MARKET DEVELOPMENT
VEGOILS-Palm Edges Down To Near 2-Wk Low AheaVEGOILS-Palm Edges Down To Near 2-Wk Low Ahead of Industry Reportd of Industry Report
VEGOILS-Palm Edges Down To Near 2-Wk Low AheaVEGOILS-Palm Edges Down To Near 2-Wk Low Ahead of Industry Reportd of Industry Report
09/11/2013 (Reuters) - Malaysian palm oil futures slipped to a near two-week low on Friday as a bout of technical selling pressured prices, but the market was rangebound ahead of a key industry report on production and stocks in the world's No.2 producer.
A surge in the palm market last Friday prompted a round of profit-taking and a technical correction this week, stretching losses into a fourth straight day and setting prices on track for their biggest weekly loss since end-March.
Market players are waiting for official data on Malaysian end-October palm oil stocks, exports and output that will be released on Monday by industry regulator, the Malaysian Palm Oil Board (MPOB).
A Reuters survey on Thursday showed that Malaysian palm oil stocks probably inched up to 1.82 million tonnes in October, with the increase in inventories limited as the seasonally high-cycle began to wane and monsoon rains dented production.
"This is the fourth day the market is down. There is a correction in prices and some technical selling going on. The focus will be on Monday for the MPOB data," said a trader with a foreign commodities brokerage.
"The market is trading in a range. If the stocks and production go higher than expected, the market will try to test the 2,500 ringgit support level," the trader added.
By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had fallen 0.9 percent to 2,522 ringgit ($793) per tonne. Prices traded in a tight range between 2,517-2,540 ringgit, and have shed 4 percent so far this week -- the steepest weekly drop in 7 months.
Total traded volume stood at 9,875 lots of 25 tonnes each on Thursday, lower than the usual 12,500 lots as some investors stayed on the sidelines ahead of the official stocks report.
Technicals showed that Malaysian palm oil is expected to fall further to 2,491 ringgit, as it has broken below support at 2,544 ringgit per tonne, said Reuters market analyst Wang Tao.
In other markets, Brent futures slipped as China's crude imports in October fell to the lowest in more than a year, but an improvement in the overall trade numbers stemmed a further slide and kept the contract above $103 a barrel.
A U.S. plan to ban artificial trans fats in processed foods could strip away as much as 15 percent of the nation's edible soyoil demand, industry officials say, and give way to alternative vegetable oils such as palm oil to replace the partially hydrogenated soyoil used in foods ranging from cookies to frozen pizza.
Investors will also be keeping watch on export data for the first ten days of November, which will also be released on Monday, to gauge demand for the tropical oil especially from major buyer China.
Traders say Chinese buyers could start re-stocking palm oil ahead of its spring festival celebrated early next year.
In vegetable oil markets, the U.S. soyoil contract for December fell 0.4 percent in early Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange fell 0.4 percent.
Palm, soy and crude oil prices at 0615 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 0 +0.00 0 0 0
MY PALM OIL DEC3 2519 -24.00 2518 2531 369
MY PALM OIL JAN4 2522 -22.00 2517 2540 5691
CHINA PALM OLEIN MAY4 6214 -56.00 6208 6274 491578
CHINA SOYOIL MAY4 7164 -38.00 7150 7190 518592
CBOT SOY OIL DEC3 40.58 -0.16 40.52 40.79 1657
NYMEX CRUDE DEC3 94.36 +0.16 94.29 94.66 5134
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 = 3.18 Malaysian ringgit)
A surge in the palm market last Friday prompted a round of profit-taking and a technical correction this week, stretching losses into a fourth straight day and setting prices on track for their biggest weekly loss since end-March.
Market players are waiting for official data on Malaysian end-October palm oil stocks, exports and output that will be released on Monday by industry regulator, the Malaysian Palm Oil Board (MPOB).
A Reuters survey on Thursday showed that Malaysian palm oil stocks probably inched up to 1.82 million tonnes in October, with the increase in inventories limited as the seasonally high-cycle began to wane and monsoon rains dented production.
"This is the fourth day the market is down. There is a correction in prices and some technical selling going on. The focus will be on Monday for the MPOB data," said a trader with a foreign commodities brokerage.
"The market is trading in a range. If the stocks and production go higher than expected, the market will try to test the 2,500 ringgit support level," the trader added.
By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had fallen 0.9 percent to 2,522 ringgit ($793) per tonne. Prices traded in a tight range between 2,517-2,540 ringgit, and have shed 4 percent so far this week -- the steepest weekly drop in 7 months.
Total traded volume stood at 9,875 lots of 25 tonnes each on Thursday, lower than the usual 12,500 lots as some investors stayed on the sidelines ahead of the official stocks report.
Technicals showed that Malaysian palm oil is expected to fall further to 2,491 ringgit, as it has broken below support at 2,544 ringgit per tonne, said Reuters market analyst Wang Tao.
In other markets, Brent futures slipped as China's crude imports in October fell to the lowest in more than a year, but an improvement in the overall trade numbers stemmed a further slide and kept the contract above $103 a barrel.
A U.S. plan to ban artificial trans fats in processed foods could strip away as much as 15 percent of the nation's edible soyoil demand, industry officials say, and give way to alternative vegetable oils such as palm oil to replace the partially hydrogenated soyoil used in foods ranging from cookies to frozen pizza.
Investors will also be keeping watch on export data for the first ten days of November, which will also be released on Monday, to gauge demand for the tropical oil especially from major buyer China.
Traders say Chinese buyers could start re-stocking palm oil ahead of its spring festival celebrated early next year.
In vegetable oil markets, the U.S. soyoil contract for December fell 0.4 percent in early Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange fell 0.4 percent.
Palm, soy and crude oil prices at 0615 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 0 +0.00 0 0 0
MY PALM OIL DEC3 2519 -24.00 2518 2531 369
MY PALM OIL JAN4 2522 -22.00 2517 2540 5691
CHINA PALM OLEIN MAY4 6214 -56.00 6208 6274 491578
CHINA SOYOIL MAY4 7164 -38.00 7150 7190 518592
CBOT SOY OIL DEC3 40.58 -0.16 40.52 40.79 1657
NYMEX CRUDE DEC3 94.36 +0.16 94.29 94.66 5134
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 = 3.18 Malaysian ringgit)