MARKET DEVELOPMENT
VEGOILS-Palm Edges Off One-Month High As Weak Exports Weigh
VEGOILS-Palm Edges Off One-Month High As Weak Exports Weigh
14/05/2013 (Reuters) - Malaysian palm oil futures eased from a one-month high on Monday as worries about weak exports prompted profit-taking and offset initial gains driven by slowing inventory levels.
Edible oil futures got off to a strong start as traders priced in a drop of 11.3 percent in Malaysia's end-April palm oil stocks to 1.93 million tonnes from a month earlier.
But lacklustre export demand later weighed down prices. Palm exports slid 18.4 percent to 377,193 tonnes for the first 10 days of May from a month earlier, on slowing demand from Europe and China, cargo surveyor Societe Generale de Surveillance said last Friday.
"The Malaysian palm oil stock finally crossed below the 2-million-tonne mark, which is positive for the crude palm oil price as it is an indication that stocks have normalised," said Ivy Ng, senior research analyst at Malaysia's CIMB Investment Bank.
"But this was offset by the 18 percent drop in palm oil exports for the first 10 days of May," she added. "We suspect the weaker exports may be due to higher demand for Indonesian palm oil ... and slower demand from China due to high stocks at the ports."
The benchmark July contract on the Bursa Malaysia Derivatives Exchange lost 0.4 percent to close at 2,309 ringgit ($771) per tonne, and off an earlier high of 2,341 ringgit, a level last seen on April 12.
Total traded volumes stood at 20,607 lots of 25 tonnes each, lower than the average 35,000 lots.
Stagnant production growth in April led to a bigger decline in Malaysian stocks than expected, and analysts said slowing output growth could continue to trim stocks this month, and support crude prices.
"Looking forward, we believe stocks could fall 5 percent month-on-month to 1.84 million tonnes by May. The trend of declining inventory is supportive," said Alan Lim Seong Chun, a research analyst with Malaysia's Kenanga Investment Bank.
In other markets, crude prices slipped towards $103 a barrel on Monday as oil demand in the world's second-largest consumer China fell to eight-month lows, weighing on the global outlook for the fuel.
In vegetable oil markets, U.S. soyoil for July delivery fell 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange rose 0.4 percent.
Palm, soy and crude oil prices at 0959 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY3 2300 +10.00 2300 2300 20
MY PALM OIL JUN3 2299 -6.00 2290 2324 447
MY PALM OIL JUL3 2312 -7.00 2301 2341 10911
CHINA PALM OLEIN SEP3 6118 +56.00 6102 6170 613534
CHINA SOYOIL SEP3 7482 +26.00 7464 7546 912344
CBOT SOY OIL JUL3 49.12 -0.13 48.95 49.46 3753
NYMEX CRUDE JUN3 94.94 -1.09 94.90 95.81 21108
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=2.995 ringgit)
Edible oil futures got off to a strong start as traders priced in a drop of 11.3 percent in Malaysia's end-April palm oil stocks to 1.93 million tonnes from a month earlier.
But lacklustre export demand later weighed down prices. Palm exports slid 18.4 percent to 377,193 tonnes for the first 10 days of May from a month earlier, on slowing demand from Europe and China, cargo surveyor Societe Generale de Surveillance said last Friday.
"The Malaysian palm oil stock finally crossed below the 2-million-tonne mark, which is positive for the crude palm oil price as it is an indication that stocks have normalised," said Ivy Ng, senior research analyst at Malaysia's CIMB Investment Bank.
"But this was offset by the 18 percent drop in palm oil exports for the first 10 days of May," she added. "We suspect the weaker exports may be due to higher demand for Indonesian palm oil ... and slower demand from China due to high stocks at the ports."
The benchmark July contract on the Bursa Malaysia Derivatives Exchange lost 0.4 percent to close at 2,309 ringgit ($771) per tonne, and off an earlier high of 2,341 ringgit, a level last seen on April 12.
Total traded volumes stood at 20,607 lots of 25 tonnes each, lower than the average 35,000 lots.
Stagnant production growth in April led to a bigger decline in Malaysian stocks than expected, and analysts said slowing output growth could continue to trim stocks this month, and support crude prices.
"Looking forward, we believe stocks could fall 5 percent month-on-month to 1.84 million tonnes by May. The trend of declining inventory is supportive," said Alan Lim Seong Chun, a research analyst with Malaysia's Kenanga Investment Bank.
In other markets, crude prices slipped towards $103 a barrel on Monday as oil demand in the world's second-largest consumer China fell to eight-month lows, weighing on the global outlook for the fuel.
In vegetable oil markets, U.S. soyoil for July delivery fell 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange rose 0.4 percent.
Palm, soy and crude oil prices at 0959 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY3 2300 +10.00 2300 2300 20
MY PALM OIL JUN3 2299 -6.00 2290 2324 447
MY PALM OIL JUL3 2312 -7.00 2301 2341 10911
CHINA PALM OLEIN SEP3 6118 +56.00 6102 6170 613534
CHINA SOYOIL SEP3 7482 +26.00 7464 7546 912344
CBOT SOY OIL JUL3 49.12 -0.13 48.95 49.46 3753
NYMEX CRUDE JUN3 94.94 -1.09 94.90 95.81 21108
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=2.995 ringgit)