KANSAS CITY (Dow Jones)--Cash grain markets are expected to remain relatively quiet as futures prices look to open mixed and many producers choose to wait for higher prices before selling their grain and soybeans, analysts said Wednesday.
Interior basis for corn, wheat and soybeans at select locations across the country held mostly steady in quiet trade.
Scattered grain sales were reported Tuesday, however, sparked by a futures market rally that put at least a temporary stop to the sharp losses that took place in January.
"Many analysts had expected speculative funds to be buyers in the grain complex at the start of the new year, but just the opposite has happened," said Karl Setzer, analyst with MaxYield Cooperative.
Since the start of the new year, speculative funds have liquidated 100,000 corn contracts, 40,000 soybean and 30,000 wheat contracts, Setzer said in his morning commentary.
In export news, South Korea is tendering for 6.5 million bushels of corn and up to 2 million bushels of feed wheat, said Bryce Knorr, analyst with Farm Futures.
Based on national averages supplied by the Minneapolis Grain Exchange, soybean basis firmed 1/2 cent overnight, while corn strengthened 1 1/2 cents a bushel. Wheat basis softened, led by a 1 3/4 cent loss in soft red winter, a 1 1/2 decline in hard red spring and a modest 1/2 cent loss in hard red winter.
National cash price indices maintained by the MGE Tuesday closed at $8.77 1/2 for soybeans, reflecting an average basis of -48 cents relative to the days settlement of March CBOT futures.
Domestic cash prices also averaged $3.28 1/2 for corn (-36 1/2 cents basis March CBOT), $4.10 1/4 for hard red winter wheat (-88 3/4 cents basis March KCBT), $3.97 1/2 for soft red winter wheat (-89 3/4 cents basis March CBOT) and $5.14 1/2 for hard red spring wheat (-2 1/4 cent basis March MGE).
Chicago Board of Trade soybean futures are expected to open mixed, with corn and wheat called 1 cent to 2 cents lower.
A firm U.S. dollar and choppy to weak action in the key energy and precious metals markets may exert light selling pressure in the grain pits, a trader said.
CROP WEATHER
Mostly dry conditions are seen in the Midwest Wednesday, with a chance for snow developing in the west and spreading east Thursday and Friday, said Joel Burgio, meteorologist at DTN Weather.
Some areas could receive several inches of snow, particularly in central and southern areas of the western Midwest.
In the eastern Midwest, snow is likely Thursday night through Friday night, with the heaviest totals from 3 to 6 inches in the south and east-central areas.
On the central and southern Plains, snow is expected Wednesday night and Thursday in the feedlots of the Texas and Oklahoma panhandle regions, as well as southwestern Kansas, Burgio said.
Snow accumulations in the panhandles may total 4 inches.
-By Tom Sellen, Dow Jones Newswires; 913-322-5177; tom.sellen@dowjones.com
(END) Dow Jones Newswires
02-03-10 1000ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Wednesday, February 3, 2010
US Cash Grain Outlook: Basis Mostly Steady Across The Board
CBOT Soy Outlook:Steady, Firm; Looking For Carryover Support
CHICAGO (Dow Jones)--Chicago Board of Trade soybean futures are seen starting Wednesday's day session with a steady to firmer undertone, looking to follow through on Tuesday's technical bounce.
In overnight trade, March soybeans were 1 cent or 0.11% higher at $9.26 1/2, and May soybeans were 1/4 cent higher or 0.03% higher at $9.36 3/4.
The market got caught up in general commodity buying Tuesday, but without bullish outside support to rekindle short covering activity, traders will only have cautious optimism for extending the recovery, said Don Roose, president U.S. Commodities.
In early market action, the U.S. dollar index is slightly higher, crude oil is lower, down from overnight advances and metal futures are lower.
The ability of futures to climb will be influenced by how outside markets move and what impact there movements will have on commodities. Bearish fundamentals, with record crop potential for South America, ample U.S. inventories and sparse, fresh export demand are seen limiting the market's ability to rally on its own.
However, market bulls can draw some encouragement if futures can consolidate at current levels and not challenge underlying chart support, a CBOT floor analyst said. That would signal that the market has found some value despite bearish supply outlooks, he added.
A market technician said the next downside price objective for March soybeans is pushing and closing prices below major psychological support at $9.00. The next upside technical objective is pushing and closing March prices above solid technical resistance at $9.50.
The DTN Meteorlogix weather forecast said a period of dry, hot weather is likely during the next 6 days in Brazil.
This should begin to diminish soil moisture and increase stress to crops. Showers and cooler conditions early next week should help, but it is uncertain how much rain would occur in southern growing areas, before drier, hotter weather redevelops, Meteorlogix said.
In Argentina, episodes of scattered showers and cooler temperatures will continue. This will help crops recover from last week's hot, dry spell, Meteorlogkix said.
Meanwhile, private analytical firm Informa Economics will release its latest world crop estimates, with updated U.S. and world balance sheets at 11:30 am EST.
In overseas markets, soybean futures traded on the Dalian Commodity Exchange settled higher Wednesday, following a rebound on CBOT Tuesday. The September 2010 soybean contract settled up CNY12, or 0.3%, at CNY3,767 a metric ton.
