MARKET DEVELOPMENT
VEGOILS-Palm Oil Ends Down on Demand Concerns For 3rd Weekly Loss in 4
VEGOILS-Palm Oil Ends Down on Demand Concerns For 3rd Weekly Loss in 4
20/07/2013 (Reuters) - Malaysian palm oil futures fell 1.5 percent on Friday, its third weekly drop in four, as worries persisted over slowing export demand and higher output in the second half.
The tropical oil hit a 2013 low of 2,222 ringgit earlier in the week that stoked some bargain-buying, but not quite enough to prevent a 1.9 percent loss for the week.
Traders are now awaiting July 1-20 exports data due over the next few days, which could determine market direction next week. Cargo surveyor Intertek Testing Services will issue the exports data on Saturday, while another surveyor, Societe Generale de Surveillance, will release it on Monday.
Slowing demand after the start of Ramadan cut Malaysian palm oil shipments by as much as 24 percent during the first 15 days of July.
The start of a seasonally higher production cycle in the second half of the year also raised the prospect of inventory levels climbing higher this month. Malaysian end-stocks stood at 1.65 million tonnes in June, the lowest in over two years.
"As output from Indonesia and Malaysia usually peak between July and September, we might expect stockpiles to increase. This would weigh on the prevailing low palm oil prices," said Singapore-based Phillip Futures in a note to clients on Friday.
"Being less optimistic, we retain our bearish view on palm oil. We could expect the 2,200 ringgit support level to be tested again in near term."
The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose to an intra-day high of 2,302 ringgit per tonne, a level not seen since July 12, before easing to close at 2,257 ringgit ($707).
Total traded volume stood at 28,194 lots of 25 tonnes each, lower than the average 35,000 lots. Prices moved between 2,252 ringgit and 2,302 ringgit.
Malaysian plantation firm Felda Global Ventures Holdings Bhd has offered to pay 1.21 billion ringgit ($378.84 million) for an unlisted planter, as it seeks to boost land assets and palm oil output after its listing last year.
In other markets, Brent held above $108 a barrel on Friday, hovering near a three-month high on hopes of a steady recovery in U.S. demand following strong economic data and reassuring comments from the Federal Reserve on monetary stimulus.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.1 percent in Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange lost 0.3 percent.
Palm, soy and crude oil prices at 1001 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2328 -12.00 2320 2352 232
MY PALM OIL SEP3 2270 -35.00 2270 2315 3286
MY PALM OIL OCT3 2257 -34.00 2252 2302 12678
CHINA PALM OLEIN JAN4 5596 -24.00 5582 5676 437980
CHINA SOYOIL JAN4 7220 -18.00 7208 7280 566880
CBOT SOY OIL DEC3 45.43 +0.04 45.35 45.59 4242
NYMEX CRUDE AUG3 108.18 +0.14 107.73 108.28 8919
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=3.193 ringgit)
The tropical oil hit a 2013 low of 2,222 ringgit earlier in the week that stoked some bargain-buying, but not quite enough to prevent a 1.9 percent loss for the week.
Traders are now awaiting July 1-20 exports data due over the next few days, which could determine market direction next week. Cargo surveyor Intertek Testing Services will issue the exports data on Saturday, while another surveyor, Societe Generale de Surveillance, will release it on Monday.
Slowing demand after the start of Ramadan cut Malaysian palm oil shipments by as much as 24 percent during the first 15 days of July.
The start of a seasonally higher production cycle in the second half of the year also raised the prospect of inventory levels climbing higher this month. Malaysian end-stocks stood at 1.65 million tonnes in June, the lowest in over two years.
"As output from Indonesia and Malaysia usually peak between July and September, we might expect stockpiles to increase. This would weigh on the prevailing low palm oil prices," said Singapore-based Phillip Futures in a note to clients on Friday.
"Being less optimistic, we retain our bearish view on palm oil. We could expect the 2,200 ringgit support level to be tested again in near term."
The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose to an intra-day high of 2,302 ringgit per tonne, a level not seen since July 12, before easing to close at 2,257 ringgit ($707).
Total traded volume stood at 28,194 lots of 25 tonnes each, lower than the average 35,000 lots. Prices moved between 2,252 ringgit and 2,302 ringgit.
Malaysian plantation firm Felda Global Ventures Holdings Bhd has offered to pay 1.21 billion ringgit ($378.84 million) for an unlisted planter, as it seeks to boost land assets and palm oil output after its listing last year.
In other markets, Brent held above $108 a barrel on Friday, hovering near a three-month high on hopes of a steady recovery in U.S. demand following strong economic data and reassuring comments from the Federal Reserve on monetary stimulus.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.1 percent in Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange lost 0.3 percent.
Palm, soy and crude oil prices at 1001 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2328 -12.00 2320 2352 232
MY PALM OIL SEP3 2270 -35.00 2270 2315 3286
MY PALM OIL OCT3 2257 -34.00 2252 2302 12678
CHINA PALM OLEIN JAN4 5596 -24.00 5582 5676 437980
CHINA SOYOIL JAN4 7220 -18.00 7208 7280 566880
CBOT SOY OIL DEC3 45.43 +0.04 45.35 45.59 4242
NYMEX CRUDE AUG3 108.18 +0.14 107.73 108.28 8919
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=3.193 ringgit)