MARKET DEVELOPMENT
VEGOILS-Palm Oil Hits 1-Week Low, Tracks Weak Soyoil; Chinese Data, Fed Eyed
VEGOILS-Palm Oil Hits 1-Week Low, Tracks Weak Soyoil; Chinese Data, Fed Eyed
30/04/2014 (Reuters) - Malaysian palm oil futures eased to one-week lows on Tuesday, as traders booked profits after strong gains in the previous session and as comparative vegetable oils weighed on sentiment.
The U.S. soyoil contract for July reversed earlier falls to gain 0.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange traded 0.4 percent lower. Palm typically tracks the rival commodity as both vegetable oils are common food and fuel substitutes.
"We are in a very tight trading range," said a trader with a foreign commodities brokerage. "There is no fresh incentive in palm markets, we are lower due to tracking movements in soy."
By the close, the benchmark July contract on the Bursa Malaysia Derivatives Exchange fell 1.3 percent to end at 2,638 ringgit ($810) per tonne, after earlier touching a low of 2,635 ringgit.
Total traded volumes were thin at 30,550 lots of 25 tonnes, against the average 35,000 lots.
Palm prices hit a near one-week high on Monday at 2,685 ringgit, as positive export data late last week fuelled optimism of a recovery in demand for the tropical oil.
"Chinese imports have been quite bad," the trader added. "There is a credit squeeze because buyers find it hard to get credit."
Technicals showed that Malaysian palm oil may drop to its April 21 low of 2,612 ringgit per tonne, as indicated by a wedge, said Reuters market analyst Wang Tao.
"This week, the releases of China Manufacturing Purchasing Managers' Index coupled with the Federal Open Market Committee meeting are expected to cause some turbulence in the palm oil markets," Phillip Futures said in a note.
"Prices are holding well above the resistance at 2,650 ... we are bullish in palm oil for this week."
Also looking ahead, the Muslim holy month of Ramadan will begin in late June, followed by the Eid al-Fitr celebrations in July, and this is expected to help boost palm oil demand next month.
In related news, Indonesian conglomerate PT Astra International reported late on Monday a 10 percent rise in first-quarter net profit, partially lifted by a rise in palm oil prices.
In other markets, crude oil rebounded towards $109 a barrel a day after prospects of a return of Libyan supply prompted its biggest daily fall in nearly a month although investors showed muted response to more U.S. sanctions on Russia.
Palm, soy and crude oil prices at 1028 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2696 -21.00 2690 2705 205
MY PALM OIL JUN4 2651 -37.00 2650 2678 5237
MY PALM OIL JUL4 2638 -34.00 2635 2664 17862
CHINA PALM OLEIN SEP4 6170 -38.00 6124 6176 421708
CHINA SOYOIL SEP4 6998 -28.00 6968 7014 396988
CBOT SOY OIL JUL4 42.88 +0.05 42.65 43.05 4975
NYMEX CRUDE JUN4 101.13 +0.29 100.81 101.40 14998
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 = 3.2650 Malaysian Ringgits) ($1 = 6.2530 Chinese Yuan)
The U.S. soyoil contract for July reversed earlier falls to gain 0.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange traded 0.4 percent lower. Palm typically tracks the rival commodity as both vegetable oils are common food and fuel substitutes.
"We are in a very tight trading range," said a trader with a foreign commodities brokerage. "There is no fresh incentive in palm markets, we are lower due to tracking movements in soy."
By the close, the benchmark July contract on the Bursa Malaysia Derivatives Exchange fell 1.3 percent to end at 2,638 ringgit ($810) per tonne, after earlier touching a low of 2,635 ringgit.
Total traded volumes were thin at 30,550 lots of 25 tonnes, against the average 35,000 lots.
Palm prices hit a near one-week high on Monday at 2,685 ringgit, as positive export data late last week fuelled optimism of a recovery in demand for the tropical oil.
"Chinese imports have been quite bad," the trader added. "There is a credit squeeze because buyers find it hard to get credit."
Technicals showed that Malaysian palm oil may drop to its April 21 low of 2,612 ringgit per tonne, as indicated by a wedge, said Reuters market analyst Wang Tao.
"This week, the releases of China Manufacturing Purchasing Managers' Index coupled with the Federal Open Market Committee meeting are expected to cause some turbulence in the palm oil markets," Phillip Futures said in a note.
"Prices are holding well above the resistance at 2,650 ... we are bullish in palm oil for this week."
Also looking ahead, the Muslim holy month of Ramadan will begin in late June, followed by the Eid al-Fitr celebrations in July, and this is expected to help boost palm oil demand next month.
In related news, Indonesian conglomerate PT Astra International reported late on Monday a 10 percent rise in first-quarter net profit, partially lifted by a rise in palm oil prices.
In other markets, crude oil rebounded towards $109 a barrel a day after prospects of a return of Libyan supply prompted its biggest daily fall in nearly a month although investors showed muted response to more U.S. sanctions on Russia.
Palm, soy and crude oil prices at 1028 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2696 -21.00 2690 2705 205
MY PALM OIL JUN4 2651 -37.00 2650 2678 5237
MY PALM OIL JUL4 2638 -34.00 2635 2664 17862
CHINA PALM OLEIN SEP4 6170 -38.00 6124 6176 421708
CHINA SOYOIL SEP4 6998 -28.00 6968 7014 396988
CBOT SOY OIL JUL4 42.88 +0.05 42.65 43.05 4975
NYMEX CRUDE JUN4 101.13 +0.29 100.81 101.40 14998
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 = 3.2650 Malaysian Ringgits) ($1 = 6.2530 Chinese Yuan)