MARKET DEVELOPMENT
VEGOILS-Palm Gains Ahead of Lunar New Year Holidays
VEGOILS-Palm Gains Ahead of Lunar New Year Holidays
31/01/2014 (Reuters) - Malaysian palm oil futures ended in positive territory for the second successive day on Thursday, with traders citing short-covering ahead of a long weekend and favourable currencies.
Palm oil futures and physical markets in Malaysia will be closed from midday for the Lunar New Year and Federal Territories Day holidays, and will resume trade on Feb. 4.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged up 0.8 percent to end at 2,563 ringgit ($770) per tonne by Thursday's midday close.
Total traded volume stood at 9,547 lots of 25 tonnes, lower than the usual 12,500 lots.
"The market is pretty strong," said a trader with foreign commodities brokerage in Malaysia. "There is some short-covering going on because of the long holiday.
"Positives include the ringgit weakening," the trader added. "After the holidays, direction will be related to external markets again, like soybeans."
Most emerging Asian currencies fell on Thursday, as a further reduction in U.S. monetary stimulus and slowing economic growth in China made investors wary of taking on risk.
A weak ringgit improves margins for overseas buyers and refiners, lifting demand for palm oil, which is used in a variety of household products from soaps to cookies and chocolate.
Benchmark palm prices, however, have fallen 3.8 percent this month, their biggest monthly loss since September last year, as investors fretted that sluggish export demand would fail to dent
palm stocks in the world's second-largest producer.
Some traders forecast demand to rise in the coming months as winter fades and the weather becomes warmer. Buyers facing the northern winter had cut down purchases of palm as the tropical oil solidifies in cold temperatures.
In technicals, Malaysian palm oil is expected to rise further towards 2,581 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent futures held near $108 a barrel as bitter cold across the northern Hemisphere boosted heating oil demand, while the U.S. Federal Reserve's move to trim its monetary stimulus weighed on prices.
In rival vegetable oils, the U.S. soyoil contract for March was little changed, while the most active May soybean oil contract on the Dalian Commodities Exchange lost 1.1 percent in early Asian trade.
Palm, soy and crude oil prices at 0538 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2535 +0.00 2529 2535 6
MY PALM OIL MAR4 2564 +23.00 2529 2564 667
MY PALM OIL APR4 2563 +19.00 2532 2567 4748
CHINA PALM OLEIN MAY4 5672 -28.00 5630 5674 126978
CHINA SOYOIL MAY4 6398 -68.00 6370 6432 201374
CBOT SOY OIL MAR4 37.12 +0.02 36.98 37.17 2354
NYMEX CRUDE MAR4 97.44 +0.08 97.36 97.68 3231
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 = 3.3350 Malaysian ringgit)
Palm oil futures and physical markets in Malaysia will be closed from midday for the Lunar New Year and Federal Territories Day holidays, and will resume trade on Feb. 4.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged up 0.8 percent to end at 2,563 ringgit ($770) per tonne by Thursday's midday close.
Total traded volume stood at 9,547 lots of 25 tonnes, lower than the usual 12,500 lots.
"The market is pretty strong," said a trader with foreign commodities brokerage in Malaysia. "There is some short-covering going on because of the long holiday.
"Positives include the ringgit weakening," the trader added. "After the holidays, direction will be related to external markets again, like soybeans."
Most emerging Asian currencies fell on Thursday, as a further reduction in U.S. monetary stimulus and slowing economic growth in China made investors wary of taking on risk.
A weak ringgit improves margins for overseas buyers and refiners, lifting demand for palm oil, which is used in a variety of household products from soaps to cookies and chocolate.
Benchmark palm prices, however, have fallen 3.8 percent this month, their biggest monthly loss since September last year, as investors fretted that sluggish export demand would fail to dent
palm stocks in the world's second-largest producer.
Some traders forecast demand to rise in the coming months as winter fades and the weather becomes warmer. Buyers facing the northern winter had cut down purchases of palm as the tropical oil solidifies in cold temperatures.
In technicals, Malaysian palm oil is expected to rise further towards 2,581 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent futures held near $108 a barrel as bitter cold across the northern Hemisphere boosted heating oil demand, while the U.S. Federal Reserve's move to trim its monetary stimulus weighed on prices.
In rival vegetable oils, the U.S. soyoil contract for March was little changed, while the most active May soybean oil contract on the Dalian Commodities Exchange lost 1.1 percent in early Asian trade.
Palm, soy and crude oil prices at 0538 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2535 +0.00 2529 2535 6
MY PALM OIL MAR4 2564 +23.00 2529 2564 667
MY PALM OIL APR4 2563 +19.00 2532 2567 4748
CHINA PALM OLEIN MAY4 5672 -28.00 5630 5674 126978
CHINA SOYOIL MAY4 6398 -68.00 6370 6432 201374
CBOT SOY OIL MAR4 37.12 +0.02 36.98 37.17 2354
NYMEX CRUDE MAR4 97.44 +0.08 97.36 97.68 3231
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 = 3.3350 Malaysian ringgit)