MARKET DEVELOPMENT
VEGOILS-Palm Slips to Over 3-month Low on Uncertainty Ahead of Key Report, Firm Ringgit
VEGOILS-Palm Slips to Over 3-month Low on Uncertainty Ahead of Key Report, Firm Ringgit
09/05/2014 (Reuters) - Malaysian palm oil futures slipped to a more than three-month low on Thursday, falling six out of seven sessions, due to uncertainty ahead of a key report on stocks, while a firm ringgit continued to hurt sentiment.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell to a Feb. 6 low of 2,552 ringgit late Thursday, before closing at 2,563 ringgit ($793) per tonne, down 0.6 percent.
Investors await a key industry report that will detail palm oil stocks, exports and output for April in Malaysia, the world's second-largest grower of the commodity.
"This market is looking for new supportive leads. So far we don't have any. You've got production, end-stocks and also exports inching up ... The market does not know where to go," said a trader with a foreign commodities brokerage.
Malaysian palm oil stocks likely inched up to a three-month high of 1.70 million tonnes in April as output of the tropical oil continued to rise, a Reuters survey ahead of official data showed, with a pick up in export demand checking a greater rise in inventories.
Total traded volume stood at 33,042 lots of 25 tonnes, slightly below the average 35,000 lots.
Technicals showed that a bearish target at 2,519 ringgit per tonne will be confirmed when palm oil falls below its May 6 low of 2,558 ringgit, said Reuters market analyst Wang Tao.
A stronger ringgit also dragged on palm prices, setting them on track to post their second straight weekly fall.
The Malaysian ringgit rose 0.15 percent to 3.2455 against the U.S. dollar late Thursday, making the ringgit-priced feedstock more expensive for overseas buyers.
Traders say the current weakness in palm prices could attract demand, especially as buyers rush to replenish stockpiles ahead of a Muslim festival in July that is celebrated with communal fasting and feasting.
"If the market really comes down further to coincide with Ramadan, then exports may jump in the later part of May and into June," the Kuala Lumpur-based trader said. He added that the immediate support for prices was at 2,550 ringgit, with a resistance at 2,600 ringgit.
In other markets, Brent oil fell below $108 a barrel on Thursday as tensions in Ukraine appeared to show signs of easing but the crisis in Libya and a jump in Chinese crude imports to a record high underpinned prices.
In competing vegetable oil markets, 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 fell 0.7 percent.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2627 -15.00 2625 2643 44
MY PALM OIL JUN4 2591 -10.00 2581 2607 2469
MY PALM OIL JUL4 2563 -16.00 2552 2584 18751
CHINA PALM OLEIN SEP4 5968 -38.00 5952 6012 283684
CHINA SOYOIL SEP4 6776 -50.00 6768 6824 352110
CBOT SOY OIL JUL4 41.07 +0.24 40.78 41.10 4824
NYMEX CRUDE JUN4 100.47 -0.30 100.33 100.93 14302
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 = 6.2280 Chinese yuan)
($1 = 3.233 Malaysian ringgit)
The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell to a Feb. 6 low of 2,552 ringgit late Thursday, before closing at 2,563 ringgit ($793) per tonne, down 0.6 percent.
Investors await a key industry report that will detail palm oil stocks, exports and output for April in Malaysia, the world's second-largest grower of the commodity.
"This market is looking for new supportive leads. So far we don't have any. You've got production, end-stocks and also exports inching up ... The market does not know where to go," said a trader with a foreign commodities brokerage.
Malaysian palm oil stocks likely inched up to a three-month high of 1.70 million tonnes in April as output of the tropical oil continued to rise, a Reuters survey ahead of official data showed, with a pick up in export demand checking a greater rise in inventories.
Total traded volume stood at 33,042 lots of 25 tonnes, slightly below the average 35,000 lots.
Technicals showed that a bearish target at 2,519 ringgit per tonne will be confirmed when palm oil falls below its May 6 low of 2,558 ringgit, said Reuters market analyst Wang Tao.
A stronger ringgit also dragged on palm prices, setting them on track to post their second straight weekly fall.
The Malaysian ringgit rose 0.15 percent to 3.2455 against the U.S. dollar late Thursday, making the ringgit-priced feedstock more expensive for overseas buyers.
Traders say the current weakness in palm prices could attract demand, especially as buyers rush to replenish stockpiles ahead of a Muslim festival in July that is celebrated with communal fasting and feasting.
"If the market really comes down further to coincide with Ramadan, then exports may jump in the later part of May and into June," the Kuala Lumpur-based trader said. He added that the immediate support for prices was at 2,550 ringgit, with a resistance at 2,600 ringgit.
In other markets, Brent oil fell below $108 a barrel on Thursday as tensions in Ukraine appeared to show signs of easing but the crisis in Libya and a jump in Chinese crude imports to a record high underpinned prices.
In competing vegetable oil markets, 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 fell 0.7 percent.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2627 -15.00 2625 2643 44
MY PALM OIL JUN4 2591 -10.00 2581 2607 2469
MY PALM OIL JUL4 2563 -16.00 2552 2584 18751
CHINA PALM OLEIN SEP4 5968 -38.00 5952 6012 283684
CHINA SOYOIL SEP4 6776 -50.00 6768 6824 352110
CBOT SOY OIL JUL4 41.07 +0.24 40.78 41.10 4824
NYMEX CRUDE JUN4 100.47 -0.30 100.33 100.93 14302
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 = 6.2280 Chinese yuan)
($1 = 3.233 Malaysian ringgit)