US soy futures rallied for the tenth consecutive trading day, fueled by expectations smaller South American crops are generating more US export demand. USDA reinforced that trend Friday, announcing fresh sales to unknown destinations for both the current marketing year and upcoming year, which starts in September. The "day in and day out" announcements of export sales of soybeans solidified trader ideas that government forecasters may be underestimating US soy demand forecasts, said Terry Reilly, analyst with Citigroup in Chicago. Soybean market has jumped 12% since Jan 30. CBOT May soybeans ended 10 1/2 cents higher at $13.33/bushel.
Soybean Meal/Oil (Source: CME)
Soy-product futures end mixed, with a big push in traders buying soymeal against soyoil on spreads action. Soymeal is rallying in step with soybeans as increased export demand tightens soy supplies, making soymeal more expensive to produce. But soyoil fell, succumbing to broader weakness in the energy pits. CBOT May soymeal ends up $3.60 at $359.10/short ton while May soyoil drops 0.19c to 54.08c/pound.
Informa Cuts Brazil Soybean Crop Estimates (Source: CME)
Private analytical firm Informa Economics on Friday lowered its outlook for the Brazilian soybean harvests, according to traders. Informa cut its forecast for soybean output in Brazil, the world's second-largest producer of the oilseed, because of dry conditions stressing soybeans as they were blooming and filling pods in the southernmost state of Rio Grande do Sul in February. The closely watched agricultural forecaster lowered its estimate for Brazil's soybean crop to 68 million tons from its previous estimate of 70 million tons, traders said. The U.S. Department of Agriculture last month projected the crop at 72 million tons. Informa also cut its forecast for Paraguay soybean output by 2.4 million tons from last month to 4 million, traders said. Tempering the reductions in Brazil and Paraguay soybean crop estimates was Informa's 1-million-ton increase in Argentina's soybean crop estimate to 47.5 million tons, traders said. USDA's February estimate was 48 million tons.
The increase is due to above-normal February rains which were timely for the late-planted single crop and double crop soybeans, traders said. Argentina's crop production is important to global agricultural markets as it is also the world's third-largest soybean exporter, and the leading exporter of soy products. Informa forecast Brazil corn production at 61.5 million tons, unchanged from its previous estimate. Informa pegged corn production in Argentina, the world's second-largest corn exporter, at 22.5 million tons, unchanged from its previous estimate and above USDA's February estimate of 22 million tons, traders said. Informa also pegged world cotton production at 123.5 million bales, down 60,000 from last month, traders said. Reduced production forecasts in Brazil and Australia due to excessive February rains were tempered by a 300,000 bale increase in Pakistan, Informa noted in the report according to traders. The USDA is scheduled to release updated figures on Friday March 9, at 8:30 a.m. EST.
Palm Oil Seen Rising 7% to Year High as Drought Wilts South American Crops (Source: Bloomberg)
Palm oil may advance 7 percent to the highest level in a year by mid-April as cooking-oil demand outstrips supply, according to TransGraph Consulting Pvt Chairman Nagaraj Meda, who’s forecast prices for 13 years. Stockpiles of soybeans, crushed to make an alternative oil, will decline after dry weather hurt crops in Brazil and Argentina, said Meda, who’s also managing director of Hyderabad, India-based TransGraph, which advises the industry. Palm oil may climb to 3,500 ringgit ($1,165) from 3,259 ringgit on March 2, before sliding to 2,800 ringgit after July as prospects for the U.S. soybean harvest become clearer, he said. Palm oil, used in everything from candy bars to biofuel, rallied last month by the most since December 2010 after drought cut South American crops. Meda’s forecast for a near-term gain is less bullish than a prediction from industry veteran Dorab Mistry, who’s set to update his outlook at a conference starting tomorrow in Malaysia, the second-largest producer.
There was positive price momentum following damage to the soybean crop, Meda said in a phone interview on March 1. Economic-stimulus packages in developed nations including Europe had also helped to boost demand, he said.
Palm oil drops as soy, crude-oil driven rally pauses
KUALA LUMPUR, March 2 (Reuters) - Malaysian crude palm oil futures fell as traders booked profits from a rally driven by surging crude oil prices and prospects of tighter soyoil supplies from South America.
"In general, demand is strong because people will buy more palm oil than soyoil due to the South American drought but Malaysia may not be capturing demand because of Indonesia," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Rains help Argentina's soy, corn crops recover
BUENOS AIRES, March 1 (Reuters) - A leading Argentine grains exchange held its soy and corn harvest estimates steady on Thursday, saying the rains that soaked fields over the past week have improved the outlook for soybeans.
Buenos Aires Grains Exchange forecast soy production at 46.2 million tonnes and expects a corn harvest of 21.3 million tonnes. Argentina is the world's no. 3 supplier of soybeans and the second-biggest corn supplier after the United States.
