Thursday, November 8, 2012

20121108 1100 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
November Soybeans finished down 8 at 1508 3/4, 14 off the high and 8 1/2 up from the low. January Soybeans closed down 8 1/2 at 1507. This was 9 3/4 up from the low and 14 3/4 off the high. December Soymeal closed down 3.2 at 469.5. This was 4.3 up from the low and 5.9 off the high. December Soybean Oil finished down 0.06 at 48.62, 0.44 off the high and 0.21 up from the low. January soybeans finished the day lower but off session lows and above $15.00. Technical selling as well as a stronger US Dollar offered resistance to prices. Outside markets were sharply lower with the Dow Jones down over 200 points. Concerns that no agreement will be made on the fiscal cliff and uncertainly over the path of the global economy pushed investors to the sidelines and towards safe havens like the US Dollar. Underlying support is coming from strong export demand from China and a tight global supply outlook if South America fails to produce a bumper crop this year. Weather has turned more favorable in South America this week. Argentina is expected to dry down before seeing another chance for rainfall this weekend. Central and northern Brazil is expected to see rainfall this week which should relieve soil moisture deficits. Additional pressure was linked to thoughts that the USDA will raise the US average soybean yield and production estimate in this Friday's USDA report.

EDIBLE OIL: Malaysian palm oil futures gained snapping three days of losses, with investors buying after prices dropped to a one-month low earlier in the session and on concerns year-end floods in the country could hurt production. (Reuters)

By Michael Taylor
JAKARTA | Wed Nov 7, 2012 8:19pm EST
Nov 8 (Reuters) - Benchmark Malaysian palm oil prices must stay at around 2,200 ringgit ($720) a tonne for two months in order to stimulate demand for the edible oil and reduce high stock levels, a leading industry analyst said on Thursday.
Malaysian palm oil prices have already lost about a quarter this year to trade at around 2,400 ringgit ($780) a tonne, as stocks rise in top producers Indonesia and Malaysia and demand slumps, hit by a global economic downturn.
But palm prices must fall further within the next 4 to 6 weeks to lure buyers and cut back inventories, said Dorab Mistry, head of edible oil trading at Indian conglomerate Godrej Industries.
He made a similar call at an industry conference in Malaysia in October.
"One thing is crystal clear. Futures are very overpriced at present," Mistry said in a speech to be delivered at an industry meeting in the Chinese city of Guangzhou.
"A period of short-term pain will be rewarded with ample long-term gain."
Last month, second-largest producer Malaysia said it would cut export taxes next year, which has helped support crude palm oil prices. The government also said it would scrap duty-free export quotas.
Mistry said that by January, the government would have to announce loopholes and exemptions to this new export tax regime to allow substantial duty-free exports of crude palm oil, otherwise monthly exports will fall.
"In their euphoria, plantation groups and their cheerleaders have overlooked one simple but significant fact," Mistry said. "In the last fortnight, palm oil has completely priced itself out of any meaningful energy demand," he added.
Palm oil is used as a cooking oil, biofuel and in cosmetics.

Seasonally strong production may have driven Malaysian palm oil stocks to another record high in October, a Reuters survey of five plantation firms showed this week.
Inventory levels may have grown 7.5 percent in October to 2.67 million tonnes from a previous peak of 2.48 million in September, the poll showed.
Malaysian palm oil stocks are likely to increase further in November and December, Mistry said, adding that they will total 3 million tonnes by Jan. 1 next year.
Crude palm oil production will be 18.4 million tonnes by Malaysia this year and 27.5 million by Indonesia, he estimated.
Output prospects next year had brightened as a result of the fadeout of the El Nino weather event and better rain, he added.
Turning to rival edible oil soyoil, Mistry said prices of soybeans, now trading at about $15.18-1/4 a bushel, would depend on the weather, acreage and pace of planting in South America, and crucially, releases from Chinese state reserves.
"If the state reserve releases another 2 million tonnes of soybeans between now and March, Chinese imports will be reduced to that extent, and prices need not rise to $18," he said.
"Prices around $16 will be sufficient to see us through until new crop Brazilian supplies come to market." ($1=3.0615 Malaysian ringgit) (Reporting by Michael Taylor; Editing by Clarence Fernandez)

No comments: