MARKET DEVELOPMENT
VEGOILS-Palm Drops Ahead of Eid Holiday, Tighter Supplies in Focus
VEGOILS-Palm Drops Ahead of Eid Holiday, Tighter Supplies in Focus
06/08/2013 (Reuters) - Malaysian palm oil futures slipped on Monday ahead of the Eid al-Fitr holidays later in the week, although prospects for tighter supplies curbed losses.
Prices of the world's most traded edible oil have lost more than 8 percent this year. But the market could see some recovery as exports rose in July, signalling a decline in stocks.
A Reuters poll showed stocks in Malaysia, the second largest producer, could fall to 1.6 million tonnes in July -- below a two-year low of 1.65 million tonnes hit in June.
"The declines are muted but people don't want to take the risk of completely selling down," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"We could see short covering kick in later as tight supplies in palm oil hover over us and global agricultural markets are still open during Eid," he added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange closed down 0.9 percent to 2,238 ringgit ($690) per tonne.
Total traded volume stood at 21,765 lots of 25 tonnes each, below the average 17,500 lots.
The Bursa Malaysia market will be closed from the second half of Wednesday and will reopen again on Monday, Aug. 12. Markets in Indonesia, the world's largest palm oil producer, are closed this week.
Reuters analyst Wang Tao said a bearish target at 2,221 ringgit per tonne remained unchanged for palm oil, as it failed to break resistance at 2,272 ringgit.
Forecasts of crop friendly weather across the U.S. Midwest have fanned concerns of bumper crops in other agricultural markets from wheat to corn, including soybeans that Malaysian palm oil prices track.
A bumper soybean crop could yield more soyoil supplies, narrowing its premium to palm oil and grabbing demand.
The U.S. soyoil contract for December edged down in late Asian trade after sharp falls last week. The most-active January soybean oil contract on the Dalian Commodities Exchange dropped 0.5 percent.
In other markets, Brent crude rose above $109 a barrel on Monday on supply outages and after promising China data, but investors were cautious after Iran and the United States both signalled a will to improve relations.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2310 +14.00 2310 2325 36
MY PALM OIL SEP3 2271 -5.00 2258 2287 1763
MY PALM OIL OCT3 2238 -20.00 2233 2262 11922
CHINA PALM OLEIN JAN4 5446 -24.00 5434 5486 336382
CHINA SOYOIL JAN4 6994 -36.00 6978 7040 586874
CBOT SOY OIL DEC3 42.78 -0.04 42.65 42.90 4142
NYMEX CRUDE SEP3 106.37 -0.57 106.01 107.69 27717
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 = 3.2575 Malaysian ringgit)
Prices of the world's most traded edible oil have lost more than 8 percent this year. But the market could see some recovery as exports rose in July, signalling a decline in stocks.
A Reuters poll showed stocks in Malaysia, the second largest producer, could fall to 1.6 million tonnes in July -- below a two-year low of 1.65 million tonnes hit in June.
"The declines are muted but people don't want to take the risk of completely selling down," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"We could see short covering kick in later as tight supplies in palm oil hover over us and global agricultural markets are still open during Eid," he added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange closed down 0.9 percent to 2,238 ringgit ($690) per tonne.
Total traded volume stood at 21,765 lots of 25 tonnes each, below the average 17,500 lots.
The Bursa Malaysia market will be closed from the second half of Wednesday and will reopen again on Monday, Aug. 12. Markets in Indonesia, the world's largest palm oil producer, are closed this week.
Reuters analyst Wang Tao said a bearish target at 2,221 ringgit per tonne remained unchanged for palm oil, as it failed to break resistance at 2,272 ringgit.
Forecasts of crop friendly weather across the U.S. Midwest have fanned concerns of bumper crops in other agricultural markets from wheat to corn, including soybeans that Malaysian palm oil prices track.
A bumper soybean crop could yield more soyoil supplies, narrowing its premium to palm oil and grabbing demand.
The U.S. soyoil contract for December edged down in late Asian trade after sharp falls last week. The most-active January soybean oil contract on the Dalian Commodities Exchange dropped 0.5 percent.
In other markets, Brent crude rose above $109 a barrel on Monday on supply outages and after promising China data, but investors were cautious after Iran and the United States both signalled a will to improve relations.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2310 +14.00 2310 2325 36
MY PALM OIL SEP3 2271 -5.00 2258 2287 1763
MY PALM OIL OCT3 2238 -20.00 2233 2262 11922
CHINA PALM OLEIN JAN4 5446 -24.00 5434 5486 336382
CHINA SOYOIL JAN4 6994 -36.00 6978 7040 586874
CBOT SOY OIL DEC3 42.78 -0.04 42.65 42.90 4142
NYMEX CRUDE SEP3 106.37 -0.57 106.01 107.69 27717
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 = 3.2575 Malaysian ringgit)