So much for the link between crude oil prices and vegetable oil values.
While the two are seen as historically being positively correlated, a reflection of the use of vegetable oils in making biodiesel, they were heading in totally different directions on Monday.
Brent crude dropped more than 2% at one point to $36.05 a barrel, taking out its low on Christmas Eve 2008 to reach levels not seen since 2004.
(Brent has now dropped nearly 40% so far in 2015, and more than 15% since an Opec meeting earlier this month which failed to back production cuts.)
However, in Chicago, soyoil for March rose 1.1% to 31.11 cents a pound as of 09:45 UK time (03:45 Chicago time), rising back above its 200-day moving average.
And in Kuala Lumpur, palm oil soared 1.9% to 2,448 ringgit a tonne, earlier hitting 2,457 ringgit a tonne, the highest for a benchmark contract since late September.
An extra 3 ringgit, and it would have matched its highest since June last year.
Dryness concerns
The strength reflects in part the ongoing concerns that El Nino will, in bringing dryness to South East Asia, cause a drop in palm oil output, with the impact on production typically lagging a few months behind when the lack of rainfall actually occurs.
However, there was some better, or at least less dismal, news on Malaysian exports too, with cargo surveyor ITS reporting shipments so far this month at 728,421 tonnes, a tumble of 25% from the same period of November.
Nonetheless, that implies some recent pick-up, with the pace of decline as of December 15 at 36%.
Chinese imports
Nor were monthly import data for China, a huge buyer of vegetable oils, so downbeat either, with volumes for palm oil in November at 462,528 tonnes.
Although a drop of 2.9% year on year, the pace of imports for 2015 as a whole remained definitely positive, up 11.2% at 5.24m tonnes.
The data were certainly received bullishly in China itself, where palm oil for May, the best-traded contract, closed up 2.5% at 4,614 yuan a tonne on the Dalian exchange.
Chinese imports of soyoil were, at 90,984 tonnes in November, up nine-fold year on year and bucking a downward trend.
Imports for 2015 a whole were still down 27% at 802,144 tonnes.
Rapeseed oil imports were higher too, up 31% at 106,177 tonnes for the month, again against the 2015 trend, with buy-ins for the first 11 months of the year down 8.9% at 708,523 tonnes.
‘Concerns of crop losses’
And there was the broader support to the oilseed complex too to factor in from South America, which has for so long been a weight on values.
In Brazil, worries over northern dryness, which helped lift soybean prices on Friday, remain alive.
“Northern Brazil remains dry, stirring concerns of crop losses without moisture over the next few weeks,” said CHS Hedging, noting that “we are embarking on their critical stage for promoting big yields”.
Benson Quinn Commodities said: “South American weather is beginning to draw some of the trade’s attention considering the emergence of dried conditions across northern areas of Brazil ahead of the more critical growing stages.”
Argentine question
And, from Argentina, the idea of a wave of selling by farmers, now that crop export taxes and restrictions have been removed or reduced and the peso liberated and depreciated, have not been realised – yet – either.
Certainly, plenty of caution remains over Argentine farmers’ intentions.
“Any sign of Argentine producer selling will cap the rally with market estimating the Argentine is sitting on 10m-15m tonnes of the 30m tonnes of Argentine stocks,” Minnesota-based Benson Quinn Commodities said, viewing the last session’s soybean rally as something of a selling opportunity.
“The US producer needs to reward this price move with a little bit of selling.”
Peso performance
But signs of huge crop selling have so far not been detected, with CHS highlighting particularly a lack of sales in corn and wheat, flagging “no sign of Argentine corn heading to market with the elimination of their corn export tax”.
It may be that farmers are waiting to see how the peso performs, after being liberated last Thursday, when it plunge to close at 13.3065 to $1, from 9.8144 to $1 previously, under the old regime of currency controls.
(Growers hoarded crops largely as a hedge against a falling peso.)
However, the peso has stabilised since, standing early on Monday at 13.13 to $1, little changed on Friday’s close.
Price rises
In Chicago, soybeans themselves for March were 0.2% higher at $8.94 ½ a bushel, comfortably above their 100-day moving average, which they regained in the last session.
It may have helped that regulatory data late on Friday showed hedge funds having already rebuilt a decent net short position, up more than 18,000 lots week on week at nearly 30,000 lots.
Canola was dragged higher too, adding 0.2% to Can$485.50 a tonne in Winnipeg for March delivery.
