RTRS - Global importers to buy more cheap palm oil in 2013- Oil World

HAMBURG, Jan 22 (Reuters) - Global edible oil importers are likely to increase purchases of low-priced palm oil in coming months, turning away from soyoil and other more expensive seed-based oils, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“Palm oil has clearly improved its price-competitiveness for food as well as for non-food applications,” Oil World said. “This is good news for consumers worldwide who will become increasingly dependent on palm oil in the months ahead as a result of insufficient supplies of seed oils."

Malaysian refined, bleached and deodorised (RBD) palm oil is currently around $300 a tonne cheaper than Argentine fob soyoil export prices, Oil World said.

“We expect sizable increases in palm oil imports and consumption in India, China, the European Union and several other countries,” it said.

Ample global stocks have been weakening palm oil prices since September, Oil World said.

Global soyoil production is likely to stagnate at the year-ago level in Jan./Mar. 2013 as processing of South America’s new soybean crop is likely to start only gradually, it said.

RTRS - Oil World cuts Argentine 2013 soybean crop forecast, ups Brazil

HAMBURG, Jan 22 (Reuters) - Oilseeds analyst Oil World said it has cut its forecasts for the 2013 soybean harvest in Argentina by 1 million tonnes because of unfavourably dry weather but has raised its forecast of Brazil's crop by 0.5 million tonnes.

Oil World now forecasts Argentina will harvest 52.0 million tonnes of soybeans in early 2013, down from 53 million tonnes it forecast in December and 56 million tonnes in October but still up from 39.9 million tonnes Argentina harvested in early 2012.

Hamburg-based Oil World said on Tuesday it has raised its forecast of Brazil’s 2013 crop to 81.5 million tonnes from 81.0 million tonnes forecast in December and up from 66.8 million tonnes Brazil harvested in early 2012 because of more positive weather in the country.

Big South American harvests are needed in early 2013 to relieve the tight global soybean market, where the U.S. is carrying the major burden of meeting global export demand.

Soybean prices hit record highs in September 2012 as drought ravaged the U.S. crop after poor Argentine and Brazilian harvests. Prices later fell back as the U.S. harvest turned out better than feared and big South American crops in early 2013 may relieve world supplies.

Oil World’s forecast is more pessimistic than official estimates of the crop in Argentina, the world’s third largest soybean exporter after the United States and Brazil. The U.S. Department of Agriculture on Jan. 11 forecast Argentina’s 2013 soybean crop at 54.0 million tonnes. Argentina’s government expects at least a 55 million tonne crop. 

Argentina had hot and dry weather in the second half of December and early January with some soybean regions receiving only 10-20 percent of normal rain volumes, Oil World said.

“If the dryness continues until early February, soybeans and other summer crops will be stressed and the yield potential reduced,” it said.

Brazil’s weather has been more favourable and Oil World had said on Jan. 15 the country’s soybean crop could exceed 81 million tonnes. 

Chicago March soybeans rose nearly 4 percent last week, partly because of concern about Argentina’s crop. 

“The weather conditions in Argentina in coming weeks will determine whether the current risk premium on prices must be raised further or whether we will experience seasonal supply and price pressure with fund liquidation,” Oil World said.

Trader's highlight

NEW YORK, Jan 22 (Reuters) - The yen rose against the dollar and euro on Tuesday after the Bank of Japan said its open-ended commitment to buy assets would kick in only next year, but the prospect of more monetary accommodation by a central bank appeared to lend support to a broad range of financial assets, including stocks, gold and oil.

Analysts said the yen's rise would likely be short-lived and that on a medium-term basis, it would weaken.

The euro benefited from a surprisingly sharp jump in investor sentiment in Germany. Analysts said, however, that the currency's recent climb could put the euro zone at a competitive disadvantage when its economy needs to grow.

Hopes that the global economy would improve allowed cyclical sectors to lead the Standard & Poor's 500 to a five-year high.

Investors waited for earnings results from technology companies due after the closing bell and were not disappointed.

A catalyst from positive earnings results is needed for stocks to move still higher, he said, while mixed earnings with "lower guidance" would make another upward move more difficult.

Signals that Republican leaders in the U.S. House of Representatives would pass a nearly four-month extension of the U.S. debt limit were also helpful for riskier assets.

Global stock markets were mixed. Japanese equities and world indices rose on the BoJ news, but European shares fell on a potential price war in French telecommunications.

Japan's central bank, under intense political pressure to overcome deflation, doubled its inflation target to 2 percent. The BoJ also said it had decided to switch to an open-ended approach to buying assets each month next year, setting no deadline for completing the purchases.

