MARKET DEVELOPMENT
VEGOILS-Palm Creeps Up on Hopes for Smaller Output Rise
VEGOILS-Palm Creeps Up on Hopes for Smaller Output Rise
23/07/2013 (Reuters) - Malaysian palm oil futures edged up in rangebound trade on Monday, fed by optimism that output in July could miss initial estimates, although sluggish exports damped investor appetite.
Palm production in Malaysia, the world's No.2 producer, rose 2.3 percent in June, signalling the start of a higher output cycle in the second half of the year.
But a bigger uptick in July could have faltered, as plantation workers get shorter hours during the Muslim holy month of Ramadan to observe a fast that runs from sunrise to sunset.
"A lot of people still believe that production should be up against the previous month. But this is the fasting month. I think it won't be up much, may be less than 5 percent," said a trader with a foreign commodities brokerage.
Palm oil exports from July 1 to 20 fell 14 percent from a month ago, cargo surveyor Intertek Testing Services showed, as shipments to India and Europe slackened. Another surveyor, Societe Generale de Surveillance, reported a 13.4 percent decline.
"The market is still rangebound, between 2,200 and 2,300 ringgit. There is a strong setback from the export figures. Towards the end of the month, exports should roughly be down around 10 to 12 percent," the Kuala Lumpur-based trader added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange gained 0.7 percent to close at 2,272 ringgit ($715) per tonne. Prices traded in a tight range between 2,245 and 2,281 ringgit.
Total traded volume stood at 22,504 lots of 25 tonnes each, lower than the average 35,000 lots.
Global oilseeds prices are likely to edge lower on an ample supply outlook, with Malaysian refined palmolein prices to average a four-year low of $820 over the next 12 months, said leading vegetable oil analyst Thomas Mielke.
That represents a decline of 3 percent from the $845 average in the year ending June 2013, Reuters calculations showed.
World palm oil production is likely to rise to a record 56.2 million tonnes in 2013 from 53.7 million in 2012, Mielke said in a paper prepared for an online palm oil seminar this week.
In other markets, oil rose above $108 a barrel on Monday as investors shift their focus to U.S. oil that extended its gains against Brent after flipping to a premium for the first time since 2010 in the previous session.
In vegetable oil markets, the U.S. soyoil contract for December rose 0.5 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange also gained 0.2 percent.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2355 +29.00 2324 2360 331
MY PALM OIL SEP3 2299 +24.00 2270 2304 2897
MY PALM OIL OCT3 2272 +15.00 2245 2281 13258
CHINA PALMOLEIN JAN4 5616 -12.00 5572 5636 426550
CHINA SOYOIL JAN4 7256 +14.00 7202 7276 637174
CBOT SOY OIL DEC3 45.56 +0.24 45.17 45.68 5069
NYMEX CRUDE AUG3 108.66 +0.61 108.14 108.70 1734
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palmolein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.18 ringgit)
Palm production in Malaysia, the world's No.2 producer, rose 2.3 percent in June, signalling the start of a higher output cycle in the second half of the year.
But a bigger uptick in July could have faltered, as plantation workers get shorter hours during the Muslim holy month of Ramadan to observe a fast that runs from sunrise to sunset.
"A lot of people still believe that production should be up against the previous month. But this is the fasting month. I think it won't be up much, may be less than 5 percent," said a trader with a foreign commodities brokerage.
Palm oil exports from July 1 to 20 fell 14 percent from a month ago, cargo surveyor Intertek Testing Services showed, as shipments to India and Europe slackened. Another surveyor, Societe Generale de Surveillance, reported a 13.4 percent decline.
"The market is still rangebound, between 2,200 and 2,300 ringgit. There is a strong setback from the export figures. Towards the end of the month, exports should roughly be down around 10 to 12 percent," the Kuala Lumpur-based trader added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange gained 0.7 percent to close at 2,272 ringgit ($715) per tonne. Prices traded in a tight range between 2,245 and 2,281 ringgit.
Total traded volume stood at 22,504 lots of 25 tonnes each, lower than the average 35,000 lots.
Global oilseeds prices are likely to edge lower on an ample supply outlook, with Malaysian refined palmolein prices to average a four-year low of $820 over the next 12 months, said leading vegetable oil analyst Thomas Mielke.
That represents a decline of 3 percent from the $845 average in the year ending June 2013, Reuters calculations showed.
World palm oil production is likely to rise to a record 56.2 million tonnes in 2013 from 53.7 million in 2012, Mielke said in a paper prepared for an online palm oil seminar this week.
In other markets, oil rose above $108 a barrel on Monday as investors shift their focus to U.S. oil that extended its gains against Brent after flipping to a premium for the first time since 2010 in the previous session.
In vegetable oil markets, the U.S. soyoil contract for December rose 0.5 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange also gained 0.2 percent.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2355 +29.00 2324 2360 331
MY PALM OIL SEP3 2299 +24.00 2270 2304 2897
MY PALM OIL OCT3 2272 +15.00 2245 2281 13258
CHINA PALMOLEIN JAN4 5616 -12.00 5572 5636 426550
CHINA SOYOIL JAN4 7256 +14.00 7202 7276 637174
CBOT SOY OIL DEC3 45.56 +0.24 45.17 45.68 5069
NYMEX CRUDE AUG3 108.66 +0.61 108.14 108.70 1734
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palmolein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1=3.18 ringgit)