In The News - 19/09/2005
Malaysia's palm oil futures rose on Friday on expectations of strong overseas demand and talk that India may reduce import duties on edible oils, dealers said.
Malaysia is the world's largest palm oil producer and exporter.
The benchmark December crude palm oil contract <KPOZ5> on Bursa Malaysia Derivatives rose 8 ringgit to 1,399 ringgit a tonne ($371.18 a tonne).
The day's high was 1,404 ringgit and the low was 1,387. Other traded months <0#KPO:> settled 5-20 ringgit higher.
Overall volume was quite high at 7,680 lots of 25 tonnes.
"The market moved higher as players expected demand to come in as we are moving into the demand season," said one Malaysian dealer in Kuala Lumpur.
"We have festival seasons coming in in the next two months."
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 to make special food and cakes for the Muslim Ramadan and Hindu Diwali festivals in November, dealers said.
There was a rumour in the market that India would reduce import duties on edible oils, including palm oil and soyoil, they said.
"The
rumour also helped move the market," said one dealer.
"When you move into the festival season, naturally, demand is there. I will not be surprised it they do that."
The market was expected to remain active over the coming week and could possibly move above 1,400 ringgit, dealers said.
"Volume was quite good today. I think the market will go up steadily and try above 1,400 ringgit next week," said one dealer.
($1=3.769
ringgit)
Chicago Board of Trade soybean futures closed firm Friday on a pre-weekend technical bounce after the November contract slid more than 25 cents in the past week, traders said.
The nine-day relative strength index for the November contract <SX5> closed at 27 on Friday, up from 25 on Thursday. An RSI of 30 level or below is one indicator of a technically oversold market.
Strong export interest also helped prices to rebound slightly.
"There
is a very definite increase in export interest ...
that's why we've seen a marked increase in FOB interest in the
U.S.," said Roy Huckabay, analyst with The Linn Group in Chicago.
"I
think you've got bean business going on in every port in the country that can
load stuff. It's happening on the Atlantic it happening on the Pacific its
happening at the Gulf," Huckabay said.
November
<SX5> closed 2-1/2 cents per bushel higher at $5.71-1/4 per bushel, and
the deferreds were steady to up 2-1/4 cents.
But
volume was on the thin before the weekend, with funds buying about 1,000 soybean
contracts.
There
was little to no pre-weekend harvest hedge pressure, which helped the market
from closing lower, traders said.
U.S.
Gulf export markets were trying get back to normal after ports were closed by
Hurricane Katrina more than two weeks ago. Export terminals and the Port of New
Orleans were open this week, but loadings were well below usual. Moving grain to
the Gulf also remained slow due to shortage of barges.
Overnight
business included Taiwan's purchase of 15,000 tonnes of U.S. soy.
Meteorlogix
weather on Friday said there should be no major harvest delays in the Midwest
despite some rain late this week. Also, no damaging cold weather was in sight.
Midwest
cash basis bids for soybeans on Friday were steady to weaker as harvest was
picking up in the Corn Belt, dealers said.
The
soymeal market closed higher, taking its cue from soybeans. Soyoil futures were
up earlier then turned down as the soyoil/soymeal spread corrected slightly from
this week's strength in soyoil vs. soymeal.
October
soymeal <SMV5> settled 30 cents per ton higher at $173.50, with the
deferreds up 20 to $1.10. October <BOV5> was down 0.17 cent per lb at
21.96 cents, with the deferreds down 0.15 to 0.30.
A
soft tone to U.S. soymeal markets kept a lid on the day's rebound. Soymeal
supplies were seen building as freshly harvested beans move into crushing
plants, dealers said.
But
there were no soymeal or soybean deliveries on Friday, the last delivery day for
those two contracts. There were also no September soyoil deliveries. The last
delivery day for soyoil is Sept. 30.
India
reducing its base import prices of palm and soybean oils was viewed market
neutral for soyoil as the change affected all imported oils, traders said.
For
crude soyoil, India said on Friday it cut its base import price to $506/tonne
from $558/tonne. Crude palm oil base import price was dropped to $397/tonne from
$423/tonne.
Malaysian
palm oil futures closed firm overnight. Traders in Kuala Lumpur said palm rose
on expectations of strong overseas demand and talk that India may reduce import
duties on edible oils.
Estimated
soybean trade was 41,926 futures and 17,541 options. Soymeal volume was
estimated at 25,510 futures and 2,217 options. Soyoil trade was pegged at 20,308
futures and 4,809 futures.
(Note:
all prices in Canadian dollars unless noted.)
Winnipeg
Commodity Exchange
canola futures broke to new seven-month lows on Friday on heavy fund selling and
ahead of a weekend of better harvest
weather, traders said.
"They (funds) sold it right into the close, and they don't usually do that, and why they did it today, nobody knows," a canola trader said, estimating the net fund short position around 5,000 contracts.
Canola settled $5.00 to $6.30 per tonne lower, with November <RSX5> down $5.50 at $258.30, just above contract lows of $255.20, and January <RSF6> was down $5.30 at $267.20.
Canola volumes were estimated at 6,848 contracts, up from a total of 4,314 on Thursday.
Commercials were early buyers on ideas the selling was overdone, traders said, but later sold the market ahead of the weekend.
Environment Canada forecast rain for most of the Prairies on Friday and Saturday, but said conditions would be mainly clear for Sunday through Tuesday.
Some weather models show clear, dry weather in the extended forecast, while others forecast unsettled weather, Environment Canada said.
Canola was left vulnerable to more fund and commercial selling next week, traders said.
"It's not pretty, that's for sure: here comes the contract lows," a trader said.
An estimated 642 November/January canola spread traded between $8.00 and $8.80, with 133 November/March between $15.10 and $15.90 and 126 November/July between $22.50 and $27.00.
($1=$1.18
Canadian)
For More Inquiries:
Our e-mail
: [email protected]