MARKET DEVELOPMENT
VEGOILS-Palm Edges up; Higher Edible Oil Supply Woes Curb Gains
VEGOILS-Palm Edges up; Higher Edible Oil Supply Woes Curb Gains
(Updates prices, adds trader quote, adds Indonesian palm export tax)
* Investors brace for bigger yields of U.S. soybeans
* Prices rangebound between 1,950-2,040 ringgit, fresh leads awaited -trader
* Palm oil to test support at 1,950 ringgit -technicals
* Indonesia cuts September palm export tax to 9 pct
29/08/2014 (Reuters) - Malaysian palm oil futures edged up in tight trade on Thursday, but stayed under the 2,000-ringgit mark as investors braced for an anticipated surge in rival edible oil supply amid rising palm oil production in the world's top growers.
Benchmark prices are languishing near five-year lows and are headed for their biggest monthly drop since September 2012, as worries of bumper crops of U.S. soybeans and disappointing demand for palm pressured the tropical oil.
Bigger supplies of soybeans for crushing would weaken soyoil prices and potentially turn price-sensitive buyers to the rival edible oil instead.
"The overall bearish sentiment is still there," said a Malaysia-based trader with a local commodities firm.
"The record soybean crop in the U.S., the fast rising Malaysian palm oil stocks, overall bad exports - these are the known factors in the past one month. Prices have already factored in these, but are still under pressure because of the bearish sentiment."
The benchmark November contract on the Bursa Malaysia Derivatives Exchange had nudged up 0.3 percent to 1,982 ringgit ($630) per tonne by Thursday's close, with prices stuck between 1,965 ringgit and 2,001 ringgit.
Market players said for the past week palm prices were very volatile in early trade as investors hunted for fresh leads on production and exports.
"The bearish sentiment can change if prices cross 2,040 ringgit. If it breaks 1,950 ringgit, quick selling will come in.
Now it is stuck between this range," the Kuala Lumpur-based trader added.
Export data on Malaysia's overseas sales of palm oil for the full month of August will be released on Sept. 2.
"The market is trying to establish a base," said another Malaysia-based trader. "Any failure to attract fresh demand may see another round of selling."
Total traded volume on Thursday stood at 49,349 lots of 25 tonnes, above the average 35,000 lots.
Technicals showed that Malaysian palm oil is expected to test support at 1,950 ringgit per tonne, driven by a wave 5, said Reuters market analyst Wang Tao.
Analysts said soybean futures were also under pressure from strong early harvest soybean yield results in the U.S. grain belt, which in some areas were more than twice the average forecast by the U.S. Department of Agriculture.
Chicago soybeans rose on Thursday as the market paused after sliding three consecutive sessions to contract lows under pressure from the higher-than-expected yields.
Meanwhile, the U.S. soyoil contract for December edged up 0.4 percent in late Asian trade. The most active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.
Indonesia, the world's top palm grower, has lowered its export tax for crude palm oil to 9 percent for September from 10.5 percent in August. The second-largest producer Malaysia had earlier set its export tax for next month at a more competitive rate of 4.5 percent.
In other markets, Brent crude oil fell towards $102 a barrel on Thursday, depressed by ample supply and lacklustre demand as global economic growth remained tepid.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP4 1985 -11.00 1978 2000 651
MY PALM OIL OCT4 1972 -2.00 1967 1997 4074
MY PALM OIL NOV4 1982 +6.00 1965 2001 21594
CHINA PALM OLEIN JAN5 5198 +6.00 5168 5212 493170
CHINA SOYOIL JAN5 6076 -10.00 6042 6084 344948
CBOT SOY OIL DEC4 32.94 +0.13 32.79 33.05 5529
INDIA SOYOIL SEP4 619.50 +1.40 614.50 620.00 33280
NYMEX CRUDE OCT4 93.65 -0.23 93.45 93.94 17653
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.148 Malaysian ringgit)
($1 = 6.1446 Chinese yuan)
($1 = 60.56 Indian rupee)
* Investors brace for bigger yields of U.S. soybeans
* Prices rangebound between 1,950-2,040 ringgit, fresh leads awaited -trader
* Palm oil to test support at 1,950 ringgit -technicals
* Indonesia cuts September palm export tax to 9 pct
29/08/2014 (Reuters) - Malaysian palm oil futures edged up in tight trade on Thursday, but stayed under the 2,000-ringgit mark as investors braced for an anticipated surge in rival edible oil supply amid rising palm oil production in the world's top growers.
Benchmark prices are languishing near five-year lows and are headed for their biggest monthly drop since September 2012, as worries of bumper crops of U.S. soybeans and disappointing demand for palm pressured the tropical oil.
Bigger supplies of soybeans for crushing would weaken soyoil prices and potentially turn price-sensitive buyers to the rival edible oil instead.
"The overall bearish sentiment is still there," said a Malaysia-based trader with a local commodities firm.
"The record soybean crop in the U.S., the fast rising Malaysian palm oil stocks, overall bad exports - these are the known factors in the past one month. Prices have already factored in these, but are still under pressure because of the bearish sentiment."
The benchmark November contract on the Bursa Malaysia Derivatives Exchange had nudged up 0.3 percent to 1,982 ringgit ($630) per tonne by Thursday's close, with prices stuck between 1,965 ringgit and 2,001 ringgit.
Market players said for the past week palm prices were very volatile in early trade as investors hunted for fresh leads on production and exports.
"The bearish sentiment can change if prices cross 2,040 ringgit. If it breaks 1,950 ringgit, quick selling will come in.
Now it is stuck between this range," the Kuala Lumpur-based trader added.
Export data on Malaysia's overseas sales of palm oil for the full month of August will be released on Sept. 2.
"The market is trying to establish a base," said another Malaysia-based trader. "Any failure to attract fresh demand may see another round of selling."
Total traded volume on Thursday stood at 49,349 lots of 25 tonnes, above the average 35,000 lots.
Technicals showed that Malaysian palm oil is expected to test support at 1,950 ringgit per tonne, driven by a wave 5, said Reuters market analyst Wang Tao.
Analysts said soybean futures were also under pressure from strong early harvest soybean yield results in the U.S. grain belt, which in some areas were more than twice the average forecast by the U.S. Department of Agriculture.
Chicago soybeans rose on Thursday as the market paused after sliding three consecutive sessions to contract lows under pressure from the higher-than-expected yields.
Meanwhile, the U.S. soyoil contract for December edged up 0.4 percent in late Asian trade. The most active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.
Indonesia, the world's top palm grower, has lowered its export tax for crude palm oil to 9 percent for September from 10.5 percent in August. The second-largest producer Malaysia had earlier set its export tax for next month at a more competitive rate of 4.5 percent.
In other markets, Brent crude oil fell towards $102 a barrel on Thursday, depressed by ample supply and lacklustre demand as global economic growth remained tepid.
Palm, soy and crude oil prices at 1006 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP4 1985 -11.00 1978 2000 651
MY PALM OIL OCT4 1972 -2.00 1967 1997 4074
MY PALM OIL NOV4 1982 +6.00 1965 2001 21594
CHINA PALM OLEIN JAN5 5198 +6.00 5168 5212 493170
CHINA SOYOIL JAN5 6076 -10.00 6042 6084 344948
CBOT SOY OIL DEC4 32.94 +0.13 32.79 33.05 5529
INDIA SOYOIL SEP4 619.50 +1.40 614.50 620.00 33280
NYMEX CRUDE OCT4 93.65 -0.23 93.45 93.94 17653
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.148 Malaysian ringgit)
($1 = 6.1446 Chinese yuan)
($1 = 60.56 Indian rupee)