MARKET DEVELOPMENT
VEGOILS-Palm Slips After Rally on Higher Output Forecast
VEGOILS-Palm Slips After Rally on Higher Output Forecast
23/11/2013 (Reuters) - Malaysian palm oil futures ended lower on Friday, reversing gains as investors booked profits from prices that soared to more-than-one-year highs, while prospects of higher output from the world's top producer weighed on the market.
Indonesia's palm oil output will jump 13 percent to 29.5 million tonnes next year as more maturing plantation areas are harvested, the Indonesian Palm Oil Board said, expecting that to push average prices lower.
Malaysia's industry regulator expects its production in the No.2 grower to hit 19.5 million tonnes in 2014 as replanting schemes take root.
Prices had hit 2,692 ringgit in early trade, their highest in more than a year, fuelled by estimates for tighter stockpiles that could continue to fall next year.
Traders said the surge in prices could also narrow palm oil's discount to other oilseeds, and shift demand to competing soyoil.
"The new high also brought in some profit-taking before the weekend," said a trader with a local commodities brokerage.
By Friday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had lost 0.4 percent to 2,640 ringgit ($825) per tonne.
Total traded volume stood at 42,487 lots of 25 tonnes each, much higher than the average 35,000 lots.
But the fall in prices was not enough to eat into weekly gains. Palm rose 1.0 percent this week, its second straight weekly rise.
Uncertainty on palm demand could further weigh on prices, as winter rolls in and buyers cut back on purchases due to palm's tendency to solidify when cold.
The beginning of the monsoon season, however, which brings heavy rains to Malaysia and Indonesia, could hamper output, as floods complicate the task of harvesting.
Technicals were bullish. Malaysian palm oil is expected to rise to 2,716 ringgit per tonne, driven by a wave C, said Reuters market analyst Wang Tao.
The European Union will impose punitive duties on imports of biodiesel from Argentina and Indonesia for the next five years, starting from Nov. 27, after ruling that producers in the two countries were selling into the bloc at unfairly low prices.
The duties are to be set at an average of 24.6 percent for biodiesel from Argentina and 18.9 percent from Indonesia, confirming earlier Reuters reports.
Brent crude oil slipped below $110 a barrel on Friday but was on track to end higher for the second week running, with investors awaiting the outcome of talks on Iran's nuclear programme.
In competing vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange rose 0.8 percent.
Palm, soy and crude oil prices at 1044 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2640 -13.00 2635 2667 253
MY PALM OIL JAN4 2643 -10.00 2630 2688 6436
MY PALM OIL FEB4 2640 -11.00 2631 2692 22495
CHINA PALM OLEIN MAY4 6440 +98.00 6424 6488 917988
CHINA SOYOIL MAY4 7302 +60.00 7300 7384 1004284
CBOT SOY OIL JAN4 41.64 -0.16 41.51 41.88 8595
NYMEX CRUDE JAN4 95.12 -0.32 95.02 95.45 13556
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)
Indonesia's palm oil output will jump 13 percent to 29.5 million tonnes next year as more maturing plantation areas are harvested, the Indonesian Palm Oil Board said, expecting that to push average prices lower.
Malaysia's industry regulator expects its production in the No.2 grower to hit 19.5 million tonnes in 2014 as replanting schemes take root.
Prices had hit 2,692 ringgit in early trade, their highest in more than a year, fuelled by estimates for tighter stockpiles that could continue to fall next year.
Traders said the surge in prices could also narrow palm oil's discount to other oilseeds, and shift demand to competing soyoil.
"The new high also brought in some profit-taking before the weekend," said a trader with a local commodities brokerage.
By Friday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had lost 0.4 percent to 2,640 ringgit ($825) per tonne.
Total traded volume stood at 42,487 lots of 25 tonnes each, much higher than the average 35,000 lots.
But the fall in prices was not enough to eat into weekly gains. Palm rose 1.0 percent this week, its second straight weekly rise.
Uncertainty on palm demand could further weigh on prices, as winter rolls in and buyers cut back on purchases due to palm's tendency to solidify when cold.
The beginning of the monsoon season, however, which brings heavy rains to Malaysia and Indonesia, could hamper output, as floods complicate the task of harvesting.
Technicals were bullish. Malaysian palm oil is expected to rise to 2,716 ringgit per tonne, driven by a wave C, said Reuters market analyst Wang Tao.
The European Union will impose punitive duties on imports of biodiesel from Argentina and Indonesia for the next five years, starting from Nov. 27, after ruling that producers in the two countries were selling into the bloc at unfairly low prices.
The duties are to be set at an average of 24.6 percent for biodiesel from Argentina and 18.9 percent from Indonesia, confirming earlier Reuters reports.
Brent crude oil slipped below $110 a barrel on Friday but was on track to end higher for the second week running, with investors awaiting the outcome of talks on Iran's nuclear programme.
In competing vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange rose 0.8 percent.
Palm, soy and crude oil prices at 1044 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2640 -13.00 2635 2667 253
MY PALM OIL JAN4 2643 -10.00 2630 2688 6436
MY PALM OIL FEB4 2640 -11.00 2631 2692 22495
CHINA PALM OLEIN MAY4 6440 +98.00 6424 6488 917988
CHINA SOYOIL MAY4 7302 +60.00 7300 7384 1004284
CBOT SOY OIL JAN4 41.64 -0.16 41.51 41.88 8595
NYMEX CRUDE JAN4 95.12 -0.32 95.02 95.45 13556
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)