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Morning markets: China data put a dampener on oilseed prices

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Data arrives in gangs.

The estimates late last week from official Brazilian and US crop forecasters, and United Nations food statisticians, besides the Informa Economics planting data, besides macro data on the likes of Chinese inflation, were not the end of the wave of information.

The weekend bought Chinese trade which were negative on a macro front, showing a trade deficit of $31.5bn last month, blamed on slowing exports to the debt-struck eurozone, and declining imports of some agricultural commodities.

Imports of


fell 16.9%, month on month, to 3.83m tonnes, and of vegetable oils 11.3% to 550,000 tonnes. (Natural


did better, with buy-ins rising 7.1% to 150,000 tonnes.)

Soft exports

Palm oil

had the extra downer of official data showing Malaysian stocks rose 2.0% last month from January, to 2.06m tonnes, when traders had been expecting a decline.

The increase reflected a smaller drop in production than expected, in what is often the month that marks the low-point of the seasonal cycle, and a bigger-than-expected dip in exports, blamed on competition with Indonesia, the top producer and exporter, which has shaken-up its tax regime.

Palm oil fell 0.8% to 3,326 ringgit a tonne in Kuala Lumpur, as of 08:50 GMT, which was a negative sign too for rival vegetable oil


, which lost early gains to stand down 0.3% in Chicago, for May delivery, at 54.13 cents a pound.

Key reversal?


, however, the other major product of soybean processing, managed to hold steady, at $362.70 a short ton, on what is for, the complex as well as meal itself, considered an important day.

The feed, whose prices in Chicago are up some 16% this year - spurred by disappointing soybean crops in Argentina and Brazil, the top meal exporters, and the weaker US corn ethanol production which is sapping demand of rival protein source distillers' grains – suffered a technical setback on Friday.

Mike Mawdsley at Market 1 said: "Meal, which has been leading the soy complex higher since the December low, made an outside day down on Friday," meaning its trade range exceeded that of the previous session, both higher and lower, and it ended posting a negative close.

It was not a so-called "key reversal", a big chart sell-sign, "but close to it," Mr Mawdsley said.

"Should funds decide to sell meal, it should pull soybeans lower."

Spreads unwound

The fact that soymeal was higher helped limit losses in Chicago soybeans despite the data from China, the top buyer of the oilseed. Soybeans for May were 1.25 cents lower at $13.36 ½ a bushel.

But what selling there was helped prop up


, which has often tended to move opposite to the oilseed of late as a result of traders placing, or unwinding, "short corn, long soybean" spreads.

This despite what was generally considered a mildly negative US Department of Agriculture Wasde crop report for corn on Friday, besides Informa Economics lifting again estimates for US spring sowings of the grain, meaning bigger supplies and potentially softer prices.

China order?

Another "despite" is the apparent failure over the weekend for any confirmation of the rumours of Chinese purchases of US corn which ended up lifting the grain in the last session, regardless of Wasde or Informa.

"We could probably be assured that the market will be somewhat disappointed if they come back in here Monday morning and the wires aren't talking up that China did in fact buy corn," Jon Michalscheck at Benson Quinn Commodities said.

Not disappointed yet, anyway.

Corn for May added 0.5 cents to $6.45 ½ a bushel.

'Significant showers and thunderstorms'


resumed its place at the bottom of the Chicago pile, falling 0.4% to $6.40 ½ a bushel, and increasing its newly regained discount to corn.

Rains in needy areas of the US South did not help, with central and eastern Texas receiving "light-to-moderate" precipitation early in the weekend, according to, and with potentially further moisture to come.

"The track upper low over northeast New Mexico, western Oklahoma and the Texas panhandle could end up producing significant showers and thunderstorms or some severe weather in that area March 20-21," the weather service said.

Rains in northern US areas, wanted for spring sowings, looked a bit disappointing.

As an extra negative, Australian data highlighted the huge stocks of grain in store in the southern hemisphere's top exporter, at 25.6m tonnes at the end of last month, up 3.4m tonnes year on year.

And US regulatory statistics showed a huge covering in speculators' net short position in Chicago wheat - so much so that it could remove fear of placing fresh short bets.

India ban lifted

Among soft commodities,


, of which China is also a big importer, fell 0.4% to 23.56 cents a pound in New York, for May delivery.



, of which China is the top importer, fell 0.2% to 88.62 cents a pound.

The price hit a low of 88.00 cents a pound earlier on news that India, the second-ranked exporter, had, after less than a weak, withdrew a ban on shipments which sent New York futures limit up last Monday.


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