Thursday, October 11, 2012

20121011 0921 Soy Oil & Palm Oil Related News.

Palm Oil Stockpiles in Malaysia Surge to Record on Output (Bloomberg)
Palm-oil stockpiles in Malaysia, the world’s second-largest producer, jumped to a record as a surge in output and an economic slowdown in China and Europe weakened demand for the commodity used in food and biofuel. Inventories jumped 17.4 percent to 2.48 million metric tons in September from a revised 2.11 million tons in August, the Malaysian Palm Oil Board said in a statement today. That is higher than the median estimate of 2.43 million tons in a Bloomberg survey last week and surpassed the previous all-time high of 2.27 million tons in November 2008. Output surged 20 percent to 2 million tons, a monthly record, while exports rose 4.5 percent to 1.51 million tons.
Rising supplies may pressure futures which plunged to the lowest level in almost three years in Kuala Lumpur last week as a deepening economic slowdown hurt demand. Stockpiles will continue to expand in October, November and December and may reach as high as 3 million tons by January, Dorab Mistry, director at Godrej International Ltd., said Sept. 23. “This is definitely going to weigh on prices,” Abah Ofon, an analyst at Standard Chartered Plc, said by phone from Singapore today. “Policy makers in Malaysia are a little bit more proactive with regards to trying to mop up some of this inventory. This is going to limit the downside.”

Tax Cut
Malaysia’s Plantations Industries and Commodities Minister Bernard Dompok today said that the cabinet had agreed to review the export tax structure for crude palm oil and the country will work with Indonesia to stabilize prices. The extent of the cut has yet to be decided, said Dompok, who will present to the cabinet a proposal on Oct. 12. He proposed a cut to between 8 percent and 10 percent from 23 percent on Oct. 3. Indonesia reduced taxes last year to boost shipments of processed oil, increasing competition for Malaysia. Palm oil for December delivery gained 0.8 percent to 2,457 ringgit ($799) a ton on the Malaysia Derivatives Exchange, the highest price at close for the most-active contract since Oct. 1. Futures dropped 5.2 percent last week after falling on Oct. 2 to the lowest close since November 2009.
“I would expect to see demand coming back in strongly at these levels,” said Ofon. “With Indonesia now such a fierce competitor, the issue whether demand actually goes into Malaysia is arguable, a lot of that demand may just actually veer off to Indonesia instead.” Malaysian output may increase this month before declining sharply as the high production season ends, Ofon said. Output typically peaks between July and October, before tapering off from November onwards. Exports from Malaysia fell 1 percent to 448,624 tons in the first 10 days of October from 453,302 tons in the same period in September, surveyor Intertek said.

Pro Farmer: After The Bell Soybean Recap  (CME)
Soybean futures sharply extended losses in mid-morning trade and posted a low-range close, finishing 12 to 26 3/4 cents lower in November through May contracts. Early pressure was limited by news China bought 120,000 MT of soybeans for 2012-13, as it signals prices have yet to ration use. But selling picked up as traders turned their focus to forecasts for rains in Brazil and tomorrow morning's USDA reports.

Soybean Complex Market Recap (CME)
November Soybeans finished down 26 3/4 at 1523 1/4, 26 3/4 off the high and 5 1/4 up from the low. January Soybeans closed down 25 1/2 at 1523 3/4. This was 5 3/4 up from the low and 25 1/4 off the high. December Soymeal closed down 8.4 at 462.6. This was 2.8 up from the low and 8.1 off the high. December Soybean Oil finished down 0.62 at 50.63, 0.92 off the high and 0.07 up from the low.
November soybeans traded sharply lower and made a new low for the week as traders took profits ahead of a USDA report that many feel will show an increase in the average US soybean yield and production. The trade is expecting a US average soybean yield near 37 bushels per acre vs. the September estimate of 35.3. Production is expected to rise to near 2.75 billion bushels vs. 2.63 in September. Despite the lower trade midday, many in the market believe that any increase in the average soybean yield and production will be offset slightly by increases in demand. Soybean demand continues to be robust and it the USDA announced this morning that US private exporters sold 120,000 tonnes of soybeans to China for 2012/13 delivery. Soybean basis has held steady to firm in the Gulf of Mexico despite the selloff in futures, however basis bids in areas of Corn Belt have declined as harvest advances. Outside markets were mostly negative on the day with US stocks trading lower along with crude oil.

EDIBLE OIL: Malaysian palm oil futures edged up to their highest in more than a week, tracking other vegetable oil markets, although gains were limited by record stockpiles. (Reuters)

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