Soy product futures ended higher, rising in unison with soybean futures. The markets managed to bounce back from initial setbacks, as strength in beans amid strong underlying export demand supported prices throughout the soy complex, analysts said. Dec soyoil settled 0.07c or 0.1% higher at 49.60 cents a pound. Dec soymeal ended $0.40 or 0.1% higher at $335.90 a short ton. (Source : CME)
Argentina Seen Setting New Crop Records - Official (Source : CME)
Argentina' farmers are on track to break the record grain output seen last season, with production topping 100 million tons, the country's Vice Minister of Agriculture, Lorenzo Basso, said in an interview. With soybean planting just kicking off, conditions are ideal after recent showers and prices are sky-high right now. Basso estimated that production would set a new record of 55 million metric tons this season. Virtually all of that will be exported as either beans, meal or oil, he said. Argentina is the world's third largest soybean exporter after the U.S. and Brazil. Argentina leads the world in soymeal and soyoil exports. Basso also said that China had resumed heavy soyoil buying after lifting a block on the trade earlier this month. The Chinese are likely to end the year with purchases similar to those in 2009, he added. China is the largest importer of soyoil and dealt Argentine exporters a stinging blow earlier this year when it blocked soyoil imports from Argentina, citing sanitary reasons.
However, the move was widely seen as retaliation for barriers imposed on Chinese goods by Argentina amid a host of anti-dumping investigations. Argentina, the world's third-largest corn exporter, is also set to smash last year's corn record, with between 26 million and 27 million tons grown, Basso said. That would be up sharply from the 22.5 million tons grown last year, according to the U.S. Department of Agriculture. About two-thirds of the corn crop has been planted to date and conditions are good after recent showers. Basso said that about 70% of the corn crop would likely be cleared for export after about 8 million tons are set aside for domestic consumption. Argentina tightly regulates corn and wheat exports, only granting export permits once it has confirmed sufficient stocks for local residents. While farmers worry that dry weather towards the end of the year due to the La Nina weather phenomenon may affect the crops, for now soil moisture levels are excellent across much of the farm belt.
That has boosted prospects for the developing wheat crop, with Basso estimating production of about 13 million tons. That's up a million tons from the Agriculture Ministry's current forecast. Of that crop, Argentina, one of the world's leading wheat exporters, will likely ship almost 7 million tons, with most going to Brazil. Basso estimated domestic consumption next year at 5.5 million to 6 million tons.
Rising Food Costs: Hot Potato In China (Source : CME)
China's hunger is pushing prices of food commodities sharply higher lately. Back home, this boom is becoming a source of worry. Over the next decade, China's annual grain demand is likely to reach 573 million tons, which is above its current production levels. Beijing may swiftly become more reliant than ever on global markets for a class of commodities it is desperate to keep mostly home-grown. Soybeans traded in Chicago are at the highest price in 14 months, largely because of the strength of Chinese demand. Palm oil on the Malaysia Derivatives Exchange breached a 27-month peak this week. Thai rice prices are nearing a six-month high. Inside China, this already has gone from just market play to a matter of public interest. In October, the price of staples such as cooking oil and sugar sold in China's supermarkets jumped 10% to 13%. News of food shortages -- in corn, wheat, garlic, mung beans and sugar -- have dominated local headlines this year.
Food is a political hot potato, and accounts for a third of the basket of goods used to calculate inflation. So far, the government has chosen to respond within markets. It has auctioned millions of tons in reserves of grain, cooking oil, sugar and cotton, and publicly threatened to punish "speculators." Last week, the central bank raised interest rates, in part to slow price gains. Nonetheless, the gains have been accelerating. True, the last reported inflation rate -- 3.6% in September -- was still well below the 12-year high of 8.7%, touched in early 2008, but food-price increase are back at those high rates. Back then, Beijing imposed price caps on grains, edible oils, meat, milk and eggs to bring inflation back to an even keel. It took a year and a global financial crisis before the caps were lifted. Certainly, that is bitter medicine, which limits efficiency and risks hurting product quality.
But with the world betting on a richer, hungrier giant, the government knows the danger of inflation -- and the difficult job of controlling it -- is back.
Palm extends losses on dollar; China soyoil off 2-yr top
KUALA LUMPUR, Oct 27 (Reuters) - Malaysian palm oil extended losses and China's soyoil market tumbled from two-year highs as a stronger dollar made commodities priced in the currency expensive and unattractive as an inflation hedge.
"Palm oil followed a correction of China's soyoil and profit taking on a stronger dollar," said a trader in Kuala Lumpur.
China buys more Argentina soyoil as price rises-CNGOIC
BEIJING, Oct 27 (Reuters) - Chinese companies booked about 250,000 tonnes of soyoil this week, mainly from Argentina, for March-to-May shipment after Beijing lifted a ban on imports from the world's largest exporter, an official think tank said.
Some of the shipments could come from Brazil as an alternative supplier, the China National Grain and Oils Information Centre (CNGOIC) said in a report on its website (www.grain.gov.cn) on Wednesday.
China soy crush output to top 95 mln T 2010/2011-CNGOIC
BEIJING, Oct 27 (Reuters) - China will add 11 million tonnes of new soy crush capacity in 2010/2011 (Oct/Sept), with total crushing capacity to top 95 million tonnes annually, said the China National Grain and Oils Information Centre (CNGOIC).
The capacity expansion has boosted China's increase of soy imports,the centre said in a report on its website (www.grain.gov.cn).
Renewed rains seen replenishing Argentine soils
BUENOS AIRES, Oct 26 (Reuters) - Rains in Argentine corn and soy-farming regions over the last week should replenish soil moisture levels and help crops withstand drier conditions caused by the La Nina weather anomaly, a metrologist said onTuesday.
The South American country is the No. 1 global supplier of soyoil and soymeal and the third-biggest exporter of uncrushed beans, so markets are closely watching for any signs of dry conditions that could harm crops.
Siat's Ghana palm oil to go green in 2011
LONDON, Oct 26 (Reuters) - African palm oil producer Siat Group is set to get its Ghanaian output certified as sustainable by early next year, the Brussels based firm said on Tuesday.
The Roundtable on Sustainable Palm Oil (RSPO), an industry body of consumers, green groups and plantation companies, was formed in 2004 and aims to promote growth and use of sustainable oil palm products.
