Soy product futures ended mixed, with soyoil climbing on a bullish fundamental profile. Strong underlying export demand, fears of tighter global vegoil supplies and spillover strength from crude oil futures served as catalysts to support prices, analysts said. Soymeal futures grinded lower, succumbing to pressure from adjustments in the oil/meal spread relationship, traders said. The issuing of deliverable receipts by a large commercial firm added fundamental pressure to weigh on prices as well. December soyoil settled 0.65 cents or 1.4% higher at 45.09 cents per pound. December soymeal ended $0.60 or 0.2% lower at $306.90 per short ton. (Source: CME)
India 2010 Soybean Output Likely Up 4.2% At 10.13 Million Tons - Trade (Source : CME)
India's soybean output in 2010 is likely to rise 4.2% to 10.13 million metric tons as good rains are expected to increase the yield, the Soybean Processors Association of India said Thursday. The country produced about 9.72 million tons of soybean in 2009, it said in a statement. The soybean yield is likely to rise to 1,089 kilograms per hectare in 2010 from 1,006 kg/hectare last year, the trade body said. India's monsoon rains have been 2% above average so far this season, according to the state-run India Meteorological Department. The June-September monsoon season brings about 70% of India's annual rains and is crucial for summer-sown crops.
Soybean output in Madhya Pradesh, the biggest producing state, is likely to rise 11% to 6.1 million tons due to a rise in area under cultivation and a higher yield. Total area under soybean in Madhya Pradesh is estimated to have risen to 5.5 million hectares in 2010 from 5.3 million hectares last year, the trade body said. In Maharashtra, the second biggest producer, output is likely to fall to 2.8 million tons from about 3 million tons last year, it added. Higher output estimates may increase the exports of soymeal and pressurize local prices, said Mehul Agrawal, analyst with Sharekhan Commodities. The country's soymeal exports had been falling over the past few months as local prices were higher than international rates. However, exports are improving as global prices have now risen sharper than local prices.
Total soymeal exports in the marketing year starting Oct. 1 are likely to touch 4 million tons, Agrawal said. India is estimated to export about 2.5 million tons of soymeal in 2009-10, according to industry officials.
China May Lack Enough Edible Oil Stocks To Curb Prices -Report (Source: CME)
China may lack sufficient edible-oil reserves to effectively curb rising prices despite an imminent state auction, the Securities Times reported Thursday. China's grain authorities Wednesday announced an unusual state auction of edible oils, without disclosing details including the date, oil types and offer volumes. The authorities said the intent was to ensure supply and stabilize prices. Sharply rising prices have been of growing concern to the government, and Wednesday's announcement marked the addition of one more food category to a range of agricultural commodities that are testing the ability of China's vaunted agricultural reserves to defend the country's market stability and food security. Citing unnamed industry insiders, the Securities Times said the edible oils to be auctioned were likely soyoil and rapeseed oil.
However, the newspaper said, private-sector estimates place national reserves of such vegetable oils far short of domestic demand, limiting the extent to which the authorities will be able to use auctions to stabilize the market. China does not officially disclose its agriculture reserve levels. The Securities Times report was also carried Thursday on the website of the China Grains Network, the research arm of state grains stockpiler China Grain Reserves Corp., also called Sinograin Corp. "The dimensions of such an auction are likely to be limited, which makes it hard to alter the fundamental market situation," the newspaper said. The auction, China's first this year, is more likely aimed at clearing old edible-oil stocks dating from 2008, as the shelf life of such stocks are near expiry and warehouses are running out of space, it said.
Though it didn't venture to identify likely offer volumes, crucial for gauging the strength of the government's ability to control prices, the Times suggested that state reserves of such edible oils were too small to influence the market. China's rapeseed oil reserves were around 1.4 million tons, the newspaper said. If true, such reserves would be about a third of domestic rapeseed oil consumption of around 4.5 million a year, according to September data by the state-backed think tank China National Grains and Oils Information Center. The newspaper also said that "a conservative estimate of state soyoil reserves is 1.4 million tons or more, a small percentage of domestic demand." The CNGOIC estimated current Chinese soyoil consumption at around 10 million tons a year. The Securities Times said market-supportive rapeseed purchases, which have all but stopped this year, reached 5.08 million tons.
Among the state-linked buyers were Sinograin with 2.3 million tons, Cofco Ltd. with 600,000 tons, Chinatex Corp. with 180,000 tons, and local grain agencies with 1 million tons, the newspaper said. It didn't identify the buyer or buyers of the other 1 million tons. Dwindling global stockpiles and surging domestic demand have spurred sharp gains in food prices in China and abroad this year, but given the size of available reserves, edible oil prices are expected to keep rising, it said. The most-active palm oil futures on the Dalian Commodity Exchange have risen by 18% and soyoil futures by 15% in the last three months, outstripping a 9% increase in bellwether soybean futures. The state has also been auctioning wheat, corn and rice weekly to hold down prices.
Palm oil in 1st quarterly gain, weather lifts prices
KUALA LUMPUR/JAKARTA, Sept 30 (Reuters) - Malaysian palm oil rose 1.19 percent, booking its first quarterly gain in a year as a global economic recovery fueled demand and erratic weather patterns meant an uncertain grain crop outlook worldwide.
"Palm oil is supported by strong export figures and short-covering by Chinese traders ahead of the holiday," said a trader at a foreign brokerage firm in Kuala Lumpur.
Growing U.S. soyoil exports fueled by China demand
CHICAGO, Sept 29 (Reuters) - U.S. soyoil exports will stay hot even after China releases state stocks to stabilize local prices, bolstered by demand as Beijing's boycott of supplies from Argentina lingers.
China's State Grain Administration said on Wednesday it will sell vegetable oils from its state reserves to bolster supplies and stabilize prices, which were currently below the cost of U.S. imports.