The euro was down 1.3 percent on the day at 117.78 yen, though off a session low of 117.31 yen. The euro was hurt by a German newspaper report saying Germany's regulator had ordered large banks to simulate a break-up.

The Dow Jones industrial average rose 62.51 points, or 0.46 percent, at 13,712.21. The Standard & Poor's 500 Index was up 6.58 points, or 0.44 percent, at 1,492.56. The Nasdaq Composite Index was up 8.47 points, or 0.27 percent, at 3,143.18.

NYMEX - NEW YORK, Jan 22 (Reuters) - U.S. crude futures rose on Tuesday on Bank of Japan's plans for asset buying and on supportive investor confidence data from Germany that bolstered expectations for fuel demand.

CBOT Soyoil - Soybean futures on the Chicago Board of Trade rose 1.6 percent and set a one-month high on news China bought optional-origin soybeans and talk that it may be looking for more, traders said.

 

·         USDA said private exporters reported sales of 120,000 tonnes of optional origin soybeans to China for delivery in 2013/14.

 

·         USDA reported export inspections of U.S. soybeans in the latest week at 48.075 million bushels, above a range of trade estimates for 35 million to 45 million.

 

·         March soybean contracts reached $14.60-3/4, its highest level since Dec. 19, and settled at $14.51-3/4, ending above its 200-day moving average for the first time since Dec. 18.

 

·         March soyoil gapped higher at the open and set a near three-month high at 52.67 cents per lb before settling at 52.43 cents.

 

·         CFTC data showed managed funds expanded their net long position in CBOT soybeans in the week ended Jan. 15, changing course after cutting their net long in each of the previous three weeks.

 

·         Analyst Oil World cut its forecasts for Argentina's 2013 soybean harvest to 52 million tonnes, down 1 million from its previous estimate, but raised its forecast of Brazil's crop to 81.5 million tonnes, from 81 million last month. 

FCPO - KUALA LUMPUR, Jan 22 (Reuters) - Malaysian palm oil futures rose to their highest in more than two weeks on Tuesday, tracking gains in competing soyoil as dry weather in key South American soy-producing regions sparked concerns about edible oil supply as global demand recovers.

Dryness in parts of Argentina and Brazil could hurt South America's soybean yields and turn buyers towards palm oil, which is currently trading at a discount of more than $300 a tonne.

Malaysian palm oil exports fell 19 percent in the first twenty days of January, improving fractionally from a steeper drop earlier in the month and raising hopes that demand would pick up and cut record high stockpiles in the world's No.2 producer.

"Exports are improving slightly -- it's still not so good, but it should be improving," said a trader with a foreign commodities brokerage in Kuala Lumpur.

"The market has broken the resistance level of 2,445-2,450 ringgit of the third month benchmark. Technically the market looks more supportive," he added.

The benchmark April contract  on the Bursa Malaysia Derivatives Exchange rose to 2,474 ringgit ($812) per tonne, the highest level since Jan. 7, before closing at 2,466 ringgit, a gain of almost 2 percent from the previous session.

Total traded volume stood at 35,955 lots of 25 tonnes each, slightly higher than the usual 25,000 lots.

Technical analysis shows palm oil is expected to rise towards 2,486 ringgit per tonne, as it has cleared resistance at 2,449 ringgit, said Reuters market analyst Wang Tao.

Brent crude rose above $112 a barrel on Tuesday, after Japan pledged to pump in more money to boost its economy, adding to positive growth signals from the United States and China in the past few weeks.

In competing vegetable oil markets, U.S. soyoil for March delivery  rose 1.5 percent to a near 3-month high on late Tuesday, underpinned by dry weather that sparked concerns about South America's soybean crop, which is forecast to hit to record highs this year. 

Regional Equities - BANGKOK, Jan 22 (Reuters) - Southeast Asian stock markets edged lower on Tuesday, recouping some of their earlier losses as the Bank of Japan's bold policy lifted optimism about more fund flows to the region, bolstering late buying in large caps such as Singapore and Thai banks.

Singapore's Straits Times Index  ended down 0.05 percent at 3,219.86, with shares in United Overseas Bank Ltd  among actively traded, up 0.9 percent. Bangkok's SET index  fell 0.44 percent to 1,434.09.

Among bright spots in Bangkok, shares in Krung Thai Bank Pcl  gained 3.9 percent. Citi Research has raised its price target for Krung Thai Bank, citing strong revenue outlook and lower risk of future provision. 

Philippine Composite Index fell 1.1 percent to 6,104.90, snapping three sessions of gains. It had set a record finish of 6,171.70 on Monday.

Malaysia's index was down 0.43 percent at 1,628.66, after Monday's 2.4 percent loss amid concerns about the country's upcoming election.