Wednesday, May 8, 2013

RTRS - Global soymeal supplies to stay tight to June-Oil World


HAMBURG, May 7 (Reuters) - Global soymeal supplies may remain tight up to June because of the unexpectedly sluggish new crop soybean and soymeal exports from South America, Hamburg-based oilseeds analysts Oil World said on Tuesday.

“The long-awaited supply relief from South American soymeal has been repeatedly postponed and now seems unlikely to begin before end-May or June, keeping protein feed markets on fire both in Europe and worldwide,” Oil World said in a report.

“Ongoing delays in soymeal arrivals compounded by insufficient imports in recent months have created a severe shortage, necessitating further rationing of demand and virtually depleting stocks in many countries.”

Buyers of soymeal, a major animal feed, have been awaiting big exports of new crop Argentine and Brazilian soybeans in early 2013 to relieve a tight global market. Soybean prices hit record highs in September 2012 as drought hit the U.S. crop.

But port and transport bottlenecks in Brazil have cut soybean shipments despite strong global demand. Low farmer sales of new crop soybeans in Argentina have also returned global demand to tight U.S. old crop supplies.

This resulted in sharp price increases, largely for soymeal for prompt delivery, Oil World said.

Argentine soymeal for May delivery in Rotterdam was quoted on Monday at $547 a tonne cif a tonne , up from $515 a tonne in early April and around $514 a tonne in early May 2012.

“Considering this year’s harvest delays, reserved Argentine farmer selling and logistical bottlenecks in Brazil, it will apparently take more time than previously thought to alleviate the global deficit of soybean meal," Oil World said.

“Supply relief is not expected until from end-May or June, leaving many European feed producers in the red.”

German prices for animal feed wheat are currently above bread wheat prices as feed manufacturers are being compelled to buy wheat to provide a protein ingredient to replace soymeal unavailable from South America. 

Trader's highlight

DJI - NEW YORK, May 7 (Reuters) - The Dow closed above 15,000 for the first time on Tuesday and the S&P 500 ended at another record high, extending the market's rally as more investors rushed to join the party and German industrial data beat expectations.

It was the fourth straight record close for the S&P 500. Both the Dow and the S&P 500 hit intraday record highs as well.

"People are concerned they're missing the boat if they're not fully invested in the stock market right now," said Eric Kuby, chief investment officer of North Star Investment Management Corp., in Chicago.

Investors' sentiment was buoyed early in the day by data from Germany, Europe's largest economy, which reported a 2.2 percent increase in industrial orders in March, compared with expectations for a drop of 0.5 percent.

"Markets haven't really been anticipating much of a recovery in Europe . If we see any type of slight improvement in the euro-zone economy, it may add more fuel to the strong move we've already seen in equities," said Sean Lynch, global investment strategist for Wells Fargo Private Bank in Omaha, Nebraska.

The Dow Jones industrial average rose 87.31 points, or 0.58 percent, to close at a record 15,056.20. The Standard & Poor's 500 Index .gained 8.46 points, or 0.52 percent, to end at 1,625.96. The Nasdaq Composite Index advanced 3.66 points, or 0.11 percent, to close at 3,396.63.

The U.S. stock market's gains so far have come on strong corporate results and accommodative monetary policies from the Federal Reserve, two factors that may now be priced into markets. Last week's jobs report was unexpectedly strong and helped to drive stocks' advance.


Oils - NEW YORK, May 7 (Reuters) - Brent crude oil fell more than $1 on Tuesday as worries about market fundamentals curbed an early rise that had brought the price close to $106 a barrel on strong German data and concern about tension in the Middle East.

Fears of supply disruption after the Israeli air strikes on Syria close to Damascus boosted Brent early in the session, and it got close to the highest level in nearly a month following its largest three-day rally since August 2012.

Those fears subsided and Brent fell in the absence of clear signs of strengthening global demand, traders said. In a monthly report, the U.S. Energy Information Administration (EIA), a government body, cut its forecasts for oil consumption in 2013 and 2014 due to declines in Europe and Japan.

"We're getting into an area where we've had such a strong run-up in price over the past few days, when really from a fundamental standpoint it's hard to justify. We got up here on a lot of froth," said Stephen Schork, editor of The Schork Report in Pennsylvania.

Brent crude fell $1.06 to settle at $104.40 a barrel. During the session it reached $105.94, its highest since April 11. Brent has rebounded over $5 a barrel since falling below $99 last Wednesday.

U.S. oil futures  lost 54 cents to settle at $95.62.

The spread between Brent and U.S. crude largely traded in a range between $9 and $10 throughout the session. It widened out to above $10 early on, the first time it went above $10 since April 29, before settling at $8.78.


CBOT Soybean - Soybean futures on the Chicago Board of Trade rose 1 percent on Tuesday, with nearby contracts leading the way, on firm cash markets and bargain buying after Monday's sell-off, traders said.

* Concerns about planting delays in the U.S. Midwest added support, with updated midday forecasts for some rain for the region late this week.
                 
·         USDA late Monday said the U.S. soybean crop was 2 percent seeded, tied with 1983 and 1993 for the second-slowest pace by   early May, after the 1984 record of 1 percent. The five-year  average is 12 percent. 

·         Global soymeal supplies may remain tight up to June  because of unexpectedly sluggish new-crop soybean and soymeal  exports from South America, oilseeds analysts Oil World said.  

·         However, shipping agency SA Commodites/Unimar said queues of ships waiting to load soy at Brazil's biggest ports are shortening and the worst of this year's unprecedented congestion  and loading delays now appears to be over.

·         Brazil's area planted with soybeans will likely expand 4.3   percent next season to 29.1 million hectares (71.9 million  acres), local grains analysts Agroconsult said on Tuesday,  suggesting the 2013/14 crop could surpass this season's record.

·         Brazil will lobby top soy buyer China to speed approval for imports of three new gene-modified varieties of soybean, and   one of corn, a Brazilian official said. Nearly 90 percent of Brazil's soybean crop is genetically modified. 



BMD CPO - SINGAPORE, May 7 (Reuters) - Malaysian palm oil futures ended higher on Tuesday, fuelled by bargain-hunting from the previous day's nearly five-month low, although gains were capped by a firm ringgit and key industry data due at the end of the week.

A strong Malaysian ringgit , following the election victory of the country's ruling coalition, limited the upside for palm oil prices, as the ringgit-priced feedstock became more expensive for overseas buyers and refiners.

Investors also avoided taking risky bets ahead of official data for Malaysia's April palm oil stocks and output due on Friday, which could provide further trading cues.

"We can see signs that prices are already bottoming. The next few days will be crucial in determining market direction," said a dealer with a foreign commodities brokerage in Kuala Lumpur.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange closed up 0.4 percent at 2,259 ringgit ($758) per tonne, after trading in a tight range between 2,235 and 2,272 ringgit. Prices fell as low as 2,230 ringgit on Monday, a level last seen on Dec. 13.

Total traded volumes were thin, at 22,230 lots of 25 tonnes each, compared to the average 35,000 lots.

Traders are pinning hopes on stagnant production to help ease stock levels, which fell to 2.17 million tonnes by the end of March.

Prices could gain further support if inventory falls below the key psychological level of 2 million tonnes, although most traders expect only a marginal drop, due to weak exports. Malaysia's palm oil shipments in April fell as much as 5.6 percent from a month ago, cargo surveyor data showed.

In other markets, Brent crude oil fell below $105 per barrel on Tuesday, after the risk premium caused by an Israeli air strike on Syria faded.

In vegetable oil markets, the U.S. soyoil for July delivery  gained 0.4 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange rose 0.6 percent.