MARKET DEVELOPMENT
VEGOILS-Palm Ends Lower, Output Expected Steady Despite Monsoon
VEGOILS-Palm Ends Lower, Output Expected Steady Despite Monsoon
27/11/2013 (Reuter) - Malaysian palm oil futures ended lower on Tuesday, extending losses into a second day on prospects of stronger-than-expected production in the world's second-largest grower.
Market players said while the monsoon normally brings heavy thunderstorms and floods that complicate harvesting, wet weather so far this month may have encouraged fruiting instead, although yields are limited as palm's seasonal high-cycle tapers off.
Estimates from planter group the Malaysian Palm Oil Association (MPOA), showed that Nov. 1-20 output rose 4.1 percent from October's 1.97 million tonnes, despite expectations of slow output due to monsoon rains.
"Usually, around this time of the year there are always floods, but there has been no major disaster affecting palm oil so far," said a trader with a foreign commodities brokerage.
"The market was pushed up by anticipation that stocks will go drastically lower. When investors realized that supply was available, they liquidated long positions and booked profits," the Kuala Lumpur-based trader added.
By Tuesday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had lost 0.3 percent to stand at 2,622 ringgit ($819) per tonne, coming off last Friday's one-year high of 2,692 ringgit. Prices were range-bound between 2,602 and 2,637 ringgit.
Total traded volume stood at 36,571 lots of 25 tonnes each, slightly above the average 35,000 lots.
Technicals showed Malaysian palm oil was riding on a steady uptrend and may find support at 2,600 ringgit per tonne before resuming its rise, said Reuters market analyst Wang Tao.
Palm oil output from Indonesia, the world's top producer, is forecast to climb 6 percent to 28.5 million tonnes next year, although a biodiesel mandate that requires higher proportions of palm oil would see more supply snapped up for domestic use.
Palm prices have risen 7.5 percent this year - the commodity's first gain since 2010 - on optimism that the Indonesian biodiesel policy will help shift some export demand to rival Malaysia and keep palm stocks in the region in check.
Cargo surveyor data showed exports of Malaysian palm oil shipped fell between 0.1 and 2.3 percent in the Nov. 1-25 period, improving from steeper declines earlier.
In other markets, oil held near $111 a barrel on Tuesday as investors judged the historic deal between Iran and world powers would bring no immediate increase in crude oil supplies from the OPEC member.
In competing vegetable oil markets, the U.S. soyoil contract for December was flat in late Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange fell 1.1 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2590 -32.00 2583 2608 568
MY PALM OIL JAN4 2621 -9.00 2601 2636 3334
MY PALM OIL FEB4 2622 -8.00 2602 2637 19294
CHINA PALM OLEIN MAY4 6294 -156.00 6288 6436 1184336
CHINA SOYOIL MAY4 7240 -80.00 7234 7314 863778
CBOT SOY OIL JAN4 40.98 +0.03 40.78 41.07 8648
NYMEX CRUDE JAN4 94.68 +0.59 94.17 94.69 10661
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=3.22 Malaysian ringgit)
Market players said while the monsoon normally brings heavy thunderstorms and floods that complicate harvesting, wet weather so far this month may have encouraged fruiting instead, although yields are limited as palm's seasonal high-cycle tapers off.
Estimates from planter group the Malaysian Palm Oil Association (MPOA), showed that Nov. 1-20 output rose 4.1 percent from October's 1.97 million tonnes, despite expectations of slow output due to monsoon rains.
"Usually, around this time of the year there are always floods, but there has been no major disaster affecting palm oil so far," said a trader with a foreign commodities brokerage.
"The market was pushed up by anticipation that stocks will go drastically lower. When investors realized that supply was available, they liquidated long positions and booked profits," the Kuala Lumpur-based trader added.
By Tuesday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had lost 0.3 percent to stand at 2,622 ringgit ($819) per tonne, coming off last Friday's one-year high of 2,692 ringgit. Prices were range-bound between 2,602 and 2,637 ringgit.
Total traded volume stood at 36,571 lots of 25 tonnes each, slightly above the average 35,000 lots.
Technicals showed Malaysian palm oil was riding on a steady uptrend and may find support at 2,600 ringgit per tonne before resuming its rise, said Reuters market analyst Wang Tao.
Palm oil output from Indonesia, the world's top producer, is forecast to climb 6 percent to 28.5 million tonnes next year, although a biodiesel mandate that requires higher proportions of palm oil would see more supply snapped up for domestic use.
Palm prices have risen 7.5 percent this year - the commodity's first gain since 2010 - on optimism that the Indonesian biodiesel policy will help shift some export demand to rival Malaysia and keep palm stocks in the region in check.
Cargo surveyor data showed exports of Malaysian palm oil shipped fell between 0.1 and 2.3 percent in the Nov. 1-25 period, improving from steeper declines earlier.
In other markets, oil held near $111 a barrel on Tuesday as investors judged the historic deal between Iran and world powers would bring no immediate increase in crude oil supplies from the OPEC member.
In competing vegetable oil markets, the U.S. soyoil contract for December was flat in late Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange fell 1.1 percent.
Palm, soy and crude oil prices at 1003 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2590 -32.00 2583 2608 568
MY PALM OIL JAN4 2621 -9.00 2601 2636 3334
MY PALM OIL FEB4 2622 -8.00 2602 2637 19294
CHINA PALM OLEIN MAY4 6294 -156.00 6288 6436 1184336
CHINA SOYOIL MAY4 7240 -80.00 7234 7314 863778
CBOT SOY OIL JAN4 40.98 +0.03 40.78 41.07 8648
NYMEX CRUDE JAN4 94.68 +0.59 94.17 94.69 10661
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=3.22 Malaysian ringgit)