MARKET DEVELOPMENT
VEGOILS-Malaysian Palm Oil Up On Typhoon's Possible Market Impact
VEGOILS-Malaysian Palm Oil Up On Typhoon's Possible Market Impact
13/11/2013 (Reuters) - Malaysian palm oil futures jumped in late trade on Tuesday on concerns that a super typhoon in the Philippines would tighten supplies of other vegetable oils and shift demand to palm oil-based substitutes, investors said.
Traders said typhoon Haiyan, which wreaked havoc in central Philippines last week, could severely deplete coconut oil supply in the region and channel demand to palm kernel oil.
"Because of what's happening in the Philippines, there's a lot of coconut oil shipments that can't come out," a trader with a foreign commodities brokerage in Malaysia said.
"Palm kernel oil prices went up sharply because of coconut oil concerns, and this affected crude palm oil prices. I'm not sure if it's a one-day affair, but technically the market is strong," the trader added.
Palm kernel PKO-MYSTH-M1 prices soared to 3.356.52 ringgit by Tuesday's close from 3.191.18 ringgit in the afternoon.
The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange settled at 2,600 ringgit per tonne, up 2.8 percent on the day, after earlier reaching 2,604 ringgit, the highest since Nov. 4.
Total traded volume amounted to 30,466 lots of 25 tonnes each, slightly below the usual 35,000 lots.
Seasonally smaller yields of palm oil in Malaysia and Indonesia, which account for nearly all of the world's supply, have kept the market supported and lifted prices 6.6 percent so far this year, their first such gain since 2010.
Industry data on Monday showed that Malaysian palm oil output inched up 3.1 percent in October from September as monsoon rains dented the harvesting of fresh fruit bunches, with production tapering off now that the peak season is ending.
But weak exports in early November could weigh on the market. Palm oil solidifies in cold temperatures, and demand for it typically softens during winter.
Data from cargo surveyors showed exports in the Nov. 1-10 period fell 10 to 13 percent compared with the month before In other markets, Brent crude futures fell to around $106 a barrel as investors watched for further signs of easing tension between the United States and Iran, while traders booked profits after steep gains in the previous two sessions.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 1.6 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange rose 0.5 percent.
Palm, soy and crude oil prices at 1103 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2589 +57.00 2540 2589 125
MY PALM OIL DEC3 2602 +67.00 2506 2602 604
MY PALM OIL JAN4 2600 +71.00 2506 2604 18687
CHINA PALM OLEIN MAY4 6226 +8.00 6142 6228 767368
CHINA SOYOIL MAY4 7188 +36.00 7110 7196 751712
CBOT SOY OIL DEC3 41.07 +0.65 40.18 41.13 9433
NYMEX CRUDE DEC3 94.90 -0.24 94.31 95.04 18111
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 = 3.21 Malaysian ringgit)
Traders said typhoon Haiyan, which wreaked havoc in central Philippines last week, could severely deplete coconut oil supply in the region and channel demand to palm kernel oil.
"Because of what's happening in the Philippines, there's a lot of coconut oil shipments that can't come out," a trader with a foreign commodities brokerage in Malaysia said.
"Palm kernel oil prices went up sharply because of coconut oil concerns, and this affected crude palm oil prices. I'm not sure if it's a one-day affair, but technically the market is strong," the trader added.
Palm kernel PKO-MYSTH-M1 prices soared to 3.356.52 ringgit by Tuesday's close from 3.191.18 ringgit in the afternoon.
The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange settled at 2,600 ringgit per tonne, up 2.8 percent on the day, after earlier reaching 2,604 ringgit, the highest since Nov. 4.
Total traded volume amounted to 30,466 lots of 25 tonnes each, slightly below the usual 35,000 lots.
Seasonally smaller yields of palm oil in Malaysia and Indonesia, which account for nearly all of the world's supply, have kept the market supported and lifted prices 6.6 percent so far this year, their first such gain since 2010.
Industry data on Monday showed that Malaysian palm oil output inched up 3.1 percent in October from September as monsoon rains dented the harvesting of fresh fruit bunches, with production tapering off now that the peak season is ending.
But weak exports in early November could weigh on the market. Palm oil solidifies in cold temperatures, and demand for it typically softens during winter.
Data from cargo surveyors showed exports in the Nov. 1-10 period fell 10 to 13 percent compared with the month before In other markets, Brent crude futures fell to around $106 a barrel as investors watched for further signs of easing tension between the United States and Iran, while traders booked profits after steep gains in the previous two sessions.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 1.6 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange rose 0.5 percent.
Palm, soy and crude oil prices at 1103 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2589 +57.00 2540 2589 125
MY PALM OIL DEC3 2602 +67.00 2506 2602 604
MY PALM OIL JAN4 2600 +71.00 2506 2604 18687
CHINA PALM OLEIN MAY4 6226 +8.00 6142 6228 767368
CHINA SOYOIL MAY4 7188 +36.00 7110 7196 751712
CBOT SOY OIL DEC3 41.07 +0.65 40.18 41.13 9433
NYMEX CRUDE DEC3 94.90 -0.24 94.31 95.04 18111
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 = 3.21 Malaysian ringgit)