MARKET DEVELOPMENT
REFILE-VEGOILS-Weak Soy Markets Drag Palm Oil From 2-Month High
REFILE-VEGOILS-Weak Soy Markets Drag Palm Oil From 2-Month High
31/05/2013 (Reuters) - Malaysian palm oil futures edged down on Thursday, slipping from a two-month high hit the day before as weaker overseas markets and slower demand for commodities weighed on the tropical oil, and as investors booked profits.
Soy markets in the United States, tracked by palm, extended losses from the previous day following news that China, the world's largest buyer of soybeans, had cancelled a 147,000 tonne order for U.S. soy.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange ended 1.1 percent lower at 2,372 per tonne. Prices traded in a tight 2,371-2,396 ringgit range, while total traded volumes stood at 22,280 lots of 25 tonnes each, just below an average 25,000 lots.
"The market has been going up for so many days -- today it's the first day down, following weaker overseas markets," said a trader with a foreign commodities brokerage.
"The market is also down due to a technical correction and profit taking," he added.
Palm prices touched 2,420 ringgit on Wednesday, their highest since March 28, as investors anticipated tight supplies and a demand pick-up ahead of a Muslim festival, which would help trim stocks in No.2 producer Malaysia.
Technicals showed palm oil is expected to end the current correction above a support at 2,362 ringgit per tonne and then rise towards Wednesday's 2,420 ringgit high, Reuters market analyst Wang Tao said.
Investors hope the Ramadan fasting month in July, when communal feasting usually boosts consumption, will nudge up demand of the edible oil that is widely used in food items ranging from chocolate to cookies.
Market players will study export data for May, which will be released by cargo surveyors on Friday, to gauge demand. Exports of palm oil products have been sluggish this month due partly to weak demand from China.
"Exports could be down between 2-3 percent for May," the Kuala Lumpur-based trader said. "Toward the Ramadan month, normally India, Pakistan and the Middle East buys more. But this time they are not."
In other markets, oil prices eased towards $102 a barrel on Thursday and were on track for a third straight month of losses amid a tepid global demand outlook and abundant supplies in the United States.
In vegetable oil markets, U.S. soyoil for July delivery slipped 0.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange ended down 1 percent.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN3 2335 -24.00 2330 2350 144
MY PALM OIL JUL3 2369 -33.00 2368 2395 3049
MY PALM OIL AUG3 2372 -27.00 2371 2396 14034
CHINA PALM OLEIN SEP3 6144 -60.00 6114 6192 494066
CHINA SOYOIL SEP3 7484 -76.00 7450 7498 743690
CBOT SOY OIL JUL3 48.51 -0.12 48.49 48.78 6343
NYMEX CRUDE JUL3 92.57 -0.56 92.34 93.29 23937
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=3.069 ringgit)
Soy markets in the United States, tracked by palm, extended losses from the previous day following news that China, the world's largest buyer of soybeans, had cancelled a 147,000 tonne order for U.S. soy.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange ended 1.1 percent lower at 2,372 per tonne. Prices traded in a tight 2,371-2,396 ringgit range, while total traded volumes stood at 22,280 lots of 25 tonnes each, just below an average 25,000 lots.
"The market has been going up for so many days -- today it's the first day down, following weaker overseas markets," said a trader with a foreign commodities brokerage.
"The market is also down due to a technical correction and profit taking," he added.
Palm prices touched 2,420 ringgit on Wednesday, their highest since March 28, as investors anticipated tight supplies and a demand pick-up ahead of a Muslim festival, which would help trim stocks in No.2 producer Malaysia.
Technicals showed palm oil is expected to end the current correction above a support at 2,362 ringgit per tonne and then rise towards Wednesday's 2,420 ringgit high, Reuters market analyst Wang Tao said.
Investors hope the Ramadan fasting month in July, when communal feasting usually boosts consumption, will nudge up demand of the edible oil that is widely used in food items ranging from chocolate to cookies.
Market players will study export data for May, which will be released by cargo surveyors on Friday, to gauge demand. Exports of palm oil products have been sluggish this month due partly to weak demand from China.
"Exports could be down between 2-3 percent for May," the Kuala Lumpur-based trader said. "Toward the Ramadan month, normally India, Pakistan and the Middle East buys more. But this time they are not."
In other markets, oil prices eased towards $102 a barrel on Thursday and were on track for a third straight month of losses amid a tepid global demand outlook and abundant supplies in the United States.
In vegetable oil markets, U.S. soyoil for July delivery slipped 0.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange ended down 1 percent.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN3 2335 -24.00 2330 2350 144
MY PALM OIL JUL3 2369 -33.00 2368 2395 3049
MY PALM OIL AUG3 2372 -27.00 2371 2396 14034
CHINA PALM OLEIN SEP3 6144 -60.00 6114 6192 494066
CHINA SOYOIL SEP3 7484 -76.00 7450 7498 743690
CBOT SOY OIL JUL3 48.51 -0.12 48.49 48.78 6343
NYMEX CRUDE JUL3 92.57 -0.56 92.34 93.29 23937
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=3.069 ringgit)