In The News - 02/11/2005

Malaysia's palm oil futures ended lower on Wednesday on profit taking ahead of long holidays,

dealers said.

The benchmark third-month contract, January <KPOF6>, ended down 5 ringgit at 1,440 ringgit a tonne ($381.96) after touching

an intraday high of 1,447 ringgit.

"The market dipped from Monday because of profit taking," said one dealer in Kuala Lumpur.

The market was closed on Tuesday and will be closed on Thursday and Friday for the Hindu Diwali and Muslim Eid al-Fitr

Festivals.

"The market went up in the morning, but in the afternoon it eased back a bit ahead of the long holidays," said another

dealer.

Other traded months settled down 4 to 5 ringgit <0#KPO:> with overrall volume moderate at 2,594 lots of 25 tonnes each.

Dealers said they expected the market to move in a narrow range when it reopened on Monday.

"I think it depends on how Chicago moves on Thursday and Friday, but it should be range-bound trading," said one.

Soyoil and palm oil compete for similar export destinations and their prices often move in step.

Dealers pegged the immediate new resistance at 1,470 ringgit, with support at 1,420 ringgit.

Soybean futures at the Chicago Board of Trade dropped on Friday on a technical setback after a fund-led rally on Thursday, traders said.

January soybeans slipped below $6 per bushel, after closing above that level for the first time in two weeks on Thursday.

"The real surprise was how much they rallied yesterday. Some of it is just correcting that," said Anne Frick, oilseed analyst with Prudential Securities.

January soy <SF6> closed 9-3/4 cents lower at $5.92.  November <SX5> settled 11-1/4 cents down at $5.80-1/2.

Falling soyoil futures weighed on soybeans. Soyoil has been tracking the energy markets lately and U.S. crude oil futures closed $1.20 per barrel lower. Prospects for increased demand for green fuels like soy-based biodiesel has inspired soyoil to follow the energy prices recently.

December soyoil <BOZ5> slipped 0.59 cent per lb. to 22.94 cents, with the deferreds down 0.42 to 0.63.

Soymeal was also weak, closing 20 cents to $1.80 lower. December <SMZ5> was down $2.10 at $176.20.

The January crush was down 1.03 cent at 54.03 cents per bushel.

Commodity funds were sellers in all three pits. Funds sold 2,000 to 3,000 soybean contracts, 2,000 soymeal lots and 2,500 soyoil, traders said.

Volume was moderate. In soybeans, an estimated 61,620 futures and 19,535 options traded. Soymeal trade was pegged at 20,523 futures and 3,225 options. Estimated soyoil volume was 23,168 futures and 6,154 options.

Worries about possible reduced soymeal demand due to spread of the deadly bird flu virus were bearish. China and Vietnam reported new outbreaks of bird flu and in Japan authorities ordered the culling of 180,000 chickens after avian flu antibodies were found in birds at a poultry farm.

Underpinning soybean prices was a strong cash market amid fresh export interest by China for U.S. soybeans. There was talk that China bought as much as 300,000 tonnes of U.S. beans this week, traders said.

Limited country movement as U.S. farmers have tucked away their soybeans, waiting for higher prices, has forced processors to bid up for soybeans, dealers said. Some western crushers upped their spot bids by 11 cents overnight.

There were 470 deliveries on the November contract on Friday, with the Term Commodities house account issuing 457 lots. But they were met by strong commercial stopping as the ADM house account took 356 lots.

Registrations with the CBOT sagged to 1,484 lots as of late Thursday from 1,530.

Traders were beginning to monitor crop weather in South America more closely, now that soybean planting was well underway in Brazil and Argentina.

There were some concerns about dryness in Argentina. Scattered showers fell across crop regions in the past day but Argentina was forecast to be dry again this week, said Meteorlogix weather service.

In Brazil, northern areas needed more rain while southern areas were too wet. which stalled field work.

Malaysian palm oil futures were closed for a holiday.

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