Crude palm oil futures on Malaysia's derivatives exchange ended up Wednesday as crude oil rebounded and as market sentiment improved on price-supportive supply-demand fundamentals, trade participants said. The April CPO contract on the Bursa Malaysia Derivatives ended MYR46, or 1.9%, higher at MYR2,498 a metric ton.
-By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com
(Zheng Xiaolu in Beijing and Shie-Lynn Lim in Kuala Lumpur contributed to this article)
(END) Dow Jones Newswires
02-03-10 0926ET
Copyright (c) 2010 Dow Jones & Company, Inc.
CBOT Corn Outlook: Down 1-2c As Rally Fades On Outside Mkts
CHICAGO (Dow Jones)--Chicago Board of Trade corn futures are expected to dip slightly on Wednesday's open after the recent technical rebound lost steam overnight.
Corn is called 1 to 2 cents lower. In overnight trade, March corn was down 1 3/4 cents to $3.63 1/4 per bushel and May corn was down 1 3/4 cents to $3.74 1/2.
Traders said prices were firm for much of the overnight trade, topping Tuesday's highs, but slipped late and ended near session lows. Outside macro markets, such as crude oil and the dollar, weighed on prices late in the overnight session, they said.
The market could remain tethered to the outside markets Wednesday in the absence of fundamental news, traders said. Gains Monday and Tuesday were mostly attributed to a technical bounce.
"Fundamentally, there are major questions about the sustainability of this recovery," a trader said.
Large crops, both in the U.S. and South America, and unspectacular demand are the key bearish features.
Benson Quinn Commodities analyst Jon Michalscheck said in a commentary that with March options expiring Feb. 19, bulls could build a case for the market to retrace recent losses back to the $3.80 or $3.85 area, "but without a bullish fundamental change to grains and/or the energy complex, I would expect the above mentioned level to provide some formidable resistance."
A lack of farmer selling has underpinned prices, traders say. But they also note quality problems which could emerge once the weather begins to warm up, and said that has led to increased selling of the nearby March futures contract.
Corn bears still have the near-term technical advantage, a technical analyst said. The next downside price objective for the bears is to push and close prices below solid technical support at last week's low of $3.55 1/4 a bushel, he said. The next upside price objective is to push prices above solid technical resistance at $3.73 a bushel.
First resistance for March corn is seen at Tuesday's high of $3.67 1/4 and then at $3.70, the technical analyst said. First support is seen at $3.63 1/2 and then at $3.60.
Traders will be watching Wednesday for world crop estimates from a private firm, and for the possible release of the new Renewable Fuels Standard mandate from the government.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
02-03-10 0923ET
Copyright (c) 2010 Dow Jones & Company, Inc.
US Wheat Outlook: Seen Starting Mixed, Watching Money Flows
CHICAGO (Dow Jones)--U.S. wheat futures are expected to start mixed Wednesday after trading both sides overnight and ending slightly lower in a retreat from double-digit gains Tuesday.
In overnight electronic trading, Chicago Board of Trade March wheat ended down 1/2 cent at $4.86 3/4 a bushel.
The grains felt pressure toward the close of the overnight session from weakness in crude oil and gold and strength in the U.S. dollar, traders said. A firmer dollar is often seen as bearish because it makes U.S. wheat less attractive to foreign buyers and reduces investors' appetite for risk.
The dip overnight for wheat followed a rally Tuesday that was encouraged by fund buying, a CBOT floor trader said. The markets will be watching to "see if we get the same catalyst today," he said. CBOT wheat continues to be vulnerable to short covering because non-commercial speculative funds are net short more than 60,000 contracts, he said.
The supply and demand storyline for wheat continues to look weak, traders said. U.S. supplies are large, and there is stiff competition for export demand on the world market.
Jordan said it bought 100,000 tons of wheat for delivery in May. The wheat was likely from the Black Sea region and not the U.S., a trader said.
There is talk that Iraq may announce a purchase of wheat this week and that it could include some U.S. hard red winter wheat. However, the markets aren't getting too excited about the chatter because conditions in Iraq make it difficult to know when the business was actually done, a trader said.
Kansas City Board of Trade hard red winter wheat futures on Tuesday posted more modest gains than CBOT soft red winter wheat futures. That was because fund money was more active in Chicago than Kansas City, a trader said.
The next downside price objective for the bears is pushing and closing CBOT March wheat below solid technical support at the October low of $4.59, a technical analyst said. The bulls' next upside price objective is to push and close the contract above solid technical resistance at last week's high of $5.04, he said.
First resistance is seen at Tuesday's high of $4.92 1/2 and then at $5.00, a technical analyst said. First support lies at $4.80 and then at this week's and last week's low of $4.73, he said.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com
(END) Dow Jones Newswires
02-03-10 0917ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Asian Crude Palm Oil Ends Up; Output, Stocks Likely Lower
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended up Wednesday as crude oil rebounded and as market sentiment improved on price-supportive supply-demand fundamentals, trade participants said.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR46, or 1.9%, higher at MYR2,498 a metric ton after moving in a MYR2,475-MYR2,505/ton range.
The contract opened higher on short covering before rising above the psychological MYR2,500 level to hit MYR2,505 in the afternoon session, its highest level in two weeks.
"Speculators are expecting the Malaysian Palm Oil Board to issue bullish data next week and many among them have built up longs," a Malaysia-based exporter said.
