MARKET DEVELOPMENT
VEGOILS-Palm Rises to Near 1-wk High on Gains in Overseas Soy Markets, Demand Hopes
VEGOILS-Palm Rises to Near 1-wk High on Gains in Overseas Soy Markets, Demand Hopes
29/04/2014 (Reuters) - Malaysian palm oil futures rose to a near one-week high on Monday, lifted by gains in China and U.S. soyoil markets, while positive export data late last week fuelled optimism of a recovery in demand for the tropical oil.
The U.S. soyoil contract for July rose 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.7 percent. Palm typically tracks the rival commodity as both vegetable oils are common food and fuel substitutes.
"The palm market is catching up on higher soybean oil prices on Friday and today," said a trader with a foreign commodities brokerage.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange touched 2,685 ringgit in late trade, its highest since April 22, before settling at 2,673 ringgit ($819) per tonne by the day's close, a 0.5 percent rise.
Total traded volumes were thin at 27,001 lots of 25 tonnes, against the average 35,000 lots.
Technicals showed that Malaysian palm oil is expected to test a resistance zone of 2,703-2,710 ringgit per tonne, driven by a wave c, said Reuters market analyst Wang Tao.
Cargo surveyors on Friday reported that exports of Malaysian palm oil products for April 1-25 rose 3.4 percent from the same period a month ago, as shipments to India, Pakistan and China picked up.
Demand of refined palm olein, used as cooking and frying oil in food industries to produce snacks and ready-to-eat goods, also rose from a month earlier.
"Exports are very good and that is supporting prices. Export demand will pick up as we're moving into the Ramadan festive season," said the Kuala Lumpur-based trader. The Muslim holy month of Ramadan will begin in late June, followed by the Eid al-Fitr celebrations in July.
Market players anticipate Malaysia's palm oil output to rise slightly in April after surging more than 17 percent last month.
Traders said the Malaysian Palm Oil Association, a group of growers, estimate crude palm oil production in the first 20 days of April rose 3.3 percent from 1.50 million tonnes recorded in March.
Industry players say Malaysia, the world's No.2 producer of palm, faces prospects of lower output growth in the next few years after a slump in the number of Indonesian workers applying for jobs in oil palm plantations worsens a labour crunch in the sector.
In other markets, Brent crude oil rose above $110 a barrel, close to a seven-week high, as tensions mounted in eastern Ukraine and Libya delayed the reopening of a damaged eastern port.
Palm, soy and crude oil prices at 1022 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2720 +15.00 2710 2735 270
MY PALM OIL JUN4 2688 +12.00 2682 2702 4744
MY PALM OIL JUL4 2673 +13.00 2667 2685 12480
CHINA PALM OLEIN SEP4 6192 +14.00 6176 6240 389682
CHINA SOYOIL SEP4 7026 +46.00 6996 7052 474644
CBOT SOY OIL JUL4 43.37 +0.22 42.96 43.65 10470
NYMEX CRUDE JUN4 101.26 +0.66 100.49 101.52 21525
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 = 3.265 Malaysian ringgit)
($1 = 6.2530 Chinese yuan)
The U.S. soyoil contract for July rose 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.7 percent. Palm typically tracks the rival commodity as both vegetable oils are common food and fuel substitutes.
"The palm market is catching up on higher soybean oil prices on Friday and today," said a trader with a foreign commodities brokerage.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange touched 2,685 ringgit in late trade, its highest since April 22, before settling at 2,673 ringgit ($819) per tonne by the day's close, a 0.5 percent rise.
Total traded volumes were thin at 27,001 lots of 25 tonnes, against the average 35,000 lots.
Technicals showed that Malaysian palm oil is expected to test a resistance zone of 2,703-2,710 ringgit per tonne, driven by a wave c, said Reuters market analyst Wang Tao.
Cargo surveyors on Friday reported that exports of Malaysian palm oil products for April 1-25 rose 3.4 percent from the same period a month ago, as shipments to India, Pakistan and China picked up.
Demand of refined palm olein, used as cooking and frying oil in food industries to produce snacks and ready-to-eat goods, also rose from a month earlier.
"Exports are very good and that is supporting prices. Export demand will pick up as we're moving into the Ramadan festive season," said the Kuala Lumpur-based trader. The Muslim holy month of Ramadan will begin in late June, followed by the Eid al-Fitr celebrations in July.
Market players anticipate Malaysia's palm oil output to rise slightly in April after surging more than 17 percent last month.
Traders said the Malaysian Palm Oil Association, a group of growers, estimate crude palm oil production in the first 20 days of April rose 3.3 percent from 1.50 million tonnes recorded in March.
Industry players say Malaysia, the world's No.2 producer of palm, faces prospects of lower output growth in the next few years after a slump in the number of Indonesian workers applying for jobs in oil palm plantations worsens a labour crunch in the sector.
In other markets, Brent crude oil rose above $110 a barrel, close to a seven-week high, as tensions mounted in eastern Ukraine and Libya delayed the reopening of a damaged eastern port.
Palm, soy and crude oil prices at 1022 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2720 +15.00 2710 2735 270
MY PALM OIL JUN4 2688 +12.00 2682 2702 4744
MY PALM OIL JUL4 2673 +13.00 2667 2685 12480
CHINA PALM OLEIN SEP4 6192 +14.00 6176 6240 389682
CHINA SOYOIL SEP4 7026 +46.00 6996 7052 474644
CBOT SOY OIL JUL4 43.37 +0.22 42.96 43.65 10470
NYMEX CRUDE JUN4 101.26 +0.66 100.49 101.52 21525
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 = 3.265 Malaysian ringgit)
($1 = 6.2530 Chinese yuan)