MARKET DEVELOPMENT
VEGOILS-Palm Oil Eases 1.4 Pct, Near 1-month Low on Supply Prospects
VEGOILS-Palm Oil Eases 1.4 Pct, Near 1-month Low on Supply Prospects
19/09/2013 (Reuters) - Malaysian palm oil slid 1.4 percent on Wednesday, hovering near one-month lows as prospects of swelling global edible oil supplies and weakness in crude oil futures weighed on the market.
Palm oil production in Indonesia and Malaysia, the world's top producers, is expected to start rising this month as tress enter the peak production cycle, while rainfall in the U.S.Midwest is likely to boost yields of the moisture-stressed soybean crop.
"Even good export numbers are not helping the palm oil market recover," said one trader with a foreign commodities brokerage in Kuala Lumpur.
"We are entering the high production months for palm oil and the sentiment in global vegetable oil markets is also bearish. Crude oil is under pressure because tensions in Syria are easing."
The benchmark December contract on the Bursa Malaysia Derivatives Exchange closed down 1.4 percent at 2,323 ringgit ($719) per tonne, in the vicinity of Tuesday's low of 2,294 ringgit, the lowest since Aug. 20.
Total traded volumes stood at 35,314 lots of 25 tonnes each.
Investors have turned bearish after leading industry analyst Dorab Mistry said Indonesia and Malaysia would produce more palm oil this season, until at least April 2014. This would add to the supply of competing oilseeds and drag prices to new lows in January, he added.
Brent crude steadied above $108 a barrel on Wednesday as world powers held talks to eliminate Syria's chemical weapons - easing concern over the risk to Middle East crude supply.
The decline in palm oil prices comes despite strong demand for the tropical product.
Data from cargo surveyor Intertek Testing Services showed exports of Malaysian palm oil products from Sept. 1-15 rose 13.6 percent to 732,412 tonnes, compared to Aug. 1-15, boosted by more purchases of crude palm oil and palm fatty acid distillates.
Another cargo surveyor Societe Generale de Surveillance showed exports rose 12.4 percent for the same period.
Malaysia, the world's No.2 palm oil producer, has decided to keep its crude palm oil export tax for October at 4.5 percent, a government circular showed early Tuesday. The rate has been left unchanged since March.
In vegetable oil markets, the U.S. soyoil contract for December fell to its lowest since August 12. The most-active January soybean oil contract on the Dalian Commodities Exchange was largely unchanged on Wednesday.
On the technical front, Malaysian palm oil is expected to seek support at 2,320 ringgit per tonne, as it did not break a resistance at 2,362 ringgit, according to Reuters market analyst Wang Tao.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
M'ASIA PALM OIL OCT3 2329 -34.00 2328 2348 730
M'ASIA PALM OIL NOV3 2325 -33.00 2322 2351 6203
M'ASIA PALM OIL DEC3 2323 -32.00 2320 2348 14120
M'ASIA PALM OIL JAN4 2329 -26.00 2323 2344 6058
DALIAN SOY OIL JAN4 7070 -6.00 7056 7126 485690
CBOT SOY OIL DEC3 42.07 -0.17 42.03 42.24 3418
NYMEX CRUDE OCT3 106.17 +0.75 105.32 106.57 17804
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.23 Malaysian ringgit)
Palm oil production in Indonesia and Malaysia, the world's top producers, is expected to start rising this month as tress enter the peak production cycle, while rainfall in the U.S.Midwest is likely to boost yields of the moisture-stressed soybean crop.
"Even good export numbers are not helping the palm oil market recover," said one trader with a foreign commodities brokerage in Kuala Lumpur.
"We are entering the high production months for palm oil and the sentiment in global vegetable oil markets is also bearish. Crude oil is under pressure because tensions in Syria are easing."
The benchmark December contract on the Bursa Malaysia Derivatives Exchange closed down 1.4 percent at 2,323 ringgit ($719) per tonne, in the vicinity of Tuesday's low of 2,294 ringgit, the lowest since Aug. 20.
Total traded volumes stood at 35,314 lots of 25 tonnes each.
Investors have turned bearish after leading industry analyst Dorab Mistry said Indonesia and Malaysia would produce more palm oil this season, until at least April 2014. This would add to the supply of competing oilseeds and drag prices to new lows in January, he added.
Brent crude steadied above $108 a barrel on Wednesday as world powers held talks to eliminate Syria's chemical weapons - easing concern over the risk to Middle East crude supply.
The decline in palm oil prices comes despite strong demand for the tropical product.
Data from cargo surveyor Intertek Testing Services showed exports of Malaysian palm oil products from Sept. 1-15 rose 13.6 percent to 732,412 tonnes, compared to Aug. 1-15, boosted by more purchases of crude palm oil and palm fatty acid distillates.
Another cargo surveyor Societe Generale de Surveillance showed exports rose 12.4 percent for the same period.
Malaysia, the world's No.2 palm oil producer, has decided to keep its crude palm oil export tax for October at 4.5 percent, a government circular showed early Tuesday. The rate has been left unchanged since March.
In vegetable oil markets, the U.S. soyoil contract for December fell to its lowest since August 12. The most-active January soybean oil contract on the Dalian Commodities Exchange was largely unchanged on Wednesday.
On the technical front, Malaysian palm oil is expected to seek support at 2,320 ringgit per tonne, as it did not break a resistance at 2,362 ringgit, according to Reuters market analyst Wang Tao.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
M'ASIA PALM OIL OCT3 2329 -34.00 2328 2348 730
M'ASIA PALM OIL NOV3 2325 -33.00 2322 2351 6203
M'ASIA PALM OIL DEC3 2323 -32.00 2320 2348 14120
M'ASIA PALM OIL JAN4 2329 -26.00 2323 2344 6058
DALIAN SOY OIL JAN4 7070 -6.00 7056 7126 485690
CBOT SOY OIL DEC3 42.07 -0.17 42.03 42.24 3418
NYMEX CRUDE OCT3 106.17 +0.75 105.32 106.57 17804
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.23 Malaysian ringgit)