MARKET DEVELOPMENT
VEGOILS-Palm Slides to 8-month Low as Ringgit Continues to Climb
VEGOILS-Palm Slides to 8-month Low as Ringgit Continues to Climb
* Malaysian ringgit strengthens to 3.5440 per U.S. dollar
* Palm oil to test support at 2,076 ringgit - technicals
* Climate indicators suggest El Nino is forming - Australian weather bureau
29/04/2015 (Reuters) - Malaysian palm oil futures slid to an eight-month low on Tuesday as the ringgit continued to gain traction, stoking worries that overseas buyers may shy away from palm at a time when the tropical plant enters a higher production cycle.
The Malaysian currency rose as high as 3.5440 against the U.S. dollar, its strongest since early February, in its third straight session of gains, making the ringgit-priced palm feedstock more expensive for foreign customers.
"Palm is under pressure because of the strong ringgit, and talk of higher production estimates," said a trader with a foreign commodities brokerage in Malaysia.
In its fifth session of losses, the benchmark July contract on the Bursa Malaysia Derivatives exchange touched 2,075 ringgit a tonne in early trade, its lowest since Sept. 22, before settling at 2,083 ringgit ($587) by the midday break, down 1.2 percent.
Total traded volume stood at 33,978 lots of 25 tonnes each, nearly three times the usual 12,500 lots.
Technical charts showed that palm oil is expected to test a support at 2,076 ringgit per tonne, a break below which will open the way towards a range of 2,039-2,060 ringgit, Reuters market analyst Wang Tao said.
Palm's steep drop was not mirrored by soyoil, a common food and fuel substitute, enabling the tropical oil widen its discount to the rival oil. But the discount has to be attractive enough to be able to pull back demand from price-sensitive buyers, traders said.
"It (the discount) has to be at a level where it can attract demand. At the moment, it is not enough," the Malaysia-based trader added.
Palm olein POL-MYRBD-M1 is currently around $70 cheaper than Argentine soyoil BO-ARGUPR-P1, from an under $25 discount early April, but narrower than $160 at the start of 2015.
The U.S. July soyoil contract was down 0.2 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange was lower 0.1 percent.
Elsewhere, Australian Bureau of Meteorology said Pacific Ocean sea temperatures now exceed El Nino thresholds, while trade winds have weakened over the last few weeks. Should this pattern continue, the bureau said, an El Nino will develop.
In other markets, oil fell more than 1 percent on Tuesday ahead of weekly U.S. crude inventory data that is expected to hit another high and as Saudi Arabia pledged to supply more oil to China if needed.
Palm, soy and crude oil prices at 0610 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY5 2095 -26.00 2089 2095 28
MY PALM OIL JUN5 2090 -27.00 2082 2112 3545
MY PALM OIL JUL5 2083 -25.00 2075 2106 17157
CHINA PALM OLEIN SEP5 4870 -16.00 4858 4932 833356
CHINA SOYOIL SEP5 5666 -4.00 5660 5746 859470
CBOT SOY OIL JUL5 31.78 -2.20 31.75 31.88 5599
INDIA PALM OIL APR5 437.60 -2.20 437.10 438.20 128
INDIA SOYOIL JUN5 589.15 -4.25 587.00 594.00 19810
NYMEX CRUDE JUN5 56.32 -0.67 56.07 56.78 12392
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 = 3.5485 Malaysian ringgit)
($1 = 6.2070 Chinese yuan)
($1 = 63.30 Indian rupees)
* Palm oil to test support at 2,076 ringgit - technicals
* Climate indicators suggest El Nino is forming - Australian weather bureau
29/04/2015 (Reuters) - Malaysian palm oil futures slid to an eight-month low on Tuesday as the ringgit continued to gain traction, stoking worries that overseas buyers may shy away from palm at a time when the tropical plant enters a higher production cycle.
The Malaysian currency rose as high as 3.5440 against the U.S. dollar, its strongest since early February, in its third straight session of gains, making the ringgit-priced palm feedstock more expensive for foreign customers.
"Palm is under pressure because of the strong ringgit, and talk of higher production estimates," said a trader with a foreign commodities brokerage in Malaysia.
In its fifth session of losses, the benchmark July contract on the Bursa Malaysia Derivatives exchange touched 2,075 ringgit a tonne in early trade, its lowest since Sept. 22, before settling at 2,083 ringgit ($587) by the midday break, down 1.2 percent.
Total traded volume stood at 33,978 lots of 25 tonnes each, nearly three times the usual 12,500 lots.
Technical charts showed that palm oil is expected to test a support at 2,076 ringgit per tonne, a break below which will open the way towards a range of 2,039-2,060 ringgit, Reuters market analyst Wang Tao said.
Palm's steep drop was not mirrored by soyoil, a common food and fuel substitute, enabling the tropical oil widen its discount to the rival oil. But the discount has to be attractive enough to be able to pull back demand from price-sensitive buyers, traders said.
"It (the discount) has to be at a level where it can attract demand. At the moment, it is not enough," the Malaysia-based trader added.
Palm olein POL-MYRBD-M1 is currently around $70 cheaper than Argentine soyoil BO-ARGUPR-P1, from an under $25 discount early April, but narrower than $160 at the start of 2015.
The U.S. July soyoil contract was down 0.2 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange was lower 0.1 percent.
Elsewhere, Australian Bureau of Meteorology said Pacific Ocean sea temperatures now exceed El Nino thresholds, while trade winds have weakened over the last few weeks. Should this pattern continue, the bureau said, an El Nino will develop.
In other markets, oil fell more than 1 percent on Tuesday ahead of weekly U.S. crude inventory data that is expected to hit another high and as Saudi Arabia pledged to supply more oil to China if needed.
Palm, soy and crude oil prices at 0610 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY5 2095 -26.00 2089 2095 28
MY PALM OIL JUN5 2090 -27.00 2082 2112 3545
MY PALM OIL JUL5 2083 -25.00 2075 2106 17157
CHINA PALM OLEIN SEP5 4870 -16.00 4858 4932 833356
CHINA SOYOIL SEP5 5666 -4.00 5660 5746 859470
CBOT SOY OIL JUL5 31.78 -2.20 31.75 31.88 5599
INDIA PALM OIL APR5 437.60 -2.20 437.10 438.20 128
INDIA SOYOIL JUN5 589.15 -4.25 587.00 594.00 19810
NYMEX CRUDE JUN5 56.32 -0.67 56.07 56.78 12392
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 = 3.5485 Malaysian ringgit)
($1 = 6.2070 Chinese yuan)
($1 = 63.30 Indian rupees)