MARKET DEVELOPMENT
VEGOILS-Palm Ends Higher, Trade Thin Ahead of Malaysian Industry Report
VEGOILS-Palm Ends Higher, Trade Thin Ahead of Malaysian Industry Report
08/10/2013 (Reuters) - Malaysian palm oil futures ended higher for the third straight day on Monday but trade was thin, with most investors steering clear of risky bets as they waited for an industry report on palm stocks and production in the world's second-biggest producer.
Stocks in September may have jumped to 1.91 million tonnes, their highest in six months, as strong seasonal output trumped robust export demand, a Reuters survey showed on Monday.
Production is expected to surge 15 percent in September from a month before as oil palm trees seasonally produce more fruit.
Stockpiles could climb above 2.0 million tonnes again, putting more downward pressure on prices, which have lost 5 percent so far this year.
Stocks surged to a record high of 2.67 million tonnes last December but had shrunk to 1.67 million tonnes at the end of August.
Official data for September's end-stocks, exports and output will be released by the industry regulator, the Malaysian Palm Oil Board (MPOB), on Thursday, Oct. 10.
"Markets are quiet today, especially with Dalian closed. Traders are preparing for the MPOB release," said a trader with a local commodities brokerage.
Chinese markets, including the Dalian Commodities Exchange, are closed for a public holiday and will reopen on Tuesday.
By Monday's close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had edged up 0.6 percent to 2,318 ringgit ($726) per tonne. Prices traded in a tight range between 2,303 and 2,329 ringgit.
Total traded volume was thin at 26,984 lots of 25 tonnes each, much lower than the average 35,000 lots.
Technicals showed that Malaysian palm oil remained neutral in a range of 2,270 ringgit to 2,334 ringgit per tonne, Reuters market analyst Wang Tao said.
The shutdown of the U.S government could weigh on palm prices if the situation is prolonged.
The uncertainty could drag on the U.S. dollar against the ringgit, making the ringgit-priced palm feedstock more expensive for overseas buyers and refiners. The ringgit was trading slightly lower at 3.1880 per dollar late on Monday.
"It may indirectly affect palm in the sense that the U.S.dollar will weaken, and in turn strengthen the ringgit, which will put pressure on the palm oil market," said a Kuala Lumpur-based trader.
In other markets, Brent crude fell more than 1 percent to below $108 a barrel on Monday as oil production resumed in the Gulf of Mexico after a tropical storm, while concern over the U.S. government shutdown clouded the outlook for demand.
In competing vegetable oil markets, the U.S. soyoil contract for December edged down 0.2 percent in late Asian trade.
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=3.191 Malaysian ringgit)
Stocks in September may have jumped to 1.91 million tonnes, their highest in six months, as strong seasonal output trumped robust export demand, a Reuters survey showed on Monday.
Production is expected to surge 15 percent in September from a month before as oil palm trees seasonally produce more fruit.
Stockpiles could climb above 2.0 million tonnes again, putting more downward pressure on prices, which have lost 5 percent so far this year.
Stocks surged to a record high of 2.67 million tonnes last December but had shrunk to 1.67 million tonnes at the end of August.
Official data for September's end-stocks, exports and output will be released by the industry regulator, the Malaysian Palm Oil Board (MPOB), on Thursday, Oct. 10.
"Markets are quiet today, especially with Dalian closed. Traders are preparing for the MPOB release," said a trader with a local commodities brokerage.
Chinese markets, including the Dalian Commodities Exchange, are closed for a public holiday and will reopen on Tuesday.
By Monday's close, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had edged up 0.6 percent to 2,318 ringgit ($726) per tonne. Prices traded in a tight range between 2,303 and 2,329 ringgit.
Total traded volume was thin at 26,984 lots of 25 tonnes each, much lower than the average 35,000 lots.
Technicals showed that Malaysian palm oil remained neutral in a range of 2,270 ringgit to 2,334 ringgit per tonne, Reuters market analyst Wang Tao said.
The shutdown of the U.S government could weigh on palm prices if the situation is prolonged.
The uncertainty could drag on the U.S. dollar against the ringgit, making the ringgit-priced palm feedstock more expensive for overseas buyers and refiners. The ringgit was trading slightly lower at 3.1880 per dollar late on Monday.
"It may indirectly affect palm in the sense that the U.S.dollar will weaken, and in turn strengthen the ringgit, which will put pressure on the palm oil market," said a Kuala Lumpur-based trader.
In other markets, Brent crude fell more than 1 percent to below $108 a barrel on Monday as oil production resumed in the Gulf of Mexico after a tropical storm, while concern over the U.S. government shutdown clouded the outlook for demand.
In competing vegetable oil markets, the U.S. soyoil contract for December edged down 0.2 percent in late Asian trade.
Palm, soy and crude oil prices at 1012 GMT Contract Month Last Change Low High Volume MY PALM OIL OCT3 2350 +11.00 2310 2353 343 MY PALM OIL NOV3 2320 +5.00 2308 2332 1981 MY PALM OIL DEC3 2318 +13.00 2303 2329 13842 CHINA PALM OLEIN JAN4 - - - - - CHINA SOYOIL JAN4 - - - - - CBOT SOY OIL DEC3 40.17 -0.07 40.06 40.49 4679 NYMEX CRUDE NOV3 102.61 -1.23 102.50 103.59 19244
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=3.191 Malaysian ringgit)