MARKET DEVELOPMENT
VEGOILS-Palm Extends Losses To Hit 1-Month Low Ahead of USDA Report
VEGOILS-Palm Extends Losses To Hit 1-Month Low Ahead of USDA Report
28/06/2013 (Reuters) - Malaysian palm oil futures slipped to the lowest in more than a month on Thursday as investors liquidated their positions ahead of a key industry report that could show higher supplies of rival oilseed soybean.
The U.S. Department of Agriculture (USDA) will release its mid-year acreage and stocks report on Friday at 1600 GMT. Analysts expect the USDA to raise its forecast of soybean acres as the rain delays forced farmers to change spring sowing schedules.
A higher supply of soybeans to be crushed into vegetable oil could shift demand away from rival palm oil.
"I think traders are expecting higher soy supply from the USDA's Friday report, that's why the market is under pressure," said a dealer with a foreign commodities brokerage in Kuala Lumpur. "Also, a major support level (at 2,400 ringgit) was broken, so it's looking a lot like a technical selldown."
By Thursday's close, the benchmark September contract on the Bursa Malaysia Derivatives Exchange had lost 1.0 percent to 2,355 ringgit ($741) per tonne, a shade higher than its intraday low of 2,347 ringgit, a level last seen on May 23.
Total traded volumes stood at 30,897 lots of 25 tonnes each, slightly lower the average 35,000 lots.
Indonesia, the world's top palm oil producer, has set its export tax for crude palm oil at 10.5 percent for July, up from 9 percent in June, a trade ministry official said on Thursday.
Malaysia, with its export tax unchanged at 4.5 percent, could benefit from the higher tariff and draw higher demand, which in turn could provide support for palm oil prices that have fallen in five out of the last six sessions.
Traders are looking out for Malaysia's June 1-25 exports data from cargo surveyor Societe Generale de Surveillance due later in the day, after another surveyor Intertek Testing Services reported a 9.6 percent monthly increase in shipments.
In other markets, Brent crude oil rose for a fourth session on Thursday to above $102 a barrel, supported as investor conviction strengthened that monetary stimulus from major central banks would stay in place for the time being.
In vegetable oil markets, U.S. soyoil for December edged up 0.4 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange remained weak on fears of tight credit in China, losing 0.6 percent.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL3 2346 -24.00 2343 2359 725
MY PALM OIL AUG3 2359 -23.00 2352 2378 3980
MY PALM OIL SEP3 2355 -24.00 2347 2374 15854
CHINA PALM OLEIN JAN4 5828 -54.00 5806 5864 405884
CHINA SOYOIL JAN4 7302 -44.00 7242 7326 839360
CBOT SOY OIL DEC3 45.64 +0.19 45.34 45.70 4166
NYMEX CRUDE AUG3 95.75 +0.25 95.35 96.14 19735
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=3.18 ringgit)
The U.S. Department of Agriculture (USDA) will release its mid-year acreage and stocks report on Friday at 1600 GMT. Analysts expect the USDA to raise its forecast of soybean acres as the rain delays forced farmers to change spring sowing schedules.
A higher supply of soybeans to be crushed into vegetable oil could shift demand away from rival palm oil.
"I think traders are expecting higher soy supply from the USDA's Friday report, that's why the market is under pressure," said a dealer with a foreign commodities brokerage in Kuala Lumpur. "Also, a major support level (at 2,400 ringgit) was broken, so it's looking a lot like a technical selldown."
By Thursday's close, the benchmark September contract on the Bursa Malaysia Derivatives Exchange had lost 1.0 percent to 2,355 ringgit ($741) per tonne, a shade higher than its intraday low of 2,347 ringgit, a level last seen on May 23.
Total traded volumes stood at 30,897 lots of 25 tonnes each, slightly lower the average 35,000 lots.
Indonesia, the world's top palm oil producer, has set its export tax for crude palm oil at 10.5 percent for July, up from 9 percent in June, a trade ministry official said on Thursday.
Malaysia, with its export tax unchanged at 4.5 percent, could benefit from the higher tariff and draw higher demand, which in turn could provide support for palm oil prices that have fallen in five out of the last six sessions.
Traders are looking out for Malaysia's June 1-25 exports data from cargo surveyor Societe Generale de Surveillance due later in the day, after another surveyor Intertek Testing Services reported a 9.6 percent monthly increase in shipments.
In other markets, Brent crude oil rose for a fourth session on Thursday to above $102 a barrel, supported as investor conviction strengthened that monetary stimulus from major central banks would stay in place for the time being.
In vegetable oil markets, U.S. soyoil for December edged up 0.4 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange remained weak on fears of tight credit in China, losing 0.6 percent.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL3 2346 -24.00 2343 2359 725
MY PALM OIL AUG3 2359 -23.00 2352 2378 3980
MY PALM OIL SEP3 2355 -24.00 2347 2374 15854
CHINA PALM OLEIN JAN4 5828 -54.00 5806 5864 405884
CHINA SOYOIL JAN4 7302 -44.00 7242 7326 839360
CBOT SOY OIL DEC3 45.64 +0.19 45.34 45.70 4166
NYMEX CRUDE AUG3 95.75 +0.25 95.35 96.14 19735
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=3.18 ringgit)