MARKET DEVELOPMENT
VEGOILS-Palm Oil Gains on Hopes For Stocks Drawdown
VEGOILS-Palm Oil Gains on Hopes For Stocks Drawdown
13/08/2013 (Reuters) - Malaysian palm oil futures rose on Monday, as worries about a sharp rise in output receded and on hopes end-stocks in the world's No.2 producer may have shrunk again in July due to resilient export demand.
Traders said the market was recovering from speculations that output had spiked by 19 percent last month, significantly more than a 10 percent rise forecast in a Reuters poll. The bearish view had dragged prices to their lowest in more than a week last Wednesday.
Buyers returned to the markets on Monday after the Eid al-Fitr holidays on a more optimistic note ahead of industry data on stocks, production and exports that will be issued by the Malaysian Palm Oil Board (MPOB) on Aug. 14.
"Last week the market fell quite sharply before the long holiday. Today there's a bit of speculative buying ahead of the MPOB report," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Everyone expects the data to be friendly towards end-stocks and production. The market is making some adjustments towards these factors," the trader added.
Resilient demand for Malaysian palm oil that continued into the Aug. 1-10 period also boosted optimism, as cargo surveyor Intertek Testing Services reported an 18.5 percent jump in exports from the same period a month ago.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose 1.5 percent to close at 2,241 ringgit ($691) per tonne. Prices traded in a range between 2,205 ringgit and 2,260 ringgit.
Total traded volume stood at 32,666 lots of 25 tonnes each, slightly below the average 35,000 lots.
Technicals suggest Malaysian palm oil looks neutral in a range of 2,193-2,284 ringgit per tonne after piercing into a support zone of 2,193-2,211 ringgit, Reuters analyst Wang Tao said.
Investors will be keeping an eye on the U.S. Department of Agriculture's August crop report that will be released at 1600 GMT on Monday.
Grains analysts expect the U.S. government to raise its record-large forecasts for the 2013 corn and soybean harvests to reflect mild crop weather across the country.
A record soybean crop will weigh on palm prices, which has already lost 8 percent so far this year, as the bigger supply of competing soyoil will shift demand away from the tropical oil.
In other markets, Brent crude fell towards $108 per barrel after a sharp rally in the previous session, as investors waited for a slew of U.S. data this week for hints on when the Federal Reserve will start winding back its stimulus.
In vegetable oil markets, the U.S. soyoil contract for December climbed 0.6 percent ahead of the USDA report. The most-active January soybean oil contract on the Dalian Commodities Exchange closed 0.4 percent higher.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2290 +12.00 2275 2314 17
MY PALM OIL SEP3 2274 +38.00 2238 2290 1790
MY PALM OIL OCT3 2241 +34.00 2205 2260 15143
CHINA PALM OLEIN JAN4 5414 +36.00 5346 5432 501566
CHINA SOYOIL JAN4 6974 +28.00 6906 6992 769724
CBOT SOY OIL DEC3 42.14 +0.26 41.93 42.29 5559
NYMEX CRUDE SEP3 106.23 +0.26 105.66 106.40 21986
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 = 3.247 Malaysian ringgit)
Traders said the market was recovering from speculations that output had spiked by 19 percent last month, significantly more than a 10 percent rise forecast in a Reuters poll. The bearish view had dragged prices to their lowest in more than a week last Wednesday.
Buyers returned to the markets on Monday after the Eid al-Fitr holidays on a more optimistic note ahead of industry data on stocks, production and exports that will be issued by the Malaysian Palm Oil Board (MPOB) on Aug. 14.
"Last week the market fell quite sharply before the long holiday. Today there's a bit of speculative buying ahead of the MPOB report," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Everyone expects the data to be friendly towards end-stocks and production. The market is making some adjustments towards these factors," the trader added.
Resilient demand for Malaysian palm oil that continued into the Aug. 1-10 period also boosted optimism, as cargo surveyor Intertek Testing Services reported an 18.5 percent jump in exports from the same period a month ago.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose 1.5 percent to close at 2,241 ringgit ($691) per tonne. Prices traded in a range between 2,205 ringgit and 2,260 ringgit.
Total traded volume stood at 32,666 lots of 25 tonnes each, slightly below the average 35,000 lots.
Technicals suggest Malaysian palm oil looks neutral in a range of 2,193-2,284 ringgit per tonne after piercing into a support zone of 2,193-2,211 ringgit, Reuters analyst Wang Tao said.
Investors will be keeping an eye on the U.S. Department of Agriculture's August crop report that will be released at 1600 GMT on Monday.
Grains analysts expect the U.S. government to raise its record-large forecasts for the 2013 corn and soybean harvests to reflect mild crop weather across the country.
A record soybean crop will weigh on palm prices, which has already lost 8 percent so far this year, as the bigger supply of competing soyoil will shift demand away from the tropical oil.
In other markets, Brent crude fell towards $108 per barrel after a sharp rally in the previous session, as investors waited for a slew of U.S. data this week for hints on when the Federal Reserve will start winding back its stimulus.
In vegetable oil markets, the U.S. soyoil contract for December climbed 0.6 percent ahead of the USDA report. The most-active January soybean oil contract on the Dalian Commodities Exchange closed 0.4 percent higher.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2290 +12.00 2275 2314 17
MY PALM OIL SEP3 2274 +38.00 2238 2290 1790
MY PALM OIL OCT3 2241 +34.00 2205 2260 15143
CHINA PALM OLEIN JAN4 5414 +36.00 5346 5432 501566
CHINA SOYOIL JAN4 6974 +28.00 6906 6992 769724
CBOT SOY OIL DEC3 42.14 +0.26 41.93 42.29 5559
NYMEX CRUDE SEP3 106.23 +0.26 105.66 106.40 21986
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 = 3.247 Malaysian ringgit)