While China’s imports of the rapeseed variant tumbled in November by 26% year on year, to 374,902 tonnes, canola, as an oilseed high in vegetable oil rather than meal, took particular succour from the firmness in the likes of palm oil.
Furthermore, estimates from Canada’s farm ministry, AAFC, forecast Canadian canola stocks falling by 25% in 2015-16, rather than the increase that the US Department of Agriculture has pencilled in.
DDGS dispute
Back in Chicago, corn was higher too, up 0.3% at $3.75 ¾ a bushel for March delivery, despite the fall in oil, which is important as a huge amount of the grain is used to make ethanol, and soft Chinese import data too.
Chinese imports of corn last month were, at 18,674 tonnes, down 93% year on year, a figure likely to underline ideas that feed users are turning to domestic supplies instead, now that subsidy reforms have allowed values to fall.
And while imports of distillers’ grains (DDGS) soared 142% to 464,959 tonnes, that could be viewed as an attempt to stock up on the corn-derived feed ingredient ahead of measures to clamp down on buy-ins.
The US embassy in Beijing was told last week that China had accepted a petition from Chinese DDGS producers seeking anti-dumping duties on imports from the US.
‘Concerns growing’
Still, on the more positive side for corn, Chinese imports of ethanol last month soared to 135,865 tonnes, from just 26 tonnes in November 2014.
And most – 84,102 tonnes – came from the US, ahead of the 46,712 tonnes from Brazil, which makes its ethanol from sugar cane.
And for corn too, the Brazilian dryness is beginning to raise worries as the pollination period approaches.
“There is some concerns growing in respect to conditions in Brazil with areas of the northeast unseasonably dry” Benson Quinn Commodities said.
“This potentially has some legs to it as the growing season moves into more critical stages.”
‘Fundamentals remain negative’
However, Chicago wheat for March eased 0.2% to $4.86 a bushel, continuing to feel pressure from ideas of ample world supplies.
“The features in these markets don’t change,” said Benson Quinn Commodities.
“Fundamentals remain negative, which should continue well into 2016.”
And the weekly US regulatory data from the CFTC showed hedge funds having already cut a large stack of their net short on Chicago wheat futures and options, taking in 22,773 lots lower week on week to 48,207 lots, potentially limiting the appetite for further decreases.
“Given the lack of fundamental support, these fund positions look very manageable,” Benson Quinn said.
Sugar slowdown
In New York, raw sugar for March gained 0.5% to 15.18 cent a pound despite Chinese data showing a drop of 14.5% to 259,987 tonnes in imports last month.
However, there is an idea among many investors that this was down to import restrictions rather than slow demand, and does not represent the start of a significant downturn in import volumes which would undermine world values.
China’s coffee imports were down 3.9% year on year at 5.28m tonnes, and cocoa imports down 69% at just 726 tonnes.
- See more at: http://ingredientnews.com/articles/china-data-help-ags-defy-oil-price-tumble/#sthash.sikXkv8j.dpufSo much for the link between crude oil prices and vegetable oil values.
While the two are seen as historically being positively correlated, a reflection of the use of vegetable oils in making biodiesel, they were heading in totally different directions on Monday.
Brent crude dropped more than 2% at one point to $36.05 a barrel, taking out its low on Christmas Eve 2008 to reach levels not seen since 2004.
(Brent has now dropped nearly 40% so far in 2015, and more than 15% since an Opec meeting earlier this month which failed to back production cuts.)
However, in Chicago, soyoil for March rose 1.1% to 31.11 cents a pound as of 09:45 UK time (03:45 Chicago time), rising back above its 200-day moving average.
And in Kuala Lumpur, palm oil soared 1.9% to 2,448 ringgit a tonne, earlier hitting 2,457 ringgit a tonne, the highest for a benchmark contract since late September.
An extra 3 ringgit, and it would have matched its highest since June last year.
Dryness concerns
The strength reflects in part the ongoing concerns that El Nino will, in bringing dryness to South East Asia, cause a drop in palm oil output, with the impact on production typically lagging a few months behind when the lack of rainfall actually occurs.
However, there was some better, or at least less dismal, news on Malaysian exports too, with cargo surveyor ITS reporting shipments so far this month at 728,421 tonnes, a tumble of 25% from the same period of November.
Nonetheless, that implies some recent pick-up, with the pace of decline as of December 15 at 36%.
