MARKET DEVELOPMENT
VEGOILS-Palm Falls for First Time in 5 Days on Profit-taking
VEGOILS-Palm Falls for First Time in 5 Days on Profit-taking
12/02/2014 (Reuters) - Malaysian palm oil futures ended lower on Tuesday, falling for the first time in five sessions as a bout of profit-taking weighed, with prices further pressured by the end of a rally in overseas soy markets.
Palm prices, which have gained 1.3 percent so far this week, had hit a more than one-month high on Monday, partly boosted by an industry report showing that stockpiles in the No.2 producer have eased for the first time since June.
"The palm market is down a bit because of some profit-taking after four straight days of gains," said a trader with a foreign commodities brokerage in Malaysia.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange had dropped 0.2 percent to 2,611 ringgit ($784) per tonne by Tuesday's close. Trade was choppy with prices trading between 2,595 and 2,622 ringgit.
Total traded volume stood at 41,542 lots of 25 tonnes, much higher than the usual 12,500 lots.
Technicals showed that Malaysian palm oil faces a resistance at 2,597 ringgit per tonne, and may hover below this level for one day or retrace to 2,581 ringgit, said Reuters market analyst Wang Tao.
Industry regulator the Malaysian Palm Oil Board on Monday reported that palm oil stocks fell to 1.93 million tonnes at end-January, due to seasonally slowing output which typically produces smaller yields.
Traders, however, said stockpiles will have to fall more quickly in order to lift prices higher.
In vegetable oil markets tracked by palm, the most active May soybean oil contract on the Dalian Commodities Exchange fell 0.6 percent late Tuesday, coming off big gains made since last Friday. The U.S. soyoil contract for March slipped 0.6 percent.
Chicago soybeans were almost unchanged at $13.24-3/4 a bushel on Tuesday, after USDA left its outlook for soybean ending stocks unchanged at 150 million bushels, slightly above the average trade estimate of 143 million bushels.
Market players were expecting tighter supplies of soybeans due to dry weather in major producing countries, which could lift soyoil prices and channel demand to rival palm oil instead.
A Reuters poll on Tuesday showed that palm prices are expected to climb for a second straight year and would likely average at 2,700 ringgit in 2014, as strong demand from the biofuel industry soaks up supplies and curbs exports from top producers Indonesia and Malaysia.
In other markets, Brent crude edged toward $109 a barrel on Tuesday on cautious optimism that the Federal Reserve's new head will signal that it will pursue slower stimulus tapering to reduce the risk of hampering the world's biggest economy.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2610 -16.00 2595 2610 124
MY PALM OIL MAR4 2612 -3.00 2595 2629 1803
MY PALM OIL APR4 2611 -5.00 2595 2622 19113
CHINA PALM OLEIN MAY4 5838 -24.00 5828 5886 285780
CHINA SOYOIL MAY4 6618 -42.00 6608 6670 328172
CBOT SOY OIL MAR4 38.50 -0.23 38.47 38.75 4799
NYMEX CRUDE MAR4 100.37 +0.31 99.89 100.49 9352
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)
Palm prices, which have gained 1.3 percent so far this week, had hit a more than one-month high on Monday, partly boosted by an industry report showing that stockpiles in the No.2 producer have eased for the first time since June.
"The palm market is down a bit because of some profit-taking after four straight days of gains," said a trader with a foreign commodities brokerage in Malaysia.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange had dropped 0.2 percent to 2,611 ringgit ($784) per tonne by Tuesday's close. Trade was choppy with prices trading between 2,595 and 2,622 ringgit.
Total traded volume stood at 41,542 lots of 25 tonnes, much higher than the usual 12,500 lots.
Technicals showed that Malaysian palm oil faces a resistance at 2,597 ringgit per tonne, and may hover below this level for one day or retrace to 2,581 ringgit, said Reuters market analyst Wang Tao.
Industry regulator the Malaysian Palm Oil Board on Monday reported that palm oil stocks fell to 1.93 million tonnes at end-January, due to seasonally slowing output which typically produces smaller yields.
Traders, however, said stockpiles will have to fall more quickly in order to lift prices higher.
In vegetable oil markets tracked by palm, the most active May soybean oil contract on the Dalian Commodities Exchange fell 0.6 percent late Tuesday, coming off big gains made since last Friday. The U.S. soyoil contract for March slipped 0.6 percent.
Chicago soybeans were almost unchanged at $13.24-3/4 a bushel on Tuesday, after USDA left its outlook for soybean ending stocks unchanged at 150 million bushels, slightly above the average trade estimate of 143 million bushels.
Market players were expecting tighter supplies of soybeans due to dry weather in major producing countries, which could lift soyoil prices and channel demand to rival palm oil instead.
A Reuters poll on Tuesday showed that palm prices are expected to climb for a second straight year and would likely average at 2,700 ringgit in 2014, as strong demand from the biofuel industry soaks up supplies and curbs exports from top producers Indonesia and Malaysia.
In other markets, Brent crude edged toward $109 a barrel on Tuesday on cautious optimism that the Federal Reserve's new head will signal that it will pursue slower stimulus tapering to reduce the risk of hampering the world's biggest economy.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2610 -16.00 2595 2610 124
MY PALM OIL MAR4 2612 -3.00 2595 2629 1803
MY PALM OIL APR4 2611 -5.00 2595 2622 19113
CHINA PALM OLEIN MAY4 5838 -24.00 5828 5886 285780
CHINA SOYOIL MAY4 6618 -42.00 6608 6670 328172
CBOT SOY OIL MAR4 38.50 -0.23 38.47 38.75 4799
NYMEX CRUDE MAR4 100.37 +0.31 99.89 100.49 9352
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)