The MPOB is expected to issue data on January exports, output and end-month stocks on Feb. 10.
Prices also extended gains after IOI Corp. Executive Director Lee Yeow Chor said Malaysia is likely to register lower output in February and March due to floods and rains in Sabah.
Lee said prices may rise to MYR2,500-MYR2,700/ton in the next three months due to lower output and stronger exports.
Lower output may reduce Malaysia's palm oil inventories to less than 2 million tons from a 13-month high of 2.24 million tons at end-December.
Cargo surveyors estimated January palm oil exports around 1.48 million-1.50 million tons.
At 0955 GMT, light, sweet crude for March delivery on the New York Mercantile Exchange was trading 70 cents higher at $77.93 a barrel. Crude oil rose as much as 81 cents or 1% to $78.04 in Asian trade.
In the cash market, palm olein for April/May/June traded higher at $757.50/ton and $760/ton, free on board Malaysian ports, said a Singapore-based trader.
Cash CPO for prompt delivery was offered MYR40 higher at MYR2,520/ton.
Open interest on the BMD was 73,085 lots, down from 74,332 lots traded Tuesday. One lot is equivalent to 25 tons.
A total of 19,583 lots of CPO were traded versus 14,734 lots Tuesday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Feb 2010 2,527 2,463 Up 64 2,527 2,485
Mar 2010 2,499 2,458 Up 41 2,510 2,479
Apr 2010 2,498 2,452 Up 46 2,505 2,475
May 2010 2,495 2,449 Up 46 2,505 2,475
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
02-03-10 0534ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Tuesday, February 2, 2010
US Cash Grain Outlook: Firm Basis As Producers Sit Tight
KANSAS CITY (Dow Jones)--U.S. cash corn and soybean basis firmed Tuesday as producers remained tight-fisted with their on-farm stocks after cash grain markets had recently crumbled to three-month lows.
"As the markets have moved down, particularly in corn, the [cash grain] movement has really slowed down, so basis levels have a firm undertone," said Don Roose, analyst and president of U.S. Commodities in West Des Moines, Iowa.
Interior corn and soybean basis held mostly steady to firm Tuesday morning, while wheat basis as select locations across the country was mostly steady.
Chicago Board of Trade corn futures are called to open higher, as prices bounce off their lows in a technical recovery, traders said. While large grain and soybean supplies remain key issues for the markets, prices are expected to rise as traders buy back previously sold positions and as they begin to find value with prices near their lows.
CBOT corn is called 2-3 cents a bushel higher, soybeans are seen 3-5 cents higher and wheat futures are called 7-9 cents higher.
Quality issues such as poor test weights are a concern in both the domestic and export corn markets, according to Roose.
"This is being watched very, very closely, and it is an issue out here, so good quality corn is at a premium," he said.
Weather conditions this week are mostly clear for the Midwest, which will aid grain transportation to the elevators from the farm. As long as weather isn't a factor, farmers may want to expedite corn marketing in February due to the quality concerns.
In export news, Japan is seeking 85,000 tons of wheat, including 65,000 from the U.S., in a routine tender to be concluded Thursday for delivery April 1 to 13.
National cash price indices maintained by the Minneapolis Grain Exchange closed Monday at $8.61 1/4 for soybeans, reflecting an average basis of -48 1/2 cents relative to the days settlement of March CBOT futures.
Domestic cash prices also averaged $3.22 for corn (-37 cents basis March CBOT), $3.99 for hard red winter wheat (-88 1/2 cents basis March KCBT), $3.86 3/4 for soft red winter wheat (-88 cents basis March CBOT) and $5.02 for hard red spring wheat (-3/4 cent basis March MGE).
CROP WEATHER
No significant weather threats to the soft red winter wheat belt are expected in the next five to seven days, said Joel Burgio, meteorologist with DTN Weather.
In the central and southern Plains, the Texas Panhandle and southwestern Kansas have a chance of light snow on Wednesday into Thursday. No cold significant weather threats are seen for the hard red winter wheat belt, though the six- to 10-day outlook is "somewhat colder," he said.
-By Tom Sellen, Dow Jones Newswires; 913-322-5177; tom.sellen@dowjones.com
(END) Dow Jones Newswires
02-02-10 0951ET
Copyright (c) 2010 Dow Jones & Company, Inc.
CBOT Soy Outlook:Up 3-5c; Oversold Conditions, Outside Markets
CHICAGO (Dow Jones)--Oversold conditions and supportive outside market influences are expected to lift Chicago Board of Trade soybean futures to start Tuesday's day session.
In overnight trade, March soybeans were 4 3/4 cents, or 0.52%, higher at $9.14 1/2, and May soybeans were 5 cents higher, or 0.54% higher, at $9.25 3/4.
The market is poised to follow through on overnight price strength, buoyed by speculative short covering and end user buying following a month-long slide in prices to 4-month lows, analysts said.
"Each passing day the market retreats it becomes more and more overdue for a technical bounce," a CBOT floor analyst said.
A weaker U.S. dollar coupled with higher crude oil and metal futures are seen lending support to prices as well.
However, traders will keep a close eye out for any sign of upside exhaustion, as a bearish technical trend, rising global supplies, and sparse fresh export demand keep pressure on prices.
