MARKET DEVELOPMENT
VEGOILS-Palm Slips From 5-wk High As Investors Book Profits
VEGOILS-Palm Slips From 5-wk High As Investors Book Profits
18/10/2013 (Reuters) - Malaysian palm oil futures ended lower on Thursday as investors booked profits from a five-week high that was buoyed by robust exports and optimism that output volumes in the world's second-largest producer may not surge as much as initially expected.
A stronger ringgit, which hit a near one-month high of 3.1445 also added pressure to palm prices. The Malaysian ringgit led gains among emerging Asian currencies late Thursday after the U.S. Congress approved a deal to avoid a potential default for the world's largest economy.
"There's massive profit-taking because yesterday and today morning the market flew up nearly 60-70 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged down 0.4 percent to 2,400 ringgit ($762) per tonne by Thursday's close. Prices in early trade touched 2,432 ringgit, the highest since Sept. 9.
Total traded volume stood at 39,043 lots of 25 tonnes each, higher than the usual 35,000 lots.
Market players have turned optimistic that palm oil output in Malaysia could be lower than earlier estimated. While October will be the highest producing month in 2013, September's outcome suggests the growth of fresh fruit bunches might be lower this year, traders said.
September's output only rose 10.2 percent to 1.91 million tonnes in September, according to industry regulator, the Malaysian Palm Oil Board (MPOB), below a forecast 15 percent rise.
"The MPOB figure kind of confirmed that we're not going to have a high crop month in the year 2013. That's why you see all the buying," said a trader with local commodities brokerage in Malaysia.
"Come December, output will taper off because the monsoon will be around the corner," the trader added.
Technicals were bullish. Malaysian palm oil is expected to rise to 2,447 ringgit per tonne, driven by a wave c -- a powerful third wave of a three-wave cycle that developed from the July 26 low of 2,121 ringgit, Reuters market analyst Wang Tao said.
Robust exports in the first half of October also fuelled hopes that stockpiles will be kept in check, keeping prices supported.
Shipments of Malaysian palm oil products in the first half of October rose 7-12 percent compared with a month ago, cargo surveyor data showed on Wednesday, thanks to healthy demand from China and Europe.
In other markets, oil fell towards $110 a barrel on Thursday, as U.S. inventory data pointed to a well-supplied market, and as investors took money off the table ahead of a deluge of data held back by a government shut-down in the United States.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 0.2 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange climbed 1.1 percent.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2391 -9.00 2363 2421 543
MY PALM OIL DEC3 2395 -9.00 2362 2427 10548
MY PALM OIL JAN4 2400 -9.00 2369 2432 19900
CHINA PALM OLEIN JAN4 5746 +70.00 5708 5790 341188
CHINA SOYOIL JAN4 7182 +80.00 7130 7210 511648
CBOT SOY OIL DEC3 41.49 +0.12 41.32 41.84 10633
NYMEX CRUDE NOV3 101.77 -0.52 101.58 102.32 13311
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=3.15 Malaysian ringgit)
A stronger ringgit, which hit a near one-month high of 3.1445 also added pressure to palm prices. The Malaysian ringgit led gains among emerging Asian currencies late Thursday after the U.S. Congress approved a deal to avoid a potential default for the world's largest economy.
"There's massive profit-taking because yesterday and today morning the market flew up nearly 60-70 ringgit," said a trader with a foreign commodities brokerage in Kuala Lumpur.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged down 0.4 percent to 2,400 ringgit ($762) per tonne by Thursday's close. Prices in early trade touched 2,432 ringgit, the highest since Sept. 9.
Total traded volume stood at 39,043 lots of 25 tonnes each, higher than the usual 35,000 lots.
Market players have turned optimistic that palm oil output in Malaysia could be lower than earlier estimated. While October will be the highest producing month in 2013, September's outcome suggests the growth of fresh fruit bunches might be lower this year, traders said.
September's output only rose 10.2 percent to 1.91 million tonnes in September, according to industry regulator, the Malaysian Palm Oil Board (MPOB), below a forecast 15 percent rise.
"The MPOB figure kind of confirmed that we're not going to have a high crop month in the year 2013. That's why you see all the buying," said a trader with local commodities brokerage in Malaysia.
"Come December, output will taper off because the monsoon will be around the corner," the trader added.
Technicals were bullish. Malaysian palm oil is expected to rise to 2,447 ringgit per tonne, driven by a wave c -- a powerful third wave of a three-wave cycle that developed from the July 26 low of 2,121 ringgit, Reuters market analyst Wang Tao said.
Robust exports in the first half of October also fuelled hopes that stockpiles will be kept in check, keeping prices supported.
Shipments of Malaysian palm oil products in the first half of October rose 7-12 percent compared with a month ago, cargo surveyor data showed on Wednesday, thanks to healthy demand from China and Europe.
In other markets, oil fell towards $110 a barrel on Thursday, as U.S. inventory data pointed to a well-supplied market, and as investors took money off the table ahead of a deluge of data held back by a government shut-down in the United States.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 0.2 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange climbed 1.1 percent.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV3 2391 -9.00 2363 2421 543
MY PALM OIL DEC3 2395 -9.00 2362 2427 10548
MY PALM OIL JAN4 2400 -9.00 2369 2432 19900
CHINA PALM OLEIN JAN4 5746 +70.00 5708 5790 341188
CHINA SOYOIL JAN4 7182 +80.00 7130 7210 511648
CBOT SOY OIL DEC3 41.49 +0.12 41.32 41.84 10633
NYMEX CRUDE NOV3 101.77 -0.52 101.58 102.32 13311
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=3.15 Malaysian ringgit)