MARKET DEVELOPMENT
VEGOILS-Palm Hits 3-1/2-Month High, Biggest Weekly Gain Since Nov 2013
VEGOILS-Palm Hits 3-1/2-Month High, Biggest Weekly Gain Since Nov 2013
* Prices up 6 pct this week, biggest weekly gain since Nov.2013
* Malaysia's October palm exports fall 2 pct m/m-ITS
* Palm oil still targets 2,340 ringgit -technicals (Updates closing prices, adds details)
01/11/2014 (Reuters) - Malaysian palm oil futuresstretched gains into a fourth day on Friday to hover at overthree-month highs and posting their biggest weekly rise innearly a year, as the tropical oil drew support from projectionsof weaker output and easing stocks.
But market players said prices, which are up for a secondmonth having gained 4 percent in October, may be poised for acorrection with possible profit-taking on the way.
"After three consecutive days of run-up, with open positionsin free fall, prices could succumb to profit-taking with animmediate target of 2,200-2,230 ringgit," said LingamSupramaniam, director at Malaysia-based commodities firmPelindung Bestari.
While prices have gained 8.3 percent from Oct. 20, openinterest in Malaysian palm oil futures fell from267,221 lots on Oct. 20 to an early-August low of 228,662 lotson Oct. 30. It hit a record high of 287,859 lots on Sept. 10.
"If the market is bullish, open interest should rise intandem. But the market rallied and the open interest dipped, sobasically it was only short-covering," he added.
Another Kuala Lumpur-based trader said investors were likelyto book profits from palm which notched up big gains this week.
By the day's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged up 1.1percent to 2,307 ringgit ($701.3) per tonne, and was tradingbetween 2,274 and 2,311 ringgit. Prices last touched theselevels on July 18.
Total traded volume stood at 47,432 lots of 25 tonnes, muchhigher than the usual 35,000 lots.
Also supporting prices, Malaysian palm oil stocks could drop14 percent by the end of 2014 from 2.09 million tonnes at theend of last month, a senior official of the Malaysian Palm OilBoard (MPOB) said, as export demand and domestic food and fuelneeds pick up.
Palm has gained 6 percent this week, its biggest weekly gainsince November 2013, lifted by bullish projections from industryexperts that growing food consumption and weakening output couldpush prices to 2,500 ringgit per tonne in the first quarter of2015.
A bullish target at 2,340 ringgit remains unchanged for palmoil, as indicated by its wave pattern and a Fibonacci projectionanalysis, said Reuters market analyst Wang Tao.
Exports of palm oil products from Malaysia fell 2 percent inOctober from September, cargo surveyor Intertek Testing Services(ITS) said, recovering from steeper losses earlier in the monththanks to better demand in second-half October.
Also, exports of Malaysian palm oil products for Octoberfell 2.0 percent to 1,463,982 tonnes shipped during September,cargo surveyor Societe Generale de Surveillance said.
Traders, however, said export demand could dip more inNovember as the northern hemisphere winter draws nearer. Palm solidifies in cold temperatures.
In other competing vegetable oil markets, the U.S. soyoilcontract for December rose 0.5 percent, while the mostactive January soybean oil contract on the DalianCommodities Exchange added 0.7 percent.
Elsewhere, Brent crude fell more than $1 towards $85 abarrel as a firmer dollar and a well supplied market pushed thebenchmark towards its steepest monthly decline since 2012.
($1 = 3.2895 Malaysian ringgit)
($1 = 6.1124 Chinese yuan)
($1 = 61.4100 Indian rupee)
* Malaysia's October palm exports fall 2 pct m/m-ITS
* Palm oil still targets 2,340 ringgit -technicals (Updates closing prices, adds details)
01/11/2014 (Reuters) - Malaysian palm oil futuresstretched gains into a fourth day on Friday to hover at overthree-month highs and posting their biggest weekly rise innearly a year, as the tropical oil drew support from projectionsof weaker output and easing stocks.
But market players said prices, which are up for a secondmonth having gained 4 percent in October, may be poised for acorrection with possible profit-taking on the way.
"After three consecutive days of run-up, with open positionsin free fall, prices could succumb to profit-taking with animmediate target of 2,200-2,230 ringgit," said LingamSupramaniam, director at Malaysia-based commodities firmPelindung Bestari.
While prices have gained 8.3 percent from Oct. 20, openinterest in Malaysian palm oil futures fell from267,221 lots on Oct. 20 to an early-August low of 228,662 lotson Oct. 30. It hit a record high of 287,859 lots on Sept. 10.
"If the market is bullish, open interest should rise intandem. But the market rallied and the open interest dipped, sobasically it was only short-covering," he added.
Another Kuala Lumpur-based trader said investors were likelyto book profits from palm which notched up big gains this week.
By the day's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged up 1.1percent to 2,307 ringgit ($701.3) per tonne, and was tradingbetween 2,274 and 2,311 ringgit. Prices last touched theselevels on July 18.
Total traded volume stood at 47,432 lots of 25 tonnes, muchhigher than the usual 35,000 lots.
Also supporting prices, Malaysian palm oil stocks could drop14 percent by the end of 2014 from 2.09 million tonnes at theend of last month, a senior official of the Malaysian Palm OilBoard (MPOB) said, as export demand and domestic food and fuelneeds pick up.
Palm has gained 6 percent this week, its biggest weekly gainsince November 2013, lifted by bullish projections from industryexperts that growing food consumption and weakening output couldpush prices to 2,500 ringgit per tonne in the first quarter of2015.
A bullish target at 2,340 ringgit remains unchanged for palmoil, as indicated by its wave pattern and a Fibonacci projectionanalysis, said Reuters market analyst Wang Tao.
Exports of palm oil products from Malaysia fell 2 percent inOctober from September, cargo surveyor Intertek Testing Services(ITS) said, recovering from steeper losses earlier in the monththanks to better demand in second-half October.
Also, exports of Malaysian palm oil products for Octoberfell 2.0 percent to 1,463,982 tonnes shipped during September,cargo surveyor Societe Generale de Surveillance said.
Traders, however, said export demand could dip more inNovember as the northern hemisphere winter draws nearer. Palm solidifies in cold temperatures.
In other competing vegetable oil markets, the U.S. soyoilcontract for December rose 0.5 percent, while the mostactive January soybean oil contract on the DalianCommodities Exchange added 0.7 percent.
Elsewhere, Brent crude fell more than $1 towards $85 abarrel as a firmer dollar and a well supplied market pushed thebenchmark towards its steepest monthly decline since 2012.
($1 = 3.2895 Malaysian ringgit)
($1 = 6.1124 Chinese yuan)
($1 = 61.4100 Indian rupee)