MARKET DEVELOPMENT
VEGOILS-Palm Ends Lower, Investors Wary of Swelling Output
VEGOILS-Palm Ends Lower, Investors Wary of Swelling Output
26/09/2013 (Reuters) - Malaysian palm oil futures ended lower on Wednesday, reversing from gains made in the morning session as investors turned cautious over rising palm output in the world's No.2 producer.
A weak ringgit, however, continued to support prices by making the feedstock cheaper for overseas buyers and refiners. The ringgit fell 0.28 percent against the U.S. dollar late Wednesday, according to Reuters data.
The prospects of swelling global edible oil supplies in the coming months have dampened investor sentiment.
"Even with the weaker ringgit, the upside is limited," said a trader in Kuala Lumpur with a local commodities brokerage."It's difficult to avoid suspicion of the bearish fundamentals ... as it's widely known that there is an output surplus."
Malaysian palm oil production in January-August rose 5.6 percent compared with the same period last year, according to industry regulator the Malaysian Palm oil Board.
The Kuala Lumpur-based trader said Malaysia's crude palm oil production could hit a record 19.2 million tonnes this year if output continues to rise. Production was 18.79 million tonnes in 2012 and 18.91 million tonnes in 2011.
The benchmark December contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to close at 2,295 ringgit ($712) per tonne on Wednesday. Prices had earlier risen to 2,316 ringgit, but later dropped as low as 2,292 ringgit.
Total traded volumes stood at 25,376 lots of 25 tonnes each, lower than the average 35,000 lots.
Exports of Malaysian palm oil products over Sept. 1-25 rose 6.5 percent from the same period last month to 1,238,312 tonnes, said cargo surveyor Intertek Testing Services (ITS), as demand from India picked up.
Another cargo surveyor Societe Generale de Surveillance said exports climbed 6.4 percent for the same period.
The trader added that investor interest in crude palm oil futures had turned dry, keeping prices rangebound, partly due to the uncertainty about U.S. plans for tapering its monetary stimulus.
Technicals showed that Malaysian palm oil is expected to drop to 2,017 ringgit per tonne over the next three months, as it is riding on a steady downtrend, said Reuters market analyst Wang Tao.
In other markets, Brent crude climbed above $109 a barrel on Wednesday as expectations faded that new talks over Iran's nuclear programme would bring a rapid thaw in relations with the United States.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.
Palm, soy and crude oil prices at 1027 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2326 +15.00 2316 2326 501
MY PALM OIL NOV3 2300 -6.00 2297 2316 4290
MY PALM OIL DEC3 2295 -6.00 2292 2316 12926
CHINA PALM OLEIN JAN4 5400 -10.00 5380 5446 301976
CHINA SOYOIL JAN4 7060 -16.00 7042 7096 444590
CBOT SOY OIL DEC3 42.13 +0.04 42.09 42.26 4468
NYMEX CRUDE NOV3 103.72 +0.59 103.11 103.81 24979
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 = 3.2240 Malaysian ringgit)
A weak ringgit, however, continued to support prices by making the feedstock cheaper for overseas buyers and refiners. The ringgit fell 0.28 percent against the U.S. dollar late Wednesday, according to Reuters data.
The prospects of swelling global edible oil supplies in the coming months have dampened investor sentiment.
"Even with the weaker ringgit, the upside is limited," said a trader in Kuala Lumpur with a local commodities brokerage."It's difficult to avoid suspicion of the bearish fundamentals ... as it's widely known that there is an output surplus."
Malaysian palm oil production in January-August rose 5.6 percent compared with the same period last year, according to industry regulator the Malaysian Palm oil Board.
The Kuala Lumpur-based trader said Malaysia's crude palm oil production could hit a record 19.2 million tonnes this year if output continues to rise. Production was 18.79 million tonnes in 2012 and 18.91 million tonnes in 2011.
The benchmark December contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to close at 2,295 ringgit ($712) per tonne on Wednesday. Prices had earlier risen to 2,316 ringgit, but later dropped as low as 2,292 ringgit.
Total traded volumes stood at 25,376 lots of 25 tonnes each, lower than the average 35,000 lots.
Exports of Malaysian palm oil products over Sept. 1-25 rose 6.5 percent from the same period last month to 1,238,312 tonnes, said cargo surveyor Intertek Testing Services (ITS), as demand from India picked up.
Another cargo surveyor Societe Generale de Surveillance said exports climbed 6.4 percent for the same period.
The trader added that investor interest in crude palm oil futures had turned dry, keeping prices rangebound, partly due to the uncertainty about U.S. plans for tapering its monetary stimulus.
Technicals showed that Malaysian palm oil is expected to drop to 2,017 ringgit per tonne over the next three months, as it is riding on a steady downtrend, said Reuters market analyst Wang Tao.
In other markets, Brent crude climbed above $109 a barrel on Wednesday as expectations faded that new talks over Iran's nuclear programme would bring a rapid thaw in relations with the United States.
In vegetable oil markets, the U.S. soyoil contract for December edged up 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent.
Palm, soy and crude oil prices at 1027 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2326 +15.00 2316 2326 501
MY PALM OIL NOV3 2300 -6.00 2297 2316 4290
MY PALM OIL DEC3 2295 -6.00 2292 2316 12926
CHINA PALM OLEIN JAN4 5400 -10.00 5380 5446 301976
CHINA SOYOIL JAN4 7060 -16.00 7042 7096 444590
CBOT SOY OIL DEC3 42.13 +0.04 42.09 42.26 4468
NYMEX CRUDE NOV3 103.72 +0.59 103.11 103.81 24979
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 = 3.2240 Malaysian ringgit)