Argentine grains ports hit by dock workers' strike
BUENOS AIRES, March 1 (Reuters) - Argentine dock workers went on strike for better conditions on Thursday, slowing the country's ports just ahead of corn and soybean harvests key to world grains markets and the local economy.
"At this time we are not mooring ships, and this will continue until we reach a deal with the port authorities," Omar Suarez, spokesman for the SOMU harbor workers' union, told Reuters.
China to partly lift ban on Canada canola imports-trade
BEIJING, March 1 (Reuters) - Chinese quarantine authorities will allow imports of Canadian canola by some selected crushers located in major growing areas, partially lifting a ban it imposed because of fungal disease concerns, traders said on Thursday.
The import relaxation, likely to be cleared in the second half of the year, would further boost canola imports from the world's largest exporter of canola/rapeseed to China later in the year.
Malaysia's KLK eyes Indonesian palm oil refineries for growth
KUALA LUMPUR, March 2 (Reuters) - Malaysia's No.3 palm oil firm, KL Kepong , will build three refineries in Indonesia to tap higher margins after Jakarta lowered its processed edible oil export taxes, a senior company official said on Friday.
With 56 percent of KL Kepong's 248,498 hectares of total landbank in Indonesia, the firm has "little choice" but to build refineries there to enhance the value of its crude palm oil from these estates, the firm's plantations director, Roy Lim, said.
Indonesia refining advantage to dominate palm oil meeting
KUALA LUMPUR, March 2 (Reuters) - Top palm producer Indonesia's growing refining advantage over No. 2 supplier Malaysia will dominate an annual gathering of the world's palm oil business in Kuala Lumpur next week as traders examine shifts in demand.
Planters, refiners and bankers gather for the Bursa Malaysia Palm Oil Conference from Monday to Wednesday as the market for the tropical oil grows this year at the expense of soyoil, with the South American soy crop damaged by drought.
Palm Oil Seen Climbing 7% to Year High as Inventories Decline
By Ranjeetha Pakiam
March 5 (Bloomberg) -- Palm oil may advance 7 percent to the highest level in a year by mid-April as cooking-oil demand outstrips supply, according to TransGraph Consulting Pvt Chairman Nagaraj Meda, who’s forecast prices for 13 years. Stockpiles of soybeans, crushed to make an alternative oil, will decline after dry weather hurt crops in Brazil and Argentina, said Meda, who’s also managing director of Hyderabad, India-based TransGraph, which advises the industry. Palm oil may climb to 3,500 ringgit ($1,165) from 3,259 ringgit on March 2, before sliding to 2,800 ringgit after July as prospects for the U.S. soybean harvest become clearer, he said.
Palm oil, used in everything from candy bars to biofuel, rallied last month by the most since December 2010 after drought cut South American crops. Meda’s forecast for a near-term gain is less bullish than a prediction from industry veteran Dorab Mistry, who’s set to update his outlook at a conference starting tomorrow in Malaysia, the second-largest producer. There was positive price momentum following damage to the soybean crop, Meda said in a phone interview on March 1. Economic-stimulus packages in developed nations including Europe had also helped to boost demand, he said. Palm oil climbed 6.2 percent in February, touching 3,321 ringgit on Feb. 28, the highest level since June, as soybeans and crude oil rallied. The global soybean harvest may drop by 19 million tons in 2011-2012, the most ever, after the dry weather, Hamburg-based researcher Oil World said on Feb. 28.
Bull-Market Call
Mistry, director of Godrej International Ltd., has said palm oil may advance to 4,000 ringgit. Michael Coleman, managing director at Aisling Analytics Pte., who is also addressing the two-day meeting in Kuala Lumpur, said last month the commodity may climb to $1,300 (3,905 ringgit) a ton by midyear. Shifts in palm-oil prices help to influence global food costs, which have tumbled 10 percent since reaching a record in February 2011, according to a United Nations’ gauge. Higher prices boost profits at producers including Kuala Lumpur-based Sime Darby Bhd. and Singapore-based Golden Agri-Resources Ltd. Palm-oil prices would be supported by lower global reserves of oilseeds, including soybeans, as well as increased cooking- oil imports by India after local production dropped, Meda said. The country is the world’s biggest palm-oil buyer.
Edible-oil shipments into India may rise as much as 11 percent to 9.3 million tons in the year that began Nov. 1, he said. Imports of crude palm oil and refined palm olein may account for as much as 76 percent of the total, he said. Total cooking-oil production in the world’s second-most populous nation may drop 10 percent to 6.88 million tons in 2011-2012 from 7.67 million tons the previous year as oilseed crops were damaged by excessive rain and dry weather, said Meda. Palm oil may perform “very well over the coming months,” Coleman, co-founder of the Merchant Commodity Fund, told a conference in Singapore last month.
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