MARKET DEVELOPMENT
VEGOILS-Palm Falls on Poor Export Data; Biggest Monthly Drop Since Feb 2013
VEGOILS-Palm Falls on Poor Export Data; Biggest Monthly Drop Since Feb 2013
01/04/2014 (Reuters) - Malaysian palm oil futures fell to their lowest in a month and a half on Monday, with prices recording their biggest monthly drop in over a year as disappointing export data stoked worries about slowing global demand for the vegetable oil.
Cargo surveyor Intertek Testing Services (ITS) reported that Malaysia's palm oil exports in March fell 3.1 percent to 1.21 million tonnes from a month ago, hurt by weak demand from the world's top edible oil buyers China and India.
Another cargo surveyor Societe Generale de Surveillance showed that exports for the same period fell 3.4 percent to 1.20 million tonnes shipped.
A stronger Malaysian ringgit also made the ringgit-denominated feedstock more expensive for overseas investors and refiners, curbing buying interest. The ringgit rose 0.2 percent to trade at 3.2660 against the U.S. dollar late Monday.
"The weak exports are going to hold back the market," said a trader with a foreign commodities brokerage. "The strong ringgit is also a damper."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.7 percent to 2,636 ringgit
($808) per tonne by Monday's close. Prices earlier fell to 2,626 ringgit, their lowest since Feb. 12.
Total traded volume stood at 36,123 lots of 25 tonnes, slightly higher than the average 35,000 lots.
Technicals for the next quarter were bearish. Malaysian palm oil is expected to revisit its July 2013 low of 2,137 ringgit per tonne over the next three months, as it has completed a rebound from this level, Reuters market analyst Wang Tao said.
Benchmark palm prices have lost nearly 6 percent in March, their biggest monthly fall since February 2013 as a crop-damaging dry spell eased and lacklustre exports stoked fears that key importers will switch to rival oils.
But short supply for the crude grade, due to the earlier drought, has bolstered spot month prices for the April contract as well as crude palm oil sold on the physical Malaysian market. April prices rose to as high as 2,739 ringgit early Monday.
In other markets, Brent crude oil traded near a two-week high around $108 a barrel on Monday as tension between Russia and the West offset a rise in oil supply from OPEC's second-largest producer Iraq.
In competing vegetable oil markets, the U.S. soyoil contract for May edged up 0.3 percent in late Asian trade, while
the most active September soybean oil contract on the Dalian Commodities Exchange lost 0.1 percent.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2709 -26.00 2709 2739 110
MY PALM OIL MAY4 2656 -18.00 2650 2692 4826
MY PALM OIL JUN4 2636 -19.00 2626 2667 17203
CHINA PALM OLEIN SEP4 6170 -24.00 6148 6216 481756
CHINA SOYOIL SEP4 6918 -6.00 6906 6964 546160
CBOT SOY OIL MAY4 40.58 +0.10 40.38 40.79 5418
NYMEX CRUDE MAY4 101.48 -0.19 101.34 101.73 11184
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 = 3.263 Malaysian ringgit)
($1 = 6.2180 Chinese yuan)
Cargo surveyor Intertek Testing Services (ITS) reported that Malaysia's palm oil exports in March fell 3.1 percent to 1.21 million tonnes from a month ago, hurt by weak demand from the world's top edible oil buyers China and India.
Another cargo surveyor Societe Generale de Surveillance showed that exports for the same period fell 3.4 percent to 1.20 million tonnes shipped.
A stronger Malaysian ringgit also made the ringgit-denominated feedstock more expensive for overseas investors and refiners, curbing buying interest. The ringgit rose 0.2 percent to trade at 3.2660 against the U.S. dollar late Monday.
"The weak exports are going to hold back the market," said a trader with a foreign commodities brokerage. "The strong ringgit is also a damper."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.7 percent to 2,636 ringgit
($808) per tonne by Monday's close. Prices earlier fell to 2,626 ringgit, their lowest since Feb. 12.
Total traded volume stood at 36,123 lots of 25 tonnes, slightly higher than the average 35,000 lots.
Technicals for the next quarter were bearish. Malaysian palm oil is expected to revisit its July 2013 low of 2,137 ringgit per tonne over the next three months, as it has completed a rebound from this level, Reuters market analyst Wang Tao said.
Benchmark palm prices have lost nearly 6 percent in March, their biggest monthly fall since February 2013 as a crop-damaging dry spell eased and lacklustre exports stoked fears that key importers will switch to rival oils.
But short supply for the crude grade, due to the earlier drought, has bolstered spot month prices for the April contract as well as crude palm oil sold on the physical Malaysian market. April prices rose to as high as 2,739 ringgit early Monday.
In other markets, Brent crude oil traded near a two-week high around $108 a barrel on Monday as tension between Russia and the West offset a rise in oil supply from OPEC's second-largest producer Iraq.
In competing vegetable oil markets, the U.S. soyoil contract for May edged up 0.3 percent in late Asian trade, while
the most active September soybean oil contract on the Dalian Commodities Exchange lost 0.1 percent.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2709 -26.00 2709 2739 110
MY PALM OIL MAY4 2656 -18.00 2650 2692 4826
MY PALM OIL JUN4 2636 -19.00 2626 2667 17203
CHINA PALM OLEIN SEP4 6170 -24.00 6148 6216 481756
CHINA SOYOIL SEP4 6918 -6.00 6906 6964 546160
CBOT SOY OIL MAY4 40.58 +0.10 40.38 40.79 5418
NYMEX CRUDE MAY4 101.48 -0.19 101.34 101.73 11184
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 = 3.263 Malaysian ringgit)
($1 = 6.2180 Chinese yuan)