Chinese imports
Nor were monthly import data for China, a huge buyer of vegetable oils, so downbeat either, with volumes for palm oil in November at 462,528 tonnes.
Although a drop of 2.9% year on year, the pace of imports for 2015 as a whole remained definitely positive, up 11.2% at 5.24m tonnes.
The data were certainly received bullishly in China itself, where palm oil for May, the best-traded contract, closed up 2.5% at 4,614 yuan a tonne on the Dalian exchange.
Chinese imports of soyoil were, at 90,984 tonnes in November, up nine-fold year on year and bucking a downward trend.
Imports for 2015 a whole were still down 27% at 802,144 tonnes.
Rapeseed oil imports were higher too, up 31% at 106,177 tonnes for the month, again against the 2015 trend, with buy-ins for the first 11 months of the year down 8.9% at 708,523 tonnes.
‘Concerns of crop losses’
And there was the broader support to the oilseed complex too to factor in from South America, which has for so long been a weight on values.
In Brazil, worries over northern dryness, which helped lift soybean prices on Friday, remain alive.
“Northern Brazil remains dry, stirring concerns of crop losses without moisture over the next few weeks,” said CHS Hedging, noting that “we are embarking on their critical stage for promoting big yields”.
Benson Quinn Commodities said: “South American weather is beginning to draw some of the trade’s attention considering the emergence of dried conditions across northern areas of Brazil ahead of the more critical growing stages.”
Argentine question
And, from Argentina, the idea of a wave of selling by farmers, now that crop export taxes and restrictions have been removed or reduced and the peso liberated and depreciated, have not been realised – yet – either.
Certainly, plenty of caution remains over Argentine farmers’ intentions.
“Any sign of Argentine producer selling will cap the rally with market estimating the Argentine is sitting on 10m-15m tonnes of the 30m tonnes of Argentine stocks,” Minnesota-based Benson Quinn Commodities said, viewing the last session’s soybean rally as something of a selling opportunity.
“The US producer needs to reward this price move with a little bit of selling.”
Peso performance
But signs of huge crop selling have so far not been detected, with CHS highlighting particularly a lack of sales in corn and wheat, flagging “no sign of Argentine corn heading to market with the elimination of their corn export tax”.
It may be that farmers are waiting to see how the peso performs, after being liberated last Thursday, when it plunge to close at 13.3065 to $1, from 9.8144 to $1 previously, under the old regime of currency controls.
(Growers hoarded crops largely as a hedge against a falling peso.)
However, the peso has stabilised since, standing early on Monday at 13.13 to $1, little changed on Friday’s close.
Price rises
In Chicago, soybeans themselves for March were 0.2% higher at $8.94 ½ a bushel, comfortably above their 100-day moving average, which they regained in the last session.
It may have helped that regulatory data late on Friday showed hedge funds having already rebuilt a decent net short position, up more than 18,000 lots week on week at nearly 30,000 lots.
Canola was dragged higher too, adding 0.2% to Can$485.50 a tonne in Winnipeg for March delivery.
While China’s imports of the rapeseed variant tumbled in November by 26% year on year, to 374,902 tonnes, canola, as an oilseed high in vegetable oil rather than meal, took particular succour from the firmness in the likes of palm oil.
Furthermore, estimates from Canada’s farm ministry, AAFC, forecast Canadian canola stocks falling by 25% in 2015-16, rather than the increase that the US Department of Agriculture has pencilled in.
DDGS dispute
Back in Chicago, corn was higher too, up 0.3% at $3.75 ¾ a bushel for March delivery, despite the fall in oil, which is important as a huge amount of the grain is used to make ethanol, and soft Chinese import data too.
Chinese imports of corn last month were, at 18,674 tonnes, down 93% year on year, a figure likely to underline ideas that feed users are turning to domestic supplies instead, now that subsidy reforms have allowed values to fall.
And while imports of distillers’ grains (DDGS) soared 142% to 464,959 tonnes, that could be viewed as an attempt to stock up on the corn-derived feed ingredient ahead of measures to clamp down on buy-ins.
The US embassy in Beijing was told last week that China had accepted a petition from Chinese DDGS producers seeking anti-dumping duties on imports from the US.
‘Concerns growing’
Still, on the more positive side for corn, Chinese imports of ethanol last month soared to 135,865 tonnes, from just 26 tonnes in November 2014.
And most – 84,102 tonnes – came from the US, ahead of the 46,712 tonnes from Brazil, which makes its ethanol from sugar cane.
