MARKET DEVELOPMENT
VEGOILS-Palm Ends Near 2-week High After China Soy Market Jumps
VEGOILS-Palm Ends Near 2-week High After China Soy Market Jumps
10/02/2014 (Reuters) - Malaysian palm oil futures ended near a two-week high on Friday, stretching gains into a third straight session after a jump in China's soy markets signalled stronger food and fuel demand for the tropical oil.
The most active May soybean oil contract on the Dalian Commodities Exchange surged as much as 3.7 percent on Friday on its first day of trading after shutting for the Lunar New Year holidays on Jan. 31. The U.S. soyoil contract for March edged down 0.1 percent in late Asian trade.
"Palm oil is up on the back of the Dalian, which is catching up after being absent for the past five days," said a trader with a foreign commodities brokerage in Malaysia.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange had gained 0.4 percent to 2,577 ringgit ($773) per tonne by Friday's close. Prices earlier hit 2,590 ringgit, their highest since Jan. 24.
Palm prices rose 0.7 percent on the week, reversing from last week's 1.2 percent loss and the third weekly gain in four.
Total traded volume for Friday stood at 24,262 lots of 25 tonnes, below the average 35,000 lots.
Hot spells over parts of Brazil have spiked fears that the major soy grower will not be able to churn out the bumper harvest earlier expected, while a report showed No.3 soy exporter Argentina has cut production estimates for the marketing year of 2013/14 due to crop damage.
Smaller soybean supplies for crushing would boost soyoil prices and potentially shift demand to rival palm oil, a common substitute.
Market players will also be watching for official data on January palm oil end-stocks, output volumes and exports in the No.2 producer Malaysia that will be released by industry regulator the Malaysian Palm Oil Board on Feb. 10.
"The market needs new leads to really move. As of now, it is ranging between 2,500-2,600 ringgit. There will only be more news on exports and end-stocks on Monday," the trader added.
A Reuters survey on Thursday showed that palm oil output last month likely fell 8.8 percent from December as trees enter a seasonally slower production cycle. End-stocks were seen at 1.98 million tonnes, their first drop since June.
Technicals showed Malaysian palm oil may break resistance at 2,581 ringgit per tonne and rise more to 2,597 ringgit, driven by a powerful wave c, said Reuters market analyst Wang Tao.
In other markets, Brent crude oil steadied above $107 a barrel on Friday on optimism U.S. jobs data would confirm accelerating economic growth in the world's top oil consumer.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2576 +11.00 2576 2582 138
MY PALM OIL MAR4 2576 +13.00 2571 2585 919
MY PALM OIL APR4 2577 +9.00 2571 2590 9806
CHINA PALM OLEIN MAY4 5804 +144.00 5780 5860 272372
CHINA SOYOIL MAY4 6614 +218.00 6552 6630 450414
CBOT SOY OIL MAR4 38.64 -0.02 38.46 38.76 6371
NYMEX CRUDE MAR4 97.36 -0.48 97.31 98.02 9943
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 = 3.33 Malaysian ringgit)
The most active May soybean oil contract on the Dalian Commodities Exchange surged as much as 3.7 percent on Friday on its first day of trading after shutting for the Lunar New Year holidays on Jan. 31. The U.S. soyoil contract for March edged down 0.1 percent in late Asian trade.
"Palm oil is up on the back of the Dalian, which is catching up after being absent for the past five days," said a trader with a foreign commodities brokerage in Malaysia.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange had gained 0.4 percent to 2,577 ringgit ($773) per tonne by Friday's close. Prices earlier hit 2,590 ringgit, their highest since Jan. 24.
Palm prices rose 0.7 percent on the week, reversing from last week's 1.2 percent loss and the third weekly gain in four.
Total traded volume for Friday stood at 24,262 lots of 25 tonnes, below the average 35,000 lots.
Hot spells over parts of Brazil have spiked fears that the major soy grower will not be able to churn out the bumper harvest earlier expected, while a report showed No.3 soy exporter Argentina has cut production estimates for the marketing year of 2013/14 due to crop damage.
Smaller soybean supplies for crushing would boost soyoil prices and potentially shift demand to rival palm oil, a common substitute.
Market players will also be watching for official data on January palm oil end-stocks, output volumes and exports in the No.2 producer Malaysia that will be released by industry regulator the Malaysian Palm Oil Board on Feb. 10.
"The market needs new leads to really move. As of now, it is ranging between 2,500-2,600 ringgit. There will only be more news on exports and end-stocks on Monday," the trader added.
A Reuters survey on Thursday showed that palm oil output last month likely fell 8.8 percent from December as trees enter a seasonally slower production cycle. End-stocks were seen at 1.98 million tonnes, their first drop since June.
Technicals showed Malaysian palm oil may break resistance at 2,581 ringgit per tonne and rise more to 2,597 ringgit, driven by a powerful wave c, said Reuters market analyst Wang Tao.
In other markets, Brent crude oil steadied above $107 a barrel on Friday on optimism U.S. jobs data would confirm accelerating economic growth in the world's top oil consumer.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2576 +11.00 2576 2582 138
MY PALM OIL MAR4 2576 +13.00 2571 2585 919
MY PALM OIL APR4 2577 +9.00 2571 2590 9806
CHINA PALM OLEIN MAY4 5804 +144.00 5780 5860 272372
CHINA SOYOIL MAY4 6614 +218.00 6552 6630 450414
CBOT SOY OIL MAR4 38.64 -0.02 38.46 38.76 6371
NYMEX CRUDE MAR4 97.36 -0.48 97.31 98.02 9943
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 = 3.33 Malaysian ringgit)