MARKET DEVELOPMENT
VEGOILS-Palm Hits 2-Month High on Stock Drawdown Hopes
VEGOILS-Palm Hits 2-Month High on Stock Drawdown Hopes
07/06/2013 (Reuters) - Malaysian palm oil futures rose to the highest in more than two months on Thursday, buoyed by optimism that stocks of the tropical oil in the world's second largest producer could have dropped in May.
A Reuters survey on Wednesday showed that end-stocks in Malaysia may have eased to 1.78 million tonnes last month, their lowest in almost a year, as exports and domestic consumption offset near-stagnant production.
Investors are now awaiting official stocks and output data scheduled to be released by industry regulator the Malaysian Palm Oil Board (MPOB) on Monday for more trading cues. Export data for the first ten days of June will also be announced on the same day.
"Today the market is supportive because of the follow through from Wednesday's gains -- now there's expectations that stocks would fall below 1.8 million tonnes," said a trader with a foreign commodities brokerage.
"Traders are waiting for next week's MPOB report and export data. Exports in June 1-10 should be around 400,000 tonnes, slightly better than May 1-10, as we move into the festive month," the Kuala Lumpur-based trader added, referring to the Muslim holy month of Ramadan, which begins in July this year.
At market close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange rose 1.3 percent to 2,434 ($790) ringgit per tonne, slightly below its intraday high at 2,436 ringgit, its loftiest since March 27.
Total traded volumes stood at 28,268 lots of 25 tonnes each, thinner than the average 35,000 lots as traders stayed on the sidelines ahead of next week's data.
Technicals showed palm oil faces resistance at 2,420 ringgit per tonne, a break above which will lead to a further gain towards 2,457 ringgit, Reuters market analyst Wang Tao said.
Palm oil is on track to post its fifth straight weekly gain, after prices in May climbed nearly 5 percent due to restocking ahead of Ramadan, despite weaker demand from the world's second biggest buyer China. Communal feasting during Ramadan typically drives up edible oil consumption.
Prices of the edible oil have also been supported by a steady decline in stocks, from a record high of 2.63 million tonnes in December, as seasonally weaker production in the first half of the year helped offset sluggish exports.
In other markets, Brent edged further above $103 a barrel as a drop in U.S. oil stocks and news of lower Iranian exports outweighed worries that the U.S. Federal Reserve may scale back its economic stimulus.
In vegetable oil markets, U.S. soyoil for July crept up 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange ended almost unchanged.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN3 2390 +21.00 2355 2390 1
MY PALM OIL JUL3 2424 +29.00 2377 2424 2460
MY PALM OIL AUG3 2434 +31.00 2389 2436 15053
CHINA PALM OLEIN SEP3 6166 +80.00 6072 6186 509870
CHINA SOYOIL SEP3 7410 -2.00 7346 7436 581864
CBOT SOY OIL JUL3 48.38 +0.08 48.16 48.40 5180
NYMEX CRUDE JUL3 94.24 +0.50 93.69 94.39 19829
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=3.082 ringgit)
A Reuters survey on Wednesday showed that end-stocks in Malaysia may have eased to 1.78 million tonnes last month, their lowest in almost a year, as exports and domestic consumption offset near-stagnant production.
Investors are now awaiting official stocks and output data scheduled to be released by industry regulator the Malaysian Palm Oil Board (MPOB) on Monday for more trading cues. Export data for the first ten days of June will also be announced on the same day.
"Today the market is supportive because of the follow through from Wednesday's gains -- now there's expectations that stocks would fall below 1.8 million tonnes," said a trader with a foreign commodities brokerage.
"Traders are waiting for next week's MPOB report and export data. Exports in June 1-10 should be around 400,000 tonnes, slightly better than May 1-10, as we move into the festive month," the Kuala Lumpur-based trader added, referring to the Muslim holy month of Ramadan, which begins in July this year.
At market close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange rose 1.3 percent to 2,434 ($790) ringgit per tonne, slightly below its intraday high at 2,436 ringgit, its loftiest since March 27.
Total traded volumes stood at 28,268 lots of 25 tonnes each, thinner than the average 35,000 lots as traders stayed on the sidelines ahead of next week's data.
Technicals showed palm oil faces resistance at 2,420 ringgit per tonne, a break above which will lead to a further gain towards 2,457 ringgit, Reuters market analyst Wang Tao said.
Palm oil is on track to post its fifth straight weekly gain, after prices in May climbed nearly 5 percent due to restocking ahead of Ramadan, despite weaker demand from the world's second biggest buyer China. Communal feasting during Ramadan typically drives up edible oil consumption.
Prices of the edible oil have also been supported by a steady decline in stocks, from a record high of 2.63 million tonnes in December, as seasonally weaker production in the first half of the year helped offset sluggish exports.
In other markets, Brent edged further above $103 a barrel as a drop in U.S. oil stocks and news of lower Iranian exports outweighed worries that the U.S. Federal Reserve may scale back its economic stimulus.
In vegetable oil markets, U.S. soyoil for July crept up 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange ended almost unchanged.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN3 2390 +21.00 2355 2390 1
MY PALM OIL JUL3 2424 +29.00 2377 2424 2460
MY PALM OIL AUG3 2434 +31.00 2389 2436 15053
CHINA PALM OLEIN SEP3 6166 +80.00 6072 6186 509870
CHINA SOYOIL SEP3 7410 -2.00 7346 7436 581864
CBOT SOY OIL JUL3 48.38 +0.08 48.16 48.40 5180
NYMEX CRUDE JUL3 94.24 +0.50 93.69 94.39 19829
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=3.082 ringgit)