Soybeans (Source: CME)
US soybean futures fell sharply, fueled by speculative selling triggered by strength in the US dollar index and forecasts calling for improved chances of rain for South American soybean crops next week. USD index is higher on continued concern about the European banking system, and improving economic data. Better rain chances for South American crops added pressure, as traders trimmed weather premium built into prices during the market's three-week rally on Argentina dryness, analysts say. CBOT March soybeans dropped 21c or 1.7% to $12.09 a bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures slumped in unison with soybeans, stumbling on broader-based weakness across asset classes. Strength in the US dollar vs the euro produced widespread selling in dollar-denominated commodities, with additional weakness derived from improved weather potential for South American soy crops, analysts say. CBOT March soymeal ended down $7.40 at $313.20/short ton; March soyoil fell 0.97c to 52.06c/lb.
Palm Oil Output in Malaysia Seen at Nine-Month Low on Flooding By Ranjeetha Pakiam Jan. 6 (Bloomberg)
Palm oil production in Malaysia, theworld’s second-biggest supplier after Indonesia, probablydeclined to a nine-month low in December after floods disruptedharvests, according to a Bloomberg News survey. Output fell 12 percent to 1.44 million metric tons, thelowest since March, from 1.63 million tons in November,according to the median estimate in the survey of three analystsand two plantation companies. Production was 1.23 million tons ayear earlier, according to the Malaysian Palm Oil Board, whichis scheduled to publish its estimates on Jan. 10. Falling supply may pare stockpiles, helping futures inMalaysia extend the first quarterly advance in four, andpotentially boost profits at companies including Sime DarbyBhd., the world’s biggest publicly traded palm-oil producer.Futures may reach 3,400 ringgit ($1,080) a ton this month,according to Ker Chung Yang, an analyst at Phillip Futures Pte. “The stockpile figures are likely to surprise on thedownside,” Ker said by phone from Singapore. “Stockpiles arelikely to go lower because the harvesting progress is beingaffected especially in Johor and Sabah,” two of Malaysia’s maingrowing regions, because of rains and flooding, he said. The March-delivery contract fell 1.1 percent to 3,190ringgit per ton on the Malaysia Derivatives Exchange yesterday.The most-active contract gained 9.3 percent in the fourthquarter and reached a six-week high of 3,244 ringgit on Jan. 3.
Chinese Demand :
Palm oil inventories in Malaysia probably fell 3.8 percentto 1.99 million tons, dropping below the 2 million-mark for thefirst time in four months, according to the survey. Exports maydrop 7.8 percent to 1.53 million tons, the survey showed.Shipments fell 2.6 percent to 1.49 million tons in December from1.53 million tons in November, surveyor Intertek said Dec. 31. “Exports should hold up compared to last month consideringthat Chinese New Year celebrations will see some stockingactivities,” Arhnue Tan, vice president at Alliance ResearchSdn., said in an e-mail. “Stock levels will decline below 2million tons on high usage coupled with low production.” La Nina weather conditions may have been responsible forabove-average rainfall in Southeast Asia in November and earlyDecember that interfered with palm oil harvesting, causing a“sharper-than-seasonal” drop in production, Hamburg-basedresearcher Oil World said Dec. 20. Palm oil output typically peaks between July and October,before tapering off. The Lunar New Year festival in China willbe celebrated from Jan. 23 this year. Malaysian output probably gained 11 percent to 18.9 milliontons in 2011 from a year earlier, according to the survey.
China Guangdong City Seizes More Tainted Cooking Oil -Report (Source: CME)
Government officials have seized counterfeit, substandard cooking oil in the Guangdong province city of Dongguan that could be harmful to health, the state-run China Daily newspaper reported, quoting city authorities. Although the volume involved is relatively small, the seizure is the latest in a renewed bout of food safety scandals, the most prominent of which was the recent discovery of carcinogenic aflatoxin in China Mengniu Dairy Co. products. The edible oil seized in Dongguan contained soyoil and palm oil, as well as an ingredient that made it smell like peanut oil, while crude cottonseed oil, which can cause infertility, was used to clarify the liquid, the paper said. Last month, in a separate incident, Guangdong government officials ordered a recall of carcinogenic cooking oil. In March 2011, police shut down a Shaoguan city business also for producing counterfeit peanut oil.
The Dongguan seizure amounted to 3,000 liters of edible oil or roughly three metric tons, according to Dow Jones Newswires calculations--tiny in comparison with the 6,575 tons the country consumes daily. The seizures so far may only have a negligible impact on the commodity trade now, but wider confiscations may alter market dynamics. Still, the problem of illegally recycled cooking oil is potentially market-moving if the government succeeds in eliminating and replacing it with fresh edible oil. "People in China consume about 2 million-3 million tons of illegal cooking oil every year," He Dongping, a food science expert at the Wuhan Polytechnic University, told state media. China consumes about 27 million tons of cooking oil a year, according to data from the China National Grain and Oils Information Center.
Palm oil eases on renewed euro zone concerns, weather eyed
SINGAPORE, Jan 5 (Reuters) - Malaysian crude palm oil futures slipped on rekindled investor caution over the euro zone debt crisis although weather concerns in oilseed growing regions limited losses.
"There is not much activity, probably because it's the beginning of the year. The weather is definitely a concern here. Plus the market has been up for quite sometime," said a trader with a foreign commodities brokerage in Malaysia.
India's Dec oilmeal exports up 24.5 pct y/y
NEW DELHI, Jan 5 (Reuters) - India's oilmeal exports rose 24.5 percent in December to 953,526 tonnes, a top trade body said on Thursday, following higher demand from traditional buyers such as Vietnam and Japan.
Soymeal exports, which account for bulk of India's oilmeal sales, were at 798,041 tonne in December, up 30.6 percent from a year ago.
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