MARKET DEVELOPMENT
VEGOILS-Palm Oil Inches up, Falling Exports Cap Gains
VEGOILS-Palm Oil Inches up, Falling Exports Cap Gains
01/05/2013 (Reuters) - Malaysian palm oil futures edged higher on Tuesday after a near 2 percent loss the previous day, but gains were limited by falling exports and investor caution ahead of a holiday.
Malaysian exports of palm oil products dropped 4.3 percent to 1,305,120 tonnes in April from a month ago, cargo surveyor Intertek Testing Services said on Tuesday.
Trading was subdued as investors avoided taking positions ahead of the Labour Day holiday on Wednesday, with the market shifting its focus to Malaysia's palm stocks level in April.
"The market is stagnant ahead of the holiday tomorrow and the exports were no surprise," said a dealer with a foreign commodities brokerage in Kuala Lumpur.
"Production numbers will be eyed. Stocks will likely be marginally lower and that could pressure prices as people are expecting a sharper drop."
By the market close, the benchmark July contract on the Bursa Malaysia Derivatives Exchange had gained 0.6 percent to 2,286 ringgit ($752) per tonne, supported by bargain-hunting after prices fell as much as 2.4 percent the day before.
Total traded volumes were thin at 27,106 lots of 25 tonnes each compared to the average 35,000 lots a day seen so far this year.
Technicals showed palm oil is expected to revisit its April 26 high of 2,334 ringgit per tonne, said Reuters market analyst Wang Tao.
With exports slowing compared to a month ago, investors are now turning their hopes to near-stagnant production to help cut stockpiles in Malaysia. Inventory at the world's second-largest producer of the edible oil stood at 2.17 million tonnes in
March, down from February's 2.43 million tonnes.
Export demand may take a further hit as Indonesia's move to slash its crude palm oil export tax to 9 percent in May from April's 10.5 percent could hurt Malaysia's price
competitiveness, analysts said.
"Even though (Indonesia's tax) is still higher than the 4.5 percent imposed by the Malaysian government, the cut ... heightened concerns that palm oil stocks may remain high," Malaysia's Affin Investment Bank said in a note to clients on Tuesday.
In other markets, Brent oil fell towards $103 per barrel on Tuesday, weighed by worries about the demand outlook, though losses were capped on hopes that the U.S. Federal Reserve and European Central Bank may do more to stimulate the global
economy.
In vegetable oil markets, U.S. soyoil for July delivery edged up 0.1 percent in late Asian trading. The Dalian Commodities Exchange is closed for Labour Day and will only
resume trading on Thursday.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY3 2270 +22.00 2240 2275 147
MY PALM OIL JUN3 2283 +1.00 2270 2307 1874
MY PALM OIL JUL3 2286 +13.00 2270 2302 12831
CBOT SOY OIL JUL3 49.57 +0.06 49.38 49.69 4485
NYMEX CRUDE JUN3 94.52 +0.02 94.19 94.62 13532
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=3.042 ringgit)
Malaysian exports of palm oil products dropped 4.3 percent to 1,305,120 tonnes in April from a month ago, cargo surveyor Intertek Testing Services said on Tuesday.
Trading was subdued as investors avoided taking positions ahead of the Labour Day holiday on Wednesday, with the market shifting its focus to Malaysia's palm stocks level in April.
"The market is stagnant ahead of the holiday tomorrow and the exports were no surprise," said a dealer with a foreign commodities brokerage in Kuala Lumpur.
"Production numbers will be eyed. Stocks will likely be marginally lower and that could pressure prices as people are expecting a sharper drop."
By the market close, the benchmark July contract on the Bursa Malaysia Derivatives Exchange had gained 0.6 percent to 2,286 ringgit ($752) per tonne, supported by bargain-hunting after prices fell as much as 2.4 percent the day before.
Total traded volumes were thin at 27,106 lots of 25 tonnes each compared to the average 35,000 lots a day seen so far this year.
Technicals showed palm oil is expected to revisit its April 26 high of 2,334 ringgit per tonne, said Reuters market analyst Wang Tao.
With exports slowing compared to a month ago, investors are now turning their hopes to near-stagnant production to help cut stockpiles in Malaysia. Inventory at the world's second-largest producer of the edible oil stood at 2.17 million tonnes in
March, down from February's 2.43 million tonnes.
Export demand may take a further hit as Indonesia's move to slash its crude palm oil export tax to 9 percent in May from April's 10.5 percent could hurt Malaysia's price
competitiveness, analysts said.
"Even though (Indonesia's tax) is still higher than the 4.5 percent imposed by the Malaysian government, the cut ... heightened concerns that palm oil stocks may remain high," Malaysia's Affin Investment Bank said in a note to clients on Tuesday.
In other markets, Brent oil fell towards $103 per barrel on Tuesday, weighed by worries about the demand outlook, though losses were capped on hopes that the U.S. Federal Reserve and European Central Bank may do more to stimulate the global
economy.
In vegetable oil markets, U.S. soyoil for July delivery edged up 0.1 percent in late Asian trading. The Dalian Commodities Exchange is closed for Labour Day and will only
resume trading on Thursday.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY3 2270 +22.00 2240 2275 147
MY PALM OIL JUN3 2283 +1.00 2270 2307 1874
MY PALM OIL JUL3 2286 +13.00 2270 2302 12831
CBOT SOY OIL JUL3 49.57 +0.06 49.38 49.69 4485
NYMEX CRUDE JUN3 94.52 +0.02 94.19 94.62 13532
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=3.042 ringgit)