The market has had trouble sustaining any upside moves in the past month, and without any overtly bullish news, traders have yet to be convinced that a higher start to the session is more than a "bubble in a bear market," a CBOT floor analyst said.
A technical analyst said serious technical damage has been inflicted in soybeans recently. Prices are in a steep four-week downtrend on the daily bar chart. The next downside price objective for March soybeans is pushing and closing prices below major psychological support at $9.00. The next upside technical objective is pushing and closing March prices above solid technical resistance at $9.50, he said.
The DTN Meteorlogix weather forecast said an upper level ridge is expected to build westward and southward over Brazil during the next few days. This means a period of drier, hotter weather is likely during the next 6 days. The outlook for early next week shows the ridge weakening somewhat. This may allow scattered showers to redevelop in key crop areas, Meteorlogix said.
In Argentina, the developing ridge over Brazil this week likely means the Argentina region will turn wetter. Cold fronts moving in off the Pacific tend to slow down and in some cases stall out over Argentina in response to ridging over southern Brazil. This means improving conditions for crops, after last week's dry, very hot weather, Meteorlogix said.
Meanwhile, Brazilian farmers have harvested 5% of the upcoming 2009-10 soy crop as of Jan. 29, local agricultural
consultancy Celeres said in a report this week. Brazil's soy harvest remains ahead of a five-year average of 2% of
soybeans harvested at this time of year, Celeres said.
In overseas markets, soybean futures fell on the Dalian Commodity Exchange Tuesday as sellers shifted their attention to bearish fundamentals amid a lack of fresh supportive news. The September soybean contract settled CNY40, or 1.1%, lower at CNY3,755 a metric ton.
Crude palm oil futures on Malaysia's derivatives exchange ended higher in thin, range bound trade Tuesday, supported by higher soyoil futures in after-hours trade, said trade participants. The April CPO contract on the Bursa Malaysia Derivatives ended up MYR7 at MYR2,452 a metric ton.
-By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com
(Chuin-Wei Yap in Beijing and Fawziah Selamat in Jakarta contributed to this article)
(END) Dow Jones Newswires
02-02-10 0931ET
Copyright (c) 2010 Dow Jones & Company, Inc.
CBOT Corn Outlook: Up 2-3c Amid Continued Technical Bounce
CHICAGO (Dow Jones)--Chicago Board of Trade corn futures are expected to open higher Tuesday as a technical bounce from January's sharp losses continues.
Corn is called 2 cents to 3 cents higher. In overnight trade, March corn was up 3 1/2 cents to $3.62 1/2 per bushel and May corn was up 3 1/4 cents to $3.73 1/2.
The market was also slightly higher on Monday, but traders and analysts say the renewed strength is nothing for bulls to get excited about.
"I don't think we have a great deal of upside potential, but we've pretty much exhausted selling interest, at least at this level," said Shawn McCambridge, senior grains analyst for Prudential Bache.
The market could consolidate during the next several days heading into the Feb. 9 supply and demand report from the U.S. Department of Agriculture, analysts said.
Large supplies are the main bearish feature of the market, which had been trading around $4.25 in the first part of January. A big 2009 U.S. crop, expectations that farmers will plant even more acres in 2010 and favorable South American growing conditions have all kept the market under pressure.
Amid that backdrop, traders are looking for signs that the recent price break is stimulating demand. But Country Hedging analyst Christopher Steinhoff said in a Tuesday commentary that export sales recently have been merely "routine."
Gains in other markets such as equities and crude oil are giving prices a little boost Tuesday, traders said. Traders also note that farmers are refusing to sell at current low levels.
Technical analyst Jim Wyckoff said the fact that corn could only manage slight gains Monday despite a weaker dollar and gains in equities and crude was "another bearish clue."
The next downside price objective for the bears is to push and close prices below solid technical support at $3.50 a bushel. The next upside price objective for bulls is to push prices above solid technical resistance at $3.73 a bushel.
First resistance for March corn is seen at Monday's high of $3.60 3/4 and then at $3.63 1/2. First support is seen at last week's low of $3.55 1/4 and then at $3.50.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
02-02-10 0924ET
Copyright (c) 2010 Dow Jones & Company, Inc.
US Wheat Outlook: Seen Up 7c-9c In Technical Bounce
CHICAGO (Dow Jones)--U.S. wheat futures are expected to start stronger Tuesday in a technical bounce from recent losses, but traders said the upside looks limited.
Chicago Board of Trade March wheat is called to open 7 cents to 9 cents per bushel higher. In overnight electronic trading, CBOT March wheat climbed 9 1/2 cents to $4.84 1/4.
The markets are in an oversold condition and due for a corrective bounce after tumbling during January, traders said. Wheat ended near unchanged Monday, despite support from outside markets.
CBOT wheat led the upside in the grain markets overnight, with corn and soybeans posting more modest gains. It seems that "a sort of 'relief rally' is underway" in the grains after January's selloff, according to AgResource Company.
The next downside price objective for bears is pushing and closing CBOT March wheat below solid technical support at the October low of $4.59, a technical analyst said. Bulls' next upside price objective is to push and close the contract above solid technical resistance at last week's high of $5.04, he said.
First resistance is seen at Monday's high of $4.83 3/4 and then at $4.95, the technical analyst said. First support lies at Monday's low of $4.73 and then at $4.65, he said.
