MARKET DEVELOPMENT
VEGOILS-Palm Oil Slips to 1-Week Low on Bearish USDA Data
VEGOILS-Palm Oil Slips to 1-Week Low on Bearish USDA Data
12/04/2013 (Reuters) - Malaysian palm oil futures fell to the lowest in more than a week on Thursday, tracking weaker soy markets after a key U.S. industry report showed higher-than-expected global soybean stockpiles.
The U.S. Department of Agriculture (USDA) pegged quarterly global soybean stocks above trade estimates, putting soybeans and soybean oil under pressure. Palm oil tends to track soybean oil closely as they are substitutes for each other.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange fell 0.7 percent to close at 2,355 ringgit ($776) per tonne. Prices dropped to a low at 2,340 ringgit earlier in the session, a level last seen on April 1.
Total traded volumes stood at 32,041 lots of 25 tonnes each, lower than the average 35,000 lots seen so far this year.
Traders, however, expect palm oil to draw support from robust export demand and lower-than-expected inventory levels.
"On the local bourse, we are witnessing some technical inspired selling. But with lower end-stocks and better exports, we believe the market's well supported," said a trader with a local commodities brokerage in Malaysia.
The Malaysian Palm Oil Board (MPOB) on Wednesday reported an inventory level for March at 2.17 million tonnes, below a Reuters poll's consensus of 2.35 million tonnes, as exports rose as much as 10 percent on a monthly basis.
"We believe this should have been due to the higher than expected demand recovery in China as the temperature turned warmer in March," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, in a note to clients on Thursday.
Cargo surveyor data showed exports also edged higher for the first 10 days of April from a month ago, raising hopes that stocks could ease further and dip below 2 million tonnes by the end of this month.
"Looking ahead, we believe that the stock level could fall ... to 1.98 million tonnes by end of April," Lim said.
In other markets, Brent crude oil slipped towards $105 per barrel after U.S. crude oil stocks hit their highest level in more than two decades and analysts cut forecasts for global oil demand growth.
The slightly bearish USDA data dragged other vegetable oil markets lower as well. U.S. soyoil for May delivery fell 0.6 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange closed 1.4 percent lower.
Palm, soy and crude oil prices at 1003 GMT.
Contract Month Last Change Low High Volume
MY PALM OIL APR3 2300 -38.00 2300 2300 2
MY PALM OIL MAY3 2343 -17.00 2330 2365 1961
MY PALM OIL JUN3 2355 -16.00 2340 2379 15379
CHINA PALM OLEIN SEP3 6292 -76.00 6288 6392 590408
CHINA SOYOIL SEP3 7850 -114.00 7850 7976 736408
CBOT SOY OIL MAY3 49.71 -0.32 49.67 50.15 6307
NYMEX CRUDE MAY3 94.56 -0.08 94.13 94.64 15336
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=3.034 ringgit)
The U.S. Department of Agriculture (USDA) pegged quarterly global soybean stocks above trade estimates, putting soybeans and soybean oil under pressure. Palm oil tends to track soybean oil closely as they are substitutes for each other.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange fell 0.7 percent to close at 2,355 ringgit ($776) per tonne. Prices dropped to a low at 2,340 ringgit earlier in the session, a level last seen on April 1.
Total traded volumes stood at 32,041 lots of 25 tonnes each, lower than the average 35,000 lots seen so far this year.
Traders, however, expect palm oil to draw support from robust export demand and lower-than-expected inventory levels.
"On the local bourse, we are witnessing some technical inspired selling. But with lower end-stocks and better exports, we believe the market's well supported," said a trader with a local commodities brokerage in Malaysia.
The Malaysian Palm Oil Board (MPOB) on Wednesday reported an inventory level for March at 2.17 million tonnes, below a Reuters poll's consensus of 2.35 million tonnes, as exports rose as much as 10 percent on a monthly basis.
"We believe this should have been due to the higher than expected demand recovery in China as the temperature turned warmer in March," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, in a note to clients on Thursday.
Cargo surveyor data showed exports also edged higher for the first 10 days of April from a month ago, raising hopes that stocks could ease further and dip below 2 million tonnes by the end of this month.
"Looking ahead, we believe that the stock level could fall ... to 1.98 million tonnes by end of April," Lim said.
In other markets, Brent crude oil slipped towards $105 per barrel after U.S. crude oil stocks hit their highest level in more than two decades and analysts cut forecasts for global oil demand growth.
The slightly bearish USDA data dragged other vegetable oil markets lower as well. U.S. soyoil for May delivery fell 0.6 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange closed 1.4 percent lower.
Palm, soy and crude oil prices at 1003 GMT.
Contract Month Last Change Low High Volume
MY PALM OIL APR3 2300 -38.00 2300 2300 2
MY PALM OIL MAY3 2343 -17.00 2330 2365 1961
MY PALM OIL JUN3 2355 -16.00 2340 2379 15379
CHINA PALM OLEIN SEP3 6292 -76.00 6288 6392 590408
CHINA SOYOIL SEP3 7850 -114.00 7850 7976 736408
CBOT SOY OIL MAY3 49.71 -0.32 49.67 50.15 6307
NYMEX CRUDE MAY3 94.56 -0.08 94.13 94.64 15336
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=3.034 ringgit)