Soybeans (Source: CME)
US soybean futures end higher, challenging last week's highs amid firm world prices and the need for adequate US soy acres in 2012. The focus of the market is shifting to new crop planting, but concerns about additional cuts to South American crop size generating fresh export demand, and that helped rekindle bullish momentum, analysts say. Firm cash prices underpinned futures as well. Soy products climbed in unison with soybeans, with traders regaining bullish outlooks on technical buying, firm overseas prices and optimistic outlooks for demand, analysts say. CBOT May soybeans ended up 14 1/4c at $13.48 3/4/bushel.
Soybean Meal/Oil (Source: CME)
May soymeal rose $4.00 to $366.10/short ton, and May soyoil ended up 0.91c to 54.87 cents/lb.
Palm Oil to Climb to One-Year High as Cooking-Oil Supply Drops (Source: Bloomberg)
Palm oil, used in everything from candy bars to instant noodles, will advance 4 percent to the highest in more than a year by June as cooking-oil supplies drop to the lowest in more than three decades, a survey showed. The tropical oil may gain to 3,500 ringgit ($1,153) a metric ton from 3,365 ringgit at the close yesterday on the Malaysia Derivatives Exchange, according to the median estimate in a Bloomberg survey of 10 analysts and traders who attended a conference in Kuala Lumpur last week. Inventories of palm, soybean, rapeseed and six other oils will drop below 30 days of consumption this year, the fewest since 1977, U.S. Department of Agriculture data show. Global food prices rose for a second consecutive month in February on higher costs for cereals, cooking oils and sugar, as shown by the index of 55 food items tracked by the United Nations’ Food and Agriculture Organization.
“The stocks-to-usage ratio is going to be much lower this year, so that will boost prices,” said Sandeep Bajoria, chief executive officer of Sunvin Group, a Mumbai-based commodities trader, who predicts a high of 3,700 ringgit. Futures climbed as high as 3,370 ringgit yesterday, the most expensive since June 7. Prices have gained 6 percent this year compared with a 1.5 percent advance in the Standard & Poor’s GSCI Agriculture Index of eight commodities. The commodity last reached 3,500 ringgit in March last year.
Mistry, Coleman
The UN food index increased 1.2 percent in February from a month earlier and the gauge of edible oils and fats rose 2.1 percent. The cost of food may remain near current levels in coming months as demand drains increased supply, Abdolreza Abbassian, a senior FAO economist, said March 8. The edible oil may climb to a four-year high of 4,000 ringgit ($1,317) by June and then drop to $1,150 to $1,200 on a free-on-board basis, according to Dorab Mistry, director at Godrej International Ltd., who has traded the commodity for three decades. Michael Coleman, managing director at Aisling Analytics Pte, said last month the price may climb to $1,300. While global palm-oil output is set to increase 2.3 million tons this year, that won’t be enough to counter lower production of other oils including soybean and rapeseed, Thomas Mielke, executive director Oil World, said March 7. Global soybean production may drop by 20 million tons to 245.53 million tons after drought hurt crops in South America, he said.
Malaysia, Indonesia
Palm oil output in Malaysia, the second-biggest grower, is expected to climb to 19.4 million tons this year from a record 18.9 million tons in 2011, according to the Malaysian Palm Oil Board. From March, output each month will be less on a year-on- year comparison due to a low output cycle, leading to “flat” growth of as much as 19 million tons in 2012, Mistry estimates. Production in Indonesia, the largest grower, will increase by about 1.4 million tons to 26.5 million tons in 2012, he said. With crude oil trading above $100 a barrel and signs that the U.S and European Union economies are stabilizing, palm oil may climb as more investors buy commodities, said Bajoria. “There is so much liquid money throughout the world, through the hedge funds and the new money injected via the European central bank,” he said. “The money travels to the destinations where the best returns can come.”
Palm oil perks up on crude, looming U.S acreage battle
KUALA LUMPUR, March 13 (Reuters) - Malaysian crude palm oil futures edged up on Tuesday, as traders bet energy markets would hold firm and eyed the outlook for U.S. corn plantings, which could take more acreage from soybeans and limit global edible oil supply this year.
"The market is looking at the U.S. acreage battle that comes up in a couple of weeks. The palm oil price moves will be determined by external events, be it the Fed, crude oil, and U.S. soy," said a trader with a foreign brokerage in Kuala Lumpur.
India's Feb refined palm oil imports to treble
NEW DELHI, March 12 (Reuters) - India's refined palm oil imports nearly trebled in February from the previous month after changes in Indonesia's export taxes and this pace could continue, putting refiners in the world's largest edible oils importer at risk of closure.
Total palm oil imports -- the bulk of India's edible oil purchases -- rose 28 percent last month to 654,167 tonnes, according to the average of a survey of eight traders, with soyoil imports seen up 69.7 percent over January.
Indonesia’s policy to boost shipments of processed palm oil by charging lower export duties than on crude palm oil is hurting margins for refiners in Malaysia, Oil World said. The differential export-tax rate has given Indonesian processors a competitive advantage against Malaysian palm-oil refiners, the oilseed researcher said in a report. “It is obviously the ultimate goal of the Indonesian government to process domestically a much larger portion of the country’s crude palm oil production by setting this differential export-duty regime,” it said. Duty-free exports of crude palm oil make Malaysia’s domestic refiners even worse off, and refining margins in the country turned negative in recent weeks, the report showed. “Particularly the standalone refiners are in a very critical situation, while those refineries integrated into a plantation can survive owing to the profits made from the production of crude palm oil,” the researcher said. Refiners in India and China also face slipping margins as a result of Indonesia’s policy on taxing exports of processed palm oil. (Bloomberg)
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