Soybean Outlook Nov 30 - Dec 4 2009

A survey from the China National Grains and Oils Information Centre indicates that China import demand is likely to slow over the near-term as the market absorbs big US supply flow for the next several months.

On the other hand, there is also news out of China that the country will start stockpiling soybeans purchased from producers beginning December 1st and lasting through April. This is a similar program to last year and China will pay producers 1% higher than last year to secure inventory.

In addition, the European Union is expected to approve the import of GMO's in the next few days which could cause a resumption of large-scale imports of US soybeans and meal as early as December. European buying may help offset some of the slowdown in China buying of US soybeans as traders believe China has already booked US soybeans through March and future needs would be met by South America.

Oil stocks were below expectations at 2.727 billion pounds which may have helped support the oil market.

For soybeans (Grain Weekly Analysis November 25, 2009), the market seems to have mostly digested the harvest pressure and is poised to see some seasonal strength.

Dubai Chills Send World In Shockwave

RBD palm olein and soyoil tumbled in Dalian Commodity Exchange. Hang Seng was down by the range of 1000 points. It's all in big numbers, just that the color is red. All these sudden shockwave due to Dubai Chills.

Rubber Tumble On Yen Surge

(Bloomberg) -- Rubber fell for the first time this week as a rally by the Japanese currency weakened the appeal of yen-denominated contracts and crude oil’s slump cut the cost of making rival synthetic products used in tires.

China to Buy More Domestic Soybeans to Boost Farmers

(Bloomberg) -- China, the world’s largest soybean buyer, will purchase the oilseed and corn from the domestic market to boost farm incomes, the National Development and Reform Commission said today.

The government will start the purchases from northeastern areas on Dec. 1, 2009 and continue through April 30, 2010, the commission said in a statement on its Web site. A one-off subsidy of 160 yuan ($23) per metric ton will also be offered to crushers to purchase local beans, it said.

The government bought more than 6 million tons of soybeans earlier this year to help boost local prices at a time when the global recession threatened to reduce farm incomes.

“After approval from the state council, the work of purchasing grains from the northeastern regions will protect the interests of farmers and promote the steady development of grain production,” the statement said.

The purchases will be made in Inner Mongolia and the provinces of Liaoning, Jilin and Heilongjiang, it said the statement dated Nov. 13.

China relies mostly on imports to meet its soybean needs, with consumption estimated at more than 54 million tons this year and domestic supply at 14.5 million tons, according to the U.S. Department of Agriculture.

The government has made maintaining social stability a key policy aim and Beijing has bought commodities including corn and soybeans from farmers this year to help bolster rural incomes and lift grain output.

Imports in December may be more than 4 million tons with shipments in November expected to be about 3 million tons, the China National Grain & Oils Information Center said Nov. 24.

A record 73.787 million bushels of U.S. supplies were inspected for export in the week ended Nov. 19, with China accounting for 78 percent of the total, the U.S. Department of Agriculture said.

China’s soybean imports fell for a fourth month in October to 2.52 million tons, according to the customs office. Imports have dropped since reaching a record 4.71 million tons in June.

Dubai Chills

Dubai banking crisis is set to send some chills down Malaysian investors' spine when market opens again on Monday after an extended weekend holiday.

Adapt and Survive

It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.

Charles Darwin

Price Evaluation FCPO 20091126

On the daily chart, price tested the old high of 2521. Price then retraced to settle at 2482. Volume was relatively high.If price breaches 2521 convincingly, expect more speculative buying into the market.

On the weekly chart, parabolic SAR had signaled to turn long and price had also been punching the top band of the Bollinger band.

Indonesia Palm Oil Export Tax Remain Zero

Indonesia will retain its zero percent tax on crude palm oil exports in December.

Making Mistakes

He who makes no mistakes, makes no progress. But the person who keeps making the same mistakes also makes no progress.

China To Import More

(Reuters) - China will retain its huge appetite for soy imports next year, and shipments may even eclipse this year's record, thanks to Beijing's pledge to keep shoring up local prices and a pick-up in soymeal demand.

