MARKET DEVELOPMENT
VEGOILS-Palm Oil Ends Higher on Weak Ringgit, Stocks Data Eyed
VEGOILS-Palm Oil Ends Higher on Weak Ringgit, Stocks Data Eyed
06/09/2013 (Reuters) - Malaysian palm oil futures ended higher on Thursday, erasing earlier losses as a weakening ringgit triggered buying interest, although bearish sentiment persisted after a U.S. Department of Agriculture report showed damage to soy crop was not worse than expected.
Tuesday's report helped ease some fears about dry weather damaging soy yields in the U.S. crop belt, while investors were also cautious ahead of key data due next week.
Palm oil tracks soy prices as it is a substitute for soybean oil.
But traders said a weaker ringgit attracted some buyers, as it makes the feedstock cheaper. The local currency lost 0.7 percent of its value against the greenback on Tuesday.
"We see some rebound in the afternoon trading session, and it's most probably driven by the weaker ringgit. Overall, it still remains to be seen if prices can sustain above the 2,400 ringgit level," said a trader with a foreign commodities brokerage in Kuala Lumpur.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange edged up 0.5 percent higher to close at 2,410 ringgit ($730) per tonne, after trading in a range of 2,385 to 2,418 ringgit.
Total traded volume was thin at 23,779 lots of 25 tonnes each, compared with the average 35,000 lots, as most investors stayed on the sidelines ahead of the Sept. 1-10 export numbers and official data from the Malaysian Palm Oil Board (MPOB) due next week on August stocks and output.
Malaysia's August palm oil stocks likely grew to their largest level in three months as output outweighed exports, a Reuters survey showed, although healthy demand for the tropical oil kept stockpiles in check.
Technicals showed a bearish target at 2,352 ringgit per tonne remains unchanged for Malaysian palm oil, as it has broken below support at 2,403 ringgit, according to Reuters market analyst Wang Tao.
In other markets, global oil prices held above $115 a barrel on Thursday after U.S. President Barack Obama won some support from lawmakers for a military strike on Syria, adding to concerns that Middle East supply disruptions will persist.
In vegetable oil markets, the U.S. soyoil contract for December fell 0.3 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange eased 0.1 percent.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2400 +1.00 2390 2404 146
MY PALM OIL OCT3 2415 +13.00 2391 2419 1248
MY PALM OIL NOV3 2410 +12.00 2385 2418 12870
CHINA PALM OLEIN JAN4 5570 -10.00 5556 5620 363864
CHINA SOYOIL JAN4 7188 -8.00 7162 7228 540330
CBOT SOY OIL DEC3 43.80 -0.13 43.68 44.10 5809
NYMEX CRUDE OCT3 107.83 +0.59 107.13 108.04 14473
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=3.30 Malaysian ringgit)
Tuesday's report helped ease some fears about dry weather damaging soy yields in the U.S. crop belt, while investors were also cautious ahead of key data due next week.
Palm oil tracks soy prices as it is a substitute for soybean oil.
But traders said a weaker ringgit attracted some buyers, as it makes the feedstock cheaper. The local currency lost 0.7 percent of its value against the greenback on Tuesday.
"We see some rebound in the afternoon trading session, and it's most probably driven by the weaker ringgit. Overall, it still remains to be seen if prices can sustain above the 2,400 ringgit level," said a trader with a foreign commodities brokerage in Kuala Lumpur.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange edged up 0.5 percent higher to close at 2,410 ringgit ($730) per tonne, after trading in a range of 2,385 to 2,418 ringgit.
Total traded volume was thin at 23,779 lots of 25 tonnes each, compared with the average 35,000 lots, as most investors stayed on the sidelines ahead of the Sept. 1-10 export numbers and official data from the Malaysian Palm Oil Board (MPOB) due next week on August stocks and output.
Malaysia's August palm oil stocks likely grew to their largest level in three months as output outweighed exports, a Reuters survey showed, although healthy demand for the tropical oil kept stockpiles in check.
Technicals showed a bearish target at 2,352 ringgit per tonne remains unchanged for Malaysian palm oil, as it has broken below support at 2,403 ringgit, according to Reuters market analyst Wang Tao.
In other markets, global oil prices held above $115 a barrel on Thursday after U.S. President Barack Obama won some support from lawmakers for a military strike on Syria, adding to concerns that Middle East supply disruptions will persist.
In vegetable oil markets, the U.S. soyoil contract for December fell 0.3 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange eased 0.1 percent.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2400 +1.00 2390 2404 146
MY PALM OIL OCT3 2415 +13.00 2391 2419 1248
MY PALM OIL NOV3 2410 +12.00 2385 2418 12870
CHINA PALM OLEIN JAN4 5570 -10.00 5556 5620 363864
CHINA SOYOIL JAN4 7188 -8.00 7162 7228 540330
CBOT SOY OIL DEC3 43.80 -0.13 43.68 44.10 5809
NYMEX CRUDE OCT3 107.83 +0.59 107.13 108.04 14473
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=3.30 Malaysian ringgit)