09 May 2008 22:30 [Source: ICIS news]
“It’s crazy right now – very complex,” one glycerine and alcohol trader said.
Another trader said strategies for securing positions on future months were becoming increasingly difficult because of the uncertainties in the soybean and vegoil commodity markets.
Such comments were in part fostered by the release of US Department of Agriculture (USDA) oilseeds data on world markets and trade.
According to the USDA,
However, the 2007-08 carry-over was described by USDA as being well below normal.
The lower carry-over amount was expected to significantly reduce the impact that the larger 2008 crop would have on the overall
The department said the carry-over was down to 4m tonnes, offering scant cushion against a
According to the USDA, soybean stock harvested for supply and distribution in 2007-08 was about 70,358m tonnes. This compared to a 2006-07 stock of about 86,770m tonnes of production.
A number of oleochemical products rely upon soybean oil as feedstock, including fatty alcohols and fatty acids, thereby also affecting co-product glycerine.
One example was short-chain C8-10 natural alcohols, where contract prices were assessed at an average of 127.50 cents/lb in January this year by global chemical market intelligence service
US refined vegetable glycerine contract averages spiked about 20 cents/lb during the same period, moving from a 70.5 cent/lb
Kosher and vegetable glycerine supply shortages forced the price hikes, sources said.
Those shortages in part were caused by a collapse in soybean oil-based biodiesel production due to high feedstock bean oil costs. Escalating prices in the closely related Asian export market, fostered by swiftly rising soybean oil prices and other oil costs, also played a role.
($1 = €.65)
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