MARKET DEVELOPMENT
VEGOILS-Palm Oil Edges Up As weak Ringgit Fuels Demand Hopes
VEGOILS-Palm Oil Edges Up As weak Ringgit Fuels Demand Hopes
22/08/2013 (Reuters) - Malaysian palm oil futures edged higher on Wednesday, as a weaker ringgit fuelled hopes of greater export demand, although gains were held in check by a soft soy market.
The U.S. soy market edged lower after a tour of the grain belt pegged higher crop yields, putting pressure on palm oil as demand could shift to competing soybean oil.
Traders said demand could still be spurred by weak currencies in major producers Indonesia and Malaysia. Weakness in the rupiah and ringgit makes the two countries' palm exports cheaper for overseas buyers and refiners, just as China begins to restock ahead of September's Mid-Autumn festival.
The Malaysian ringgit slid to its lowest in more than three years against the dollar on Tuesday, while the Indonesian rupiah hit a fresh four-year low.
"The palm market is quite volatile today. In the early morning it was weighed down by U.S. soybeans but we saw some recovery," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"While the weaker (Indonesian) rupiah could stimulate more overseas demand, don't forget that the ringgit is also getting weaker, so in a way both countries may benefit."
Malaysian exports could reach 1.4 million tonnes this month, the trader said.
At market close, the benchmark November contract on the Bursa Malaysia Derivatives Exchange inched up 0.2 percent to 2,333 ringgit ($709) per tonne, after trading in a tight range between 2,311 and 2,340 ringgit.
Total traded volume stood at 38,333 lots of 25 tonnes each, higher than the usual 35,000 lots.
Technicals showed palm oil neutral in a range of 2,287-2,366 ringgit per tonne, said Reuters market analyst Wang Tao.
Indonesia, the world's top palm oil producer, cut its export tax for crude palm oil to 9 percent for September, down from 10.5 percent in August, an industry ministry official said on Wednesday.
The country's July exports of crude palm oil and its derivatives fell 1.64 percent to 1.59 million tonnes compared with the previous month, an industry body said on Wednesday, due to falling demand from India and China.
In contrast, Malaysia's palm exports in July inched up as much as 5.3 percent to 1.39 million tonnes from a month ago, cargo surveyor data showed.
In other markets, Brent crude oil fell below $110 a barrel on Wednesday on reports some Libyan oil exports might soon resume and on news the Seaway crude oil pipeline had shut, halting shipments from the U.S. Midwest to the Gulf Coast.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.7 percent in late Asian trade. The most-active January soybean oil contract on the Dalian
Commodities Exchange fell 0.8 percent.
Palm, soy and crude oil prices at 1001 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2393 +13.00 2376 2394 1034
MY PALM OIL OCT3 2357 +13.00 2329 2357 7744
MY PALM OIL NOV3 2333 +4.00 2311 2340 16095
CHINA PALM OLEIN JAN4 5536 -48.00 5512 5570 286308
CHINA SOYOIL JAN4 7126 -56.00 7110 7164 577178
CBOT SOY OIL DEC3 43.46 +0.28 43.05 43.47 4846
NYMEX CRUDE OCT3 104.89 -0.22 104.43 105.35 20625
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=3.29 Malaysian ringgit)
The U.S. soy market edged lower after a tour of the grain belt pegged higher crop yields, putting pressure on palm oil as demand could shift to competing soybean oil.
Traders said demand could still be spurred by weak currencies in major producers Indonesia and Malaysia. Weakness in the rupiah and ringgit makes the two countries' palm exports cheaper for overseas buyers and refiners, just as China begins to restock ahead of September's Mid-Autumn festival.
The Malaysian ringgit slid to its lowest in more than three years against the dollar on Tuesday, while the Indonesian rupiah hit a fresh four-year low.
"The palm market is quite volatile today. In the early morning it was weighed down by U.S. soybeans but we saw some recovery," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"While the weaker (Indonesian) rupiah could stimulate more overseas demand, don't forget that the ringgit is also getting weaker, so in a way both countries may benefit."
Malaysian exports could reach 1.4 million tonnes this month, the trader said.
At market close, the benchmark November contract on the Bursa Malaysia Derivatives Exchange inched up 0.2 percent to 2,333 ringgit ($709) per tonne, after trading in a tight range between 2,311 and 2,340 ringgit.
Total traded volume stood at 38,333 lots of 25 tonnes each, higher than the usual 35,000 lots.
Technicals showed palm oil neutral in a range of 2,287-2,366 ringgit per tonne, said Reuters market analyst Wang Tao.
Indonesia, the world's top palm oil producer, cut its export tax for crude palm oil to 9 percent for September, down from 10.5 percent in August, an industry ministry official said on Wednesday.
The country's July exports of crude palm oil and its derivatives fell 1.64 percent to 1.59 million tonnes compared with the previous month, an industry body said on Wednesday, due to falling demand from India and China.
In contrast, Malaysia's palm exports in July inched up as much as 5.3 percent to 1.39 million tonnes from a month ago, cargo surveyor data showed.
In other markets, Brent crude oil fell below $110 a barrel on Wednesday on reports some Libyan oil exports might soon resume and on news the Seaway crude oil pipeline had shut, halting shipments from the U.S. Midwest to the Gulf Coast.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.7 percent in late Asian trade. The most-active January soybean oil contract on the Dalian
Commodities Exchange fell 0.8 percent.
Palm, soy and crude oil prices at 1001 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2393 +13.00 2376 2394 1034
MY PALM OIL OCT3 2357 +13.00 2329 2357 7744
MY PALM OIL NOV3 2333 +4.00 2311 2340 16095
CHINA PALM OLEIN JAN4 5536 -48.00 5512 5570 286308
CHINA SOYOIL JAN4 7126 -56.00 7110 7164 577178
CBOT SOY OIL DEC3 43.46 +0.28 43.05 43.47 4846
NYMEX CRUDE OCT3 104.89 -0.22 104.43 105.35 20625
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=3.29 Malaysian ringgit)