MARKET DEVELOPMENT
VEGOILS-Palm Oil Ends Lower as Malaysian Ringgit Firms
VEGOILS-Palm Oil Ends Lower as Malaysian Ringgit Firms
08/04/2014 (Reuters) - Malaysian palm oil futures inched down in thin trade on Monday as a stronger local currency stemmed buying interest for the ringgit-denominated feedstock, although anticipation of tighter inventories capped losses.
The Malaysian ringgit gained 0.4 percent late Monday to trade at 3.2665 against the U.S. dollar, making the tropical oil more expensive for overseas investors and refiners.
"One of the reasons the market came down is because since early morning the ringgit has been strengthening to 3.26," a trader with a foreign commodities brokerage said.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange lost 1.3 percent to close at 2,623 ringgit ($802) per tonne.
Trade volumes were also subdued as the Chinese financial markets were closed for a holiday, market players said.
Palm's total traded volume stood at 32,779 lots of 25 tonnes, below the average 35,000 lots.
Technicals showed Malaysian palm oil is expected to end its current wave 4 rebound around resistance at 2,671 ringgit per tonne, before falling towards support at 2,613 ringgit, said Reuters market analyst Wang Tao.
Benchmark palm oil prices notched their first weekly gain since mid-March last week, lifted by optimism that festive-driven demand and falling stocks in the world's No.2 producer will underpin prices.
Palm oil consumption typically rises ahead of the Muslim fasting month of Ramadan and the Eid al-Fitr festival, which starts from end-June this year, as it is used as cooking oil and as a key ingredient in foods ranging from cookies to chocolate and ice-cream.
A Reuters poll of planters and traders showed that Malaysia's inventories likely dropped to a more than three-year low of 1.58 million tonnes in March as dry weather earlier this year hindered yields.
In other markets, Brent crude oil fell below $106 a barrel on Monday, snapping a two-day winning streak, after Libyan rebels occupying four eastern oil ports agreed to end an eight-month blockade, raising the prospect of increased supply to world markets.
In other competing vegetable oil markets, the U.S. soyoil contract for May fell 0.1 percent in late Asian trade.
The most Dalian Commodities Exchange was closed for a holiday and will resume trading on Tuesday.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2665 -40.00 2645 2678 179
MY PALM OIL MAY4 2645 -33.00 2628 2688 930
MY PALM OIL JUN4 2623 -35.00 2611 2663 17199
CHINA PALM OLEIN SEP4 6260 +48.00 6218 6268 341150
CHINA SOYOIL SEP4 7066 +80.00 7016 7068 478240
CBOT SOY OIL MAY4 41.51 -0.06 41.45 41.80 4274
NYMEX CRUDE MAY4 100.75 -0.39 100.42 101.08 15279
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 = 3.27 Malaysian ringgit)
($1 = 6.2123 Chinese yuan)
The Malaysian ringgit gained 0.4 percent late Monday to trade at 3.2665 against the U.S. dollar, making the tropical oil more expensive for overseas investors and refiners.
"One of the reasons the market came down is because since early morning the ringgit has been strengthening to 3.26," a trader with a foreign commodities brokerage said.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange lost 1.3 percent to close at 2,623 ringgit ($802) per tonne.
Trade volumes were also subdued as the Chinese financial markets were closed for a holiday, market players said.
Palm's total traded volume stood at 32,779 lots of 25 tonnes, below the average 35,000 lots.
Technicals showed Malaysian palm oil is expected to end its current wave 4 rebound around resistance at 2,671 ringgit per tonne, before falling towards support at 2,613 ringgit, said Reuters market analyst Wang Tao.
Benchmark palm oil prices notched their first weekly gain since mid-March last week, lifted by optimism that festive-driven demand and falling stocks in the world's No.2 producer will underpin prices.
Palm oil consumption typically rises ahead of the Muslim fasting month of Ramadan and the Eid al-Fitr festival, which starts from end-June this year, as it is used as cooking oil and as a key ingredient in foods ranging from cookies to chocolate and ice-cream.
A Reuters poll of planters and traders showed that Malaysia's inventories likely dropped to a more than three-year low of 1.58 million tonnes in March as dry weather earlier this year hindered yields.
In other markets, Brent crude oil fell below $106 a barrel on Monday, snapping a two-day winning streak, after Libyan rebels occupying four eastern oil ports agreed to end an eight-month blockade, raising the prospect of increased supply to world markets.
In other competing vegetable oil markets, the U.S. soyoil contract for May fell 0.1 percent in late Asian trade.
The most Dalian Commodities Exchange was closed for a holiday and will resume trading on Tuesday.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2665 -40.00 2645 2678 179
MY PALM OIL MAY4 2645 -33.00 2628 2688 930
MY PALM OIL JUN4 2623 -35.00 2611 2663 17199
CHINA PALM OLEIN SEP4 6260 +48.00 6218 6268 341150
CHINA SOYOIL SEP4 7066 +80.00 7016 7068 478240
CBOT SOY OIL MAY4 41.51 -0.06 41.45 41.80 4274
NYMEX CRUDE MAY4 100.75 -0.39 100.42 101.08 15279
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 = 3.27 Malaysian ringgit)
($1 = 6.2123 Chinese yuan)