MARKET DEVELOPMENT
VEGOILS-Palm Oil Rebounds After Five Straight Losses
VEGOILS-Palm Oil Rebounds After Five Straight Losses
18/07/2013 (Reuters) - Malaysian palm oil futures rose on Wednesday, as bargain hunters emerged after five straight days of losses, although optimism was subdued by rising oilseed supplies and weak export demand.
Palm oil prices fell to the lowest level this year on Tuesday, luring buyers back into the market, but traders said the tropical oil is likely to remain under pressure.
Slowing demand after the start of Ramadan knocked Malaysian palm oil exports down as much as 24 percent during the first half of July from a month ago, cargo surveyor data
showed.
The start of a higher production cycle in the second half of the year also raised concerns over inventory levels climbing this month. Malaysian palm oil stocks fell to 1.65 million tonnes in June, their lowest in over two years.
"The market lost over 150 ringgit in the past few days, so there's bound to be some correction," said a trader with a foreign commodities brokerage in Kuala Lumpur. "But fundamentals are still vulnerable. Demand from key destinations like India
was weak and oilseed supplies are on the rise."
The benchmark October contract on the Bursa Malaysia Derivatives Exchange gained 1.1 percent to close at 2,252 ringgit ($706) per tonne on Wednesday. That pulled it away
from Tuesday's low of 2,222 ringgit, a level unseen since Dec. 13.
Total traded volume stood at 40,220 lots of 25 tonnes each, higher than the average 35,000 lots. Prices moved between 2,236 to 2,274 ringgit.
Global prices of oilseeds including soybeans and soymeal are likely to fall in the coming year as large crops loom, according to Hamburg-based oilseeds analysts Oil World.
Higher supplies of soybeans to be crushed into soybean oil could further depress prices of competing palm oil, which has lost almost 7 percent in value so far this year.
In other markets, Brent crude oil slipped below $108 a barrel on Wednesday as the dollar gained ahead of comments from Federal Reserve Chairman Ben Bernanke on the U.S. central bank's plan to roll back its monetary stimulus.
In vegetable oil markets, the U.S. soyoil contract for December was up 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.7 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2276 +17.00 2271 2297 430
MY PALM OIL SEP3 2269 +24.00 2254 2293 7098
MY PALM OIL OCT3 2252 +24.00 2236 2274 18787
CHINA PALM OLEIN JAN4 5616 -24.00 5590 5662 647856
CHINA SOYOIL JAN4 7240 +48.00 7194 7302 739950
CBOT SOY OIL DEC3 45.33 +0.05 45.28 45.72 5759
NYMEX CRUDE AUG3 105.49 -0.51 105.11 105.85 18988
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=3.19 ringgit)
Palm oil prices fell to the lowest level this year on Tuesday, luring buyers back into the market, but traders said the tropical oil is likely to remain under pressure.
Slowing demand after the start of Ramadan knocked Malaysian palm oil exports down as much as 24 percent during the first half of July from a month ago, cargo surveyor data
showed.
The start of a higher production cycle in the second half of the year also raised concerns over inventory levels climbing this month. Malaysian palm oil stocks fell to 1.65 million tonnes in June, their lowest in over two years.
"The market lost over 150 ringgit in the past few days, so there's bound to be some correction," said a trader with a foreign commodities brokerage in Kuala Lumpur. "But fundamentals are still vulnerable. Demand from key destinations like India
was weak and oilseed supplies are on the rise."
The benchmark October contract on the Bursa Malaysia Derivatives Exchange gained 1.1 percent to close at 2,252 ringgit ($706) per tonne on Wednesday. That pulled it away
from Tuesday's low of 2,222 ringgit, a level unseen since Dec. 13.
Total traded volume stood at 40,220 lots of 25 tonnes each, higher than the average 35,000 lots. Prices moved between 2,236 to 2,274 ringgit.
Global prices of oilseeds including soybeans and soymeal are likely to fall in the coming year as large crops loom, according to Hamburg-based oilseeds analysts Oil World.
Higher supplies of soybeans to be crushed into soybean oil could further depress prices of competing palm oil, which has lost almost 7 percent in value so far this year.
In other markets, Brent crude oil slipped below $108 a barrel on Wednesday as the dollar gained ahead of comments from Federal Reserve Chairman Ben Bernanke on the U.S. central bank's plan to roll back its monetary stimulus.
In vegetable oil markets, the U.S. soyoil contract for December was up 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.7 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2276 +17.00 2271 2297 430
MY PALM OIL SEP3 2269 +24.00 2254 2293 7098
MY PALM OIL OCT3 2252 +24.00 2236 2274 18787
CHINA PALM OLEIN JAN4 5616 -24.00 5590 5662 647856
CHINA SOYOIL JAN4 7240 +48.00 7194 7302 739950
CBOT SOY OIL DEC3 45.33 +0.05 45.28 45.72 5759
NYMEX CRUDE AUG3 105.49 -0.51 105.11 105.85 18988
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=3.19 ringgit)