Short covering and bottom picking helped support prices, traders said. Non-commercial speculative funds hold a large net short position in CBOT wheat futures and options.
However, it will be difficult to sustain rallies in wheat because of continued bearishness about large supplies and lagging export sales, an analyst said. The mentality in the markets is to sell rallies.
Weekly U.S. wheat export sales have picked up in the past two weeks, and weekly U.S. wheat export inspections issued Monday topped expectations. However, the U.S. has a lot of business to make up for because export sales had been lagging for months, an analyst said.
The demand front was mostly quiet overnight. Japan said it is seeking 85,000 tons of wheat, including 65,000 from the U.S., in a routine tender to be concluded Thursday for delivery April 1 to 13.
In other news, there are no significant threats to U.S. winter wheat during the next week, according to DTN Meteorlogix, a private weather firm. In wheat areas of Ukraine, meanwhile, temperatures turned "much warmer" during the weekend and melted some snow cover, especially in the south, the firm said.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com
(END) Dow Jones Newswires
02-02-10 0922ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Asian Crude Palm Oil Ends Up On Soyoil; Trade Thin, Volatile
JAKARTA (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended higher in thin, rangebound trade Tuesday, supported by higher soyoil futures in after-hours trade, said trade participants.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR7 at MYR2,452 a metric ton after moving in both positive and negative territory.
Although the BMD was closed Monday for a holiday, cargo surveyors released exports data for January, which provided some support for CPO prices today but weren't bullish enough to boost prices.
Malaysia's January palm oil exports rose 24% from December to 1.48 million tons, according to cargo surveyor SGS (Malaysia) Bhd.
An estimate by another surveyor, Intertek Agri Services, put January exports at 1.50 million tons.
Both estimates were within market expectations of a rise to 1.41 million-1.50 million tons.
"Although January's exports were up significantly, many don't expect the increase to be repeated this month, and that sentiment weighed on prices," said a Kuala Lumpur-based trader.
The trader said exports may start to decline as China has bought sufficient supplies ahead of the Lunar New Year holidays, and will likely not need new supplies until late February or early March.
CPO prices were in negative territory in morning trade but found support in higher soyoil futures in after-hours trade. By the end of BMD trade, soyoil futures were up around 25 points.
In the cash market, palm olein for April/May/June traded at $745/ton and $742.50/ton, free on board Malaysian ports, said a Singapore-based trader.
Cash CPO for prompt delivery was offered MYR10 higher at MYR2,480/ton.
Open interest on the BMD was 74,332 lots, up from 74,003 lots traded Friday. One lot is equivalent to 25 tons.
A total of 14,734 lots of CPO were traded versus 14,890 lots Friday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Feb 2010 2,463 2,450 Up 13 2,473 2,447
Mar 2010 2,458 2,445 Up 13 2,463 2,430
Apr 2010 2,452 2,445 Up 07 2,462 2,427
May 2010 2,449 2,441 Up 08 2,460 2,425
-By Fawziah Selamat, Dow Jones Newswires; +62 21 3983 1277; fawziah.selamat@dowjones.com
(END) Dow Jones Newswires
02-02-10 0630ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Friday, January 29, 2010
Asia CPO Ends MYR9 Down At MYR2,442/Ton After Volatile Trade
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended lower in choppy trade Friday tracking long liquidation amid concerns of credit tightening by Chinese banks.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR6 lower at MYR2,445 a metric ton after moving in both positive and negative territory.
The contract rose in afternoon trade to an intraday high of MYR2,467/ton tracking a likely rise in January exports to around 1.41 million-1.5 million tons but gave up gains towards the end of trade.
"Investors are very concerned that the Chinese government may increase interest rates very soon. That damped sentiment even though Malaysia's palm oil exports in January is tipped to be higher," said a Hong Kong-based trading executive.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd., put exports at 1.20-1.21 million tons in December. Both cargo surveyors are expected to issue export data Monday even though markets will be closed Monday for Federal Territory Day.
Many among trade participants said palm oil's supply and demand fundamentals have turned a tad positive as production has declined amid improving export demand.
"The export growth momentum is expected to continue into February amid likely lower output next month" in tandem with the lower CPO output trend in the first six months of 2010, said a senior executive from Kuala Lumpur-based brokerage.
He said prices may rise to MYR2,500 in February as a decline in CPO output, higher demand for palm oil may prevent a build-up in palm oil inventories in Malaysia. Palm reserves were around 2.24 million tons in December.
In the cash market, palm olein for April/May/June traded at $750/ton and $755/ton, free on board Malaysian ports, said a Singapore-based trader.
Cash CPO for prompt delivery was offered MYR10 lower at MYR2,470/ton.
Open interest on the BMD was 74,003 lots, up from 73,347 lots traded Thursday. One lot is equivalent to 25 tons.
A total of 14,890 lots of CPO were traded versus 15,763 lots Wednesday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Feb 2010 2,450 2,455 Down 05 2,480 2,425
Mar 2010 2,445 2,440 Up 05 2,469 2,420
Apr 2010 2,445 2,451 Down 06 2,467 2,410
May 2010 2,441 2,444 Down 03 2,463 2,410
-By Shie-Lynn Lim, Dow Jones Newswires; +60 3 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
01-29-10 0640ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Thursday, January 28, 2010
Asian Crude Palm Oil Ends Up;Likely Higher Exports,Lower Output
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange ended higher Thursday as investors covered shorts on a likely rise in exports in January.
