Reuters Survey :
Malaysia Apr 2012 Crude Palm Oil
- Exports seen up 4.3% at 1.4 million tonnes from Mar 2012
- Stocks seen down 7% at 1.82 million tonnes from Mar 2012
- Output seen up 6.1% at 1.29 million tonnes from Mar 2012
VEGOILS-Palm oil edges up; economic fears weigh
SINGAPORE, May 4 (Reuters) - Malaysian palm oil futures inched up on the back of short-covering ahead of the weekend, but the contract is on course for its worst weekly loss since November as investors remain worried about the health of the global economy.
"There was a sell down early in the morning, but then prices pushed back up. Today is Friday so we expect a bit of short-covering in the market," said a trader with a foreign commodities brokerage in Malaysia.
Argentina exchange chops soy view to 41 mln tonnes
BUENOS AIRES, May 3 (Reuters) - A leading Argentine grains exchange slashed another 2 million tonnes off its forecast for 2011/12 soy production on Thursday due to the impact of bad weather including a sharp drought that has battered yields.
The Buenos Aires Grains Exchange cut its forecast for the harvest in the world's No. 3 soybean exporter to 41 million tonnes -- 17 percent below the previous year's crop of 49.2 million tonnes.
Market Recap: Soybean Futures (Source: CME)
Soybean futures finished a highly volatile day of trade with a mixed to mostly firmer tone. Old-crop soybean futures posted weekly losses after hitting fresh contracts highs earlier in the week, while new-crop contracts ended slightly higher for the week. Traders' focus will be split in several directions next week. Fundamentally, attention will remain on China to see if the recent buying binge continues. Also, USDA will give traders the first "official" look at the 2012-13 balance sheet next Friday.
Soybean Complex Market Recap (Source: CME)
July Soybeans finished up 4 3/4 at 1478 1/4, 3 off the high and 20 1/4 up from the low. November Soybeans closed down 1 at 1366 3/4. This was 14 3/4 up from the low and 6 1/4 off the high. July Soymeal closed up 6.2 at 432.6. This was 8.4 up from the low and 0.4 off the high. July Soybean Oil finished down 0.51 at 53.65, 0.75 off the high and 0.24 up from the low. July soybeans closed 4 3/4 cents higher on the session and closed 15 1/4 cents lower for the week. The lower close on the week after posting a contract high is seen as a negative technical development by some traders. Traders will be monitoring the weekly COT report this afternoon as the fund net long position has been at a record high for the last few weeks. The market saw some choppy trade early but a continued long liquidation selling trend emerged into the mid-session to push the market moderately lower on the day into the mid-session. Traders view the weather outlook as a negative force with 1-3 inches of rain this week for a wide portion of the Midwest which is helping to alleviate any dry spots ahead of the key growing season. July soybeans are already down as much as 54 1/2 cents from Wednesday's peak. Weakness in palm oil in the last two sessions helped to push soybean oil sharply lower with December oil pulling back to the lowest level since March 8th. Traders see canola stocks near a 4-year low for the Stats Canada stocks report for Monday. Private exporters reported the sale of 120,000 tonnes of US soybeans to unknown destination for the 2012/13 season.
Inflation fear raised as UN agency cuts soybean output forecast
MILAN, May 3 (Reuters) - World output of key animal feed ingredient soybeans is set to tumble in 2011/12, with prices poised for fresh highs, the United Nations food agency said, showing the resilience of inflation trends fanned by three months of rising food costs.
Record high food prices in February last year helped fuel the Arab Spring uprisings in the Middle East and North Africa. Prices receded in the second half of 2011 but the uptrend resumed in January.
Soy Traders Most Bullish Since March as Drought Cut Crops (Source: Bloomberg)
Soybean traders are the most bullish in seven weeks as drought damage to crops in Argentina and Brazil boosts demand for supplies from the U.S., the biggest producer of the oilseed. Sixteen of 24 analysts surveyed by Bloomberg expect prices to gain next week and one was neutral, the highest proportion since March 16. Soybean futures reached $15.125 a bushel this week, the highest since July 2008. Hedge funds are making the biggest bet on rising prices since at least June 2006, data from the Commodity Futures Trading Commission show. The U.S. Department of Agriculture has announced daily sales of at least 100,000 metric tons of soybeans 10 times since the start of April, dominated by purchases from China. Archer Daniels Midland Co., the largest grain processor, told analysts this week that it would be “difficult to buy beans going forward” because of declining South American exports.
