Thursday, July 28, 2011

20110728 1048 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures slide, with selling generated by an absence of a new weather threat for crops and jitters about the government's inability to hammer out a debt-ceiling agreement. Traders took a cautious approach awaiting clear signals on weather and decisions on the US debt ceiling. CBOT November soybeans ended down 8 1/4c at $13.80 1/2 a bushel.

Soybean Meal/Oil (Source: CME)
Soy-product futures also slid, with slower demand for soymeal and soyoil adding pressure. December soymeal dropped 1.5% to $363.60/short ton and December soyoil fell 0.3% to 57.31c/pound.

China Allows Canada Canola Despite 'Blackleg' (Source: CME)
China will continue to allow Canadian canola shipments to enter the country while government and industry participants in both countries work toward a long-term solution to a disease infecting Canadian canola, the Canadian government said Tuesday. China remains one of the largest markets for Canada's canola crop, but exports to the country have been hampered since 2009 when China placed import restrictions related to blackleg, a common fungal disease in canola. Currently, canola that tests positive for blackleg can only be delivered to crushing facilities far away from where China grows its own rapeseed crop. "This is tremendous news for our canola producers and processors and is a testament to our strong and collaborative working relationship with China," said Canadian Agriculture Minister Gerry Ritz in a statement.
"This development demonstrates that the growing Canada-China commercial relationship is benefiting Canadian farmers and their families," added Ed Fast, minister of international trade and minister for the Asia-Pacific Gateway. "We value and welcome the continued access as China is now the world's second-largest economy. It is important that we further develop our trading relationship with China to create opportunities for hard-working Canadians." The announcement is part of an ongoing strategy to achieve a stable trading environment with China for Canadian canola, according to the release. "We welcome China's commitment to work in partnership to maintain trade in canola while jointly tackling research to reduce the threat of blackleg," said Canola Council of Canada President JoAnne Buth.
During the first 10 months of the 2010/11 (August/July) crop year Canada had exported 692,000 tons of canola to China, making it the fourth-largest export destination, according to the most recent Canadian Grain Commission data as of the end of May. That compares with the previous year when Canada had sent 1.841 million tons of canola by the end of May.

Firm overseas markets lift palm oil futures, data eyed
KUALA LUMPUR, July 27 (Reuters) - Malaysia palm oil futures rose half percent in light trade  on strong soy markets as China resumed buying and dry weather in the U.S. although gains were limited over concerns of a looming U.S. debt crisis.
"Palm oil market is very quiet, but volatile trade is expected after the U.S. Agriculture Department releases a report on July's plantings," said a trader in Kuala Lumpur, referring to a key monthly report due for release on August 11.

China extends access for Canada canola
WINNIPEG, Manitoba, July 26 (Reuters) - China has agreed to continue accepting Canadian canola for another year, while the two countries work on a long-term solution to a nearly two-year-old trade dispute, Canadian Agriculture Minister Gerry Ritz said on Tuesday.
In 2009, China restricted imports of Canadian canola seed with the fungal disease blackleg, but later allowed shipments to designated Chinese ports away from China's rapeseed growing areas.

Weekend rains help corn, soy in northern US Midwest
CHICAGO, July 26 (Reuters) - Rainstorms that hit the northern U.S. Midwest during the weekend arrived just in time for farmers like Larry Hummel of Illinois who saw a heatwave suck up excess moisture that had been stored in the soil since a wet spring.
"I did notice that right at the end of the week, it (the stress) was starting to show up in the crops," said Hummel, who planted about 2,500 acres of corn and 1,200 acres of soybeans this year.

Palm Oil May Plummet to 2,800 Ringgit as Supplies Swell, Mistry Forecasts (Source: Bloomberg)
Palm oil may slump to as low as 2,800 ringgit ($952) per metric ton in September as output jumps in Malaysia and Indonesia, the world’s two largest growers, according to Dorab Mistry, director of Godrej International Ltd. Malaysia may produce 19 million tons in 2011, 2 million more than last year, Mistry told a symposium in Sydney today, according to an advance copy of his remarks. Indonesian output may gain 3 million tons to 25.5 million tons, said Mistry. Palm oil traded at 3,134 ringgit at 5:23 p.m. in Singapore yesterday. Lower palm oil prices may help to ease global food costs that rallied to a record in February, according to a United Nations gauge, and held within 2 percent of that peak in June. Mistry, who’s traded the oil used in food and fuels for more than three decades, forecast a rebound to 4,000 ringgit in 2012.
By September, “the peak summer demand will have gone, Indonesian biodiesel production will slow down dramatically and CPO production will rise strongly,” Mistry said according to the remarks, referring to crude palm oil by its initials. Malaysian stockpiles will reach a record in December, he said. Palm oil on the Malaysia Derivatives Exchange has slumped 21 percent since climbing to a 35-month high of 3,967 ringgit on Feb. 10 on expectations output will expand this year. Crude oil’s 28 percent rally over the past year has also lifted the appeal of vegetable oils in biofuels. Mistry said that his forecasts were based on crude oil at $85 to $105 per barrel.

Sime’s Forecast
Lower palm oil prices may hurt growers such as Malaysia’s Sime Darby Bhd. (SIME), the world’s biggest listed producer. Palm oil may remain at about 3,000 ringgit for the rest of the year on good demand, Franki Anthony, Sime Darby’s plantation managing director, said on July 22. Mistry’s forecast today is similar to his last public call in April, which was issued in Beijing. He said then that prices may decline to less than 3,000 ringgit as output in Southeast Asia expanded, before rallying in the final quarter. “I expect palm stocks on 1st December in Malaysia to be at a record high,” Mistry said in Sydney today, according to the remarks. Reserves in the second-largest producer reached an all- time high of 2.27 million tons in November 2008 and stood at 2.05 million tons last month, according to Bloomberg data.
Global palm oil output will expand at least 6 million tons from last year as Papua New Guinea, Thailand, India and Colombia also see growth, he said. “We have a strong recovery in tree output, plus a strong increase in mature area,” Mistry said.

Record Production
Mistry’s forecasts for production in Malaysia and Indonesia are higher than official projections. Malaysian output may be 17.6 million tons in 2011, compared with 17 million in 2010, Plantation Industries and Commodities Minister Bernard Dompok said in March. Dompok’s outlook would match output in 2009 and compare with 2008’s record 17.7 million tons, official data show. Indonesia expects output to rise 5.3 percent to 24.4 million tons in 2011, Gamal Nasir, director general for estate crops at the agriculture ministry, said in December. Production in Indonesia will rise 8.1 percent to 24 million tons in 2011, Hamburg-based researcher Oil World said in a July 19 report. Global biodiesel demand is expected to grow 3 million tons this year, while demand for food will expand 3.5 million tons driven by rising populations and better living standards in developing countries, according to Mistry. Palm oil competes with soybean oil for use in foods and fuels.
Soybean oil will remain “steady” at $1,250 a ton free-on- board for the next few months due to biodiesel mandates in Brazil and Argentina, Mistry said. Still, the erosion in export demand for soybean oil from so-called price-sensitive countries will continue given its large premium over palm oil, he said. Large stockpiles of soybeans in 2011 from better-than- expected crops in Argentina, Brazil and Paraguay may lead to an increase of almost 12 million tons in the crushing of the oilseed compared with last year, Mistry said. That would help to produce 2 million tons more soybean oil in 2011, he said. “Soya-oil prices will only rally around December-January as we approach the end of the South American crush season,” Mistry said. “The soya oil premium over palm oil will narrow as a first step before we see any gains in soya oil.”

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