MARKET DEVELOPMENT
VEGOILS-Palm Eases After Hitting Near 2-Week High on Bird Flu Worries
VEGOILS-Palm Eases After Hitting Near 2-Week High on Bird Flu Worries
10/04/2013 (Reuters) - Malaysian palm oil futuresended slightly lower after hitting a near two-week high on Tuesday as fears over the bird flu outbreak in China and its impact on soybean prices outweighed hopes for lower palm inventory in the Southeast Asian nation, the world's No.2 producer.
Industry regulator, the Malaysian Palm Oil Board (MPOB), will on Wednesday report stock levels for March, with a Reuters poll predicting a drop to 2.35 million tonnes from 2.44 million in February.
"The rise in Dalian palm and soy and also the overnight gain in U.S. soy are helping the rally, while traders are also positioning ahead of MPOB data," said Ker Chung Yang, investment analyst with Phillip Futures in Singapore.
"But the rise may be capped due to the bird flu situation in China."
Traders are keeping a close watch on the development of a new strain of bird flu in China, fearing that it could cut demand for soy used in animal feed in the world's top importer of the bean, although the World Health Organization said it was no cause for panic.
Soyoil is a close competitor of palm oil and a fall in soy prices could wean away demand from palm.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange closed 0.2 percent lower at 2,395 ringgit ($789) per tonne. Prices earlier touched a high of 2,419 ringgit, a level last seen on March 28.
Total traded volumes stood at 29,311 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year.
Technicals showed palm oil is expected to rise to 2,440 ringgit, as indicated by a high-low bottom and a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.
Market participants are also looking out for Malaysian palm export data for the first 10 days of April, due on Wednesday. Shipments edged slightly higher for March, the first increase in four months, thanks to higher demand for refined products.
In other markets, Brent crude oil rose above $105 per barrel on Tuesday, rallying from an eight-month low after China's inflation slowed, giving it room to keep monetary policy easy and support oil demand in the \ world's second-biggest consumer.
In vegetable oil markets, U.S. soyoil for May delivery inched up 0.1 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange closed 0.5 percent higher.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR3 0 +0.00 0 0 0
MY PALM OIL MAY3 2384 -8.00 2373 2410 1675
MY PALM OIL JUN3 2395 -5.00 2384 2419 15417
CHINA PALM OLEIN SEP3 6326 +66.00 6298 6358 423328
CHINA SOYOIL SEP3 7930 +40.00 7918 7982 480824
CBOT SOY OIL MAY3 49.58 +0.06 49.42 49.65 8988
NYMEX CRUDE MAY3 93.58 +0.22 93.36 93.82 14376
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.035 ringgit)
Industry regulator, the Malaysian Palm Oil Board (MPOB), will on Wednesday report stock levels for March, with a Reuters poll predicting a drop to 2.35 million tonnes from 2.44 million in February.
"The rise in Dalian palm and soy and also the overnight gain in U.S. soy are helping the rally, while traders are also positioning ahead of MPOB data," said Ker Chung Yang, investment analyst with Phillip Futures in Singapore.
"But the rise may be capped due to the bird flu situation in China."
Traders are keeping a close watch on the development of a new strain of bird flu in China, fearing that it could cut demand for soy used in animal feed in the world's top importer of the bean, although the World Health Organization said it was no cause for panic.
Soyoil is a close competitor of palm oil and a fall in soy prices could wean away demand from palm.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange closed 0.2 percent lower at 2,395 ringgit ($789) per tonne. Prices earlier touched a high of 2,419 ringgit, a level last seen on March 28.
Total traded volumes stood at 29,311 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year.
Technicals showed palm oil is expected to rise to 2,440 ringgit, as indicated by a high-low bottom and a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.
Market participants are also looking out for Malaysian palm export data for the first 10 days of April, due on Wednesday. Shipments edged slightly higher for March, the first increase in four months, thanks to higher demand for refined products.
In other markets, Brent crude oil rose above $105 per barrel on Tuesday, rallying from an eight-month low after China's inflation slowed, giving it room to keep monetary policy easy and support oil demand in the \ world's second-biggest consumer.
In vegetable oil markets, U.S. soyoil for May delivery inched up 0.1 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange closed 0.5 percent higher.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR3 0 +0.00 0 0 0
MY PALM OIL MAY3 2384 -8.00 2373 2410 1675
MY PALM OIL JUN3 2395 -5.00 2384 2419 15417
CHINA PALM OLEIN SEP3 6326 +66.00 6298 6358 423328
CHINA SOYOIL SEP3 7930 +40.00 7918 7982 480824
CBOT SOY OIL MAY3 49.58 +0.06 49.42 49.65 8988
NYMEX CRUDE MAY3 93.58 +0.22 93.36 93.82 14376
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.035 ringgit)