MARKET DEVELOPMENT
VEGOILS-Palm Down for 2nd Day as Crude Cools, but Records 3rd Weekly Gain
VEGOILS-Palm Down for 2nd Day as Crude Cools, but Records 3rd Weekly Gain
(Updates prices)
* Weekly prices up 0.1 pct, posts 3rd straight gain
* Palm prices easing alongside crude oil -trader
* Oil steadies around $113 as Iraq supply worries ease
* Palm prices to drop as Indonesia lags biodiesel targets-Mistry
28/06/2014 (Reuters) - Malaysian palm oil futures fell for a second session on Friday as easing crude prices reined in biodiesel-driven demand for the tropical oil, and as weakness in comparative soyoil markets dragged.
Benchmark prices shot up to a near one-month high of 2,511 ringgit earlier this week, as violence in Iraq sparked fears of supply disruptions from OPEC's second-largest producer, in turn making palm a more attractive option for biodiesel feedstock.
This demand cooled off as crude prices eased later. Palm prices, however, recorded their third straight weekly gain with a 0.1 percent rise.
"The palm market went up along with higher crude oil. When that came down, our market also followed," said a trader with a foreign commodities brokerage, adding that overnight losses in soy markets also weighed on palm prices.
The benchmark September contract on the Bursa Malaysia Derivatives Exchange inched down 1 percent to 2,445 ringgit ($761) per tonne by Friday's close.
Total traded volume stood at 36,041 lots of 25 tonnes, higher than the average 35,000 lots.
Brent crude was up 10 cents at $113.31 a barrel by 0930 GMT after falling 79 cents in the previous session, consolidating after one of its biggest weekly falls this year as investors unwound positions on reduced concerns over exports from strife-torn Iraq.
U.S. crude was down 5 cents at $105.79 a barrel. For the week, the contract has fallen 1.4 percent.
Technicals showed palm oil's next target is 2,422 ringgit, although it faces a resistance at 2,513-2,554 ringgit, according to Reuters market analyst Wang Tao.
Palm oil prices could drop to between 2,300-2,500 ringgit per tonne over the next few weeks, missing an earlier forecast by about 13 percent given Indonesia's disappointing uptake of palm-based biodiesel, leading vegetable oil analyst Dorab Mistry said on Thursday.
Mistry said while demand would be robust at the lower end of this range, a rise to near 2,500 ringgit could curb interest and push up Malaysian palm stocks to a peak of 2.5 million tonnes by November. Stocks at end-May stood at 1.84 million tonnes.
"Many people say that the price level now is on the higher side, and that it should go lower," the trader added.
Another Kuala Lumpur-based commodities dealer said easing palm prices will likely provide a weaker tone for next week.
Strength in the Malaysian currency on Friday also stemmed buying interest from overseas investors and refiners.
The ringgit rose as much as 0.4 percent to 3.2050 against the greenback on Friday, buoyed by expectations that Malaysia's central bank will raise interest rates next month.
But the current hot and dry weather across Malaysia capped losses, keeping palm prices in a tight range between 2,436-2,469 ringgit. Short spells of dry weather can hinder growth of palm fruit.
Some market players say the heat could be early signs of the drought-inducing El Nino weather pattern, which is slated to hit Southeast Asia later this year.
In competing vegetable oil markets, the U.S. soyoil contract fell 0.2 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange shed 0.6 percent.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL4 2468 -19.00 2461 2479 300
MY PALM OIL AUG4 2462 -19.00 2454 2479 1998
MY PALM OIL SEP4 2445 -25.00 2436 2469 21641
CHINA PALM OLEIN JAN5 5994 -62.00 5988 6048 332588
CHINA SOYOIL JAN5 7004 -40.00 6992 7052 346808
CBOT SOY OIL DEC4 40.76 -0.10 40.62 40.99 3626
NYMEX CRUDE AUG4 105.83 -0.01 105.48 105.97 15019
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 = 3.2110 Malaysian ringgit)
($1 = 6.2181 Chinese yuan)
* Weekly prices up 0.1 pct, posts 3rd straight gain
* Palm prices easing alongside crude oil -trader
* Oil steadies around $113 as Iraq supply worries ease
* Palm prices to drop as Indonesia lags biodiesel targets-Mistry
28/06/2014 (Reuters) - Malaysian palm oil futures fell for a second session on Friday as easing crude prices reined in biodiesel-driven demand for the tropical oil, and as weakness in comparative soyoil markets dragged.
Benchmark prices shot up to a near one-month high of 2,511 ringgit earlier this week, as violence in Iraq sparked fears of supply disruptions from OPEC's second-largest producer, in turn making palm a more attractive option for biodiesel feedstock.
This demand cooled off as crude prices eased later. Palm prices, however, recorded their third straight weekly gain with a 0.1 percent rise.
"The palm market went up along with higher crude oil. When that came down, our market also followed," said a trader with a foreign commodities brokerage, adding that overnight losses in soy markets also weighed on palm prices.
The benchmark September contract on the Bursa Malaysia Derivatives Exchange inched down 1 percent to 2,445 ringgit ($761) per tonne by Friday's close.
Total traded volume stood at 36,041 lots of 25 tonnes, higher than the average 35,000 lots.
Brent crude was up 10 cents at $113.31 a barrel by 0930 GMT after falling 79 cents in the previous session, consolidating after one of its biggest weekly falls this year as investors unwound positions on reduced concerns over exports from strife-torn Iraq.
U.S. crude was down 5 cents at $105.79 a barrel. For the week, the contract has fallen 1.4 percent.
Technicals showed palm oil's next target is 2,422 ringgit, although it faces a resistance at 2,513-2,554 ringgit, according to Reuters market analyst Wang Tao.
Palm oil prices could drop to between 2,300-2,500 ringgit per tonne over the next few weeks, missing an earlier forecast by about 13 percent given Indonesia's disappointing uptake of palm-based biodiesel, leading vegetable oil analyst Dorab Mistry said on Thursday.
Mistry said while demand would be robust at the lower end of this range, a rise to near 2,500 ringgit could curb interest and push up Malaysian palm stocks to a peak of 2.5 million tonnes by November. Stocks at end-May stood at 1.84 million tonnes.
"Many people say that the price level now is on the higher side, and that it should go lower," the trader added.
Another Kuala Lumpur-based commodities dealer said easing palm prices will likely provide a weaker tone for next week.
Strength in the Malaysian currency on Friday also stemmed buying interest from overseas investors and refiners.
The ringgit rose as much as 0.4 percent to 3.2050 against the greenback on Friday, buoyed by expectations that Malaysia's central bank will raise interest rates next month.
But the current hot and dry weather across Malaysia capped losses, keeping palm prices in a tight range between 2,436-2,469 ringgit. Short spells of dry weather can hinder growth of palm fruit.
Some market players say the heat could be early signs of the drought-inducing El Nino weather pattern, which is slated to hit Southeast Asia later this year.
In competing vegetable oil markets, the U.S. soyoil contract fell 0.2 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange shed 0.6 percent.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL4 2468 -19.00 2461 2479 300
MY PALM OIL AUG4 2462 -19.00 2454 2479 1998
MY PALM OIL SEP4 2445 -25.00 2436 2469 21641
CHINA PALM OLEIN JAN5 5994 -62.00 5988 6048 332588
CHINA SOYOIL JAN5 7004 -40.00 6992 7052 346808
CBOT SOY OIL DEC4 40.76 -0.10 40.62 40.99 3626
NYMEX CRUDE AUG4 105.83 -0.01 105.48 105.97 15019
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 = 3.2110 Malaysian ringgit)
($1 = 6.2181 Chinese yuan)