MARKET DEVELOPMENT
VEGOILS-Palm Falls on Higher Stocks, But Healthy Demand Cuts Losses
VEGOILS-Palm Falls on Higher Stocks, But Healthy Demand Cuts Losses
15/08/2013 (Reuters) - Malaysian palm oil futures fell on Wednesday as end-stocks rose for the first time this year, although losses were trimmed by resilient demand and forecasts for lower soybean yields.
Data from the Malaysian Palm Oil Board (MPOB) after the midday break showed inventories rose 1 percent in July to 1.66 million tonnes, marking the first rise since December, against market estimates that stocks had dropped 3 percent.
But traders said the data that implied a surge in local consumption to almost 290,000 tonnes in July from the average monthly rate of less than 200,000 tonnes provided comfort that palm oil demand remained healthy.
On top of that, prices were also supported by encouraging exports in the first 10 days of August, when the shipments rose as much as 25.8 percent from a month ago, cargo surveyor data showed.
"Look at local (consumption), we are having an unusually high figure ... that could be due to biodiesel," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Upcoming exports figures are also expected to be friendly, hence losses were contained despite the slightly higher stocks."
Cargo surveyors will release Malaysian palm oil exports data for the Aug. 1-15 period on Thursday, which could continue to show healthy demand as major buyer China restocks ahead of the Mid-Autumn festival in September.
At market close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange eased just 0.1 percent to 2,294 ringgit ($701) per tonne. Prices earlier touched 2,308 ringgit, a level not seen since July 12.
Total traded volume stood at 37,343 lots of 25 tonnes each, higher than the average 35,000 lots.
Technicals showed palm oil is expected to rise into a range of 2,348 to 2,356 ringgit per tonne, as indicated by its wave pattern and a Fibonacci ratio analysis, Reuters analyst Wang Tao said.
A cut in U.S. soybean yields and stocks that sent prices to a one-month high on Tuesday continued to provide some support, traders said, as a lower supply of soybean to be crushed into oil could increase demand for competing palm oil.
India's refined palm oil imports fell 28 percent in July from a month ago, a leading trade body said, as weakness in the rupee currency made overseas purchases dearer.
In other markets, Brent crude oil slipped towards $109 a barrel on Wednesday as investors worried that the U.S. Federal Reserve could curb its commodity-friendly economic stimulus, but Middle East supply disruptions underpinned prices.
In vegetable oil markets, the U.S. soyoil contract for December eased 0.6 percent in late Asian trade. The most-active January soybean oil contract on the Dalian
Commodities Exchange fell 0.7 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2375 +45.00 2375 2375 34
MY PALM OIL SEP3 2333 +7.00 2307 2335 1271
MY PALM OIL OCT3 2294 -3.00 2275 2308 15581
CHINA PALM OLEIN JAN4 5510 -36.00 5494 5626 730174
CHINA SOYOIL JAN4 7076 -48.00 7074 7168 957782
CBOT SOY OIL DEC3 42.70 -0.25 42.67 43.10 4773
NYMEX CRUDE SEP3 106.19 -0.64 105.92 106.69 17180
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=3.274 Malaysian ringgit)
Data from the Malaysian Palm Oil Board (MPOB) after the midday break showed inventories rose 1 percent in July to 1.66 million tonnes, marking the first rise since December, against market estimates that stocks had dropped 3 percent.
But traders said the data that implied a surge in local consumption to almost 290,000 tonnes in July from the average monthly rate of less than 200,000 tonnes provided comfort that palm oil demand remained healthy.
On top of that, prices were also supported by encouraging exports in the first 10 days of August, when the shipments rose as much as 25.8 percent from a month ago, cargo surveyor data showed.
"Look at local (consumption), we are having an unusually high figure ... that could be due to biodiesel," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Upcoming exports figures are also expected to be friendly, hence losses were contained despite the slightly higher stocks."
Cargo surveyors will release Malaysian palm oil exports data for the Aug. 1-15 period on Thursday, which could continue to show healthy demand as major buyer China restocks ahead of the Mid-Autumn festival in September.
At market close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange eased just 0.1 percent to 2,294 ringgit ($701) per tonne. Prices earlier touched 2,308 ringgit, a level not seen since July 12.
Total traded volume stood at 37,343 lots of 25 tonnes each, higher than the average 35,000 lots.
Technicals showed palm oil is expected to rise into a range of 2,348 to 2,356 ringgit per tonne, as indicated by its wave pattern and a Fibonacci ratio analysis, Reuters analyst Wang Tao said.
A cut in U.S. soybean yields and stocks that sent prices to a one-month high on Tuesday continued to provide some support, traders said, as a lower supply of soybean to be crushed into oil could increase demand for competing palm oil.
India's refined palm oil imports fell 28 percent in July from a month ago, a leading trade body said, as weakness in the rupee currency made overseas purchases dearer.
In other markets, Brent crude oil slipped towards $109 a barrel on Wednesday as investors worried that the U.S. Federal Reserve could curb its commodity-friendly economic stimulus, but Middle East supply disruptions underpinned prices.
In vegetable oil markets, the U.S. soyoil contract for December eased 0.6 percent in late Asian trade. The most-active January soybean oil contract on the Dalian
Commodities Exchange fell 0.7 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2375 +45.00 2375 2375 34
MY PALM OIL SEP3 2333 +7.00 2307 2335 1271
MY PALM OIL OCT3 2294 -3.00 2275 2308 15581
CHINA PALM OLEIN JAN4 5510 -36.00 5494 5626 730174
CHINA SOYOIL JAN4 7076 -48.00 7074 7168 957782
CBOT SOY OIL DEC3 42.70 -0.25 42.67 43.10 4773
NYMEX CRUDE SEP3 106.19 -0.64 105.92 106.69 17180
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=3.274 Malaysian ringgit)