MARKET DEVELOPMENT
VEGOILS-Palm Oil Bounces From Near Seven-Week Low
VEGOILS-Palm Oil Bounces From Near Seven-Week Low
(Recasts, adds trader quote)
* Prices rise 2.5 percent, buoyed by technical correction
* Gains limited by rising edible oil supplies, weak demand
19/03/2015 (Reuters) - Malaysian palm oil futures rallied from a near seven-week low on Wednesday in a technical correction to end higher, though traders said weaker crude oil and soy prices would cap gains.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange rallied in late trade to close 2.5 percent higher at 2,193 ringgit ($592) a tonne, after dipping to 2,128.
Market players said the correction was timely as prices have dropped 11 percent from a 2,400 ringgit peak in early March, but warned that palm's bearish trend will still prevail.
"We are in the midst of a technical-inspired correction, before fundamentals cap the rise," said a trader with a local commodities brokerage in Malaysia. "Only modest rallies are anticipated. The huge world supplies in 2015 will weigh on prices as local production picks up."
Weaker prices of crude and soy oil have also raised concerns palm might lose more market share, both as a fuel and for food.
Total traded volume stood at 59,533 lots of 25 tonnes on Wednesday, much higher than the usual 35,000 lots.
A weaker Malaysian ringgit, which usually spurs buying interest in the ringgit-priced palm feedstock, has given little relief to the downward pressure, traders say. The ringgit was trading at 3.7060 per U.S. dollar late on Wednesday.
"What's supportive is just the ringgit, but I would think that is not really a strong support as the external factors are pressuring prices more," said Ryan Chua, a broker with Oriental Pacific Futures in Kuala Lumpur.
Indonesian palm oil exports dropped to a five-month low of 1.79 million tonnes in February, industry data body showed.
However, overseas sales from the No. 1 producer are expected to pick up soon as China replenishes its depleting stockpiles of the tropical oil, traders and analysts said.
Indonesia crude palm oil output in February likely steadied near January levels, a survey of leading industry officials showed on Wednesday, although production is seen picking up in the coming months as the monsoons recede.
Brent prices fell on Wednesday on oversupply concerns as data showed U.S. crude stocks had hit a record high.
In competing vegetable oil markets, the most active September soybean oil contract on the Dalian Commodity Exchange fell 0.5 percent in late Asian trade, while the U.S. soyoil contract for May rose 1 percent.
Palm, soy and crude oil prices at 1058 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2197 +46.00 2143 2197 1065
MY PALM OIL MAY5 2199 +53.00 2135 2203 11908
MY PALM OIL JUN5 2193 +53.00 2128 2194 30471
CHINA PALM OLEIN SEP5 4616 -50.00 4578 4626 637820
CHINA SOYOIL SEP5 5362 -24.00 5338 5380 477086
CBOT SOY OIL MAY5 30.32 +3.60 29.93 30.38 5773
INDIA PALM OIL MAR5 443.00 +3.60 436.80 445.90 1106
INDIA SOYOIL APR5 580.15 +3.20 571.80 581.30 41805
NYMEX CRUDE APR5 42.24 -1.22 42.05 42.91 26680
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 = 3.7060 Malaysian ringgit)
($1 = 6.2294 Chinese yuan)
($1 = 62.71 Indian rupee)
* Prices rise 2.5 percent, buoyed by technical correction
* Gains limited by rising edible oil supplies, weak demand
19/03/2015 (Reuters) - Malaysian palm oil futures rallied from a near seven-week low on Wednesday in a technical correction to end higher, though traders said weaker crude oil and soy prices would cap gains.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange rallied in late trade to close 2.5 percent higher at 2,193 ringgit ($592) a tonne, after dipping to 2,128.
Market players said the correction was timely as prices have dropped 11 percent from a 2,400 ringgit peak in early March, but warned that palm's bearish trend will still prevail.
"We are in the midst of a technical-inspired correction, before fundamentals cap the rise," said a trader with a local commodities brokerage in Malaysia. "Only modest rallies are anticipated. The huge world supplies in 2015 will weigh on prices as local production picks up."
Weaker prices of crude and soy oil have also raised concerns palm might lose more market share, both as a fuel and for food.
Total traded volume stood at 59,533 lots of 25 tonnes on Wednesday, much higher than the usual 35,000 lots.
A weaker Malaysian ringgit, which usually spurs buying interest in the ringgit-priced palm feedstock, has given little relief to the downward pressure, traders say. The ringgit was trading at 3.7060 per U.S. dollar late on Wednesday.
"What's supportive is just the ringgit, but I would think that is not really a strong support as the external factors are pressuring prices more," said Ryan Chua, a broker with Oriental Pacific Futures in Kuala Lumpur.
Indonesian palm oil exports dropped to a five-month low of 1.79 million tonnes in February, industry data body showed.
However, overseas sales from the No. 1 producer are expected to pick up soon as China replenishes its depleting stockpiles of the tropical oil, traders and analysts said.
Indonesia crude palm oil output in February likely steadied near January levels, a survey of leading industry officials showed on Wednesday, although production is seen picking up in the coming months as the monsoons recede.
Brent prices fell on Wednesday on oversupply concerns as data showed U.S. crude stocks had hit a record high.
In competing vegetable oil markets, the most active September soybean oil contract on the Dalian Commodity Exchange fell 0.5 percent in late Asian trade, while the U.S. soyoil contract for May rose 1 percent.
Palm, soy and crude oil prices at 1058 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2197 +46.00 2143 2197 1065
MY PALM OIL MAY5 2199 +53.00 2135 2203 11908
MY PALM OIL JUN5 2193 +53.00 2128 2194 30471
CHINA PALM OLEIN SEP5 4616 -50.00 4578 4626 637820
CHINA SOYOIL SEP5 5362 -24.00 5338 5380 477086
CBOT SOY OIL MAY5 30.32 +3.60 29.93 30.38 5773
INDIA PALM OIL MAR5 443.00 +3.60 436.80 445.90 1106
INDIA SOYOIL APR5 580.15 +3.20 571.80 581.30 41805
NYMEX CRUDE APR5 42.24 -1.22 42.05 42.91 26680
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 = 3.7060 Malaysian ringgit)
($1 = 6.2294 Chinese yuan)
($1 = 62.71 Indian rupee)