MARKET DEVELOPMENT
VEGOILS-Palm Oil Inches Lower as Firm Ringgit Weighs
VEGOILS-Palm Oil Inches Lower as Firm Ringgit Weighs
04/09/2013 (Reuters) - Malaysian palm oil futures fell on Tuesday as a stronger ringgit lowered the tropical oil's appeal for overseas buyers, although a firm soy market capped the losses.
The Malaysian ringgit hit a three-week high on Tuesday, after the government cut fuel subsidies to reduce the country's fiscal deficit. A higher ringgit makes crude palm oil more expensive for overseas refiners.
But a stronger U.S. soy market lent some support to palm prices, as updated weather models forecast hot and dry weather across the soy-producing Midwest, raising fears of potential yield loss.
Palm oil tracks soy prices closely as it is a substitute for soybean oil.
"The ringgit strengthened a bit today, that's why the market came down a little, but overall the market will be trading in a range of 2,400 to 2,450 ringgit today," said a trader with a foreign commodities brokerage.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.4 percent to close at 2,419 ringgit ($736) per tonne, after trading in a tight range of
2,404-2,432 ringgit.
Total traded volume stood at 26,490 lots of 25 tonnes each, well below the usual 35,000 lots.
Technicals showed palm oil is expected to retest support at 2,403 ringgit per tonne, as it may have completed a rebound triggered by this level, according to Reuters market analyst Wang Tao.
Palm exports rose 6.5 percent in August compared with a month earlier on higher purchases by China and Europe, data from cargo surveyor Intertek Testing Services showed. Another surveyor, Societe Generale de Surveillance, reported a higher 7.6 percent increase.
The next export figures for the first 10 days of September will be due on Sept. 10, the same day the Malaysian Palm Oil Board is expected to publish official data for August stocks and output.
In other markets, Brent crude futures gained slightly on Tuesday as firm Chinese economic data bolstered expectations of demand growth, even as supply has tightened due to the collapse of Libyan exports.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.8 percent in late Asian trade. The most-active January soybean oil contract on the Dalian
Commodities Exchange gained 0.4 percent.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2422 -8.00 2400 2422 71
MY PALM OIL OCT3 2420 -10.00 2410 2433 1320
MY PALM OIL NOV3 2419 -9.00 2404 2432 16149
CHINA PALM OLEIN JAN4 5624 +2.00 5562 5696 513616
CHINA SOYOIL JAN4 7288 +32.00 7232 7340 824792
CBOT SOY OIL DEC3 44.64 +0.35 44.28 45.10 10949
NYMEX CRUDE OCT3 107.20 -0.45 104.21 107.77 71839
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 Malaysian ringgit hit a three-week high on Tuesday, after the government cut fuel subsidies to reduce the country's fiscal deficit. A higher ringgit makes crude palm oil more expensive for overseas refiners.
But a stronger U.S. soy market lent some support to palm prices, as updated weather models forecast hot and dry weather across the soy-producing Midwest, raising fears of potential yield loss.
Palm oil tracks soy prices closely as it is a substitute for soybean oil.
"The ringgit strengthened a bit today, that's why the market came down a little, but overall the market will be trading in a range of 2,400 to 2,450 ringgit today," said a trader with a foreign commodities brokerage.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.4 percent to close at 2,419 ringgit ($736) per tonne, after trading in a tight range of
2,404-2,432 ringgit.
Total traded volume stood at 26,490 lots of 25 tonnes each, well below the usual 35,000 lots.
Technicals showed palm oil is expected to retest support at 2,403 ringgit per tonne, as it may have completed a rebound triggered by this level, according to Reuters market analyst Wang Tao.
Palm exports rose 6.5 percent in August compared with a month earlier on higher purchases by China and Europe, data from cargo surveyor Intertek Testing Services showed. Another surveyor, Societe Generale de Surveillance, reported a higher 7.6 percent increase.
The next export figures for the first 10 days of September will be due on Sept. 10, the same day the Malaysian Palm Oil Board is expected to publish official data for August stocks and output.
In other markets, Brent crude futures gained slightly on Tuesday as firm Chinese economic data bolstered expectations of demand growth, even as supply has tightened due to the collapse of Libyan exports.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.8 percent in late Asian trade. The most-active January soybean oil contract on the Dalian
Commodities Exchange gained 0.4 percent.
Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2422 -8.00 2400 2422 71
MY PALM OIL OCT3 2420 -10.00 2410 2433 1320
MY PALM OIL NOV3 2419 -9.00 2404 2432 16149
CHINA PALM OLEIN JAN4 5624 +2.00 5562 5696 513616
CHINA SOYOIL JAN4 7288 +32.00 7232 7340 824792
CBOT SOY OIL DEC3 44.64 +0.35 44.28 45.10 10949
NYMEX CRUDE OCT3 107.20 -0.45 104.21 107.77 71839
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)