MARKET DEVELOPMENT
VEGOILS-Palm Posts Biggest Daily Rise In 7 Months On Export Hopes
VEGOILS-Palm Posts Biggest Daily Rise In 7 Months On Export Hopes
31/07/2013 (Reuters) - Malaysian palm oil futures posted their biggest daily rise in almost seven months on Tuesday amid hopes exports would improve in the second half of July, although lacklustre U.S. soy markets dragged on the tropical oil.
Cargo surveyors will release data on Malaysian palm oil shipments for July on Wednesday. While the exports are expected to fall, traders say the drop could be less steep than initially estimated.
Palm prices, which typically track overseas soy markets in the United States and China, have been depressed after forecasts of ideal weather conditions in the U.S. Midwest bolstered hopes for a bumper harvest that would raise global oilseed supplies.
"Exports should be quite good for July, not withstanding that July has one extra day," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Currently nothing seems to be budging. At this level a lot of people are not so comfortable in going short. I don't think anybody is very keen to selldown any further," he added.
By Tuesday's close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange had climbed 2.2 percent to 2,215 ringgit ($684) per tonne, its biggest daily percentage rise since early January.
Prices had slipped to 2,137 ringgit earlier in the session. Total traded volume stood at 57,149 lots of 25 tonnes each, much higher than the average 35,000 lots.
Technicals showed palm oil seems to be forming a temporary bottom around a support at 2,136 ringgit, and may hover above this level for one more trading session, Reuters market analyst Wang Tao said.
A weak ringgit also helped support palm oil by making it cheaper for overseas buyers.
Phillip Futures analyst Sim Han Qiang said the weakening ringgit could be due to the country's foreign outflows which were the highest among Asian currencies after the Indonesian rupiah and Indian rupee.
"With U.S. tapering in sight, outflows from emerging markets are likely to exacerbate and the U.S. dollar is set to rally against most currencies. The ringgit is likely to sustain further loss going forward," he said in a note on Tuesday.
In other markets, Brent crude hovered above $107 a barrel as investors awaited a Federal Reserve meeting for clues on the prospects for a U.S. stimulus programme that has bolstered demand in the world's top oil consumer.
In vegetable oil markets, the U.S. soyoil contract for December rose 0.4 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.
Palm, soy and crude oil prices at 1013 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2290 +37.00 2220 2290 360
MY PALM OIL SEP3 2256 +45.00 2184 2261 6958
MY PALM OIL OCT3 2215 +48.00 2137 2219 30939
CHINA PALM OLEIN JAN4 5350 -30.00 5306 5366 435450
CHINA SOYOIL JAN4 6976 -14.00 6902 6992 841666
CBOT SOY OIL DEC3 42.98 +0.16 42.69 43.20 8593
NYMEX CRUDE SEP3 103.89 -0.66 103.56 104.54 20226
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=3.237 ringgit)
Cargo surveyors will release data on Malaysian palm oil shipments for July on Wednesday. While the exports are expected to fall, traders say the drop could be less steep than initially estimated.
Palm prices, which typically track overseas soy markets in the United States and China, have been depressed after forecasts of ideal weather conditions in the U.S. Midwest bolstered hopes for a bumper harvest that would raise global oilseed supplies.
"Exports should be quite good for July, not withstanding that July has one extra day," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"Currently nothing seems to be budging. At this level a lot of people are not so comfortable in going short. I don't think anybody is very keen to selldown any further," he added.
By Tuesday's close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange had climbed 2.2 percent to 2,215 ringgit ($684) per tonne, its biggest daily percentage rise since early January.
Prices had slipped to 2,137 ringgit earlier in the session. Total traded volume stood at 57,149 lots of 25 tonnes each, much higher than the average 35,000 lots.
Technicals showed palm oil seems to be forming a temporary bottom around a support at 2,136 ringgit, and may hover above this level for one more trading session, Reuters market analyst Wang Tao said.
A weak ringgit also helped support palm oil by making it cheaper for overseas buyers.
Phillip Futures analyst Sim Han Qiang said the weakening ringgit could be due to the country's foreign outflows which were the highest among Asian currencies after the Indonesian rupiah and Indian rupee.
"With U.S. tapering in sight, outflows from emerging markets are likely to exacerbate and the U.S. dollar is set to rally against most currencies. The ringgit is likely to sustain further loss going forward," he said in a note on Tuesday.
In other markets, Brent crude hovered above $107 a barrel as investors awaited a Federal Reserve meeting for clues on the prospects for a U.S. stimulus programme that has bolstered demand in the world's top oil consumer.
In vegetable oil markets, the U.S. soyoil contract for December rose 0.4 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.
Palm, soy and crude oil prices at 1013 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2290 +37.00 2220 2290 360
MY PALM OIL SEP3 2256 +45.00 2184 2261 6958
MY PALM OIL OCT3 2215 +48.00 2137 2219 30939
CHINA PALM OLEIN JAN4 5350 -30.00 5306 5366 435450
CHINA SOYOIL JAN4 6976 -14.00 6902 6992 841666
CBOT SOY OIL DEC3 42.98 +0.16 42.69 43.20 8593
NYMEX CRUDE SEP3 103.89 -0.66 103.56 104.54 20226
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=3.237 ringgit)