Talk of lower output in Indonesia, the world's largest CPO producer, and a fall in Malaysia's palm oil production prevented prices from sliding below MYR2,400 a metric ton, said trade participants.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR22 higher at MYR2,451/ton, close to an intraday high of MYR2,475/ton.
The contract opened lower on long liquidation but quickly moved into positive territory and further extended gains during the afternoon session.
"Speculators are expecting cargo surveyors to issue bullish export data. Prices are also up as some have squared-off positions ahead of the long weekend," said a Malaysia-based exporter.
Markets will be closed Monday for Federal Territory Day.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are expected to issue export data for January Monday, despite the holiday.
If soyoil and crude oil futures are positive overnight, CPO prices could even test MYR2,500/ton Friday, said a Kuala Lumpur-based broker.
March soyoil was trading 29 points higher at 36.61 cents a pound by the end of trade on BMD.
Analysts said lower CPO output in the first six months of 2010 will likely reduce palm oil inventories in Malaysia. This may raise CPO prices as demand for the vegetable oil improves in tandem with the global economic recovery.
With Malaysia's replanting program covering 200,000 hectares of plantation land to be carried out in 2010, CPO output
is expected to decline, said an analyst at BNP Paribas.
Lower output in January may prevent a buildup in palm oil inventories and improved exports may reduce stocks to around 2 million tons, said an analyst in Kuala Lumpur. Palm reserves were around 2.24 million tons in December.
In the cash market, palm olein for April/May/June traded at $752.50/ton, free-on-board Malaysian ports, said a Singapore-based trader.
Cash CPO for prompt delivery was offered MYR30 higher at MYR2,480/ton.
Open interest on the BMD was 73,347 lots, down from 73,799 lots traded Wednesday. One lot is equivalent to 25 tons.
A total of 15,763 lots of CPO were traded versus 20,285 lots Wednesday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Feb 2010 2,463 2,439 Up 24 2,465 2,410
Mar 2010 2,440 2,429 Up 11 2,471 2,408
Apr 2010 2,451 2,429 Up 22 2,475 2,404
May 2010 2,444 2,430 Up 14 2,472 2,404
-By Shie-Lynn Lim, Dow Jones Newswires; +60 3 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
01-28-10 0540ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Wednesday, January 27, 2010
US Cash Grain Outlook:Basis Stands Pat, As Futures Fall Further
Domestic basis premiums for US cash grains were showing little response, despite a continued erosion in futures prices Wednesday.
"The cash [basis] market is holding steady at best in many regions," said Iowa commodity trade advisor Karl Setzer.
"Even buyers who are in need of grain in the Midwest are unwilling to push for deliveries, as they know weather conditions will prevent them from taking place. Exporters can see a large volume of South America grain is ready to hit the world market."
Prices being paid for most classes of US cash grain currently languish at their lowest levels in more than 2-3 months.
"The grains are in need of 'white knight'," said Top Third analyst Mark Gold. "If China continues on its present economic policy, the U.S. dollar may remain strong. Long-term trend-lines in the crude oil have been broken. Washington may be changing the rules of investment, which could certainly curtail outside trading in commodities."
Feed grain futures perpetuated a two-week decline again overnight, closing with cash-contract losses of 6 1/2 cents per bushel (0.68%) for soybeans, 2 3/4 cents (1.19%) for oats, and 1 1/4 cents (0.34%) for corn.
"Prospects for record crops in South America remain a bearish influence," said Doane Agricultural Services. "China continues to be a large customer for U.S. soybeans, although demand is likely to soon shift to South America. Also, there is concern that further monetary tightening in China will constrict their demand for commodities."
Wheat futures were firm overnight, closing with cash-contract gains of up to 1 cent (0.20%) for soft red winter wheat.
"The [wheat] market most likely will remain slow, as it seems buyers got good coverage last week, and producers are disinterested in selling at these levels," said Country Hedging analyst Brian Liedl.
National cash price indices maintained by the Minneapolis Grain Exchange closed Tuesday at $8.96 1/4 for soybeans, reflecting an average basis of -51 1/4 cents relative to the days settlement of March CBOT futures.
Domestic cash prices also averaged $3.22 1/4 for corn (-40 cents basis March CBOT), $4.08 1/2 for hard red winter wheat (-91 cents basis March KCBT), $4.00 1/2 for soft red winter wheat (-93 1/2 cents basis March CBOT) and $4.99 1/4 for hard red spring wheat (-11 cents basis March MGE).
CROP WEATHER
Calm weather conditions dominated much of the central US Wednesday, aside from light snow in the western Corn Belt, and light freezing rain in the northern Delta.
"Things are pretty quiet...all across the nation's midsection, but by this time tomorrow we will see the radar start to 'light up' over the southern Plains, as a crippling winter storm gets underway," said Freese-Notis Weather.
The storm is forecast to generate heavy snow and freezing rain across much of Texas/Oklahoma on Thursday and Friday, producing 18-24 inch snow depths in some areas. That snow/ice/rain is expected to reach the Delta and Southeast by the end of the week, as well.
