Friday, October 5, 2012

20121005 1007 Soy Oil & Palm Oil Related News.

Palm Oil Poised to Decline After Rebound, Mistry Predicts (Bloomberg)
Palm oil, the most-used cooking oil, is set to resume its decline in the next few days after a bounce, said Dorab Mistry, director at Godrej International Ltd. Prices may decline to $749 a metric ton for cargoes delivered in Rotterdam because the export tax in Indonesia, the biggest producer, drops to zero at that level, said Mistry in response to e-mailed questions from Bloomberg. He correctly predicted a slump in futures in July. Crude palm oil was at $800 in Rotterdam yesterday, data compiled by Bloomberg show. Futures on the Malaysia Derivatives Exchange, the global benchmark, have plunged 22 percent since the end of August as slowing demand increased stockpiles in Indonesia and Malaysia, the biggest producers. Declining prices may reduce revenues for companies including Sime Darby Bhd (SIME) and IOI Corp. and help cap increases in global food costs.
“A bounce is to be expected and natural,” said Mistry. “The market should resume its journey to $749 cif Rotterdam in the next few days. I’m pessimistic about the macro scenario.” With a decline to $749 and no export tax, palm oil producers in Indonesia would be “better off than at present,” said Mistry. “It also means that Malaysian refiners become competitive once again.” The contract for December delivery ended little changed at 2,352 ringgit after trading between a 2.3 percent gain and a 1.3 percent loss. Futures fell 8.5 percent to close at a three-year low of 2,255 ringgit on Oct. 2. That was the biggest drop for the most-active contract since October 2008.

Tax Proposal
Indonesia reduced taxes last year to boost exports of processed oil, increasing competition for refiners in Malaysia. When prices of crude and refined palm oil and olein drop below $750 a ton, no export duty is imposed. The country will maintain its export-tax policy, Deputy Trade Minister Bayu Krisnamurthi told reporters in Jakarta today. A proposal to cut export taxes on crude palm oil to between 8 percent and 10 percent from the current 23 percent will be presented to the Malaysian cabinet tomorrow, Plantations Minister Bernard Dompok said late yesterday. “Indonesian refineries’ competitive advantage comes from their ability to buy CPO cheaper” because the domestic price is reduced by the amount of the export duty, Alvin Tai, an analyst at OSK Investment Bank Bhd., said today.
The price plunge will give some relief to Malaysian refiners in the short term,said Mohammad Jaaffar Ahmad, chief executive of Palm Oil Refiners Association of Malaysia. Even at these prices, Indonesian refiners had an advantage of at least $40 a ton in production costs, he said. Stockpiles in Malaysia will continue to expand in October, November and December and may reach as high as 3 million tons by January, Mistry said Sept. 23. Inventories in Indonesia have hovered between 3.5 million tons and 4 million tons since 2010 as against popular estimates of 1.5 million tons to 2 million tons, he said.

Soybeans Gain a Second Day as Price Drop May Boost Import Demand (Bloomberg)
Soybeans rose for second day in Chicago on speculation import demand may strengthen after prices fell from a record. Soybeans have dropped 14 percent from the all-time high of $17.89 a bushel on Sept. 4. Global exports will climb 4.1 percent to a record 93.7 million metric tons in 2012-13, the U.S. Department of Agriculture forecasts. China bought 110,000 tons from U.S. exporters and another 180,000 tons, the USDA said on Sept. 27 and Sept. 28. “There have been some pretty heavy exports lately so some demand is being met,” William Adams, a fund manager at Resilience AG in Zurich, said today by phone. “If there is a good season in Australia and South America, we could see some more weakness.” Soybeans for delivery in November climbed 0.9 percent to $15.46 a bushel on the Chicago Board of Trade at 12:39 p.m. in London. The oilseed yesterday advanced 0.1 percent after dropping 4.4 percent in two sessions.
Taiwan bought 60,000 tons of Brazilian soybeans from Bunge Ltd. for delivery in February at a tender today, the Breakfast Soybean Procurement Association-Taichung Group said by e-mail. Corn for December delivery gained 0.6 percent to $7.6125 a bushel and wheat for delivery in the same month was up 0.2 percent at $8.7475 a bushel. Milling wheat futures jumped 0.9 percent on NYSE Liffe in Paris.

Pro Farmer: After The Bell Soybean Recap (CME)
Soybean futures enjoyed strong gains throughout the day, but the market moved well off its highs after midday to settle 17 to 19 3/4 cents higher in the November through March contracts. Soybean futures surged following the release of USDA's Weekly Export Sales Report this morning, but saw settled off the daily high amid light profit-taking.

Soybean Complex Market Recap (CME)
November Soybeans finished up 19 3/4 at 1551 1/2, 17 1/4 off the high and 20 1/2 up from the low. January Soybeans closed up 18 3/4 at 1551. This was 19 up from the low and 16 1/2 off the high. December Soymeal closed up 4.5 at 468.9. This was 5.0 up from the low and 7.9 off the high. December Soybean Oil finished up 0.71 at 51.44, 0.34 off the high and 0.83 up from the low.
November soybeans traded sharply higher early in the session but gains eroded into the close and the market closed off session highs, but still in positive territory. The lower US dollar and a relentless export sales pace by the US added to the supportive tone. Some traders believe that despite the possibility of a yield increase in next week's USDA report; the likelihood of increased demand could mean extra supply will not improve this year's US soybean carryout drastically. The soybean market reported an explosive weekly export sales number this morning with sales for soybeans coming in at 1,296,600 tonnes for the current marketing year and 6,300 for the next marketing year. As of September 27th, cumulative soybean sales stand at 82% of the USDA forecast for the current marketing year vs. a 5 year average of 43%. Only 108,000 tonnes of sales are needed each week to reach the USDA forecast. Total net soybean meal sales were pegged at 375,100 tonnes and total net soybean oil sales at 3,300 tonnes. Traders reported that basis in the Gulf of Mexico held steady to firm on good demand which is s short term positive for the soybean market.

EDIBLE OIL: Malaysian palm oil futures ended flat, as traders awaited a government decision on a proposal to cut export tax on the crude shipments that could help spur exports at a time when stocks are rising at a faster pace. (Reuters)

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