By FWi staff
WITH the possible impact of the meat and bonemeal (MBM) ban now built into prices, markets retreated into a quiet pre-Christmas mood, revisiting the more bearish fundamentals.
The US Department of Agriculture (USDA) report confirmed increased use of US and South American soyameal and soyabeans this season in the EU, but also reminded markets about large, bearish global vegetable oil stocks.
Prices were generally weaker last week with palm oil losing $8-12. MATIF and delivered rapeseed prices were also lower.
A stronger Euro and Pound against the US Dollar added to the price pressure.
Despite higher meal prices, EU rapeseed crush margins remain weak. Reports indicate a shift to crushing soyabeans instead.
International: USDA report bullish – and bearish
IN its December supply and demand report, the USDA revised – as expected – this seasons US soyabean and soyameal export projections higher, and closing stocks lower.
China and the EU are envisaged as main export destinations.
The EU MBM ban is estimated to increase total EU soyabean and soyameal import requirements to 0.9m and 0.5m tonnes respectively.
A large proportion is expected to be supplied by the USA.
While this was rated as positive, a surplus of soya oil is expected to limit the profitability of soyabean processing.
Global oversupply of vegetable oils may limit price rises.
2000 in brief
What was bullish:
- EU rapeseed crop at 9.2m, well below last year;
- GM rapeseed unintentionally grown in the EU, with some 4700ha in the UK destroyed;
- Chinas large soyabean imports support markets;
- EU MBM ban increases meal import requirement;
- Weak euro helped EU oilseed prices
What was (and still is) bearish:
- Weak EU crush margins reduce seed processing;
- Ample global vegetable oil supplies pushes palm oil prices to seven-year lows;
- India raised vegetable oil import duties three times.
Taken from HGCA weekly MI Oilseeds