MARKET DEVELOPMENT
VEGOILS-Palm ends lower again as strong ringgit weighs, but exports support
VEGOILS-Palm ends lower again as strong ringgit weighs, but exports support
21/09/2013 (Reuters) - Malaysian palm oil futures fell for the third straight session on Friday and extended declines for a second week as a stronger local currency curbed appetite from overseas buyers, although strong export numbers limited losses.
Despite easing slightly, the ringgit was still near 3-month highs hit as it surged nearly 3 percent after the U.S.Federal Reserve's surprise decision not to taper its economic stimulus just yet.
But healthy exports in September reined in losses and kept prices in a tight range of 2,303-2,318 ringgit per tonne. Cargo surveyor Intertek Testing Services showed that shipments of Malaysian palm oil rose 13.1 percent to 996,377 tonnes during Sept. 1-20 compared to a month ago.
Another cargo surveyor, Societe Generale de Surveillance showed exports for the same period climbed 9.2 percent.
"The strong ringgit is definitely weighing on the market, both yesterday and today," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But the fact that prices went down so little shows the resilience and friendliness that the market feels towards palm oil," the trader added.
By Friday's close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had lost 0.9 percent to 2,297 ringgit ($725) per tonne, bringing prices down 2.2 percent for the week.
Total traded volumes stood at 21,822 lots of 25 tonnes each, much lower than the average 35,000 lots.
On the technical front, a bearish target at 2,270 ringgit per tonne remains unchanged for Malaysian palm oil as it has a better chance to break support at 2,311 ringgit, said Reuters market analyst Wang Tao.
Investors have turned bearish on forecasts that Southeast Asian palm oil output could start rising from September onwards, with the seasonally higher cycle seen dragging on until at least April 2014.
Expectations of bumper crops of competing oilseeds such as soybeans could cause a flood of edible oils in the market and depress prices in the coming months. Palm prices have already lost 5.8 percent so far this year -- extending declines into a
third year.
But palm oil exports seem to be holding for now, lending hope that the strong demand will eat into stocks and prevent inventories from surging to record levels last seen in December. Stocks at end-August stood at 1.67 million tonnes.
Prices could also get support from rising Indian demand.
Edible oil imports of the world's top buyer are likely to rise 4 percent to a record 10.7 million tonnes in 2013/14 due to rapid growth in consumption, with the entire rise met by palm oil, a leading trade expert said on Friday.
In other markets, oil edged up to $109 a barrel on Friday, supported by the Federal Reserve's decision this week to leave its stimulus programme unchanged, falling U.S. crude inventories and persistent concerns about supplies.
The U.S. soyoil contract for December fell 0.9 percent in late Asian trade.
The Dalian Commodities Exchange will resume trading on Monday after closing from Sept. 19 for the mid-autumn festival.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2305 -17.00 2302 2315 350
MY PALM OIL NOV3 2298 -20.00 2298 2319 1932
MY PALM OIL DEC3 2297 -20.00 2296 2318 12957
CHINA PALM OLEIN JAN4 5392 +2.00 5378 5452 402222
CHINA SOYOIL JAN4 7070 -6.00 7056 7126 485690
CBOT SOY OIL DEC3 42.58 -0.38 42.47 42.98 3552
NYMEX CRUDE OCT3 106.21 -0.18 106.01 106.46 4662
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 = 3.16 Malaysian ringgit)
Despite easing slightly, the ringgit was still near 3-month highs hit as it surged nearly 3 percent after the U.S.Federal Reserve's surprise decision not to taper its economic stimulus just yet.
But healthy exports in September reined in losses and kept prices in a tight range of 2,303-2,318 ringgit per tonne. Cargo surveyor Intertek Testing Services showed that shipments of Malaysian palm oil rose 13.1 percent to 996,377 tonnes during Sept. 1-20 compared to a month ago.
Another cargo surveyor, Societe Generale de Surveillance showed exports for the same period climbed 9.2 percent.
"The strong ringgit is definitely weighing on the market, both yesterday and today," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But the fact that prices went down so little shows the resilience and friendliness that the market feels towards palm oil," the trader added.
By Friday's close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had lost 0.9 percent to 2,297 ringgit ($725) per tonne, bringing prices down 2.2 percent for the week.
Total traded volumes stood at 21,822 lots of 25 tonnes each, much lower than the average 35,000 lots.
On the technical front, a bearish target at 2,270 ringgit per tonne remains unchanged for Malaysian palm oil as it has a better chance to break support at 2,311 ringgit, said Reuters market analyst Wang Tao.
Investors have turned bearish on forecasts that Southeast Asian palm oil output could start rising from September onwards, with the seasonally higher cycle seen dragging on until at least April 2014.
Expectations of bumper crops of competing oilseeds such as soybeans could cause a flood of edible oils in the market and depress prices in the coming months. Palm prices have already lost 5.8 percent so far this year -- extending declines into a
third year.
But palm oil exports seem to be holding for now, lending hope that the strong demand will eat into stocks and prevent inventories from surging to record levels last seen in December. Stocks at end-August stood at 1.67 million tonnes.
Prices could also get support from rising Indian demand.
Edible oil imports of the world's top buyer are likely to rise 4 percent to a record 10.7 million tonnes in 2013/14 due to rapid growth in consumption, with the entire rise met by palm oil, a leading trade expert said on Friday.
In other markets, oil edged up to $109 a barrel on Friday, supported by the Federal Reserve's decision this week to leave its stimulus programme unchanged, falling U.S. crude inventories and persistent concerns about supplies.
The U.S. soyoil contract for December fell 0.9 percent in late Asian trade.
The Dalian Commodities Exchange will resume trading on Monday after closing from Sept. 19 for the mid-autumn festival.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2305 -17.00 2302 2315 350
MY PALM OIL NOV3 2298 -20.00 2298 2319 1932
MY PALM OIL DEC3 2297 -20.00 2296 2318 12957
CHINA PALM OLEIN JAN4 5392 +2.00 5378 5452 402222
CHINA SOYOIL JAN4 7070 -6.00 7056 7126 485690
CBOT SOY OIL DEC3 42.58 -0.38 42.47 42.98 3552
NYMEX CRUDE OCT3 106.21 -0.18 106.01 106.46 4662
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 = 3.16 Malaysian ringgit)