In The News - 16/09/2005

Malaysian crude palm oil futures closed lower on Thursday, reversing earlier gains as players booked profits following a drop in rival U.S. soyoil prices during Asian trade.

Estimates of better exports in the first half of September compared with a month earlier had aided the earlier rise. 

The benchmark contract, November <KPOX5>, ended down 5 ringgit at 1,385 ringgit ($367.47) a tonne after trading as high as 1,396.

Overall volume stood at 4,714 lots of 25 tonnes each, up from Wednesday's 3,730 lots.

Societe Generale de Surveillance, the market's main cargo tracker, said on Thursday Malaysian exports of oil palm products for Sept. 1 to 15 were estimated at 608,419 tonnes, up 6.6 percent from the 571,006 tonnes tracked for Aug. 1 to 15.

But dealers said a more important estimate would be for Sept. 1-20 exports, due next Wednesday.

"From what we observe in physical sales of palm oil and vessel loadings at ports, exports are recovering," said another trader. "But we don't have the numbers to back that up."

September usually marks the start of one of the busiest periods in shipments of palm oil, when Pakistan, the Middle East and India import more oils to make special food for the Muslim Ramadan and Hindu Diwali festivals in November.

Dealers said earlier this week that the fundamentals for palm oil did not look strong after the official Malaysian Palm Oil Board (MPOB) reported palm oil output grew 5.6 percent in August from July, more than the 4 percent growth the market had been expecting.

MPOB said exports rose 8.31 percent -- in line with market forecasts -- but stocks jumped 4.72 percent -- agaiinst expectations of about 3.7 percent.

Chicago Board of Trade soyoil futures fell in Thursday's electronic trade, with October down 0.15 cent per lb and December down 0.16 cent.

($1=3.7690 ringgit)

Chicago Board of Trade soy futures ground to the week's lows on Thursday as the market continued to look for a bottom after USDA released its bearish crop data four days ago, traders said.

Also bearish was a step-up in harvest and good yield reports despite a summer drought.

"There was pressure coming from ideas of harvest hedge pressure and also from concerns it's going to take a while to get things going again at the Gulf," said 

Anne Frick, oilseeds analyst with Prudential Securities.

November soybeans fell to a near seven-month low, hitting $5.68 per bushel late in the session before closing 11-1/2 cents weaker at $5.68-3/4. The deferreds settled 8 to 11-1/2 cents.

"Late technical selling drove us lower late. Below $5.72 stops were hit" in November, said one CBOT floor broker.

Funds were late sellers with Citigroup featured selling 1,500 November, traders said. Commercial pricing surfaced as prices dipped.

Weekly U.S. export sales for soybeans were within expectations and viewed as market-neutral, traders said. USDA said export sales of U.S. soy last week totaled 595,300 tonnes, compared with estimates for 450,000 to 650,000 tonnes.

The largest amount, or 152,000 tonnes, was marked for unknown destinations. The world's top soybean buyer, China, was second and booked 115,000 tonnes.

There was talk that China bought three to four cargoes of U.S. soybeans this week out of the Gulf, traders said. Recent sales have been sourced out of the Pacific Northwest as Gulf export loadings have been limited after Hurricane Katrina.

Operations at the Gulf were far more normal and the cost to move supplies by barge to the Gulf remained historically high. Spot shipment on the Mississippi River traded 800 percent of tariff on Wednesday. But deferred rates were weakening, which was viewed as a positive sign for exports, floor traders said.

The Midwest harvest of early maturing soybeans was gaining speed. Early yield reports from Ohio to Iowa reflected solid numbers, ranging from 39 to 60 bushels an acre, cash dealers said.

Midwest harvest weather through the weekend should be mostly clear, helping to speed harvest along, Meteorlogix weather service said early Thursday.

But soybean basis bids early Thursday firmed at several Midwest locations as farmers limited their sales of newly harvested soybeans because of low prices, dealers said.

There 199 deliveries on the expired September contract on Thursday. A customer of R.J. O'Brien stopped 134 lots.

Registrations with the CBOT were unchanged at 1,020 lots.

The soymeal market followed soybeans lower, pressured by disappointing weekly export sales and a soft tone to U.S. cash markets. October <SMV5> closed $3.80 lower at $173.20 per ton, with the back months down 50 cents to $4.

USDA said U.S. soymeal export sales last week totaled 72,400 tonnes (old-crop and new-crop combined), vs. estimates for 75,000 to 150,000 tonnes.

The meal market found pressure from 134 deliveries against the expired September contract. Soymeal registrations with the CBOT were unchanged at 200 lots.

Soyoil futures closed lower as the drop in soybeans weighed. But soyoil market held up well compared to the other soy markets amid strong commercial buying by ADM Investor services. The firm bought about 1,200 soyoil contracts scattered between Oct, Dec, Jan, May, July, traders said.

October <BOV5> closed 0.04 cent down at 22.13 cents per lb. Deferreds were 0.05 to 0.12 weaker.

Weekly U.S. soyoil export sales were supportive along with domestic demand for soyoil for biodiesel production.

U.S. weekly soyoil export sales reached 9,100 tonnes (old-crop and new-crop combined). That was above trade estimates for 2,000 to 8,000 tonnes.

Malaysian palm oil futures closed mixed but mostly weak overnight. Traders in Kuala Lumpur said palm reversed earlier gains as players booked profits following a drop in rival U.S. soyoil prices.

There were light deliveries of 50 contracts on the expired September contract Thursday. They were met by strong stopping with the ADM house account taking all of the soyoil. Soyoil registrations with the CBOT were unchanged at 3,852 lots.

Soybean futures trade was on the lighter side estimated at 55,535 lots. Soy options trade was pegged at 26,807 contracts. Estimated soymeal volume was 32,770 futures, which was on the heavier side, and 2,662 options. In soyoil, an estimated 21,779 futures and 1,454 options traded.

Winnipeg Commodity Exchange canola futures settled lower on Thursday in sympathy with U.S. soy, but slow harvest and a lack of short-term speculative selling provided some support, traders said.

"We couldn't take our market down at all, which just tells you that everybody's afraid to sell it," a canola trader said. 

Canola ended steady to $1.50 per tonne lower, with November <RSX5> down 60 cents at $263.80 and January <RSF6> down 40 cents at $272.50.

Canola volumes were estimated at 3,583 contracts, down from 6,418 on Wednesday.

Chicago Board of Trade soybean futures were weak on harvest pressure and reports of good yields, pressuring canola futures lower.

But a lack of aggressive farmer hedges and short-term speculative and fund selling interest limited losses, traders said. Exporter buying also provided support.

The vessel line-up for the Pacific port of Vancouver showed a total of 158,000 tonnes of canola was slated to load for export by the end of September. Another 21,000 was booked for east coast export in the coming month.

Canada's harvest has slowed because of cold, rainy weather, which Environment Canada said could persist for the next week. 

But some private forecasts are calling for better harvest weather in the six- to 10-day outlook, traders said. 

An estimated 728 November/January canola spread traded between $8.30 and $8.80.

($1=$1.19 Canadian)

Back

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