MARKET DEVELOPMENT
VEGOILS-Palm Ends Lower on Profit-taking But Optimism on Stocks Supports
VEGOILS-Palm Ends Lower on Profit-taking But Optimism on Stocks Supports
25/10/2013 (Reuters) - Malaysian palm oil futures ended lower on Thursday, snapping four days of gains as investors booked profits from prices that hit near two-month highs in the previous session.
A stronger ringgit also curbed overseas buying interest, but optimism that stocks in Malaysia, the world's second-largest producer, might remain below the 2-million-tonne mark this year capped losses. Prices are still not far off Wednesday's top of 2,485 ringgit - the highest level since Aug. 28.
Market players are betting that output in October, typically the highest-producing month of the year, has lost steam while exports continue to hold steady.
Growers' estimates show production during Oct. 1-20 could have dropped by 10.5 percent, quelling initial fears that Malaysian output would surge towards the end of the year and cause a stock buildup.
"The market was overdone yesterday, so there's some profit-taking today," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Also, the ringgit has strengthened a bit compared to yesterday. Palm's resistance is at 2,500 ringgit, and the immediate support is at 2,450 ringgit," the trader added.
The Malaysian ringgit rose as much as 0.7 percent to 3.1460 per dollar early Thursday, but dropped back to 3.1630 later in the day.
By Thursday's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had dropped 0.9 percent to 2,461 ringgit ($779) per tonne.
Total traded volume stood at 44,093 lots of 25 tonnes each, higher than the usual 35,000 lots.
Technicals showed Malaysian palm oil is expected to seek a support at 2,449 ringgit per tonne before retesting a resistance at 2,491 ringgit, Reuters market analyst Wang Tao said.
Weak crude oil prices also weighed on palm, as it shifts demand away from tropical oil as an alternative biodiesel feedstock. Oil prices have dropped following a steep run up in U.S. crude oil inventories, showing there was ample supply in the world's largest oil consumer.
U.S. crude for December delivery gained 42 cents to $97.28 on Thursday after ending at its lowest settlement since July 1 on Wednesday.
Demand for Malaysian biodiesel products could pick up in the next few months after European Union member states agreed to impose higher duties on biodiesel imported from Indonesia and Argentina from November onwards.
Market players will also be looking at cargo surveyor export data for the Oct. 1-25 period, to be issued on Friday, to gauge demand of the tropical oil.
In competing vegetable oil markets, the U.S. soyoil contract for December was flat in late Asian trade, while the most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.1 percent.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2473 -15.00 2459 2478 353
MY PALM OIL DEC3 2461 -20.00 2456 2481 4639
MY PALM OIL JAN4 2461 -21.00 2455 2481 23416
CHINA PALM OLEIN MAY4 6124 -34.00 6108 6218 991834
CHINA SOYOIL MAY4 7202 +6.00 7168 7226 753958
CBOT SOY OIL DEC3 41.49 -0.01 41.30 41.61 5382
NYMEX CRUDE DEC3 97.29 +0.43 97.00 97.69 22164
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=3.161 Malaysian ringgit)
A stronger ringgit also curbed overseas buying interest, but optimism that stocks in Malaysia, the world's second-largest producer, might remain below the 2-million-tonne mark this year capped losses. Prices are still not far off Wednesday's top of 2,485 ringgit - the highest level since Aug. 28.
Market players are betting that output in October, typically the highest-producing month of the year, has lost steam while exports continue to hold steady.
Growers' estimates show production during Oct. 1-20 could have dropped by 10.5 percent, quelling initial fears that Malaysian output would surge towards the end of the year and cause a stock buildup.
"The market was overdone yesterday, so there's some profit-taking today," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Also, the ringgit has strengthened a bit compared to yesterday. Palm's resistance is at 2,500 ringgit, and the immediate support is at 2,450 ringgit," the trader added.
The Malaysian ringgit rose as much as 0.7 percent to 3.1460 per dollar early Thursday, but dropped back to 3.1630 later in the day.
By Thursday's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had dropped 0.9 percent to 2,461 ringgit ($779) per tonne.
Total traded volume stood at 44,093 lots of 25 tonnes each, higher than the usual 35,000 lots.
Technicals showed Malaysian palm oil is expected to seek a support at 2,449 ringgit per tonne before retesting a resistance at 2,491 ringgit, Reuters market analyst Wang Tao said.
Weak crude oil prices also weighed on palm, as it shifts demand away from tropical oil as an alternative biodiesel feedstock. Oil prices have dropped following a steep run up in U.S. crude oil inventories, showing there was ample supply in the world's largest oil consumer.
U.S. crude for December delivery gained 42 cents to $97.28 on Thursday after ending at its lowest settlement since July 1 on Wednesday.
Demand for Malaysian biodiesel products could pick up in the next few months after European Union member states agreed to impose higher duties on biodiesel imported from Indonesia and Argentina from November onwards.
Market players will also be looking at cargo surveyor export data for the Oct. 1-25 period, to be issued on Friday, to gauge demand of the tropical oil.
In competing vegetable oil markets, the U.S. soyoil contract for December was flat in late Asian trade, while the most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.1 percent.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2473 -15.00 2459 2478 353
MY PALM OIL DEC3 2461 -20.00 2456 2481 4639
MY PALM OIL JAN4 2461 -21.00 2455 2481 23416
CHINA PALM OLEIN MAY4 6124 -34.00 6108 6218 991834
CHINA SOYOIL MAY4 7202 +6.00 7168 7226 753958
CBOT SOY OIL DEC3 41.49 -0.01 41.30 41.61 5382
NYMEX CRUDE DEC3 97.29 +0.43 97.00 97.69 22164
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=3.161 Malaysian ringgit)