Friday, November 9, 2012

20121109 1005 Soy Oil & Palm Oil Related News.

Soybean Complex Market Recap (CME)
November Soybeans finished down 9 1/2 at 1499 1/4, 13 3/4 off the high and 1/4 up from the low. January Soybeans closed down 11 1/4 at 1495 3/4. This was 3/4 up from the low and 17 3/4 off the high. December Soymeal closed down 6.6 at 462.9. This was 0.8 up from the low and 8.7 off the high. December Soybean Oil finished up 0.15 at 48.77, 0.43 off the high and 0.32 up from the low. January soybeans traded lower on the day and settled below $15.00 for the first time since October 16th. The soybean market continues to be caught up in outside market volatility caused by fears of the US Fiscal Cliff and uncertainly in Europe. Brazil's government estimated soybean production near 80.1 to 83 million tonnes in 2012/13 which is down from prior estimates of 80 to 82.8. The USDA is currently projecting production at 81 million tonnes. Overall demand for soybeans remain strong but this week's exports sales were a huge disappointment and were reported at 186,400 tonnes for the current marketing year and 5,500 for the next marketing year for a total of 191,900. The trade was expecting sales between 500-700,000 tonnes and an unknown destination canceled 545,000 tonnes. As of November 1st, cumulative soybean sales stand at 75% of the USDA forecast for the current marketing year vs. a 5 year average of 54%. Sales of 195,000 tonnes are needed each week to reach the USDA forecast. Net meal sales totaled 194,600 tonnes and net oil sales came in at 36,700 tonnes. The USDA will release an updated supply and demand report tomorrow morning. Most in the market feel the USDA will increase the yield which is currently estimated at 37.8 bushels per acre.

Soybeans Drop as Slowing World Economy Curbs Demand; Corn Falls (Bloomberg)
Soybeans fell to a three-week low after a government report showed a drop in overseas demand for supplies from the U.S., the world’s biggest exporter. Corn declined. Sales of soybeans in the week ended Nov. 1 plunged 75 percent from a week earlier and corn sales dropped 6.1 percent, the U.S. Department of Agriculture said today. The dollar rose to a two-month high against a basket of six currencies after European Central Bank President Mario Draghi said growth will stay weak. A stronger dollar erodes the appeal of commodities. “U.S. exports are slowing,” Jacquie Voeks, a senior market adviser for West Bend, Wisconsin-based Stewart Peterson Group, said in a telephone interview. “The economic environment in not conducive for grain market investors.”
Soybean futures for January delivery dropped 0.7 percent to close at $14.9575 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $14.93, the lowest for a most-active contract since Oct. 17. The oilseed has fallen 16 percent since reaching a record $17.89 in September after rains pared yield losses in the U.S. caused by the worst drought since 1956. Corn futures for December delivery declined 0.4 percent to $7.4125 a bushel on the CBOT, after gaining 1.2 percent during the prior two sessions. Prices have dropped 13 percent since touching a record $8.49 on Aug. 10 as demand slowed from meat and fuel producers. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.

EDIBLE OIL: Malaysian palm oil futures fell to their lowest in more than a month tracking losses in global markets caused by renewed worries that economic woes in the United States and Europe could hurt commodity demand. (Reuters)

Palm-Oil Shipments From Indonesia Seen Jumping to 10-Month High (Bloomberg)
Palm-oil exports from Indonesia, the world’s largest producer, will probably climb 13 percent this month to the highest level since January as lower prices and taxes spur importers to boost purchases. Shipments are set to increase to 1.6 million metric tons from an estimated 1.41 million tons in October, according to the median of estimates from three plantation executives, an analyst and a refiner compiled by Bloomberg. Output will decline to 2.4 million tons from 2.43 million tons, the survey showed. Stockpiles may drop to 2.5 million tons from 2.6 million tons, three respondents said. Palm oil, used in everything from soap to biofuels, has lost 26 percent this year as the global economic slowdown hurt demand while increased production in Indonesia and Malaysia, the two biggest growers, boosted reserves. Prices need to drop further in the next few weeks to attract buyers and clear inventories, which are at a record in Malaysia, according to Dorab Mistry, director at Godrej International Ltd.
“Some traders will boost purchases, hoping that prices rebound,” said Teguh Patriawan, president director at Jakarta- based planter PT Nusantara Sawit Persada. He expects shipments to total at least 1.5 million tons this month. Palm oil for January delivery tumbled 2.5 percent to 2,336 ringgit ($762) a ton on the Malaysia Derivatives Exchange yesterday, the lowest close since Oct. 2. Most-active prices dropped to 2,230 ringgit on Oct. 3, the lowest since November 2009. Futures need to fall to 2,200 ringgit, Mistry said yesterday, reiterating a forecast.

Lower Taxes
Shipments from Indonesia may rise after the government cut the tax on exports of the crude variety to 9 percent this month from 13.5 percent in October, said Susanto, head of marketing at the Indonesian Palm Oil Association, known as Gapki. The tax on crude palm oil this month is the lowest since October 2010, when it was 7.5 percent, according to data compiled by Bloomberg. The duty on refined, bleached and deodorized, or RBD, palm olein was halved to 3 percent, while that on RBD palm oil was reduced to zero from 4 percent. Exports from Indonesia dropped 2.1 percent to 1.38 million tons in September as India and China reduced purchases, Gapki said on Oct. 29. Shipments to India, the biggest buyer, declined 9.5 percent to 507,460 tons and purchases by China fell 8 percent to 205,730 tons, association data showed.
Figures for exports last month have not been issued. The estimate of 1.41 million tons was the median from a Bloomberg survey of four plantation executives, a refiner and an analyst published on Oct. 8. Projected exports in November would be the highest since January, when they were 1.64 million tons, according to Gapki data.

