MARKET DEVELOPMENT
VEGOILS-Palm Oil Falls for 2nd Day, Tracks Losses in Soy
VEGOILS-Palm Oil Falls for 2nd Day, Tracks Losses in Soy
(Updates prices, adds graf on Thailand palm oil hectarage)
* Palm market following losses in soy markets, but prices rangebound -trader
* Palm oil still targets 2,220 ringgit -technicals
* Ringgit up 0.53 pct at 3.1850 per dollar
06/08/2014 (Reuters) - Malaysian palm oil futures fell in thin trade on Tuesday, tracking losses in overseas soyoil markets, with uncertainty about bigger global edible oil supplies keeping prices stuck in rangebound trade.
The firmer Malaysian ringgit also curbed some buying interest. The ringgit gained 0.53 percent to 3.1850 per dollar on Tuesday, squeezing margins for overseas investors and refiners. The benchmark October contract on the Bursa
Malaysia Derivatives Exchange edged down 0.4 percent to 2,258 ringgit ($709) per tonne by Tuesday's close, settling near the lower end of the day's trading range of 2,248-2,280 ringgit. Total traded volume stood at only 27,255 lots of 25 tonnes, lower than the average 35,000 lots.
"Soybean oil was down over 20 points this morning, and the Dalian was also slightly down. So, the palm market opened higher, then came down," said a trader with a foreign commodities brokerage.
The U.S. soyoil contract fell 1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange gained 0.2 percent. U.S. new-crop soybean prices also fell on Tuesday, after the U.S. Department of Agriculture pegged the crop condition at 71 percent good-to-excellent, which was above market expectations.
Palm typically tracks soyoil prices as they are both common food and fuel substitutes. Technicals showed that Malaysian palm oil is poised to break
a support at 2,250 ringgit per tonne and fall more towards 2,220 ringgit, as indicated by its wave pattern and a falling wedge, according to Reuters market analyst Wang Tao.
"The contract is riding on wave 5, the fifth wave of a five-wave cycle that developed from the June 25 high of 2,511 ringgit," Tao said.
"A part of this wave, along with the preceding wave 4, has been shaped into a wedge, which is a typical bearish pattern." Market participants say palm output in Indonesia and Malaysia, the world's top palm growers, will likely rise faster in the final months of this year, adding to bumper supplies of global oilseeds.
Despite tree stress from a short spell of drought in the first quarter of this year, traders and growers said Malaysian palm production could also gain momentum and lift stockpiles above the 2 million tonne mark in the next two or three months.
"They expect output to rise in the months to come...but currently, the market is still in range trading," the Kuala Lumpur-based trader added. "We're still waiting for more information."
Thailand, the world's No.3 palm producer that supplies about 5 percent of global output, said on Tuesday it plans to expand its oil palm estates by 25 percent and encourage rubber farmers to switch to growing palm oil, as it looks to shore up rubber prices as well as meet rising demand for palm-based biofuel.
Official data for Malaysia's end-July stocks, production and export volumes will only be released by industry regulator, the Malaysian Palm Oil Board, next Monday.
In other markets, Brent crude oil steadied above $105 a barrel on Tuesday as tensions in the Middle East and North Africa balanced ample supply in the Atlantic basin.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2328 -13.00 2315 2329 172
MY PALM OIL SEP4 2290 -9.00 2278 2303 1751
MY PALM OIL OCT4 2258 -9.00 2248 2280 16928
CHINA PALM OLEIN JAN5 5628 -2.00 5614 5656 323646
CHINA SOYOIL JAN5 6402 +10.00 6394 6438 218532
CBOT SOY OIL DEC4 36.03 -0.37 35.98 36.39 3977
NYMEX CRUDE SEP4 98.44 +0.15 98.28 98.67 12323
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 = 3.1865 Malaysian ringgit)
($1 = 6.1708 Chinese yuan)
* Palm market following losses in soy markets, but prices rangebound -trader
* Palm oil still targets 2,220 ringgit -technicals
* Ringgit up 0.53 pct at 3.1850 per dollar
06/08/2014 (Reuters) - Malaysian palm oil futures fell in thin trade on Tuesday, tracking losses in overseas soyoil markets, with uncertainty about bigger global edible oil supplies keeping prices stuck in rangebound trade.
The firmer Malaysian ringgit also curbed some buying interest. The ringgit gained 0.53 percent to 3.1850 per dollar on Tuesday, squeezing margins for overseas investors and refiners. The benchmark October contract on the Bursa
Malaysia Derivatives Exchange edged down 0.4 percent to 2,258 ringgit ($709) per tonne by Tuesday's close, settling near the lower end of the day's trading range of 2,248-2,280 ringgit. Total traded volume stood at only 27,255 lots of 25 tonnes, lower than the average 35,000 lots.
"Soybean oil was down over 20 points this morning, and the Dalian was also slightly down. So, the palm market opened higher, then came down," said a trader with a foreign commodities brokerage.
The U.S. soyoil contract fell 1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange gained 0.2 percent. U.S. new-crop soybean prices also fell on Tuesday, after the U.S. Department of Agriculture pegged the crop condition at 71 percent good-to-excellent, which was above market expectations.
Palm typically tracks soyoil prices as they are both common food and fuel substitutes. Technicals showed that Malaysian palm oil is poised to break
a support at 2,250 ringgit per tonne and fall more towards 2,220 ringgit, as indicated by its wave pattern and a falling wedge, according to Reuters market analyst Wang Tao.
"The contract is riding on wave 5, the fifth wave of a five-wave cycle that developed from the June 25 high of 2,511 ringgit," Tao said.
"A part of this wave, along with the preceding wave 4, has been shaped into a wedge, which is a typical bearish pattern." Market participants say palm output in Indonesia and Malaysia, the world's top palm growers, will likely rise faster in the final months of this year, adding to bumper supplies of global oilseeds.
Despite tree stress from a short spell of drought in the first quarter of this year, traders and growers said Malaysian palm production could also gain momentum and lift stockpiles above the 2 million tonne mark in the next two or three months.
"They expect output to rise in the months to come...but currently, the market is still in range trading," the Kuala Lumpur-based trader added. "We're still waiting for more information."
Thailand, the world's No.3 palm producer that supplies about 5 percent of global output, said on Tuesday it plans to expand its oil palm estates by 25 percent and encourage rubber farmers to switch to growing palm oil, as it looks to shore up rubber prices as well as meet rising demand for palm-based biofuel.
Official data for Malaysia's end-July stocks, production and export volumes will only be released by industry regulator, the Malaysian Palm Oil Board, next Monday.
In other markets, Brent crude oil steadied above $105 a barrel on Tuesday as tensions in the Middle East and North Africa balanced ample supply in the Atlantic basin.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2328 -13.00 2315 2329 172
MY PALM OIL SEP4 2290 -9.00 2278 2303 1751
MY PALM OIL OCT4 2258 -9.00 2248 2280 16928
CHINA PALM OLEIN JAN5 5628 -2.00 5614 5656 323646
CHINA SOYOIL JAN5 6402 +10.00 6394 6438 218532
CBOT SOY OIL DEC4 36.03 -0.37 35.98 36.39 3977
NYMEX CRUDE SEP4 98.44 +0.15 98.28 98.67 12323
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 = 3.1865 Malaysian ringgit)
($1 = 6.1708 Chinese yuan)