MARKET DEVELOPMENT
VEGOILS-Palm Slips on Weak Markets, Traders Brace for USDA Report
VEGOILS-Palm Slips on Weak Markets, Traders Brace for USDA Report
29/06/2013 (Reuters) - Malaysian palm oil futures dipped to touch a fresh one-month low on Friday, tracking weak global commodity markets, while investors braced for a key U.S. agricultural report that is slated to show record planting of competing soybean.
Analysts expect the U.S. Department of Agriculture (USDA), which will release its mid-year acreage and stocks report later on Friday, to raise estimates of soybean acreage as heavy rains forced farmers to plant more of the later-maturing soy.
A bigger soybean supply for crushing into edible oil could claw demand away from palm oil. The two vegetable oils are commonly used as substitutes for one another.
Losses were capped by strong exports buoyed by demand ahead of a month-long Muslim festival coming in July, when daily communal feasts are expected to drive up consumption.
Exports in June 1-25 rose between 6-10 percent compared to the same period in May.
"Most of the global commodities are depressed and moving downwards, and palm is not spared. The USDA report is also expected to be negative," said a Kuala Lumpur-based trader with a foreign commodities brokerage.
The benchmark September contract on the Bursa Malaysia Derivatives Exchange had lost 0.5 percent to 2,344 ringgit ($742) per tonne by Friday's close. Prices earlier fell
to 2,346 ringgit, the lowest since May 21.
Investor jitters ahead of the USDA report and unsteady overseas soy markets depressed palm this week and led the vegetable oil to post a weekly loss of 3.9 percent.
Total traded volumes stood 32,137 lots of 25 tonnes each, slightly lower than the usual 35,000 lots.
Traders will be looking for total palm oil exports in June, due to be released on Monday, to gauge demand of the tropical oil. Some traders expect last-minute festive buying to prop up exports into the first half of July.
Still, palm oil prices could see a sharper-than-expected drop in 2013 from slowing demand in key markets in Europe and Asia, and increased competition from rival soyoil, a Reuters poll showed on Thursday.
The median forecast of 25 analysts who cover the sector estimated an average price of 2,500 ringgit ($806) per tonne for the year, compared to 2,958 ringgit in 2012.
In other markets, Brent crude oil futures rose to around $103 a barrel and are set for the first monthly rise in five, after comments from Federal Reserve governors that the U.S. central bank is in no rush to curtail stimulus programme.
In vegetable oil markets, U.S. soyoil for December edged up 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.2 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL3 2337 -11.00 2337 2370 96
MY PALM OIL AUG3 2345 -14.00 2344 2380 2673
MY PALM OIL SEP3 2344 -11.00 2341 2376 16296
CHINA PALM OLEIN JAN4 5844 +14.00 5790 5878 391178
CHINA SOYOIL JAN4 7294 +12.00 7260 7344 666980
CBOT SOY OIL DEC3 45.23 +0.04 45.16 45.51 4412
NYMEX CRUDE AUG3 97.61 +0.56 96.55 97.82 21925
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=3.161 ringgit)
Analysts expect the U.S. Department of Agriculture (USDA), which will release its mid-year acreage and stocks report later on Friday, to raise estimates of soybean acreage as heavy rains forced farmers to plant more of the later-maturing soy.
A bigger soybean supply for crushing into edible oil could claw demand away from palm oil. The two vegetable oils are commonly used as substitutes for one another.
Losses were capped by strong exports buoyed by demand ahead of a month-long Muslim festival coming in July, when daily communal feasts are expected to drive up consumption.
Exports in June 1-25 rose between 6-10 percent compared to the same period in May.
"Most of the global commodities are depressed and moving downwards, and palm is not spared. The USDA report is also expected to be negative," said a Kuala Lumpur-based trader with a foreign commodities brokerage.
The benchmark September contract on the Bursa Malaysia Derivatives Exchange had lost 0.5 percent to 2,344 ringgit ($742) per tonne by Friday's close. Prices earlier fell
to 2,346 ringgit, the lowest since May 21.
Investor jitters ahead of the USDA report and unsteady overseas soy markets depressed palm this week and led the vegetable oil to post a weekly loss of 3.9 percent.
Total traded volumes stood 32,137 lots of 25 tonnes each, slightly lower than the usual 35,000 lots.
Traders will be looking for total palm oil exports in June, due to be released on Monday, to gauge demand of the tropical oil. Some traders expect last-minute festive buying to prop up exports into the first half of July.
Still, palm oil prices could see a sharper-than-expected drop in 2013 from slowing demand in key markets in Europe and Asia, and increased competition from rival soyoil, a Reuters poll showed on Thursday.
The median forecast of 25 analysts who cover the sector estimated an average price of 2,500 ringgit ($806) per tonne for the year, compared to 2,958 ringgit in 2012.
In other markets, Brent crude oil futures rose to around $103 a barrel and are set for the first monthly rise in five, after comments from Federal Reserve governors that the U.S. central bank is in no rush to curtail stimulus programme.
In vegetable oil markets, U.S. soyoil for December edged up 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange rose 0.2 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL3 2337 -11.00 2337 2370 96
MY PALM OIL AUG3 2345 -14.00 2344 2380 2673
MY PALM OIL SEP3 2344 -11.00 2341 2376 16296
CHINA PALM OLEIN JAN4 5844 +14.00 5790 5878 391178
CHINA SOYOIL JAN4 7294 +12.00 7260 7344 666980
CBOT SOY OIL DEC3 45.23 +0.04 45.16 45.51 4412
NYMEX CRUDE AUG3 97.61 +0.56 96.55 97.82 21925
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=3.161 ringgit)