“As the soybean supply in Brazil is running out, that is forcing the Chinese to return to the U.S.,” said Chris Gadd, an analyst at Macquarie Group Ltd. in London. “You’d expect to see continued strength in U.S. exports.” Soybeans rose 22 percent to $14.685 on the Chicago Board of Trade this year, rebounding from last year’s 14 percent slump. The Standard & Poor’s GSCI gauge of 24 raw materials climbed 1.1 percent as the MSCI All-Country World Index (MXWD) of equities added 7.5 percent. Treasuries returned 0.2 percent, a Bank of America Corp. index shows.
Biggest Consumer
China, the world’s biggest soybean consumer, bought 921,642 tons of U.S. soybeans in the four weeks ended April 26, nearly triple the amount in the same period in 2011, the USDA said yesterday. It’s booked 7.121 million tons of soybeans for shipment in the next crop year, 21 percent more than at this time last year, USDA data show. Prices may match the record $16.3675 set in 2008 this quarter, Erin FitzPatrick, an analyst at Rabobank International in London, wrote in an e-mail April 30. UBS AG raised on April 26 its forecast for this quarter’s average price to $14.227 from $12.70. Oil World, a research company in Hamburg, cut its prediction for global production to 238.1 million tons on May 1, 10 percent less than a year earlier.
Viterra Inc., a grain handler based in Regina, Canada, said last week that oilseed supplies may be limited through the next growing season that begins Sept. 1. ADM Chief Risk Officer Craig Huss said on a conference call May 1 that South American exports would decline as countries “rationalize what they have.”
Argentina’s Crop
The jump in prices is already curbing demand, according to Oil World. Consumption will climb 1.4 percent this season, compared with a 6.3 percent expansion a year earlier, the company forecast in a report dated April 27. “We’re starting to see a bit of demand destruction at these levels,” said FitzPatrick of Rabobank. “We still don’t have a good handle on what Argentina’s crop is going to be and how many acres will be planted in the U.S. The degree of how much we’ll need to ration demand will be based on these crop sizes, and that still isn’t clear yet.” U.S. soybean planting probably will be 1.8 million acres more than the 73.9 million projected by the USDA on March 30, according to Rabobank. The U.S. planted 74.98 million acres last year. The USDA updates its estimate on June 29.
World soybean production may drop to 240 million tons this season, 9.5 percent less than a year earlier, the United Nations’ Food & Agriculture Organization said in a report yesterday. South American output will decline 14 percent after dry weather in Brazil, Argentina and Paraguay “decimated yields,” the FAO said.
ICE Futures U.S.
In other commodities, 15 of 24 people surveyed by Bloomberg anticipate higher corn prices next week. The grain slipped 5.4 percent to $6.1175 a bushel this year in Chicago. Five of 12 people surveyed said raw sugar will fall next week three were neutral. The commodity dropped 11 percent this year to 20.84 cents a pound on ICE Futures U.S. in New York. Ten of 23 traders and analysts surveyed expect copper to decline next week and six were neutral. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, rose 7.6 percent to $8,174 a ton this year. Gold futures on the Comex in New York increased 4.8 percent to $1,642.10 an ounce this year. Prices gained the previous 11 years and holdings in gold-backed exchange-traded products are about 1.2 percent below the record 2,410.2 tons set March 13, data compiled by Bloomberg show. Fifteen of 28 traders and analysts surveyed by Bloomberg said gold would climb next week and five were neutral.
Goldman Sachs
Money managers cut wagers on higher prices across 18 commodities by 29 percent in the past two months, according to data compiled by Bloomberg. Goldman Sachs Group Inc.’s analysts, led by Jeffrey Currie in New York, said in a report April 24 they expect raw materials to return 13 percent over the next 12 months. Combined open interest, or contracts outstanding, across the 24 commodities in the S&P GSCI rose 17 percent this year, data compiled by Bloomberg show. “The global recovery will gain in pace later this year and next, but we expect more temporary setbacks in the short to medium term,” said Filip Petersson, an analyst at SEB AB in Stockholm. “That may actually offer good opportunities to buy commodities.”
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