6 de noviembre de 2014 / 7:49 / en 3 años

Dalian vegoil futures undervalued, Chinese vegoil stocks too low - Mistry

* Dalian futures undervalued vs cash market - top analyst Mistry

* Chinese soy crush margins to improve

* Indian vegetable oil imports to hit record 12.3 mln T 2014/2015

* Palm oil price to go above 2,500 ringgit after March

By Anuradha Raghu

Nov 6 (Reuters) - Vegetable oil futures on the Dalian Commodity Exchange (DCE) are undervalued against the cash market as they do not reflect doubts over U.S. carry-over stocks, deterring imports into China, the world’s No.2 consumer, industry analyst Dorab Mistry said.

The U.S. Department of Agriculture may have overestimated the crop acreage in the United States, Mistry said, meaning the estimated carry-over for U.S. soybeans could drop to 350 million bushels from 500 million.

That possibility had not been taken into account by Chinese traders, he told an oils and oilseeds conference in Guangzhou on Thursday.

“If 100 to 150 million bushels are taken away ... it can make a difference of 10 to 15 percent to prices,” he said. “DCE futures are too low and do not adequately reflect this risk.”

The most active soybean oil contract on the Dalian exchange has tumbled about 18 percent so far this year, with January at 5,856 yuan ($958) per tonne, versus Dalian cash prices BO-EXFDLN-STD of around 6,000 yuan.

Higher futures versus cash prices would indicate increased demand for the edible oil.

Mistry also said that imported vegetable oil stocks in China, especially palm oil, were “too low at present”, and that prices of Dalian refined, bleached and deodorised palm olein futures had to rise to facilitate more imports of the oil.

Customs data shows China imported around 3.94 million tonnes of palm oil products from Malaysia and Indonesia in the year to September, 10 percent less than in the same period a year before, and about 1 million tonnes of soyoil.

Edible oil imports to India, the world’s top buyer, will hit a record 12.3 million tonnes in the 2014/2015 oil year, Mistry forecast, with purchases of palm seen rising 13 percent to 8.75 million tonnes.

“India will import larger tonnages of crude palm oil and that will bring palm back into favour with Indian refiners.”

Mistry also sees Chinese crush margins improving in coming months due to lower soybean prices than a year before.

China’s National Grain and Oils Information Centre expects monthly soybean imports to jump around 38 percent to 5.81 million tonnes in November and then to 6.8 million tonnes in December as Chinese buyers race to secure cheap supplies from a massive U.S. harvest.

Analysts estimate crush margins stand at about 200 yuan ($32.7) for processing a tonne of soy into soymeal and soyoil, versus losses of about 500 yuan in the first half of the year.

“I believe the worst is over for oilseed farmers, for plantations and for crushers and processors,” Mistry said.


Mistry, who heads the vegetable oil trading arm at India’s Godrej Industries, kept his forecast that crude palm oil (CPO) futures had bottomed out and would rise to around 2,500 ringgit by March as output begins to drop and stocks ease.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange traded around 2,273 ringgit per tonne ($679) on Thursday, having shed some of its gains from Monday’s near-four-month high of 2,345 ringgit.

Mistry said palm prices were unlikely to return to the Sept. 2 low of 1,914 ringgit between now and mid-2015 unless there is an unexpected surge in South American soybean crops or palm output, or financial markets crash and drag commodities down.

“Looking ahead beyond March 2015, I expect vegetable oil prices to keep up a gradual improvement,” he said.

“Palm oil stocks will be lowest around June 2015. In anticipation of that, it is likely that CPO prices will comfortably exceed 2,500 ringgit.”

He kept his projection that Malaysia, the world’s No.2 palm grower, would produce between 19.6 million and 19.8 million tonnes of crude palm oil this year, while top grower Indonesia may at best produce 30 million tonnes, versus 19.2 million and 26 million respectively in the previous crop year.

1 US dollar = 3.345 Malaysian ringgit 1 US dollar = 6.1126 Chinese yuan Reporting by Anuradha Raghu in Kuala Lumpur; Editing by Alan Raybould

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