"The winter wheat crop in that region will benefit from this moisture, but it will be a storm that will paralyze transportation, cause widespread power outages, and stress cattle in the big feedlot operations," said the service.
The Midwest will miss out on the bulk of the precipitation from this storm, although temperatures will plunge to levels 10-15 degrees Fahrenheit below normal.
-By Gary Wulf; Dow Jones Newswires; Gary.Wulf@dowjones.com
(END) Dow Jones Newswires
01-27-10 0952ET
Copyright (c) 2010 Dow Jones & Company, Inc.
CBOT Corn Outlook:Down 1-2c; Tech Pressure, Large Crops
CHICAGO (Dow Jones)--Chicago Board of Trade corn futures are expected to open slightly lower Wednesday after overnight losses as abundant supplies continue to loom over the market.
Corn is called 1 to 2 cents lower. In overnight trade, March corn was down 1 1/4 cents to $3.61 per bushel and May corn was down 1 1/2 cents to $3.71 3/4.
After making new lows on Tuesday, technically the market is looking bearish, and there are few signs of fundamental support breaking the market out of its slump soon, traders said.
The main bearish factors are the 2009 crop, which, according to the U.S. Department of Agriculture, is a record; an expected increase in 2010 corn acreage; and favorable South America growing conditions that are fueling expectations of large crops there.
The market needs improved demand in order to halt its slide, analysts say. Analysts expect the USDA to report strong weekly net export sales on Thursday, although below last week's huge total of 1.6 million metric tons.
Terry Reilly, analyst of Citigroup, also noted that Taiwan opted for South American corn in a recent tender, which is bearish for the U.S. market.
Commodity traders will be keeping an eye on news out of a Federal Reserve Board meeting this afternoon, and are awaiting President Barack Obama's State of the Union speech Wednesday night, for any rhetoric that is negative for commodities, analysts said. The president's recent proposal for bank reform has been seen as a negative for commodities.
Outside macro markets appear to be a mixed influence Wednesday, analysts said.
Technically, the market gained more downside momentum by making new lows on Tuesday, analysts said.
The next downside price objective for the bears is to push and close prices below solid technical support at $3.50 a bushel. The next upside price objective is to push prices above solid technical resistance at $3.92 1/2 a bushel, which is the top of the recent downside price gap on the daily bar chart.
First resistance for March corn is seen at $3.65 and then at Tuesday's high of $3.69. First support is seen at Tuesday's low of $3.60 1/4 and then at $3.55.
Reilly said that major support lies all the way down at $3.30.
"We're going to have some negative outside influence to get down to that level though," he said.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
01-27-10 0935ET
Copyright (c) 2010 Dow Jones & Company, Inc.
CBOT Soy Outlook: Down On Big Supplies, Overnight Weakness
CHICAGO (Dow Jones)--Chicago Board of Trade soybeans are expected to open lower Wednesday following overnight losses and continued pressure from bearish South American crops.
Soybeans are called 4 to 6 cents lower. In overnight trade, March soybeans were down 6 1/2 cents to $9.41 per bushel and May soybeans were down 6 3/4 cents to $9.50 1/4.
March soymeal was down $2.30 to $285.10 per short ton and March soyoil was down 28 points to 36.49 cents per pound.
After climbing Tuesday, the market "failed to sustain a short covering rally" overnight, AgResource Co. said in a morning commentary.
South American supplies are overhanging the market, as favorable weather prompts predictions of very large crops there, which will mean increased competition with the U.S. for export business, analysts say.
Although Argentina has had a dry spell lately, analysts note that crops there are forecast to get rain this weekend into early next week.
"If they get it, it's probably price-negative. If they don't there's probably a little bit of a bounce," said Don Roose, president of U.S. Commodities in Des Moines.
Outside macro markets are a mixed influence Wednesday morning, analysts said.
Commodity traders will be keeping an eye on news out of a Federal Reserve Board meeting Wednesday afternoon, and are awaiting President Obama's State of the Union speech Wednesday night, for any rhetoric that is "commodity negative," Roose said. The President's recent proposal for bank reform has been seen as a negative for commodities.
The next downside price objective for the bears is pushing and closing prices below major psychological support at $9.00, a technical analyst said. The next upside technical objective for the bulls is pushing and closing March prices above solid technical resistance at last week's high of $9.84.
First resistance for March soybeans is seen at $9.50 and then at this week's high of $9.56. First support is seen at $9.40 and then at Tuesday's low of $9.32 1/2.
In other markets, soybean futures rose on the Dalian Commodity Exchange Wednesday, shaking off nervousness over credit tightening that rattled the commodities complex, as the market looked to supportive government agricultural policies and stronger global soy prices.
The benchmark September soybean contract settled CNY16 or 0.4% higher at CNY3,920 a metric ton.
Also, crude palm oil futures on Malaysia's derivatives exchange fell below MYR2,400 a metric ton due to selling pressure related to concerns over China's tightening monetary policy, but came off lows in a bout of short covering.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
01-27-10 0926ET
Copyright (c) 2010 Dow Jones & Company, Inc.
US Wheat Outlook: Seen Mixed, Waiting For Egypt Results
CHICAGO (Dow Jones)--U.S. wheat futures are expected to start mixed Wednesday as the markets attempt to consolidate and traders wait to see results of an Egyptian tender.
