MARKET DEVELOPMENT
VEGOILS-Palm Oil Dips as Traders Take Profits After 8-Day Climb
VEGOILS-Palm Oil Dips as Traders Take Profits After 8-Day Climb
* Prices down 0.1 pct by end of day, reversing earlier gains
* Monsoon floods seen hitting palm oil supply in Q1, 2015
* Palm may rise to 2,318-2,338 range -technicals (Recasts, updates prices)
31/12/2014 (Reuters) - Malaysian palm oil slipped on Tuesday as traders took profits after an eight-day rally, but prices remained supported by monsoon floods that have inundated plantations, threatening to reduce output in the world's second-largest producer.
Severe monsoon flooding in Malaysia that has forced nearly a quarter of a million people to evacuate, is likely to cause a bigger-than-expected disruption to crude palm oil production in December with the impact likely to last well into the first quarter of 2015.
By Tuesday's close the benchmark March contract had slipped 0.09 percent to 2,283 ringgit ($653) per tonne after hitting 2,305 ringgit earlier in the day.
Traded volume stood at 39,969 lots of 25 tonnes, above the daily average of around 35,000 lots traded.
"It was typical profit taking," a palm oil trader with a foreign commodities brokerage in Kuala Lumpur told Reuters, referring to the dip after the rally. He added that prices were still holding relatively firm because of the floods.
"The market is firm due to floods disrupting supplies," said another trader. "We are hearing supply is tight in the spot physical market."
Palm oil may rise further into a range of 2,318-2,338 ringgit per tonne, as it had cleared a resistance at 2,287 ringgit, Reuters market analyst Wang Tao said.
Thunderstorms prevent plantation workers from harvesting fresh fruit bunches from oil palm trees, leaving them to over ripen and in some cases rot.
Fruits that do get harvested, however, may not make it to mills in time to be crushed as roads are inundated with water, or may have to be turned away as mills are shut due to flooding.
The Malaysian Palm Oil Association, a group of growers, forecast that crude palm oil production in Malaysia fell 21 percent between Dec. 1 and 20 compared with the same period a month ago.
A group of millers in southern peninsular Malaysia estimated that crude palm oil production between Dec. 1 and 25 in the states of Johor, Pahang and Melaka plunged 37 percent from the same period in November, according to traders.
Dalian soybean oil gained 0.5 percent.
($1 = 3.5 ringgit).
* Monsoon floods seen hitting palm oil supply in Q1, 2015
* Palm may rise to 2,318-2,338 range -technicals (Recasts, updates prices)
31/12/2014 (Reuters) - Malaysian palm oil slipped on Tuesday as traders took profits after an eight-day rally, but prices remained supported by monsoon floods that have inundated plantations, threatening to reduce output in the world's second-largest producer.
Severe monsoon flooding in Malaysia that has forced nearly a quarter of a million people to evacuate, is likely to cause a bigger-than-expected disruption to crude palm oil production in December with the impact likely to last well into the first quarter of 2015.
By Tuesday's close the benchmark March contract had slipped 0.09 percent to 2,283 ringgit ($653) per tonne after hitting 2,305 ringgit earlier in the day.
Traded volume stood at 39,969 lots of 25 tonnes, above the daily average of around 35,000 lots traded.
"It was typical profit taking," a palm oil trader with a foreign commodities brokerage in Kuala Lumpur told Reuters, referring to the dip after the rally. He added that prices were still holding relatively firm because of the floods.
"The market is firm due to floods disrupting supplies," said another trader. "We are hearing supply is tight in the spot physical market."
Palm oil may rise further into a range of 2,318-2,338 ringgit per tonne, as it had cleared a resistance at 2,287 ringgit, Reuters market analyst Wang Tao said.
Thunderstorms prevent plantation workers from harvesting fresh fruit bunches from oil palm trees, leaving them to over ripen and in some cases rot.
Fruits that do get harvested, however, may not make it to mills in time to be crushed as roads are inundated with water, or may have to be turned away as mills are shut due to flooding.
The Malaysian Palm Oil Association, a group of growers, forecast that crude palm oil production in Malaysia fell 21 percent between Dec. 1 and 20 compared with the same period a month ago.
A group of millers in southern peninsular Malaysia estimated that crude palm oil production between Dec. 1 and 25 in the states of Johor, Pahang and Melaka plunged 37 percent from the same period in November, according to traders.
Dalian soybean oil gained 0.5 percent.
($1 = 3.5 ringgit).