MARKET DEVELOPMENT
VEGOILS-Palm Oil Slides to 1-year Low as Higher Production Weighs
VEGOILS-Palm Oil Slides to 1-year Low as Higher Production Weighs
* Palm oil drops to 1-year low on production outlook
* Growers estimate output rose almost 7 percent in July (Updates closing prices)
09/08/2014 (Reuters) - Malaysian palm oil futuresdropped to a one-year low on Friday with the market on track fora fifth week of declines in six as expectations of higherproduction pressured prices.
The Malaysian Palm Oil Association, a group of growers,estimated that palm oil production in the world's second largestproducer, rose 6.9 percent to 1.68 million tonnes in July,traders said. This is above a Reuters forecast of 4.9 percentgrowth.
The benchmark October contract on the BursaMalaysia Derivatives Exchange closed down 0.8 percent at 2,235ringgit ($697) per tonne. Traded volume stood at 39,121 lots of25 tonnes. Earlier in the session, it fell to 2,231 ringgit atonne, the lowest since Aug. 12 last year.
"Production in July could exceed what has been estimated bythe association," said one Kuala Lumpur-based trader. "We thinkit will be close to double-digit growth and at the same timefresh demand is lacking."
Malaysian palm oil output is likely to steadily rise in themonths ahead, traders said
Industry regulator, the Malaysian Palm Oil Board, is due torelease official data on end-July palm stocks, production andexports on Monday.
A Reuters survey pegged end-July stocks at amore-than-three-year low of 1.64 million tonnes, although marketplayers warn that a surge in palm output will push up stockpilesin the following months.
Higher production of palm oil will add to global edible oilsupplies with output of rival soybeans likely to climb tonear-record level in the United States.
Favourable crop weather in the U.S. Midwest has also fuelledexpectations that the U.S Department of Agriculture will raiseestimates of soybeans in its monthly report next Tuesday.
Palm oil is expected to break a resistance at 2,268 ringgitper tonne and rise more to 2,298 ringgit, following thecompletion of a five-wave cycle, according to Reuters marketanalyst Wang Tao.
For a 24-hr palm oil chart analysis:http://graphics.thomsonreuters.com/F/1/20140808105440.jpg
The U.S. soyoil contract for December fell 0.4percent in late Asian trade, while the most active Januarysoybean oil contract on the Dalian Commodities Exchangefinished largely unchanged.
Brent crude oil rose by more than $1 towards $107 on Fridayafter the United States approved air strikes against Islamistmilitants in Iraq, raising concerns over the security of oilsupplies from OPEC's second largest producer. ($1 = 3.2060 ringgit)
Palm, soy and crude oil prices at 1005 GMTContract Month Last Change Low High VolumeMY PALM OIL AUG4 2291 -25.00 2290 2307 274MY PALM OIL SEP4 2258 -19.00 2255 2290 1598MY PALM OIL OCT4 2235 -19.00 2231 2268 17463CHINA PALM OLEIN JAN5 5626 +0.00 5612 5648 203530CHINA SOYOIL JAN5 6410 -4.00 6388 6420 154166CBOT SOY OIL DEC4 35.88 -0.17 35.85 36.06 3790NYMEX CRUDE SEP4 98.00 +0.66 97.35 98.45 31493 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
* Growers estimate output rose almost 7 percent in July (Updates closing prices)
09/08/2014 (Reuters) - Malaysian palm oil futuresdropped to a one-year low on Friday with the market on track fora fifth week of declines in six as expectations of higherproduction pressured prices.
The Malaysian Palm Oil Association, a group of growers,estimated that palm oil production in the world's second largestproducer, rose 6.9 percent to 1.68 million tonnes in July,traders said. This is above a Reuters forecast of 4.9 percentgrowth.
The benchmark October contract on the BursaMalaysia Derivatives Exchange closed down 0.8 percent at 2,235ringgit ($697) per tonne. Traded volume stood at 39,121 lots of25 tonnes. Earlier in the session, it fell to 2,231 ringgit atonne, the lowest since Aug. 12 last year.
"Production in July could exceed what has been estimated bythe association," said one Kuala Lumpur-based trader. "We thinkit will be close to double-digit growth and at the same timefresh demand is lacking."
Malaysian palm oil output is likely to steadily rise in themonths ahead, traders said
Industry regulator, the Malaysian Palm Oil Board, is due torelease official data on end-July palm stocks, production andexports on Monday.
A Reuters survey pegged end-July stocks at amore-than-three-year low of 1.64 million tonnes, although marketplayers warn that a surge in palm output will push up stockpilesin the following months.
Higher production of palm oil will add to global edible oilsupplies with output of rival soybeans likely to climb tonear-record level in the United States.
Favourable crop weather in the U.S. Midwest has also fuelledexpectations that the U.S Department of Agriculture will raiseestimates of soybeans in its monthly report next Tuesday.
Palm oil is expected to break a resistance at 2,268 ringgitper tonne and rise more to 2,298 ringgit, following thecompletion of a five-wave cycle, according to Reuters marketanalyst Wang Tao.
For a 24-hr palm oil chart analysis:http://graphics.thomsonreuters.com/F/1/20140808105440.jpg
The U.S. soyoil contract for December fell 0.4percent in late Asian trade, while the most active Januarysoybean oil contract on the Dalian Commodities Exchangefinished largely unchanged.
Brent crude oil rose by more than $1 towards $107 on Fridayafter the United States approved air strikes against Islamistmilitants in Iraq, raising concerns over the security of oilsupplies from OPEC's second largest producer. ($1 = 3.2060 ringgit)
Palm, soy and crude oil prices at 1005 GMTContract Month Last Change Low High VolumeMY PALM OIL AUG4 2291 -25.00 2290 2307 274MY PALM OIL SEP4 2258 -19.00 2255 2290 1598MY PALM OIL OCT4 2235 -19.00 2231 2268 17463CHINA PALM OLEIN JAN5 5626 +0.00 5612 5648 203530CHINA SOYOIL JAN5 6410 -4.00 6388 6420 154166CBOT SOY OIL DEC4 35.88 -0.17 35.85 36.06 3790NYMEX CRUDE SEP4 98.00 +0.66 97.35 98.45 31493 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