MARKET DEVELOPMENT
VEGOILS-Palm Oil Climbs for Fifth Day to Near 15-month High
VEGOILS-Palm Oil Climbs for Fifth Day to Near 15-month High
(Recasts, updates throughout)
29/09/2015 (Reuters) - Malaysian palm oil futures climbed for a fifth straight day on Monday to their highest level in almost 15 months, as traders bet on increasing demand, lower supply and declines in the ringgit.
By Monday's close, the benchmark December palm oil contract on the Bursa Malaysia Derivatives exchange was up 2.22 percent at 2,394 ringgit ($541.02) a tonne, up from a low of 2,302 ringgit hit in the morning session.
In afternoon trading, the benchmark touched 2,408 ringgit, its highest since July 2014.
"This rally really was beyond our expectations," said a trader with a foreign commodities brokerage in Kuala Lumpur. "The currency factor is coming in right now."
The depreciation of the ringgit , which has lost nearly a fifth so far this year, makes palm cheaper for offshore buyers, supporting demand.
Recent smoke from forest fires in Indonesia was seen affecting oil palm production, the trader said.
"With the haze being so bad it's actually affecting the pollination of flowers," the trader added, and this was expected to reduce production of palm oil.
Indonesia has faced criticism for failing to control forest fires on the islands of Sumatra and Borneo that have sent thick smoke across a swathe of Southeast Asia, pushing air pollution to unhealthy levels in Singapore, Malaysia and northern Indonesia.
Expectations of seasonal increases in demand from India and China were also supporting prices, the trader said.
However, several traders said the trend may not last much longer.
"My main worry will be because the market has appreciated a lot in a very short period of time, so tomorrow maybe some (companies) will initiate forced selling," another trader said.
In competing vegetable oil markets, the U.S. December soyoil contract inched up 0.04 percent in late Asian trading.
Oil prices fell on Monday, paring some of last week's 2 percent rally, despite evidence of slowing U.S. production and a fourth weekly increase in U.S. investor holdings of crude futures.
Palm, soy and crude oil prices at 1058 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT5 2323 +64.00 2255 2325 181
MY PALM OIL NOV5 2356 +53.00 2270 2370 3235
MY PALM OIL DEC5 2394 +52.00 2302 2408 30981
CHINA PALM OLEIN JAN6 4502 +34.00 4486 4556 948428
CHINA SOYOIL JAN6 5442 +56.00 5414 5468 405324
CBOT SOY OIL DEC5 27.98 +1.70 27.41 28.09 11825
INDIA PALM OIL SEP5 424.30 +1.70 417.00 425.60 1121
INDIA SOYOIL OCT5 605.60 +20.15 594.60 608.30 74315
NYMEX CRUDE NOV5 44.83 -0.87 44.74 45.50 28373
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 = 4.4250 ringgit)
($1 = 4.4250 ringgit)
29/09/2015 (Reuters) - Malaysian palm oil futures climbed for a fifth straight day on Monday to their highest level in almost 15 months, as traders bet on increasing demand, lower supply and declines in the ringgit.
By Monday's close, the benchmark December palm oil contract on the Bursa Malaysia Derivatives exchange was up 2.22 percent at 2,394 ringgit ($541.02) a tonne, up from a low of 2,302 ringgit hit in the morning session.
In afternoon trading, the benchmark touched 2,408 ringgit, its highest since July 2014.
"This rally really was beyond our expectations," said a trader with a foreign commodities brokerage in Kuala Lumpur. "The currency factor is coming in right now."
The depreciation of the ringgit , which has lost nearly a fifth so far this year, makes palm cheaper for offshore buyers, supporting demand.
Recent smoke from forest fires in Indonesia was seen affecting oil palm production, the trader said.
"With the haze being so bad it's actually affecting the pollination of flowers," the trader added, and this was expected to reduce production of palm oil.
Indonesia has faced criticism for failing to control forest fires on the islands of Sumatra and Borneo that have sent thick smoke across a swathe of Southeast Asia, pushing air pollution to unhealthy levels in Singapore, Malaysia and northern Indonesia.
Expectations of seasonal increases in demand from India and China were also supporting prices, the trader said.
However, several traders said the trend may not last much longer.
"My main worry will be because the market has appreciated a lot in a very short period of time, so tomorrow maybe some (companies) will initiate forced selling," another trader said.
In competing vegetable oil markets, the U.S. December soyoil contract inched up 0.04 percent in late Asian trading.
Oil prices fell on Monday, paring some of last week's 2 percent rally, despite evidence of slowing U.S. production and a fourth weekly increase in U.S. investor holdings of crude futures.
Palm, soy and crude oil prices at 1058 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT5 2323 +64.00 2255 2325 181
MY PALM OIL NOV5 2356 +53.00 2270 2370 3235
MY PALM OIL DEC5 2394 +52.00 2302 2408 30981
CHINA PALM OLEIN JAN6 4502 +34.00 4486 4556 948428
CHINA SOYOIL JAN6 5442 +56.00 5414 5468 405324
CBOT SOY OIL DEC5 27.98 +1.70 27.41 28.09 11825
INDIA PALM OIL SEP5 424.30 +1.70 417.00 425.60 1121
INDIA SOYOIL OCT5 605.60 +20.15 594.60 608.30 74315
NYMEX CRUDE NOV5 44.83 -0.87 44.74 45.50 28373
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 = 4.4250 ringgit)
($1 = 4.4250 ringgit)