MARKET DEVELOPMENT
VEGOILS-Palm Oil Climbs to 5-Month High on Output Concerns
VEGOILS-Palm Oil Climbs to 5-Month High on Output Concerns
* Palm oil on track for a fourth consecutive session of gains
* Market also tracks gain in palm olein on Dalian - trader
* Palm may gain more to 2,744 ringgit/tonne - Technicals
23/08/2017 (Reuters) - Malaysian palm oil futures extended gains on Tuesday to hit five-month highs on concerns about production, and tracking gains in related edible oils.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 1.4 percent at 2,748 ringgit ($642.06) at the midday break, its highest since March 24, and heading for a fourth straight session of gains.
Traded volumes stood at 23,622 lots of 25 tonnes each at noon.
"Demand (for palm oil) is still the same but local production is not coming up, which is the main reason why the market is holding up," said a trader from Kuala Lumpur, adding that he did not expect the strong surge to continue.
"Market gains have been very volatile, when the fall comes it will be equally drastic."
The market could be "drawing strength" from palm olein on China's Dalian Commodity Exchange, said another trader, adding that production remained a bullish factor for palm oil as output remains lower than expected in Sabah, the largest producing state in Malaysia.
Malaysia's palm oil output is seen rising in the second half of the year, in line with seasonal trend and as the dry weather effects of a crop-damaging El Nino weather phenomenon wear off.
Production in 2017 is estimated to rise 15.5 percent from the previous year to reach 20 million tonnes, according to industry body the Malaysian Palm Oil Board on Monday.
However, a Reuters survey of traders, planters and analysts pegged production at lower levels, between 18.7 million to 19.5 million tonnes.
Palm oil may rise more to 2,744 ringgit per tonne, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related vegetable oils, the October soybean oil contract on the Chicago Board of Trade rose 0.6 percent, while the January soybean oil on the Dalian Commodity Exchange was up 1.1 percent.
The January palm olein contract on Dalian was also up 1.8 percent.
Palm oil prices are impacted by the movements in related edible oils, as they compete for a share in the global vegetable oils market.
Palm, soy and crude oil prices at 0530 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP7 2733 +30.00 2717 2733 760
MY PALM OIL OCT7 2738 +35.00 2712 2738 1275
MY PALM OIL NOV7 2748 +37.00 2721 2748 11407
CHINA PALM OLEIN JAN8 5540 +100.00 5442 5554 654244
CHINA SOYOIL JAN8 6364 +68.00 6284 6374 419762
CBOT SOY OIL DEC7 34.36 +0.21 34.06 34.4 4090
INDIA PALM OIL AUG7 518.50 +3.70 516.40 519.3 229
INDIA SOYOIL SEP7 661.8 +2.70 655.2 662 6290
NYMEX CRUDE SEP7 47.53 +0.16 47.40 47.57 409
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 = 4.2800 ringgit)
($1 = 64.1175 Indian rupees)
($1 = 6.6570 Chinese yuan)
* Market also tracks gain in palm olein on Dalian - trader
* Palm may gain more to 2,744 ringgit/tonne - Technicals
23/08/2017 (Reuters) - Malaysian palm oil futures extended gains on Tuesday to hit five-month highs on concerns about production, and tracking gains in related edible oils.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 1.4 percent at 2,748 ringgit ($642.06) at the midday break, its highest since March 24, and heading for a fourth straight session of gains.
Traded volumes stood at 23,622 lots of 25 tonnes each at noon.
"Demand (for palm oil) is still the same but local production is not coming up, which is the main reason why the market is holding up," said a trader from Kuala Lumpur, adding that he did not expect the strong surge to continue.
"Market gains have been very volatile, when the fall comes it will be equally drastic."
The market could be "drawing strength" from palm olein on China's Dalian Commodity Exchange, said another trader, adding that production remained a bullish factor for palm oil as output remains lower than expected in Sabah, the largest producing state in Malaysia.
Malaysia's palm oil output is seen rising in the second half of the year, in line with seasonal trend and as the dry weather effects of a crop-damaging El Nino weather phenomenon wear off.
Production in 2017 is estimated to rise 15.5 percent from the previous year to reach 20 million tonnes, according to industry body the Malaysian Palm Oil Board on Monday.
However, a Reuters survey of traders, planters and analysts pegged production at lower levels, between 18.7 million to 19.5 million tonnes.
Palm oil may rise more to 2,744 ringgit per tonne, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
In related vegetable oils, the October soybean oil contract on the Chicago Board of Trade rose 0.6 percent, while the January soybean oil on the Dalian Commodity Exchange was up 1.1 percent.
The January palm olein contract on Dalian was also up 1.8 percent.
Palm oil prices are impacted by the movements in related edible oils, as they compete for a share in the global vegetable oils market.
Palm, soy and crude oil prices at 0530 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP7 2733 +30.00 2717 2733 760
MY PALM OIL OCT7 2738 +35.00 2712 2738 1275
MY PALM OIL NOV7 2748 +37.00 2721 2748 11407
CHINA PALM OLEIN JAN8 5540 +100.00 5442 5554 654244
CHINA SOYOIL JAN8 6364 +68.00 6284 6374 419762
CBOT SOY OIL DEC7 34.36 +0.21 34.06 34.4 4090
INDIA PALM OIL AUG7 518.50 +3.70 516.40 519.3 229
INDIA SOYOIL SEP7 661.8 +2.70 655.2 662 6290
NYMEX CRUDE SEP7 47.53 +0.16 47.40 47.57 409
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 = 4.2800 ringgit)
($1 = 64.1175 Indian rupees)
($1 = 6.6570 Chinese yuan)