In overnight electronic trading, Chicago Board of Trade March wheat edged up 1/2 cent to $4.94 1/2 per bushel.
Prices finished the overnight session slightly higher after trading both higher and lower. The markets are trying to enter a consolidation mode after sharp, recent losses, traders said.
The markets are technically oversold after the losses and due for a bounce, a trader said. However, large world supplies are fundamentally bearish for prices, he said.
The next downside price objective for the bears is pushing and closing CBOT March wheat below solid technical support at the October low of $4.59, a technical analyst said. Bulls' next upside price objective is to push and close the contract above solid technical resistance at $5.38, he said.
First resistance is anticipated at Tuesday's high of $5.00 1/2 and then at this week's high of $5.04, the analyst said. First support lies at Tuesday's low of $4.91 1/2 and then at last week's low of $4.85 1/4, he said.
Recent sell-offs have improved export demand for U.S. wheat, but "large amounts will need to be exported to catch up to" the U.S. Department of Agricultures' target for the year of 825 million bushels, Country Hedging said in a note.
Weekly U.S. wheat export sales for the week ended Jan. 14 were impressive at a marketing-year high, but the U.S. still faces stiff competition for business from other countries.
Traders are waiting to see the results of a tender from Egypt's state-owned General Authority for Supply Commodities. Egypt, a major wheat buyer on the world market, is known for being price sensitive.
GASC said it is seeking to buy 55,000 to 60,000 tons of U.S. soft red wheat, U.S. soft white wheat and U.S. hard red wheat. It also is looking for 60,000 tons of Australian, German, Argentinean, Kazakh, Russian or French wheat.
"It's expected that GASC will secure Russian, French or Kazakh wheat, at FOB prices well below the U.S.," AgResource Co. said in a note.
Trading executives said Wednesday that large volumes of Kazakh-origin wheat are likely to be offered and bought during Egypt's import tenders over the next few months. Kazakhstan is trying to bring down surging inventories, they said.
In other news, widespread snowfall in Oklahoma and Texas should bring beneficial moisture to dormant hard red winter wheat, an analyst said. In the Midwest, temperatures will not be cold enough to harm dormant soft red winter wheat, according to private weather firm DTN Meteorlogix.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com
(END) Dow Jones Newswires
01-27-10 0928ET
Copyright (c) 2010 Dow Jones & Company, Inc.
Asian Crude Palm Oil Ends Up; Off Lows On Short Covering
KUALA LUMPUR (Dow Jones)--Crude palm oil futures on Malaysia's derivatives exchange fell below MYR2,400 a metric ton due to selling pressure related to concerns over China's tightening monetary policy, but came off lows in a bout of short covering.
Prices turned choppy during the afternoon session, moving between positive and negative territory but ending higher.
The benchmark April CPO contract on the Bursa Malaysia Derivatives ended MYR22 higher at MYR2,429/ton after moving in a range between MYR2,393-MYR2,438/ton.
"Gains on BMD were more of a technically-inspired rally. Global vegetable oil supply fundamentals remain bearish on prospects for a record South American soybean crop," a Kuala Lumpur-based trading executive said.
Investors were also concerned about China's future monetary policy measures, which have also affected most other commodity markets.
This year's soybean supply may be the key driver of prices in 2010, Barclays Capital said in a note.
With prospects for a large increase in global supply in the offing, prices of soybean and soybean products including soyoil may edge lover in the coming months. Brazilian and Argentine output will be flowing into markets in the first and second quarter this year, it said.
The soyoil price outlook influences palm oil prices as the vegetable oils compete for similar export markets.
During Asian trading hours, March soyoil on the Chicago Board of Trade fell as much as 30 points to 36.47 cents/pound.
The March contract was last trading down 13 points from the overnight close at 36.64 cents/pound, down 13 points from the overnight close.
Palm oil's current supply fundamentals helped negate bearish cues from external markets and prevent a sharp decline in prices, due to a double-digit percentage decline in output in Jan. 1-25 from a month earlier, some traders said.
However, Indonesia's exports of CPO in 2010 may rise 16% on year to 18 million tons as prices are likely to remain within a range favored by palm oil buyers, Joko Supriyono, secretary-general of the Indonesian Palm Oil Association said.
In 2009, Indonesia exported an estimated 15.5 million tons, an increase of 12% over 13.8 million tons in 2008, he said.
In the cash market, palm olein for April/May/June traded at $752.50/ton and $747.50/ton, free-on-board Malaysian ports, a Singapore-based trader said.
Cash CPO for prompt delivery was offered MYR10 higher at MYR2,450/ton.
Open interest on the BMD was 73,799 lots, up from 72,657 lots traded Tuesday. One lot is equivalent to 25 tons.
A total of 20,285 lots of CPO were traded versus 23,684 lots Monday.
Closing BMD CPO futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Feb 2010 2,425 2,420 Up 05 2,431 2,397
Mar 2010 2,429 2,410 Up 19 2,432 2,395
Apr 2010 2,429 2,407 Up 22 2,438 2,393
May 2010 2,430 2,411 Up 19 2,436 2,396
-By Shie-Lynn Lim, Dow Jones Newswires; +60 3 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
01-27-10 0553ET
Copyright (c) 2010 Dow Jones & Company, Inc.
