MARKET DEVELOPMENT
Malaysian Palm Oil Price Rises to 18-month High as Weather May Lower Output
Malaysian Palm Oil Price Rises to 18-month High as Weather May Lower Output
31/12/2015 (Reuter) - Malaysian palm oil futures rose for a second day on Wednesday, reaching their highest levelin 18 months, on concerns year-end monsoon rains and El Nino-related dryness may lower future output.
The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to 2,495 ringgit ($581.86) a tonne at the end of the trading session. The contract hit an intra-day high of 2,504 ringgit, the most since June 25, 2014.
"There's some year-end covering going on, and people are expecting a decline in December production. People are expecting a decline by high single digit (percent)," said a trader at a brokerage based in Kuala Lumpur.
Traded volume stood at 32,042 lots of 25 tonnes each on Wednesday.
The year-end monsoon season impacts palm oil production across Southeast Asia annually, as seasonal rains and floods hinder the gathering of fresh fruit bunches, affect road networks and disrupt supply chains.
El Nino's dry weather pattern effect should also lower palm fruit yields and output next year, reducing stockpiles and supporting prices. Top producers Indonesia and Malaysia in October slashed their 2016 forecasts of palm output.
Traders expect demand for the full month of December to fall, pending export data that will be released on Thursday. Cargo surveyors reported a 15-16 percent drop in shipments from December 1-25 compared with the same period a month ago.
Palm oil may rise into a range of 2,649-2,698 ringgit per tonne over the next three months, as indicated by its wave pattern and a Fibonacci ratio analysis, according to Reuters market analyst for commodities and energy technicals Wang Tao.
In other vegetable oil markets, the U.S. January soyoil contract is up 0.4 percent while the May soybean oil
contract on the Dalian Commodity Exchange gained 1.8 percent.
Palm, soy and crude oil prices at 1050 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN6 2295 +4.00 2275 2300 127
MY PALM OIL FEB6 2419 +6.00 2398 2430 2703
MY PALM OIL MAR6 2495 +11.00 2474 2504 19342
CHINA PALM OLEIN MAY6 4864 +174.00 4792 4868 2192238
CHINA SOYOIL MAY6 5718 +132.00 5640 5730 1132472
CBOT SOY OIL MAR6 30.81 +0.50 30.79 31.00 4219
INDIA PALM OIL DEC5 401.60 +0.50 400.80 402.80 469
INDIA SOYOIL JAN6 619.50 -1.90 617.80 623.80 29550
NYMEX CRUDE FEB6 36.93 -0.94 36.85 37.40 38495
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 = 4.2880 ringgit)
($1 = 66.3700 Indian rupees)
($1 = 6.4896 Chinese yuan)
The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to 2,495 ringgit ($581.86) a tonne at the end of the trading session. The contract hit an intra-day high of 2,504 ringgit, the most since June 25, 2014.
"There's some year-end covering going on, and people are expecting a decline in December production. People are expecting a decline by high single digit (percent)," said a trader at a brokerage based in Kuala Lumpur.
Traded volume stood at 32,042 lots of 25 tonnes each on Wednesday.
The year-end monsoon season impacts palm oil production across Southeast Asia annually, as seasonal rains and floods hinder the gathering of fresh fruit bunches, affect road networks and disrupt supply chains.
El Nino's dry weather pattern effect should also lower palm fruit yields and output next year, reducing stockpiles and supporting prices. Top producers Indonesia and Malaysia in October slashed their 2016 forecasts of palm output.
Traders expect demand for the full month of December to fall, pending export data that will be released on Thursday. Cargo surveyors reported a 15-16 percent drop in shipments from December 1-25 compared with the same period a month ago.
Palm oil may rise into a range of 2,649-2,698 ringgit per tonne over the next three months, as indicated by its wave pattern and a Fibonacci ratio analysis, according to Reuters market analyst for commodities and energy technicals Wang Tao.
In other vegetable oil markets, the U.S. January soyoil contract is up 0.4 percent while the May soybean oil
contract on the Dalian Commodity Exchange gained 1.8 percent.
Palm, soy and crude oil prices at 1050 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN6 2295 +4.00 2275 2300 127
MY PALM OIL FEB6 2419 +6.00 2398 2430 2703
MY PALM OIL MAR6 2495 +11.00 2474 2504 19342
CHINA PALM OLEIN MAY6 4864 +174.00 4792 4868 2192238
CHINA SOYOIL MAY6 5718 +132.00 5640 5730 1132472
CBOT SOY OIL MAR6 30.81 +0.50 30.79 31.00 4219
INDIA PALM OIL DEC5 401.60 +0.50 400.80 402.80 469
INDIA SOYOIL JAN6 619.50 -1.90 617.80 623.80 29550
NYMEX CRUDE FEB6 36.93 -0.94 36.85 37.40 38495
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 = 4.2880 ringgit)
($1 = 66.3700 Indian rupees)
($1 = 6.4896 Chinese yuan)