MARKET DEVELOPMENT
VEGOILS-Palm Oil Slips to 1-Week Low on Bigger Stockpile Woes
VEGOILS-Palm Oil Slips to 1-Week Low on Bigger Stockpile Woes
11/06/2014 (Reuters) - Malaysian palm oil futures slipped to a one-week low on Tuesday after an industry report showed stocks in the world's second-largest producer hit a four-month high at the end of May, with sluggish demand adding pressure to prices.
Industry regulator Malaysian Palm Oil Board reported Malaysian palm oil stocks rose 4.2 percent to 1.84 million tonnes in May, above market forecasts for 1.81 million tonnes, after a pick up in production offset overseas sales of the tropical commodity.
"The market reacted to the MPOB figure and sold down accordingly," said a trader with a foreign commodities brokerage. "The report confirms the idea that the stocks will hit the 2-million-tonne mark by September."
Weakness in rival edible oil markets also weighed.
"The external sector is not holding the market. When they (investors) saw the Chinese and U.S. soybean oil weakening, theytook the opportunity to sell down further," the Kuala Lumpur-based trader added.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange had inched down 1.1 percent to 2,386 ringgit ($744) per tonne by Tuesday's close, stretching itslosses into a fourth straight session.
Palm prices, down for a twelfth session out of 13, fell asmuch as to 2,376 ringgit in afternoon trade, a June 3 low.
Total traded volume stood at 39,327 lots of 25 tonnes, abovethe usual 12,500 lots.
Technicals were also bearish.
A rebound target at 2,446 ringgit per tonne has been aborted for palm oil, as it could have resumed its downtrend, said Reuters market analyst Wang Tao.
The U.S. soyoil contract for July lost 0.6 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange fell 0.7 percent. Losses in rival edible oil prices narrow palm'sdiscount and could channel demand away from the tropical oil.
Cargo surveyor Intertek Testing Services reported thatexports of Malaysian palm oil products in the first ten days of June fell 0.3 percent to 390,729 tonnes compared with the same period a month ago, with shipments to India, China and Europe falling.
Another cargo surveyor, Societe Generale de Surveillance,will release its own statistics on June 16.
Strength in the Malaysian ringgit continued to pressure palm, as it erodes margins and makes the ringgit-priced feedstock less attractive for overseas investors and refiners.
The Southeast Asian currency has gained more than 2 percentsince the start of the year and on Monday advanced to a near seven-month high of 3.1930.
In other markets, Brent crude steadied around $110 a barrelon Tuesday, supported by tight supply and hopes of healthy demand growth from the world's top two oil consumers, the United States and China.
Palm, soy and crude oil prices at 1028 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 0 +0.00 0 0 0
MY PALM OIL JUL4 2394 -22.00 2386 2419 1550
MY PALM OIL AUG4 2386 -26.00 2376 2416 16566
CHINA PALM OLEIN SEP4 5834 -22.00 5830 5884 176416
CHINA SOYOIL SEP4 6694 -44.00 6692 6760 144102
CBOT SOY OIL JUL4 39.03 -0.25 38.80 39.34 5191
NYMEX CRUDE JUL4 104.73 +0.32 104.44 104.89 20134
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 = 3.2060 Malaysian ringgit)
($1 = 6.2250 Chinese yuan)
Industry regulator Malaysian Palm Oil Board reported Malaysian palm oil stocks rose 4.2 percent to 1.84 million tonnes in May, above market forecasts for 1.81 million tonnes, after a pick up in production offset overseas sales of the tropical commodity.
"The market reacted to the MPOB figure and sold down accordingly," said a trader with a foreign commodities brokerage. "The report confirms the idea that the stocks will hit the 2-million-tonne mark by September."
Weakness in rival edible oil markets also weighed.
"The external sector is not holding the market. When they (investors) saw the Chinese and U.S. soybean oil weakening, theytook the opportunity to sell down further," the Kuala Lumpur-based trader added.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange had inched down 1.1 percent to 2,386 ringgit ($744) per tonne by Tuesday's close, stretching itslosses into a fourth straight session.
Palm prices, down for a twelfth session out of 13, fell asmuch as to 2,376 ringgit in afternoon trade, a June 3 low.
Total traded volume stood at 39,327 lots of 25 tonnes, abovethe usual 12,500 lots.
Technicals were also bearish.
A rebound target at 2,446 ringgit per tonne has been aborted for palm oil, as it could have resumed its downtrend, said Reuters market analyst Wang Tao.
The U.S. soyoil contract for July lost 0.6 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange fell 0.7 percent. Losses in rival edible oil prices narrow palm'sdiscount and could channel demand away from the tropical oil.
Cargo surveyor Intertek Testing Services reported thatexports of Malaysian palm oil products in the first ten days of June fell 0.3 percent to 390,729 tonnes compared with the same period a month ago, with shipments to India, China and Europe falling.
Another cargo surveyor, Societe Generale de Surveillance,will release its own statistics on June 16.
Strength in the Malaysian ringgit continued to pressure palm, as it erodes margins and makes the ringgit-priced feedstock less attractive for overseas investors and refiners.
The Southeast Asian currency has gained more than 2 percentsince the start of the year and on Monday advanced to a near seven-month high of 3.1930.
In other markets, Brent crude steadied around $110 a barrelon Tuesday, supported by tight supply and hopes of healthy demand growth from the world's top two oil consumers, the United States and China.
Palm, soy and crude oil prices at 1028 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 0 +0.00 0 0 0
MY PALM OIL JUL4 2394 -22.00 2386 2419 1550
MY PALM OIL AUG4 2386 -26.00 2376 2416 16566
CHINA PALM OLEIN SEP4 5834 -22.00 5830 5884 176416
CHINA SOYOIL SEP4 6694 -44.00 6692 6760 144102
CBOT SOY OIL JUL4 39.03 -0.25 38.80 39.34 5191
NYMEX CRUDE JUL4 104.73 +0.32 104.44 104.89 20134
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 = 3.2060 Malaysian ringgit)
($1 = 6.2250 Chinese yuan)