MARKET DEVELOPMENT
CORRECTED-VEGOILS-Palm Slips to Over 1-Week Low on Weak Soy, Prices Fall for 2nd Straight Month
CORRECTED-VEGOILS-Palm Slips to Over 1-Week Low on Weak Soy, Prices Fall for 2nd Straight Month
30/04/2014 (Reuters) - Malaysian palm oil futures slipped to a more than one-week low on Wednesday, tracking volatile soyoil markets overseas, although a slight pick up in export demand provided some support to the tropical oil.
Cargo surveyor Intertek Testing Services reported that exports of Malaysia's palm oil products rose 1.3 percent to 1,220,882 tonnes in April compared with a month earlier, as higher imports from the world's top edible oil consumers India and China offset weaker demand in Europe.
But market players say palm oil demand will need to rise faster to lift prices, which dropped 0.4 percent in April, its second straight monthly fall.
"I don't think people are convinced that demand is there yet," said a trader with a foreign commodities brokerage. "We need to see at least a 10 percent rise to pull the market further up."
The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell to 2,615 ringgit, the lowest since April 21, in late Wednesday trade, before settling at 2,622 ringgit ($804) per tonne by the day's close, down 0.5 percent.
Total traded volumes stood at 36,572 lots of 25 tonnes,above the average 35,000 lots.
Technicals showed that a bearish target at 2,612 ringgit per tonne remains unchanged for palm oil as it has got out of a wedge, said Reuters market analyst Wang Tao. He added that an immediate target will be the April 21 low of 2,612 ringgit, where a fall below which could be extended to 2,572 ringgit.
Trade movements in palm futures were choppy on Wednesday, following volatility in overseas U.S. and China soyoil markets.
The U.S. soyoil contract for July fell 0.6 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange was nearly flat.
"Investors are moving in and out (of the market)," the Kuala Lumpur-based trader added.
"There is a strong possibility they are going to make a round of selling to further press prices to 2,600 ringgit. We have to watch this carefully."
In other markets, oil fell towards $108 per barrel on Wednesday pressured by an improving supply outlook with stocks in the United States expected to be at a record high and optimism about higher exports from Libya.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2692 +2.00 2658 2722 987
MY PALM OIL JUN4 2644 -8.00 2631 2661 4040
MY PALM OIL JUL4 2622 -14.00 2615 2647 18015
CHINA PALM OLEIN SEP4 6130 -24.00 6118 6170 315216
CHINA SOYOIL SEP4 6990 -2.00 6978 7008 283078
CBOT SOY OIL JUL4 42.70 -0.25 42.69 43.00 3308
NYMEX CRUDE JUN4 100.34 -0.94 100.10 100.76 20971
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 = 3.261 Malaysian ringgit)
($1 = 6.2593 Chinese yuan)
Cargo surveyor Intertek Testing Services reported that exports of Malaysia's palm oil products rose 1.3 percent to 1,220,882 tonnes in April compared with a month earlier, as higher imports from the world's top edible oil consumers India and China offset weaker demand in Europe.
But market players say palm oil demand will need to rise faster to lift prices, which dropped 0.4 percent in April, its second straight monthly fall.
"I don't think people are convinced that demand is there yet," said a trader with a foreign commodities brokerage. "We need to see at least a 10 percent rise to pull the market further up."
The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell to 2,615 ringgit, the lowest since April 21, in late Wednesday trade, before settling at 2,622 ringgit ($804) per tonne by the day's close, down 0.5 percent.
Total traded volumes stood at 36,572 lots of 25 tonnes,above the average 35,000 lots.
Technicals showed that a bearish target at 2,612 ringgit per tonne remains unchanged for palm oil as it has got out of a wedge, said Reuters market analyst Wang Tao. He added that an immediate target will be the April 21 low of 2,612 ringgit, where a fall below which could be extended to 2,572 ringgit.
Trade movements in palm futures were choppy on Wednesday, following volatility in overseas U.S. and China soyoil markets.
The U.S. soyoil contract for July fell 0.6 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange was nearly flat.
"Investors are moving in and out (of the market)," the Kuala Lumpur-based trader added.
"There is a strong possibility they are going to make a round of selling to further press prices to 2,600 ringgit. We have to watch this carefully."
In other markets, oil fell towards $108 per barrel on Wednesday pressured by an improving supply outlook with stocks in the United States expected to be at a record high and optimism about higher exports from Libya.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2692 +2.00 2658 2722 987
MY PALM OIL JUN4 2644 -8.00 2631 2661 4040
MY PALM OIL JUL4 2622 -14.00 2615 2647 18015
CHINA PALM OLEIN SEP4 6130 -24.00 6118 6170 315216
CHINA SOYOIL SEP4 6990 -2.00 6978 7008 283078
CBOT SOY OIL JUL4 42.70 -0.25 42.69 43.00 3308
NYMEX CRUDE JUN4 100.34 -0.94 100.10 100.76 20971
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 = 3.261 Malaysian ringgit)
($1 = 6.2593 Chinese yuan)