MARKET DEVELOPMENT
VEGOILS-Palm Slips To Near 5-Mth Low, Investors Wary Ahead of Poll
VEGOILS-Palm Slips To Near 5-Mth Low, Investors Wary Ahead of Poll
03/05/2013 (Reuters) - Malaysian palm oil futures slipped to a near 5-month low on Friday, posting a weekly loss of 2.7 percent, with many investors exiting the market as the country heads into polls.
Malaysia, the world's No.2 palm oil producer, holds general elections on Sunday in what could be the toughest test of the ruling coalition's 56-year grip on power.
The Malaysian benchmark stock index lost more than a tenth on its first trading day after the country's last elections in 2008.
"There's a lot of uncertainty because there's no major news on the market yet. For now a lot of people are trying to leave the market, pending the election results next Monday," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"People are worried the stock market is going to go down. A weaker ringgit will be good for palm oil, but a weaker stock index is bad. So we're not sure which way palm will move -- it depends on the results of the elections," the trader said.
Investors also avoided taking risks as they waited for further trading clues from official data on palm stocks and output levels due next week.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to close at 2,254 ringgit ($743) per tonne. Prices earlier fell to 2,243 ringgit, a level last seen on Dec. 14.
Total traded volumes stood at 28,510 lots of 25 tonnes each, slightly below the average 35,000 lots.
Cargo surveyor data on Tuesday showed April's palm oil exports fell between 4.3 percent and 5.6 percent on the month, on waning Chinese demand, stoking concern that prices, already down around 7.5 percent this year, could tumble further.
Affin Investment Bank on Friday cut its average selling price forecast for crude palm oil in 2013 to 2,600 ringgit per tonne from 2,800 ringgit, citing a sluggish outlook due to "uneven global growth, high palm oil stocks, the outbreak of the H7N9 virus in China, and a likely delay in the implementation of biodiesel policy".
In other markets, Brent crude eased slightly lower below $103 a barrel on Friday, but held most of its gains from the previous session, as investors awaited U.S. jobs figures that may show the economy is quickening in the world's top oil
consumer.
In vegetable oil markets, the U.S. soyoil for July delivery rose 0.6 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities
Exchange gained 0.9 percent.
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY3 0 +0.00 0 0 0
MY PALM OIL JUN3 2252 -3.00 2244 2276 1924
MY PALM OIL JUL3 2254 -7.00 2243 2282 14052
CHINA PALM OLEIN SEP3 5884 +40.00 5844 5926 476546
CHINA SOYOIL SEP3 7270 +68.00 7184 7272 709028
CBOT SOY OIL JUL3 48.75 +0.27 48.44 48.86 3962
NYMEX CRUDE JUN3 94.21 +0.22 93.56 94.29 16655
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
Crude in U.S. dollars per barrel
($1=3.033 ringgit)
Malaysia, the world's No.2 palm oil producer, holds general elections on Sunday in what could be the toughest test of the ruling coalition's 56-year grip on power.
The Malaysian benchmark stock index lost more than a tenth on its first trading day after the country's last elections in 2008.
"There's a lot of uncertainty because there's no major news on the market yet. For now a lot of people are trying to leave the market, pending the election results next Monday," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"People are worried the stock market is going to go down. A weaker ringgit will be good for palm oil, but a weaker stock index is bad. So we're not sure which way palm will move -- it depends on the results of the elections," the trader said.
Investors also avoided taking risks as they waited for further trading clues from official data on palm stocks and output levels due next week.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to close at 2,254 ringgit ($743) per tonne. Prices earlier fell to 2,243 ringgit, a level last seen on Dec. 14.
Total traded volumes stood at 28,510 lots of 25 tonnes each, slightly below the average 35,000 lots.
Cargo surveyor data on Tuesday showed April's palm oil exports fell between 4.3 percent and 5.6 percent on the month, on waning Chinese demand, stoking concern that prices, already down around 7.5 percent this year, could tumble further.
Affin Investment Bank on Friday cut its average selling price forecast for crude palm oil in 2013 to 2,600 ringgit per tonne from 2,800 ringgit, citing a sluggish outlook due to "uneven global growth, high palm oil stocks, the outbreak of the H7N9 virus in China, and a likely delay in the implementation of biodiesel policy".
In other markets, Brent crude eased slightly lower below $103 a barrel on Friday, but held most of its gains from the previous session, as investors awaited U.S. jobs figures that may show the economy is quickening in the world's top oil
consumer.
In vegetable oil markets, the U.S. soyoil for July delivery rose 0.6 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities
Exchange gained 0.9 percent.
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY3 0 +0.00 0 0 0
MY PALM OIL JUN3 2252 -3.00 2244 2276 1924
MY PALM OIL JUL3 2254 -7.00 2243 2282 14052
CHINA PALM OLEIN SEP3 5884 +40.00 5844 5926 476546
CHINA SOYOIL SEP3 7270 +68.00 7184 7272 709028
CBOT SOY OIL JUL3 48.75 +0.27 48.44 48.86 3962
NYMEX CRUDE JUN3 94.21 +0.22 93.56 94.29 16655
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
Crude in U.S. dollars per barrel
($1=3.033 ringgit)