Record Reserves
Global vegetable-oil reserves are at a record and palm and lauric oil stockpiles will keep expanding until December, Mistry said at a conference in China yesterday. Indonesian exporters may be shipping “substantial” cargoes to Malaysia to benefit from higher prices there, said Mistry, who’s worked in the industry for 35 years. Stockpiles in Malaysia reached a record 2.48 million tons in September after surging 46 percent from June, according to data from the Malaysian Palm Oil Board, which is set to release figures for October on Nov. 12. A Bloomberg survey published on Nov. 6 showed that stockpiles in Malaysia may have expanded further last month, reaching 2.7 million tons.

French food makers decry palm oil tax proposal
Thu Nov 8, 2012 12:51pm EST
* French Senator proposes to quadruple palm oil tax
* Food makers say proposal scandalous
* Health minister dubious on need for tax
By Sybille de La Hamaide
PARIS, Nov 8 (Reuters) - French food makers on Thursday denounced a proposed fourfold tax increase on palm oil in food, saying that if it was damaging to health it should be banned, not taxed.
The social commission of France's upper house adopted a proposal on Wednesday for a tax of 300 euros per tonne of palm, coconut and palm kernel oil used in human food on top of existing taxes of around 100 euros. It would also apply to imported food products.
The use of palm oil has been met with an increasing public outcry in France and other parts of the world due to links to deforestation and ill health with several key French retailers promising to ban or cut the vegetable oil, or switch to sustainable sources.
But food manufacturers strongly disagree.
"Palm oil as such is not bad for health," Jean-Rene Buisson, head of France's Ania food industry association said.
"Punitive acts such as raising a tax by 300 percent to push industrials to use something else is absolutely scandalous," he said.
The proposed tax, dubbed "Nutella tax" in France because the chocolate and nut spread contains a significant amount of palm oil, still needs to be approved by the Senate before being sent to the lower house for approval.
But given French Health Minister Marisol Tourraine's lukewarm reaction to the proposal, it is unlikely to pass, at least without some amendment.
"It is normal to deal with the health impact of palm oil but I'm not sure that we should engage the debate in the framework of a purely financial amendment," Tourraine told Canal+ television.
"I wish to take the time for a discussion on public health, the risk for obesity in particular," she said.
The left-wing Senator behind the proposal said he was motivated by concerns the high level of saturated fat in palm oil could increase risks of obesity and cause heart disease.
"This tax would be a price signal, not to consumers but to food makers so that they replace these oils by new recipes, more respectful of human health," the amendment says.
But Buisson said palm oil, which is solid at ambient temperatures, was irreplaceable in products such as Nutella or some cookies.
French people consume an average of 2 kg of palm oil a year and the country as a whole 126,000 tonnes. If adopted the tax would add 40 million euros to France's state health insurance pot.
France adopted a 160 percent rise on beer taxes in October and last year introduced a levy on drinks containing added sugar or artificial sweeteners to help combat obesity.
The proposed additional palm oil tax of 300 euros currently accounts for a rise of 45 percent on European palm oil prices, quoted at $845 or 663 euros in Rotterdam. ($1 = 0.7840 euros)

UPDATE 1-Wilmar Q3 profit jumps 26 pct, oilseeds and grains rebound
Thu Nov 8, 2012 7:27pm EST
(Adds detail on earnings, comments on outlook)
* Q3 net profit $405.8 mln vs $321 mln a year ago
* Oilseeds and grains post pre-tax profit of $60.3 mln
* Positive contribution from sugar business
By Eveline Danubrata
SINGAPORE, Nov 9 (Reuters) - Singapore palm oil firm Wilmar International Ltd beat forecasts with a 26 percent rise in third-quarter net profit, helped by its sugar business and a rebound at its oilseeds and grains unit after two quarters of losses.
Wilmar, whose stock has slumped 38 percent this year mainly due to losses at its China business, said it remained positive on its long-term prospects due to economic growth in China, India and Indonesia, as well as increased palm oil production in Indonesia.
July-September net profit rose to $405.8 million, up from $321 million a year earlier, and well ahead of forecasts for an average $335 million, based on a Reuters poll of five analysts.
The company's oilseeds and grains segment posted a pre-tax profit of $60.3 million, mainly due to improved crushing margins and better timing for its purchase of raw materials. The unit lost $92.5 million in the first half of 2012 as overcapacity in China put pressure on margins.
Its sugar business also posted better results as the sugar crushing season went into full swing in the quarter.
Wilmar joined agribusiness giants Archer Daniels Midland Co and Cargill Inc in posting improved quarterly earnings.
Wilmar shares closed at S$3.12 on Thursday. The stock's 38 percent decline this year lags a 14 percent gain in the broader Straits Times Index.
In the large and midcap food products industry, Wilmar is among the worst performers out of nearly 200 stocks worldwide, Thomson Reuters StarMine data shows.
Out of 26 analysts tracking Wilmar, 13 had a 'hold' rating, eight had 'sell' or 'strong sell', while five had 'strong buy' or 'buy', according to Thomson Reuters data. (Reporting by Eveline Danubrata; Editing by Richard Pullin)

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