And for corn too, the Brazilian dryness is beginning to raise worries as the pollination period approaches.
“There is some concerns growing in respect to conditions in Brazil with areas of the northeast unseasonably dry” Benson Quinn Commodities said.
“This potentially has some legs to it as the growing season moves into more critical stages.”
‘Fundamentals remain negative’
However, Chicago wheat for March eased 0.2% to $4.86 a bushel, continuing to feel pressure from ideas of ample world supplies.
“The features in these markets don’t change,” said Benson Quinn Commodities.
“Fundamentals remain negative, which should continue well into 2016.”
And the weekly US regulatory data from the CFTC showed hedge funds having already cut a large stack of their net short on Chicago wheat futures and options, taking in 22,773 lots lower week on week to 48,207 lots, potentially limiting the appetite for further decreases.
“Given the lack of fundamental support, these fund positions look very manageable,” Benson Quinn said.
Sugar slowdown
In New York, raw sugar for March gained 0.5% to 15.18 cent a pound despite Chinese data showing a drop of 14.5% to 259,987 tonnes in imports last month.
However, there is an idea among many investors that this was down to import restrictions rather than slow demand, and does not represent the start of a significant downturn in import volumes which would undermine world values.
China’s coffee imports were down 3.9% year on year at 5.28m tonnes, and cocoa imports down 69% at just 726 tonnes.
- See more at: http://ingredientnews.com/articles/china-data-help-ags-defy-oil-price-tumble/#sthash.sikXkv8j.dpuf
While the two are seen as historically being positively correlated, a reflection of the use of vegetable oils in making biodiesel, they were heading in totally different directions on Monday.
Brent crude dropped more than 2% at one point to $36.05 a barrel, taking out its low on Christmas Eve 2008 to reach levels not seen since 2004.
(Brent has now dropped nearly 40% so far in 2015, and more than 15% since an Opec meeting earlier this month which failed to back production cuts.)
However, in Chicago, soyoil for March rose 1.1% to 31.11 cents a pound as of 09:45 UK time (03:45 Chicago time), rising back above its 200-day moving average.
And in Kuala Lumpur, palm oil soared 1.9% to 2,448 ringgit a tonne, earlier hitting 2,457 ringgit a tonne, the highest for a benchmark contract since late September.
An extra 3 ringgit, and it would have matched its highest since June last year.
Dryness concerns
The strength reflects in part the ongoing concerns that El Nino will, in bringing dryness to South East Asia, cause a drop in palm oil output, with the impact on production typically lagging a few months behind when the lack of rainfall actually occurs.
However, there was some better, or at least less dismal, news on Malaysian exports too, with cargo surveyor ITS reporting shipments so far this month at 728,421 tonnes, a tumble of 25% from the same period of November.
Nonetheless, that implies some recent pick-up, with the pace of decline as of December 15 at 36%.
Chinese imports
Nor were monthly import data for China, a huge buyer of vegetable oils, so downbeat either, with volumes for palm oil in November at 462,528 tonnes.
Although a drop of 2.9% year on year, the pace of imports for 2015 as a whole remained definitely positive, up 11.2% at 5.24m tonnes.
The data were certainly received bullishly in China itself, where palm oil for May, the best-traded contract, closed up 2.5% at 4,614 yuan a tonne on the Dalian exchange.
Chinese imports of soyoil were, at 90,984 tonnes in November, up nine-fold year on year and bucking a downward trend.
Imports for 2015 a whole were still down 27% at 802,144 tonnes.
Rapeseed oil imports were higher too, up 31% at 106,177 tonnes for the month, again against the 2015 trend, with buy-ins for the first 11 months of the year down 8.9% at 708,523 tonnes.
‘Concerns of crop losses’
And there was the broader support to the oilseed complex too to factor in from South America, which has for so long been a weight on values.
In Brazil, worries over northern dryness, which helped lift soybean prices on Friday, remain alive.
“Northern Brazil remains dry, stirring concerns of crop losses without moisture over the next few weeks,” said CHS Hedging, noting that “we are embarking on their critical stage for promoting big yields”.
Benson Quinn Commodities said: “South American weather is beginning to draw some of the trade’s attention considering the emergence of dried conditions across northern areas of Brazil ahead of the more critical growing stages.”
Argentine question
And, from Argentina, the idea of a wave of selling by farmers, now that crop export taxes and restrictions have been removed or reduced and the peso liberated and depreciated, have not been realised – yet – either.
