MARKET DEVELOPMENT
VEGOILS-Palm Climbs To 1-Mth Top After US Cuts Soy Forecast
VEGOILS-Palm Climbs To 1-Mth Top After US Cuts Soy Forecast
14/08/2013 (Reuters) - Malaysian palm oil futures hit a one-month high on Tuesday after the U.S. government made deeper-than-expected cuts to its forecasts for soybean yields and stocks, while strong exports of the tropical oil also helped prop up prices.
Chicago soybean futures rallied more than 3 percent on Monday after the U.S.Department of Agriculture trimmed its estimates instead of raising it.
"By itself, the news of the lower than expected U.S. soybean production should be positive to crude palm oil prices," said Kenanga Investment Bank analyst Alan Lim Seong Chun on Tuesday.
"Insufficient soybean will lead to low soybean oil supply globally and this will increase demand for palm oil, which is commonly used as soybean oil substitute," he added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange climbed 2.4 percent to close at 2,296 ringgit ($705) per tonne. Prices earlier rose to 2,303 ringgit, a level not seen since July 12.
Total traded volume stood at 32,054 lots of 25 tonnes each, slightly below the average 35,000 lots.
Technicals showed that Malaysian palm oil is expected to rise more to 2,314 ringgit per tonne, as it has broken above a resistance at 2,272 ringgit, Reuters analyst Wang Tao said.
Malaysian palm oil shipments in the first ten days of August jumped 18.5 percent, cargo surveyor Intertek Testing Services said on Monday, as China re-stocked ahead of the Mid-Autumn festival which will be celebrated in September.
Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 25.8 percent increase for the same period.
Investors are also optimistic ahead of industry data on Wednesday that is widely expected to show inventories in the world's No.2 producer has shrunk further from its current 1.65 million tonnes.
In other markets, Brent crude rose above $109 per barrel after oil exports from Libya fell to their lowest for two years, heightening supply worries ahead of scheduled cuts in output from fellow OPEC member Iraq.
In vegetable oil markets, the U.S. soyoil contract for December rose 1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange gained 2.8 percent.
Palm, soy and crude oil prices at 1002 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2330 +50.00 2315 2330 9
MY PALM OIL SEP3 2327 +51.00 2299 2328 1329
MY PALM OIL OCT3 2296 +54.00 2271 2303 16800
CHINA PALM OLEIN JAN4 5570 +180.00 5462 5596 791636
CHINA SOYOIL JAN4 7144 +192.00 7036 7176 1288042
CBOT SOY OIL DEC3 43.21 +0.46 42.60 43.29 9456
NYMEX CRUDE SEP3 107.07 +0.96 105.95 107.20 22988
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 = 3.257 Malaysian ringgit)
Chicago soybean futures rallied more than 3 percent on Monday after the U.S.Department of Agriculture trimmed its estimates instead of raising it.
"By itself, the news of the lower than expected U.S. soybean production should be positive to crude palm oil prices," said Kenanga Investment Bank analyst Alan Lim Seong Chun on Tuesday.
"Insufficient soybean will lead to low soybean oil supply globally and this will increase demand for palm oil, which is commonly used as soybean oil substitute," he added.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange climbed 2.4 percent to close at 2,296 ringgit ($705) per tonne. Prices earlier rose to 2,303 ringgit, a level not seen since July 12.
Total traded volume stood at 32,054 lots of 25 tonnes each, slightly below the average 35,000 lots.
Technicals showed that Malaysian palm oil is expected to rise more to 2,314 ringgit per tonne, as it has broken above a resistance at 2,272 ringgit, Reuters analyst Wang Tao said.
Malaysian palm oil shipments in the first ten days of August jumped 18.5 percent, cargo surveyor Intertek Testing Services said on Monday, as China re-stocked ahead of the Mid-Autumn festival which will be celebrated in September.
Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 25.8 percent increase for the same period.
Investors are also optimistic ahead of industry data on Wednesday that is widely expected to show inventories in the world's No.2 producer has shrunk further from its current 1.65 million tonnes.
In other markets, Brent crude rose above $109 per barrel after oil exports from Libya fell to their lowest for two years, heightening supply worries ahead of scheduled cuts in output from fellow OPEC member Iraq.
In vegetable oil markets, the U.S. soyoil contract for December rose 1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange gained 2.8 percent.
Palm, soy and crude oil prices at 1002 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG3 2330 +50.00 2315 2330 9
MY PALM OIL SEP3 2327 +51.00 2299 2328 1329
MY PALM OIL OCT3 2296 +54.00 2271 2303 16800
CHINA PALM OLEIN JAN4 5570 +180.00 5462 5596 791636
CHINA SOYOIL JAN4 7144 +192.00 7036 7176 1288042
CBOT SOY OIL DEC3 43.21 +0.46 42.60 43.29 9456
NYMEX CRUDE SEP3 107.07 +0.96 105.95 107.20 22988
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 = 3.257 Malaysian ringgit)