Soybean Complex Market Recap (CME)
January Soybeans finished up 25 at 1438 1/2, 1/2 off the high and 26 1/4 up from the low. November Soybeans closed up 13 3/4 at 1297. This was 17 up from the low and 3 off the high.
January Soymeal closed up 7.2 at 419.1. This was 8.4 up from the low and -7.2 off the high.
January Soybean Oil finished up 0.44 at 51.31, 0.19 off the high and 0.63 up from the low.
March soybeans traded sharply higher on the day on support from a stronger meal market and oil saw gains as well. Thoughts that China has secured additional cargos this week helped to support along with a drier forecast for Argentina and Southern Brazil. Northern Brazil continues to see beneficial rainfall but scattered showers in Mato Grosso could delay harvest activity this week. The CIF basis was steady midday on the jump in futures but interior basis levels remain historically high as traders attempt to drum up cash grain movement in the country. Crush margins remain positive but have contracted modestly due to the firm basis levels. The tight domestic supply outlook and strong pace of demand continues to favor the bulls but some suggest that the possible bumper crop in South America along with a shift in demand to the Southern Hemisphere could limit gains as we move into February and March.
Indonesia rules out changes to palm export tax structure (Reuters)
Indonesia, the world's biggest palm oil producer, will not change its export tax structure for the edible oil or follow rival producer Malaysia by cutting tariffs on crude grades to zero, the trade minister said on Wednesday.
EDIBLE OIL: Malaysian palm oil futures rose to their highest in over a week on Wednesday on investor optimism a zero-duty tax structure will spur exports from the world's No.2 producer and help boost global demand for the tropical oil. (Reuters)
Prices of palm oil remain marooned near three-year lows as the vegetable oil is caught between opposing fundamentals that may take several months to resolve themselves. However, over the next six months, the bearish factors appear more likely to dissipate, while the bullish ones will remain in place. On the bearish side of the ledger are record inventories in Malaysia, a rapid slowdown in Chinese imports as new customs inspection rules take effect and demand in Europe that is still soft because of economic weakness. On the positive side are robust and growing Indian imports, a zero export tax by Malaysia and 2013 output that is expected to be steady, or only slightly higher.Add to this the shape of the curve of the futures traded in Kuala Lumpur, which is still in a relatively rare contango, meaning prices for forward months trade at a premium to those for immediate delivery. Palm oil is also still trading at a steep discount to soya oil, a complementary product whose price palm oil has historically tracked fairly closely. It's likely that both palm oil's contango in the futures curve and its wide discount to soya oil will reverse in time, but first the short-term factors that are capping prices will have to be worked through. (Reuters)
India will consider imposing a 5% duty on imports of crude palm oil to shield domestic oilseed growers from cheap supplies, two government officials said. The Cabinet may also discuss raising the tariff on refined cooking oils to 10% from 7.5%, said the officials, who declined to be identified. (Malaysian Reserve)
VEGOILS-Malaysia's zero export-tax optimism lifts palm oil
Wed Jan 16, 2013 5:18am EST
* Zero pct CPO tax in Feb to boost exports -trader
* Investors see stockpiles coming off in February from
record high
* Palm oil may test resistance at 2,449 ringgit -technicals
(Updates prices, adds detail)
By Anuradha Raghu
KUALA LUMPUR, Jan 16 (Reuters) - Malaysian palm oil futures
rose to their highest in over a week on Wednesday on investor
optimism a zero-duty tax structure will spur exports from the
world's No.2 producer and help boost global demand for the
tropical oil.
The positive sentiment was also buoyed by seasonally slowing
production which could help curb stockpiles that hit a new
record of 2.63 million tonnes in December.
The Malaysian government announced on Tuesday that it will
retain its crude palm oil export tax at zero percent for
February, the same as January, in an effort to give a
competitive edge over top producer and biggest rival Indonesia.
"Indonesia's crude palm oil is now pricier than Malaysian
crude palm oil. So Malaysian exports will definitely pick up,"
said a trader with a foreign commodities brokerage.
"Most traders are trading on the forward view. Even though
exports are not looking so good now, but with the overall drop
in production, we are expecting stocks to be lower in February
or March," the trader added.
The benchmark April contract on the Bursa Malaysia
Derivatives Exchange closed 0.5 percent higher at 2,428 ringgit
($804) per tonne. Prices had earlier touched 2,444 ringgit, the
highest level seen since Jan. 7.
Total traded volume stood at 35,249 lots of 25 tonnes each,
higher than the usual 25,000 lots.
Technical analysis showed that Malaysian palm oil may test a
resistance of 2,449 ringgit per tonne, a break above which will
lead to a further gain to 2,522 ringgit, said Reuters market
analyst Wang Tao.
Weaker winter demand from Europe and China had taken a toll
on palm oil exports, causing shipments to fall more than 20
percent in the first 15 days of January. Palm oil tends to
solidify in cold temperatures.
But with warmer weather on its way, traders expect demand to
pick up in the next few weeks.
"Moving forward, it can only improve -- it will not go
worse. The weather is getting warmer and you will see more
imports going into China," the trader added.
Brent crude rose towards $111 a barrel on Wednesday after
robust U.S. retail sales boosted hopes for stronger demand in
the world's top oil consumer, while oil inventories there rose
much less than expected.
U.S. soyoil for March delivery rose 0.2 percent in
late Asian trade. The most active May soybean oil contract
on the Dalian Commodity Exchange edged up 0.4 percent.
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