22.01.2008

General
The financial market has start to lose ground since yesterday worldwide. Stock Exchange in Germany lost nearly 7% per day, the highest loss since September 11th, 2007.
Today losses went on in Japan and China, and it is expected that the crisis will further occur.
Banks are still writing down losses due to subprime crisis in the USA.
This nervousness influenced the commodity markets, also agricultural products.
Futures of Palmoil in Kuala Lumpur have lost nearly 5% today.
The overnight session in Chicago for the futures of soy and wheat indicate also big losses today.
Panic sales influence actually the markets.
Fundamentals for agricultural products have not changed. Production of the most important oilseeds is still not enough to fulfil the demand.

7 Oilseeds
World Supply and Demand (Mio. Tn)

Season 07/08* .06/07. 05/06 .04/05 .03/04

Opening Stocks 82,90 73,20 64,90 48,00 53,40
Production 378,40 397,20 383,30 372,10 324,40

Total Supplies 461,30 470,40 448,20 420,10 377,80

Disappearance 400,90 387,50 375,00 355,20 329,80
Ending Stocks 60,40 82,90 73,20 64,90 48,00

Stock/Usage ** 15% 21% 20% 18% 15%
* Forecast
** Stocks in % of annual disapperance
Source: USDA
Ending stocks by the end of crops season 2007/2008 will be reduced by nearly 27% compared to last year. This is the sharpest decrease ever seen. The production of the 7 Oilseeds is expected to be down by nearly 19 Mio tons compared to last season, mainly to lower production of soybeans and sunflower seed. The Production of sunflower seed is expected to decrease by nearly 3 Mio tons.
Fight for acres is expected to be very hard as both stocks for oilseeds and grains are at lowest levels.
This will have increasing impact on prices.
Strong demand remains from China and India.
Also stocks of oils become tight despite the fact that production of palm oil is increasing sharply.
Exchange RatePoor prospects on economic growth in Europe made the US-$ firmer compared to Euro.

Crude Mineral Oil
Turmoil in the financial sector led to big losses in crude mineral oil.

Palm Oil
Palm Oil futures corrected sharp in Kuala Lumpur due to nervousness in the financial sector and fell to a two weeks low.
Profit taking and liquidation of positions were the reason.

Coconut- and Palmkernel Oil
Prices of coconut and palmkernel oil fell also due to the financial crisis from their record levels. .

Rape Oil and Sun Oil

Prices for Rape Oil and Sunoil remain at record levels, despite yesterday´s and today´s corrections.

Rapeseed supplies will be tight this and next season due to lower production and stocks. Sunoil remaines at record levels as relief from Argentina will not come as expected. Demand for sun oil remains very high.