The weaker U.S. dollar has also triggered an inflow of funds into commodities as an inflation hedge and makes palm oil priced in the greenback much cheaper for overseas buyers. "However, I am afraid that (new) level will not be sufficient to ration demand," Mistry said in a speech due to be delivered at an oilseed conference in the southern China city of Guangzhou.
"The period of greatest tightness will be between February and May 2011 and we may require even higher prices in December and January to prepare the world for that tightness." Benchmark Malaysian prices this year have support from an output shortfall in Malaysia and, to some extent, in top producer Indonesia as El Nino's hotter weather dried up yields.
London-based Mistry said the subsequent back-to-back transition from El Nino to La Nina in the middle of 2010 has caused severe imbalances in the global climate and may further hurt overall oilseed production. La Nina can bring more rains to palm oil producing Southeast Asia that aids in oil palm pollination but the weather condition potentially triggers hotter weather in soyoil-exporting South America that can affect soybean crop yields.
"Even with current estimates of 67 million tonnes of beans for Brazil and 52 million for Argentina, the world's supply and demand fundamentals are very tight. Any loss due to La Nina will make it tighter," Mistry said. Mistry, head of vegetable oil trade in Godrej International, said cash Argentine soyoil may rise as much as 10 percent to $1,250 per tonne in the short term as consumers shift to soyoil after chasing tight rapeseed oil and sunseed oil supplies.
BEIJING, Nov 5 (Reuters) - Most Dalian corn contracts <0#DCC:> hit a record while soy <0#DSA:>, soyoil <0#DBY:> and palmoil <0#DCP:> futures touched their daily trading limits on Friday to track gains on the Chicago Board of Trade (CBOT). "All these rises are 'imported' rises because of a weaker U.S. dollar. We believe oilseeds will be stronger, following bullish crude oil prices," said Wang Ping, an analyst with Dongwu Futures Co Ltd based in Shanghai.
Dalian corn, which used to move in opposite direction from prices in Chicago because of government stocks, has recently been tracking rises on the Chicago Board of Trade <0#C:> as China may turn to more imports next year due to tight domestic supply, said Wang. The May corn contract
Soyoil for May delivery
US soy product futures finish mixed, with soyoil climbing on spillover support from Asian markets. Crude palm oil futures on Malaysia's derivatives exchange hit fresh 27-month high and led soyoil higher, according to Global Commodity Analytics and Consulting, a US brokerage. Soymeal lost ground, as market participants bought soyoil and sold soymeal in spread traders, trader says. CBOT Dec soyoil ends up 0.97 cent at 52.22 cents per pound. CBOT Dec soymeal slips 20c to $348 per hundredweight. (Source: CME)
New Planting Rule Improves Palm Industry Image - Unilever (Source: CME)
A proposed new planting rule by the Roundtable on Sustainable Palm oil, that requires oil palm growers to get approvals from local communities, will improve the industry's image, a company executive at Unilever NV said. The industry has previously faced criticism by environmental groups that it cleared forest lands to cultivate oil palms. The new planting procedure--proposed by environmental groups and set to be adopted at the upcoming Roundtable conference in Jakarta next week--requires oil palm growers to prepare correct regulatory permits, documents that identify areas that fall under primary forest, or peat soils, and for new oil palm plantings from Jan. 1, 2010. Many growers say they are burdened with too many RSPO requirements and the new planting procedure would slow oil palm expansion particularly in Indonesia, leading to higher prices in the longer term as global demand increases.
"The planting rule is the only way to make sure planters adhere to RSPO principles and requirements," the Netherlands-based Jan Kees Vis, global director for sustainable sourcing development at Unilever, said. Jan Kees, also president at RSPO, said the planting rule would also put to rest deforestation charges made by environmental groups. The planting rule, if implemented, would also require growers to address all grievances with local communities before they commence operations on new areas. The RSPO, an industry consortium, was formed by the World Wildlife Fund and Unilever in 2004, which is adopting stringent and sustainable practices for palm-oil cultivation after palm oil producers in Malaysia and Indonesia were charged by environmental groups with cutting down forest trees and draining peat lands for oil palm cultivation.
The allegations led to blacklisting of some plantation firms by major food producers as they rushed to protect global brands by jumping on the sustainable bandwagon, demanding environ mentally friendly palm oil. Most palm oil producers have made that pledge to be fully certified by the RSPO in the next few years, but Jan Kees warned against a tendency to delay certification plans until demand picks up.
U.S. soy hits 25-month top on dollar, Fed push
SINGAPORE, Nov 5 (Reuters) - U.S. second-month soybean futures climbed to a 25-month high and wheat extended gains as funds flowed into commodities after the U.S. Federal Reserve's new stimulus plan boosted appetite for risk assets.
"There's a broad allocation for commodities at the moment," said Adam Davis, senior commodity analyst at Merricks Capital in Melbourne.
USDA confirms China rejected US corn shipment
WASHINGTON, Nov 4 (Reuters) - The U.S. Agriculture Department on Thursday confirmed that China has rejected a shipments of U.S. corn after it detected a genetically modified variety not yet approved in China.
"We understand that industry representatives are working directly with the Chinese on this matter. We continue to monitor the situation," a USDA spokeswoman said.
Argentina corn sowings seen higher-exchange
BUENOS AIRES, Nov 4 (Reuters) - Argentina's 2010/11 commercial-use corn area is seen rising to 3.15 million hectares from the previous forecast of 3.0 million hectares, the Buenos Aires Grains Exchange said on Thursday.
The exchange held its estimate for 2010/11 wheat production at a minimum of 12.1 million tonnes, and kept its forecast for 2010/11 soy area at 18.7 million hectares.
US corn supply seen falling to 15-year low
CHICAGO, Nov 4 (Reuters) - U.S. corn ending stocks will fall next year to their lowest level in 15 years, along with the stocks-to-use ratio, amid a shrinking crop and robust demand, a Reuters Poll of analysts showed.
A wet July and dry August has already lead the U.S. Agriculture Department to trim its corn yield estimate by 4 percent last month, and the analysts polled are expecting the USDA to trim its yield again on Tuesday at 8:30 a.m. EST (1330 GMT), when it releases its November crop production and supply/demand reports.
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