU5> closed $2.40 per ton lower at $178 -- and a $1.40
discount to October <SMV5>, which was settled $2.30 down at $179.40.
CBOT
soyoil futures fell on spillover pressure from soybeans. Also bearish was USDA
raising its new-crop U.S. soyoil stocks estimate by 100 million lbs to 1.6
billion and more deliveries against the September contract. There were 581 lots
posted on Monday but they were met by strong stopping, with the ADM house
account taking 441 lots.
Registrations
with the CBOT were unchanged at 3,828.
CBOT
September soyoil <BOU5> was down 0.13 cent per lb at 22.04 cents. The back
months were 0.09 to 0.23 cent lower.
Malaysian
palm oil futures closed lower overnight amid bearish crop and export numbers.
Commodity
funds were net sellers of about 4,000 soybeans, 1,500 soymeal and 2,000 soyoil,
traders said.
Volume
in the soy complex was light to moderate. In soybeans, an estimated 56,898
futures and 37,137 options traded. Estimated soymeal volume was 26,097 futures
and 1,712 options. Soyoil trade was pegged at 19,647 futures and 1,995 options.
(Note:
all prices in Canadian dollars unless noted.)
Winnipeg Commodity Exchange canola futures settled lower on Monday after losses in the allied U.S. soy market and on continued but light farmer
selling,
traders said.
Canola ended 80 cents to $2.90 per tonne lower, with November <RSX5> down $1.50 at $264.40 and January <RSF6> down $1.00 at $273.00.
Canola volumes were estimated at 2,659 contracts, down from a total of 3,787 on Friday.
The market traded in a narrow range, following Chicago Board of Trade soybeans lower at the opening after the U.S.
Agriculture Department boosted crop production estimates in a report on Monday.
Japanese and other scale-down commercial buying provided some support, along with the declining Canadian dollar.
Concerns about weekend rains that caused quality losses and harvest delays in Alberta and parts of Saskatchewan also provided support, traders said, noting cash premiums at the port of Vancouver have improved.
"If you can't get the grain off the field, you can't get the grain into a rail car, and you can't get the grain onto a boat," a canola trader said.
Canola traders were also preparing for a Statistics Canada report slated for release at 7:30 a.m. CDT (1230 GMT) on Tuesday that was expected to confirm huge old-crop canola stocks at July 31.
Trade estimates of canola stocks ahead of the report ranged from 1.5 million to 1.8 million tonnes, sharply higher than the 609,000 tonnes on the same date the previous year.
Traders said an estimated 215 November/January canola spreads traded at between $8.20 to $8.70.
($1=$1.19
Canadian)
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