Rising imports are already evident as the world's biggest soy importer has taken advantage of a record U.S. harvest to book 15.84 million tonnes of new U.S. soy, nearly twice as much as the 8.28 million tonnes booked by this point in 2008, U.S. Department of Agriculture figures show.

Palm Oil Inventory To Decline

(Reuters) - Palm oil stocks in Indonesia and Malaysia will drop around 500,000 tonnes to 3.5 million tonnes by the end of the year as strong Asian demand outpaces production hit by rains, traders said on Tuesday.

Stocks in the world's top two producers of the vegetable oil are set to come down by half a million tonnes in a matter of five weeks as big buyers China and India keep on purchasing palm oil that holds a $140 a tonne discount to rival soyoil.

Palm oil's discount usually stands at $40-50 a tonne in the last three months to the soyoil once the U.S. soybean harvests comes in, trade data showed.

Rainy weather in Malaysia hitting palm oil output will also contribute to the decline in stocks, said Malaysian, Singaporean and Indonesian traders.

More Rain Expected

More rain is expected until Saturday by the Meteorological Department and this is expected to continue to slow down harvesting of palm oil, disrupt some supply chain and prolong the moisture of the soil which may result in yield reduction. A prolong harvesting issue may eat up some of the record inventory recorded last month (October).

It's Like Robbing A Bank

The perfect speculator must know when to get in; more important he must know when to stay out; and most important he must know when to get out once he's in

A Note On Palm Oil During Winter Time

• It's uncommon for both China and Europe to buy more palm oil in winter, because palm oil tends to turn into a solid in cold weather earlier than other vegetable oils.
• Many producers and exporters are expecting December palm oil exports to be weak, as major vegetable oils buyers would generally have locked in their requirements through January.
  

Trading As A Business

You approach your trading as a business, making note of what you buy or sell and why in the same matter-of-fact way that you balance your checkbook. By not personalizing your trading decisions, you're able to look forward to making them.

China's Import Data Up To October

China's General Administration of Customs Monday confirmed October crude oil imports reached 19.3 million metric tons, close to 4.56 million barrels a day, up 20% from a year earlier.

China's soybean imports in October rose 18% on year to 2.52 million metric tons, the General Administration of Customs said Monday.

Fear Drives Market

There is only one thing that moves the market: fear. Whether it’s a fear of losing money or a fear of missing out on making money, the simple fact is that fear is the main driver for traders.

Here are 3 ways to move beyond your fear:

1. Get over yourself -- As a trader, you need to accept the reality that you are always missing out on some trade somewhere. The markets were here long before you began trading and will be here long after you’ve retired to your quiet little island getaway.
2. Know your strengths -- Instead of chasing current hot markets (commodities) or styles (technicals) know what your competitive advantage is and stick to it.
3. Know your job -- Contrary to popular opinion, a trader's job is not to make money. That’s the market’s job.
   

Rather, your job is to do the following:

• Figure out your competitive advantage.
• Execute that advantage when it appears.
• Manage risk as the market moves.

Do your job and you won’t have to worry about chasing the market because you're afraid to miss out.

--CNBC

Chinese Proverb

Fish see the bait, but not tile hook; men see tile profit, but not the peril

FCPO Closes On 27 Nov

Market in Malaysia will close Friday for national holidays.

Soybean At Three Month High

(Bloomberg) -- Soybeans rose to the highest in more than three months on speculation that demand will be sustained from China, the world’s largest buyer.

U.S. exporters sold 1.35 million tons of soybeans in the week ended Nov. 12, 58 percent more than the previous four-week average, the U.S. Department of Agriculture said yesterday. Prices of the oilseed may gain 20 percent by March on rising demand for animal feed and cooking oil in China, the U.S. Soybean Export Council said Nov. 18.

“We’re certainly very long on soybeans,” Jonathan Barratt, managing director at Commodity Broking Services Pty., said. “The demand is certainly there out of China and I think they’re just starting to be felt in their imports and I think that will continue for some time.”