MARKET DEVELOPMENT
VEGOILS-Palm Trades Flat After Export Data, Hovers Near 8-Mth Highs
VEGOILS-Palm Trades Flat After Export Data, Hovers Near 8-Mth Highs
01/11/2013 (Reuters) - Malaysian palm oil futures matched an eight-month high from the previous session before tracking back to trade flat on Thursday, with traders consolidating recent gains against a backdrop of lower output expectations.
By the midday, the benchmark January contract on the Bursa Malaysia Derivatives Exchange rose 0.1 percent to 2,550 ringgit ($810) per tonne.
Earlier, prices touched 2,573 ringgit per tonne, matching a peak from Wednesday's session, which was the highest level since Feb. 20.
"Today we are taking a breather but holding above 2,500 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"The export data came out down slightly, but people were not expecting much ... production is still slow and will be down this month."
Exports of Malaysian palm oil products in October fell 0.5 percent to 1,521,928 tonnes from 1,530,292 tonnes shipped in September, cargo surveyor Intertek Testing Services (ITS) said.
Both Malaysia and Indonesia, which account for about 90 percent of the world's palm oil production, are now entering their monsoon weather season, with many traders now forecasting lower annual output than initially expected.
"Malaysian stocks are now back down at a manageable level," said a Singapore-based analyst. "There is also potential for production to under whelm in Indonesia and this is providing some price support, and may help with a technical squeeze.
"If a weather driven theme, it is going to be temporary so you may expect a little correction into the first quarter of next year."
Total traded volume on the Malaysian benchmark stood at 9,093 lots of 25 tonnes each, under the usual 12,500 lots.
Technicals showed Malaysian palm oil is expected to rise to 2,630 ringgit per tonne, as it has broken above a resistance at 2,544 ringgit, said Reuters market analyst Wang Tao.
Another supporting factor for palm oil, traders said, was expectations of a rise in biodiesel use next year in both Malaysia and Indonesia, with both countries likely to impose higher biodiesel blend requirements.
"Overseas investors are under estimating Indonesian biodiesel demand," said a Jakarta-based palm trader.
In other markets, Brent crude edged lower, but held well above $109 a barrel and was set to end October with its fourth monthly gain in five, bolstered by disruptions to shipments from key producer Libya.
In competing vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in early Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange was little changed.
Palm, soy and crude oil prices at 0644 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2578 -7.00 2578 2589 15
MY PALM OIL DEC3 2564 +7.00 2559 2583 523
MY PALM OIL JAN4 2550 +3.00 2547 2573 6336
CHINA PALM OLEIN MAY4 6282 +24.00 6264 6332 821510
CHINA SOYOIL MAY4 7210 +12.00 7182 7240 879714
CBOT SOY OIL DEC3 41.48 -0.14 41.43 41.69 3813
NYMEX CRUDE DEC3 96.43 -0.34 96.35 96.70 5125
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 = 3.1485 Malaysian ringgit)
By the midday, the benchmark January contract on the Bursa Malaysia Derivatives Exchange rose 0.1 percent to 2,550 ringgit ($810) per tonne.
Earlier, prices touched 2,573 ringgit per tonne, matching a peak from Wednesday's session, which was the highest level since Feb. 20.
"Today we are taking a breather but holding above 2,500 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"The export data came out down slightly, but people were not expecting much ... production is still slow and will be down this month."
Exports of Malaysian palm oil products in October fell 0.5 percent to 1,521,928 tonnes from 1,530,292 tonnes shipped in September, cargo surveyor Intertek Testing Services (ITS) said.
Both Malaysia and Indonesia, which account for about 90 percent of the world's palm oil production, are now entering their monsoon weather season, with many traders now forecasting lower annual output than initially expected.
"Malaysian stocks are now back down at a manageable level," said a Singapore-based analyst. "There is also potential for production to under whelm in Indonesia and this is providing some price support, and may help with a technical squeeze.
"If a weather driven theme, it is going to be temporary so you may expect a little correction into the first quarter of next year."
Total traded volume on the Malaysian benchmark stood at 9,093 lots of 25 tonnes each, under the usual 12,500 lots.
Technicals showed Malaysian palm oil is expected to rise to 2,630 ringgit per tonne, as it has broken above a resistance at 2,544 ringgit, said Reuters market analyst Wang Tao.
Another supporting factor for palm oil, traders said, was expectations of a rise in biodiesel use next year in both Malaysia and Indonesia, with both countries likely to impose higher biodiesel blend requirements.
"Overseas investors are under estimating Indonesian biodiesel demand," said a Jakarta-based palm trader.
In other markets, Brent crude edged lower, but held well above $109 a barrel and was set to end October with its fourth monthly gain in five, bolstered by disruptions to shipments from key producer Libya.
In competing vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in early Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange was little changed.
Palm, soy and crude oil prices at 0644 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2578 -7.00 2578 2589 15
MY PALM OIL DEC3 2564 +7.00 2559 2583 523
MY PALM OIL JAN4 2550 +3.00 2547 2573 6336
CHINA PALM OLEIN MAY4 6282 +24.00 6264 6332 821510
CHINA SOYOIL MAY4 7210 +12.00 7182 7240 879714
CBOT SOY OIL DEC3 41.48 -0.14 41.43 41.69 3813
NYMEX CRUDE DEC3 96.43 -0.34 96.35 96.70 5125
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 = 3.1485 Malaysian ringgit)