MARKET DEVELOPMENT
VEGOILS-Palm Drops to Near 1-wk Low on Bearish Outlook For H2 2015
VEGOILS-Palm Drops to Near 1-wk Low on Bearish Outlook For H2 2015
(Updates prices, adds milestone of near 1-week low)
* Prices under pressure from bearish H2 outlook by top analysts
* Palm oil to drop into range of 2,275-2,312 ringgit -technicals
* TAKE A LOOK-Palm oil price outlook conference
06/03/2015 (Reuters) - Malaysian palm oil futures dropped to their lowest in nearly a week on Thursday, backtracking from a rally that had lifted the contract to an eight-month top, after top industry analysts painted a gloomy outlook for the second half of the year.
Leading edible oil analysts at the closely-followed Palm and Lauric Oils Price Outlook Conference in Kuala Lumpur say palm is set for a "year of two halves" - prices may rise over the next few months on tightening supplies, but could plumb six-year lows later in 2015 as output overwhelms demand.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange closed down 1.8 percent to 2,321 ringgit ($636) a tonne, just off their lowest since Feb. 27. On Wednesday, the contract had climbed to 2,400 ringgit, their highest since July 2014.
Despite initial hope that the seasonal drop in top growers Malaysia and Indonesia could buoy prices, market participants are now doubtful how much support this would provide, seeing that volatile oil prices may continue to dent palm's biodiesel demand.
"Shrinking palm stocks in the near term may not push prices above 2,450 ringgit," said a trader with a foreign commodities firm in Kuala Lumpur.
"...the vacuum in biofuel demand and record bean crop should constantly apply pressure to trade sideways lower to check its 6-month support at 2,100 ringgit," the trader added. "Only a weather disruption could rally prices above 2,450-2,500 ringgit."
CIMB analyst Ivy Ng said in a Thursday report that "the key wild cards for 2015 will be Indonesia biodiesel demand, weather event and crude oil price."
Total traded volume on Thursday stood at 42,278 lots of 25 tonnes each, higher than the usual 35,000 lots.
The industry is also watching India, the world's top palm consumer, that is anticipated to book record edible oil shipments of 12.5-13.0 million tonnes in the year to October, versus 11.6 million tonnes a year ago.
Industry sources told Reuters that duty-free exports of crude palm oil offered by Indonesia and Malaysia would help spur bigger imports.
Both countries will keep export taxes for the crude grade at zero percent.
Brent crude future prices rose above $61 a barrel on Thursday, as investors brushed aside bearish U.S. inventories data to focus on the lack of a deal in talks over Iran's nuclear programme.
In vegetable oil markets, the U.S. soyoil contract for May fell 1.1 percent in late trade, while the most active May soybean oil contract on the Dalian Commodity Exchange tumbled 2 percent.
Palm, soy and crude oil prices at 1016 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR5 2365 -13.00 2360 2387 135
MY PALM OIL APR5 2332 -38.00 2325 2366 2451
MY PALM OIL MAY5 2321 -43.00 2320 2364 26720
CHINA PALM OLEIN MAY5 5056 -80.00 5020 5114 234122
CHINA SOYOIL SEP5 5584 -116.00 5566 5684 396500
CBOT SOY OIL MAY5 31.87 -2.10 31.81 32.41 10414
INDIA PALM OIL MAR5 460.00 -2.10 459.00 462.70 620
INDIA SOYOIL APR5 584.70 -3.65 583.70 589.70 14125
NYMEX CRUDE APR5 52.29 +0.76 51.60 52.33 31888
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 = 3.6480 Malaysian ringgit)
($1 = 6.2662 Chinese yuan)
($1 = 62.23 Indian rupee)
* Prices under pressure from bearish H2 outlook by top analysts
* Palm oil to drop into range of 2,275-2,312 ringgit -technicals
* TAKE A LOOK-Palm oil price outlook conference
06/03/2015 (Reuters) - Malaysian palm oil futures dropped to their lowest in nearly a week on Thursday, backtracking from a rally that had lifted the contract to an eight-month top, after top industry analysts painted a gloomy outlook for the second half of the year.
Leading edible oil analysts at the closely-followed Palm and Lauric Oils Price Outlook Conference in Kuala Lumpur say palm is set for a "year of two halves" - prices may rise over the next few months on tightening supplies, but could plumb six-year lows later in 2015 as output overwhelms demand.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange closed down 1.8 percent to 2,321 ringgit ($636) a tonne, just off their lowest since Feb. 27. On Wednesday, the contract had climbed to 2,400 ringgit, their highest since July 2014.
Despite initial hope that the seasonal drop in top growers Malaysia and Indonesia could buoy prices, market participants are now doubtful how much support this would provide, seeing that volatile oil prices may continue to dent palm's biodiesel demand.
"Shrinking palm stocks in the near term may not push prices above 2,450 ringgit," said a trader with a foreign commodities firm in Kuala Lumpur.
"...the vacuum in biofuel demand and record bean crop should constantly apply pressure to trade sideways lower to check its 6-month support at 2,100 ringgit," the trader added. "Only a weather disruption could rally prices above 2,450-2,500 ringgit."
CIMB analyst Ivy Ng said in a Thursday report that "the key wild cards for 2015 will be Indonesia biodiesel demand, weather event and crude oil price."
Total traded volume on Thursday stood at 42,278 lots of 25 tonnes each, higher than the usual 35,000 lots.
The industry is also watching India, the world's top palm consumer, that is anticipated to book record edible oil shipments of 12.5-13.0 million tonnes in the year to October, versus 11.6 million tonnes a year ago.
Industry sources told Reuters that duty-free exports of crude palm oil offered by Indonesia and Malaysia would help spur bigger imports.
Both countries will keep export taxes for the crude grade at zero percent.
Brent crude future prices rose above $61 a barrel on Thursday, as investors brushed aside bearish U.S. inventories data to focus on the lack of a deal in talks over Iran's nuclear programme.
In vegetable oil markets, the U.S. soyoil contract for May fell 1.1 percent in late trade, while the most active May soybean oil contract on the Dalian Commodity Exchange tumbled 2 percent.
Palm, soy and crude oil prices at 1016 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR5 2365 -13.00 2360 2387 135
MY PALM OIL APR5 2332 -38.00 2325 2366 2451
MY PALM OIL MAY5 2321 -43.00 2320 2364 26720
CHINA PALM OLEIN MAY5 5056 -80.00 5020 5114 234122
CHINA SOYOIL SEP5 5584 -116.00 5566 5684 396500
CBOT SOY OIL MAY5 31.87 -2.10 31.81 32.41 10414
INDIA PALM OIL MAR5 460.00 -2.10 459.00 462.70 620
INDIA SOYOIL APR5 584.70 -3.65 583.70 589.70 14125
NYMEX CRUDE APR5 52.29 +0.76 51.60 52.33 31888
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 = 3.6480 Malaysian ringgit)
($1 = 6.2662 Chinese yuan)
($1 = 62.23 Indian rupee)