Flood damage for corn and soya crops in U.S. midwest is good news for crude palm oil (CPO) prices, says Credit Suisse. "The crop damage in the U.S. could become a big positive catalyst for oilseed and vegetable oil prices," says broker. Notes U.S. is world's largest producer of corn and soya, too late to replant corn crop that has been destroyed. Adds, continued strength in crude oil prices, falling vegetable oils stock-to-use ratio, strikes in Argentina hitting soybean exports also positive for CPO prices. But says rising Malaysian palm oil inventories is a potential negative. Maintains Overweight call on Asian palm oil sector with Indofood Agri (5JS.SG) a top pick; rates Outperform with S$3.40 target. Indofood Agri shares closed +2.1% at S$2.42 yesterday.
Bad for
Corn - China Sun, Luzhou
Soya - Celestial, Pine Agritech
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