MARKET DEVELOPMENT
VEGOILS-Palm Ends Higher on Bargain Hunting, Weaker Ringgit
VEGOILS-Palm Ends Higher on Bargain Hunting, Weaker Ringgit
28/11/2013 (Reuters) - Malaysian palm oil futures ended higher on Wednesday as a weaker ringgit currency attracted bargain hunters, but trade was thin as most traders avoided risky bets ahead of an industry meet in Indonesia later this week.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange rose 0.7 percent to 2,640 ringgit ($817) per tonne by Wednesday's close, but prices were stuck in a range between 2,617 and 2,653 ringgit.
"The ringgit was weaker, so that helped improve margins," said a trader with a local commodities brokerage. "There was also a lot of buying interest after prices traded just above the 2,600-ringgit level."
The Malaysian ringgit fell 0.17 percent to 3.2260 against the greenback late on Wednesday, stoking demand from overseas buyers and refiners as it made the ringgit-priced feedstock cheaper.
Market players are also waiting for fresh leads on palm oil output as the monsoon season arrives. A group of planters in the world's No.2 grower said output probably rose 4 percent in the Nov. 1-20 period from a month ago, but heavier rains closer to December could disrupt harvesting.
"The arrival of fresh fruit bunches at mills has begun to slow down," the Malaysia-based trader added.
Total traded volume stood at only 16,750 lots of 25 tonnes each, less than half the average of 35,000 lots, as investors stayed on the sidelines ahead of Friday's Indonesian Palm Oil Conference and 2014 Price Outlook.
Technicals showed Malaysian palm oil could have completed a correction from the Nov. 22 high of 2,692 ringgit per tonne and is expected to rise toward this level, Reuters market analyst Wang Tao said.
Palm prices have risen more than 8 percent this year, partly lifted by optimism that Indonesia's higher blending requirements for biodiesel will stoke demand for the vegetable oil and keep global palm stocks in check.
But the top palm producer might find it hard to meet the ambitious timetable to burn more palm-based biodiesel, hampered by the demands of distributing the fuel to its thousands of islands and users' reluctance to fill tanks with biofuel.
In other markets, Brent crude oil edged above $111 a barrel on Wednesday as unrest in Libya stoked supply fears ahead of northern hemisphere winter demand, but a higher-than-expected build in U.S. crude stocks capped gains.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 0.5 percent in early Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange was flat.
Palm, soy and crude oil prices at 1029 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2619 +6.00 2600 2620 437
MY PALM OIL JAN4 2639 +18.00 2618 2650 2228
MY PALM OIL FEB4 2640 +18.00 2617 2653 10505
CHINA PALM OLEIN MAY4 6314 -40.00 6268 6330 811020
CHINA SOYOIL MAY4 7274 -2.00 7224 7276 654262
CBOT SOY OIL JAN4 40.76 +0.16 40.60 40.94 6902
NYMEX CRUDE JAN4 93.29 -0.39 93.25 93.60 12731
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=3.23 Malaysian ringgit)
The benchmark February contract on the Bursa Malaysia Derivatives Exchange rose 0.7 percent to 2,640 ringgit ($817) per tonne by Wednesday's close, but prices were stuck in a range between 2,617 and 2,653 ringgit.
"The ringgit was weaker, so that helped improve margins," said a trader with a local commodities brokerage. "There was also a lot of buying interest after prices traded just above the 2,600-ringgit level."
The Malaysian ringgit fell 0.17 percent to 3.2260 against the greenback late on Wednesday, stoking demand from overseas buyers and refiners as it made the ringgit-priced feedstock cheaper.
Market players are also waiting for fresh leads on palm oil output as the monsoon season arrives. A group of planters in the world's No.2 grower said output probably rose 4 percent in the Nov. 1-20 period from a month ago, but heavier rains closer to December could disrupt harvesting.
"The arrival of fresh fruit bunches at mills has begun to slow down," the Malaysia-based trader added.
Total traded volume stood at only 16,750 lots of 25 tonnes each, less than half the average of 35,000 lots, as investors stayed on the sidelines ahead of Friday's Indonesian Palm Oil Conference and 2014 Price Outlook.
Technicals showed Malaysian palm oil could have completed a correction from the Nov. 22 high of 2,692 ringgit per tonne and is expected to rise toward this level, Reuters market analyst Wang Tao said.
Palm prices have risen more than 8 percent this year, partly lifted by optimism that Indonesia's higher blending requirements for biodiesel will stoke demand for the vegetable oil and keep global palm stocks in check.
But the top palm producer might find it hard to meet the ambitious timetable to burn more palm-based biodiesel, hampered by the demands of distributing the fuel to its thousands of islands and users' reluctance to fill tanks with biofuel.
In other markets, Brent crude oil edged above $111 a barrel on Wednesday as unrest in Libya stoked supply fears ahead of northern hemisphere winter demand, but a higher-than-expected build in U.S. crude stocks capped gains.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 0.5 percent in early Asian trade. The most active May soybean oil contract on the Dalian Commodities Exchange was flat.
Palm, soy and crude oil prices at 1029 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2619 +6.00 2600 2620 437
MY PALM OIL JAN4 2639 +18.00 2618 2650 2228
MY PALM OIL FEB4 2640 +18.00 2617 2653 10505
CHINA PALM OLEIN MAY4 6314 -40.00 6268 6330 811020
CHINA SOYOIL MAY4 7274 -2.00 7224 7276 654262
CBOT SOY OIL JAN4 40.76 +0.16 40.60 40.94 6902
NYMEX CRUDE JAN4 93.29 -0.39 93.25 93.60 12731
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=3.23 Malaysian ringgit)