MARKET DEVELOPMENT
VEGOILS-Palm Oil Drops To 3-Week Low on Output Rise Worries
VEGOILS-Palm Oil Drops To 3-Week Low on Output Rise Worries
12/09/2013 (Reuters) - Malaysian palm oil futures fell on Wednesday to the lowest in three weeks, weighed down by concerns of rising production pushing stocks higher this month.
But losses were capped by some bargain-hunting in the morning session, while encouraging export figures and official data pointing to a lower-than-expected increase in August inventory level also provided some support.
"We see a slight reversal (in the morning session) today after yesterday's loss. But there are still concerns about stronger production ... and if demand cannot keep up with it, then stocks may climb again this month," said a trader with a foreign commodities brokerage in Kuala Lumpur.
On Wednesday, the benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to close at 2,330 ringgit ($715) per tonne, its lowest level since Aug. 22.
Total traded volumes were thin at 26,753 lots of 25 tonnes each, compared to the average 35,000 lots.
Technicals showed palm oil may rebound to 2,385 ringgit per tonne before falling again, according to Reuters market analyst Wang Tao.
Malaysia's palm oil end-stocks in August inched up 0.1 percent from a month ago to 1.67 million tonnes, with exports registering a 7.4 percent growth to 1.52 million tonnes, industry regulator Malaysian Palm Oil Board said on Tuesday.
"Overall, we reckon the news is positive to crude palm oil prices as the good demand growth month-on-month so far has been able to absorb the additional supply," Alam Lim Seong Chun, analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.
Export demand continued to remain resilient in the first 10 days of September, with shipments rising 10.8 percent and 6.8 percent from the same period a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance, respectively.
In other markets, Brent crude rose above $112 a barrel on Wednesday, after falling more than 4 percent in the past two days as concerns eased regarding an imminent strike against Syria.
In vegetable oil markets, the U.S. soyoil contract for December was almost flat 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 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 0 +0.00 0 0 0
MY PALM OIL OCT3 2342 -12.00 2336 2366 1310
MY PALM OIL NOV3 2330 -21.00 2330 2367 13098
CHINA PALM OLEIN JAN4 5524 +8.00 5488 5528 338610
CHINA SOYOIL JAN4 7236 +30.00 7186 7238 573098
CBOT SOY OIL DEC3 43.08 +0.02 42.95 43.30 5706
NYMEX CRUDE OCT3 107.67 +0.28 106.53 108.00 23580
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=3.259 Malaysian ringgit)
But losses were capped by some bargain-hunting in the morning session, while encouraging export figures and official data pointing to a lower-than-expected increase in August inventory level also provided some support.
"We see a slight reversal (in the morning session) today after yesterday's loss. But there are still concerns about stronger production ... and if demand cannot keep up with it, then stocks may climb again this month," said a trader with a foreign commodities brokerage in Kuala Lumpur.
On Wednesday, the benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to close at 2,330 ringgit ($715) per tonne, its lowest level since Aug. 22.
Total traded volumes were thin at 26,753 lots of 25 tonnes each, compared to the average 35,000 lots.
Technicals showed palm oil may rebound to 2,385 ringgit per tonne before falling again, according to Reuters market analyst Wang Tao.
Malaysia's palm oil end-stocks in August inched up 0.1 percent from a month ago to 1.67 million tonnes, with exports registering a 7.4 percent growth to 1.52 million tonnes, industry regulator Malaysian Palm Oil Board said on Tuesday.
"Overall, we reckon the news is positive to crude palm oil prices as the good demand growth month-on-month so far has been able to absorb the additional supply," Alam Lim Seong Chun, analyst with Malaysia's Kenanga Investment Bank, said in a note to clients.
Export demand continued to remain resilient in the first 10 days of September, with shipments rising 10.8 percent and 6.8 percent from the same period a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance, respectively.
In other markets, Brent crude rose above $112 a barrel on Wednesday, after falling more than 4 percent in the past two days as concerns eased regarding an imminent strike against Syria.
In vegetable oil markets, the U.S. soyoil contract for December was almost flat 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 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP3 0 +0.00 0 0 0
MY PALM OIL OCT3 2342 -12.00 2336 2366 1310
MY PALM OIL NOV3 2330 -21.00 2330 2367 13098
CHINA PALM OLEIN JAN4 5524 +8.00 5488 5528 338610
CHINA SOYOIL JAN4 7236 +30.00 7186 7238 573098
CBOT SOY OIL DEC3 43.08 +0.02 42.95 43.30 5706
NYMEX CRUDE OCT3 107.67 +0.28 106.53 108.00 23580
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=3.259 Malaysian ringgit)