Certainly, plenty of caution remains over Argentine farmers’ intentions.
“Any sign of Argentine producer selling will cap the rally with market estimating the Argentine is sitting on 10m-15m tonnes of the 30m tonnes of Argentine stocks,” Minnesota-based Benson Quinn Commodities said, viewing the last session’s soybean rally as something of a selling opportunity.
“The US producer needs to reward this price move with a little bit of selling.”
Peso performance
But signs of huge crop selling have so far not been detected, with CHS highlighting particularly a lack of sales in corn and wheat, flagging “no sign of Argentine corn heading to market with the elimination of their corn export tax”.
It may be that farmers are waiting to see how the peso performs, after being liberated last Thursday, when it plunge to close at 13.3065 to $1, from 9.8144 to $1 previously, under the old regime of currency controls.
(Growers hoarded crops largely as a hedge against a falling peso.)
However, the peso has stabilised since, standing early on Monday at 13.13 to $1, little changed on Friday’s close.
Price rises
In Chicago, soybeans themselves for March were 0.2% higher at $8.94 ½ a bushel, comfortably above their 100-day moving average, which they regained in the last session.
It may have helped that regulatory data late on Friday showed hedge funds having already rebuilt a decent net short position, up more than 18,000 lots week on week at nearly 30,000 lots.
Canola was dragged higher too, adding 0.2% to Can$485.50 a tonne in Winnipeg for March delivery.
While China’s imports of the rapeseed variant tumbled in November by 26% year on year, to 374,902 tonnes, canola, as an oilseed high in vegetable oil rather than meal, took particular succour from the firmness in the likes of palm oil.
Furthermore, estimates from Canada’s farm ministry, AAFC, forecast Canadian canola stocks falling by 25% in 2015-16, rather than the increase that the US Department of Agriculture has pencilled in.
DDGS dispute
Back in Chicago, corn was higher too, up 0.3% at $3.75 ¾ a bushel for March delivery, despite the fall in oil, which is important as a huge amount of the grain is used to make ethanol, and soft Chinese import data too.
Chinese imports of corn last month were, at 18,674 tonnes, down 93% year on year, a figure likely to underline ideas that feed users are turning to domestic supplies instead, now that subsidy reforms have allowed values to fall.
And while imports of distillers’ grains (DDGS) soared 142% to 464,959 tonnes, that could be viewed as an attempt to stock up on the corn-derived feed ingredient ahead of measures to clamp down on buy-ins.
The US embassy in Beijing was told last week that China had accepted a petition from Chinese DDGS producers seeking anti-dumping duties on imports from the US.
‘Concerns growing’
Still, on the more positive side for corn, Chinese imports of ethanol last month soared to 135,865 tonnes, from just 26 tonnes in November 2014.
And most – 84,102 tonnes – came from the US, ahead of the 46,712 tonnes from Brazil, which makes its ethanol from sugar cane.
And for corn too, the Brazilian dryness is beginning to raise worries as the pollination period approaches.
“There is some concerns growing in respect to conditions in Brazil with areas of the northeast unseasonably dry” Benson Quinn Commodities said.
“This potentially has some legs to it as the growing season moves into more critical stages.”
‘Fundamentals remain negative’
However, Chicago wheat for March eased 0.2% to $4.86 a bushel, continuing to feel pressure from ideas of ample world supplies.
“The features in these markets don’t change,” said Benson Quinn Commodities.
“Fundamentals remain negative, which should continue well into 2016.”
And the weekly US regulatory data from the CFTC showed hedge funds having already cut a large stack of their net short on Chicago wheat futures and options, taking in 22,773 lots lower week on week to 48,207 lots, potentially limiting the appetite for further decreases.
“Given the lack of fundamental support, these fund positions look very manageable,” Benson Quinn said.
Sugar slowdown
In New York, raw sugar for March gained 0.5% to 15.18 cent a pound despite Chinese data showing a drop of 14.5% to 259,987 tonnes in imports last month.
However, there is an idea among many investors that this was down to import restrictions rather than slow demand, and does not represent the start of a significant downturn in import volumes which would undermine world values.
China’s coffee imports were down 3.9% year on year at 5.28m tonnes, and cocoa imports down 69% at just 726 tonnes.
- See more at: http://ingredientnews.com/articles/china-data-help-ags-defy-oil-price-tumble/#sthash.sikXkv8j.dpuf
