MARKET DEVELOPMENT
VEGOILS-Palm Oil Lifted By Healthy Exports, Demand Hopes
VEGOILS-Palm Oil Lifted By Healthy Exports, Demand Hopes
03/09/2013 (Reuters) - Malaysian palm oil futures inched up on Monday on expectations that healthy exports will persist into September, fuelling hopes that end-stocks in the world's No.2 producer will not spike for now.
Palm oil exports rose 6.5 percent in August compared to a month ago, cargo surveyor Intertek Testing Services showed on Monday, as China and Europe increased purchases of the tropical oil.
Another cargo surveyor, Societe Generale de Surveillance, reported a slightly higher 7.6 percent increase.
"Exports were higher in August and I think that will also continue in September," said a trader with a local commodities brokerage.
The Kuala Lumpur-based trader added that strong demand has also helped boost activity at local refineries.
"Margins are better, so the refiners are running at nearly full capacity. Although yields will be higher in September, demand is expected to be excellent."
Forecasts of lower soy yields due to a dry spell in the U.S. grain belt, along with a weak ringgit, lifted palm oil prices 7.5 percent in August - their best monthly performance since December 2010.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange climbed 0.9 percent to close at 2,426 ringgit ($742) per tonne on Monday. Prices traded in a
tight range between 2,411 ringgit and 2,440 ringgit.
Total traded volume stood at 33,536 lots of 25 tonnes each, a tad lower than the average 35,000 lots.
Technicals showed that signals are mixed for Malaysian palm oil as it is not clear how strong the current rebound will be, said Reuters market analyst Wang Tao.
Market players will also be looking out for official data on August's stocks, production and exports that will be released on Sept. 10 by industry regulator the Malaysian Palm Oil Board.
Estimates by the Malaysian Palm Oil Association, a group of planters, showed that production in Aug. 1-20 had dropped 7.4 percent despite a higher yield cycle for oil palm trees that typically begins in the second half of the year.
But traders say the dip could be due to slower harvesting during the Muslim festival of Ramadan and Eid al-Fitr as plantation workers went on holiday.
"The production drop is not because trees are not producing, but because of the delay in harvest. The fruit is still there," the trader added.
In other markets, Brent crude oil steadied around $114 on Monday, consolidating after a week of gains, as a military strike against Syria looked less imminent and worries over possible Middle East supply disruptions receded.
In vegetable oil markets, the most-active January soybean oil contract on the Dalian Commodities Exchange rose 1.5 percent. Trading in the U.S. soyoil contract for December is closed for the U.S. Labor Day holiday.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2420 +13.00 2420 2420 34
MY PALM OIL OCT3 2428 +24.00 2411 2437 2112
MY PALM OIL NOV3 2426 +22.00 2411 2440 16121
CHINA PALM OLEIN JAN4 5650 +88.00 5574 5650 408810
CHINA SOYOIL JAN4 7288 +110.00 7188 7290 736246
CBOT SOY OIL DEC3 44.17 +0.00 0.00 0.00 0
NYMEX CRUDE OCT3 106.90 -0.75 104.21 107.15 29320
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=3.27 Malaysian ringgit)
Palm oil exports rose 6.5 percent in August compared to a month ago, cargo surveyor Intertek Testing Services showed on Monday, as China and Europe increased purchases of the tropical oil.
Another cargo surveyor, Societe Generale de Surveillance, reported a slightly higher 7.6 percent increase.
"Exports were higher in August and I think that will also continue in September," said a trader with a local commodities brokerage.
The Kuala Lumpur-based trader added that strong demand has also helped boost activity at local refineries.
"Margins are better, so the refiners are running at nearly full capacity. Although yields will be higher in September, demand is expected to be excellent."
Forecasts of lower soy yields due to a dry spell in the U.S. grain belt, along with a weak ringgit, lifted palm oil prices 7.5 percent in August - their best monthly performance since December 2010.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange climbed 0.9 percent to close at 2,426 ringgit ($742) per tonne on Monday. Prices traded in a
tight range between 2,411 ringgit and 2,440 ringgit.
Total traded volume stood at 33,536 lots of 25 tonnes each, a tad lower than the average 35,000 lots.
Technicals showed that signals are mixed for Malaysian palm oil as it is not clear how strong the current rebound will be, said Reuters market analyst Wang Tao.
Market players will also be looking out for official data on August's stocks, production and exports that will be released on Sept. 10 by industry regulator the Malaysian Palm Oil Board.
Estimates by the Malaysian Palm Oil Association, a group of planters, showed that production in Aug. 1-20 had dropped 7.4 percent despite a higher yield cycle for oil palm trees that typically begins in the second half of the year.
But traders say the dip could be due to slower harvesting during the Muslim festival of Ramadan and Eid al-Fitr as plantation workers went on holiday.
"The production drop is not because trees are not producing, but because of the delay in harvest. The fruit is still there," the trader added.
In other markets, Brent crude oil steadied around $114 on Monday, consolidating after a week of gains, as a military strike against Syria looked less imminent and worries over possible Middle East supply disruptions receded.
In vegetable oil markets, the most-active January soybean oil contract on the Dalian Commodities Exchange rose 1.5 percent. Trading in the U.S. soyoil contract for December is closed for the U.S. Labor Day holiday.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2420 +13.00 2420 2420 34
MY PALM OIL OCT3 2428 +24.00 2411 2437 2112
MY PALM OIL NOV3 2426 +22.00 2411 2440 16121
CHINA PALM OLEIN JAN4 5650 +88.00 5574 5650 408810
CHINA SOYOIL JAN4 7288 +110.00 7188 7290 736246
CBOT SOY OIL DEC3 44.17 +0.00 0.00 0.00 0
NYMEX CRUDE OCT3 106.90 -0.75 104.21 107.15 29320
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=3.27 Malaysian ringgit)