Soy Oil chart reading : side way range bound.
Soybeans (Source: CME)
US soybean futures ends higher, garnering support from planting concerns, as slowed seeding progress in the eastern Midwest and northern Plains raise issues of potential acreage and yield losses. Tight US stockpiles have placed increased pressure on farmers to produce bumper soy crops in 2011, and with rains across the Midwest clouding the picture for acreage, traders are content to keep risk premium in the market. A recovery in crude-oil and metal futures markets added support by limiting investor selling, analysts said. CBOT July soy ended up 0.3% at $13.77/bushel.
Soybean Meal/Oil (Source: CME)
Soy product futures ended mixed, with soyoil rising on spillover support from a recovery in crude oil futures and higher world vegoil prices. Soyoil was buoyed by a pick up in world vegoil demand and expectations for tight soyoil inventories in Thursday's soy crush report from US Census Bureau, analysts said. Soymeal slumped on slower export and domestic demand. CBOT soyoil ended 0.8% higher at 57.96c/pound, and July soymeal dropped 0.3% to $358.30/short ton.
Monsanto Dangles New Seeds In Push To Collect Argentina Royalties (Source: CME)
Monsanto Co. is making a big push to get Argentina's farmers to voluntarily pay for its latest genetically modified soybean seeds with the promise of higher yields as the biotech giant seeks to increase its revenues from one of the world's top breadbaskets. Monsanto's attempt to sell an earlier version of its seeds introduced 15 years ago was a flop after the company failed to obtain an Argentine patent and its efforts to collect royalties were foiled by local regulations. Argentina is the world's third-leading exporter of soybeans, behind the U.S. and Brazil. Its new Roundup Ready 2 seeds, which are resistant to glyphosate-based herbicides and insect pests, are expected to increase yields by 10% to 15%, according to St. Louis-based Monsanto.
Monsanto hopes to reach an agreement with at least 80% of the country's growers as "a sign that the Argentine farm sector really wants to move forward with this technology," Pablo Vaquero, Sustainability and Corporate Affairs Director for Southern Latin America, said in an interview. Vaquero said that about 2,600 farmers who cultivate 4.5 million hectares, or 25% of the nation's farmland, have already agreed to the deal. The company is focusing on large-scale growers in a country where about 10,000 farmers are responsible for 80% of soy production, he said. Today, Monsanto mainly sells transgenic corn seeds in Argentina, which farmers need to buy from the company each year because, unlike soybeans, the modified traits in corn are diluted over time. Last year, its sales to Argentina totaled just over $600 million out of overall global sales of $10.5 billion.
Monsanto has patented the new soy seeds in Argentina, but under local law farmers aren't required to pay royalties on the seeds they hold back for the next planting season. Farmers have used that law to block Monsanto's previous efforts to charge for the use of its technology. Monsanto's efforts have run into fierce resistance from one of the country's leading farm groups, the Argentine Agrarian Federation, or FAA, which represents small-scale growers. The FAA's May newsletter carries a broad banner on the title page exhorting farmers to "Stand Up To Monsanto" and tells them to refuse to sign any kind of agreement. The company "is looking to control the productive process and convert the farmer into Monsanto's tenant," the FAA said. "It's a return to feudalism." Monsanto has enjoyed strong sales of Round Up Ready 2 in the U.S. this year after farmers reaped hefty gains in crop yields in 2010.
Monsanto plans to introduce the seeds on a commercial scale in Brazil during 2011, which has set the clock ticking on the company's window for reaching a deal in Argentina. Monsanto is well aware of the risk that its new seeds could be smuggled across the border to Argentina and enter into widespread use before the company has a mechanism in place for collecting royalties. In fact, Brazilian farmers engaged in a similar scheme a decade ago when they saw the high yields their Argentine counterparts were getting with Monsanto seeds. Despite being illegal in Brazil, the seeds were imported on a wide scale, eventually forcing the government to approve their use. "We can't do anything to stop the seeds from coming into Argentina ... but if the technology isn't approved by the government, it will violate the seed and patent laws and will need to be addressed by the Argentine legal system," Vaquero said.
"The risk exists and we're doing everything we can to avoid a repeat of the past," he added.
Palm oil slips on crude, exports cap losses
KUALA LUMPUR, May 25 (Reuters) - Malaysian palm oil futures eased on Wednesday, as investors booked profits on weaker crude oil although losses were limited by a strong export rebound this month.
"The market had already priced in an increase in exports and are just doing a minor correction," said a trader with a foreign commodities brokerage. "Palm oil has little room to go down as the margins are positive and the ringgit is weakening."
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