MARKET DEVELOPMENT
VEGOILS-Palm Oil Edges Lower, But Firm Exports Cap Losses
VEGOILS-Palm Oil Edges Lower, But Firm Exports Cap Losses
05/09/2013 (Reuters) - Malaysian palm oil futures edged lower on Wednesday, tracking the U.S. soy market that dropped after a U.S. Department of Agriculture report showed yields were not worse than expected.
Palm oil tracks soy prices as it is a substitute for soybean oil. But losses in the tropical oil were curbed by data showing August exports from Malaysia rose as much as 7.6 percent from a month earlier, helped by higher purchases from Europe and China.
Investors are now waiting for the Sept. 1-10 exports number and official data from the Malaysian Palm Oil Board (MPOB) on August stocks and output, due next week, for more trading cues.
"Palm oil prices are undergoing the consolidation phase with prices hovering around the 2,400 ringgit level. Investors are likely to seek for more confirmations and directions pending the release of the MPOB official data," said Singapore-based Phillip Futures in a note on Wednesday.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.7 percent to close at 2,399 ringgit ($731) per tonne, after trading in a range of 2,392-2,417 ringgit.
Total traded volumes were thin at 15,778 lots of 25 tonnes each, compared with the usual 35,000 lots.
Technicals showed palm oil may drop to 2,352 ringgit per tonne as it has pierced below support at 2,403 ringgit, according to Reuters market analyst Wang Tao.
Traders are also closely watching the ringgit, which eased slightly on Wednesday from the previous day's three-week high. A higher ringgit makes crude palm oil more expensive for overseas refiners.
In other markets, Brent crude held above $115 a barrel on Wednesday as U.S. lawmakers' support for military action against Syria revived concerns that Middle East oil supplies might be disrupted if the conflict widens.
Chicago soybeans fell 1.4 percent, coming under pressure after the USDA rated 54 percent of U.S. crop was in good to excellent condition, down 4 percentage points from the previous week but in line with market expectations.
In vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange dropped 1.2 percent.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2390 -30.00 2390 2399 65
MY PALM OIL OCT3 2402 -17.00 2395 2419 678
MY PALM OIL NOV3 2399 -18.00 2392 2417 9681
CHINA PALM OLEIN JAN4 5584 -32.00 5550 5604 414388
CHINA SOYOIL JAN4 7188 -90.00 7166 7240 765076
CBOT SOY OIL DEC3 43.95 -0.24 43.71 44.26 5390
NYMEX CRUDE OCT3 107.70 -0.84 107.65 108.61 18559
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=3.28 Malaysian ringgit)
Palm oil tracks soy prices as it is a substitute for soybean oil. But losses in the tropical oil were curbed by data showing August exports from Malaysia rose as much as 7.6 percent from a month earlier, helped by higher purchases from Europe and China.
Investors are now waiting for the Sept. 1-10 exports number and official data from the Malaysian Palm Oil Board (MPOB) on August stocks and output, due next week, for more trading cues.
"Palm oil prices are undergoing the consolidation phase with prices hovering around the 2,400 ringgit level. Investors are likely to seek for more confirmations and directions pending the release of the MPOB official data," said Singapore-based Phillip Futures in a note on Wednesday.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.7 percent to close at 2,399 ringgit ($731) per tonne, after trading in a range of 2,392-2,417 ringgit.
Total traded volumes were thin at 15,778 lots of 25 tonnes each, compared with the usual 35,000 lots.
Technicals showed palm oil may drop to 2,352 ringgit per tonne as it has pierced below support at 2,403 ringgit, according to Reuters market analyst Wang Tao.
Traders are also closely watching the ringgit, which eased slightly on Wednesday from the previous day's three-week high. A higher ringgit makes crude palm oil more expensive for overseas refiners.
In other markets, Brent crude held above $115 a barrel on Wednesday as U.S. lawmakers' support for military action against Syria revived concerns that Middle East oil supplies might be disrupted if the conflict widens.
Chicago soybeans fell 1.4 percent, coming under pressure after the USDA rated 54 percent of U.S. crop was in good to excellent condition, down 4 percentage points from the previous week but in line with market expectations.
In vegetable oil markets, the U.S. soyoil contract for December fell 0.5 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange dropped 1.2 percent.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 2390 -30.00 2390 2399 65
MY PALM OIL OCT3 2402 -17.00 2395 2419 678
MY PALM OIL NOV3 2399 -18.00 2392 2417 9681
CHINA PALM OLEIN JAN4 5584 -32.00 5550 5604 414388
CHINA SOYOIL JAN4 7188 -90.00 7166 7240 765076
CBOT SOY OIL DEC3 43.95 -0.24 43.71 44.26 5390
NYMEX CRUDE OCT3 107.70 -0.84 107.65 108.61 18559
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=3.28 Malaysian ringgit)