MARKET DEVELOPMENT
VEGOILS-Palm Ends Lower on Higher End-stocks, Weak Exports
VEGOILS-Palm Ends Lower on Higher End-stocks, Weak Exports
11/12/2013 (Reuters) - Malaysian palm oil futures ended lower on Tuesday after a key industry report showed end-stocks in the world's second-largest producer had climbed to their highest in eight months, while weak exports dampened investor sentiment.
Inventories at end-November rose to 1.98 million tonnes, from 1.85 million tonnes in October, industry regulator the Malaysian Palm Oil Board (MPOB) said, as seasonally weaker output did little to offset a lull in exports last month.
Demand for palm oil could decline further in December as top consumers cut back purchases of the tropical oil that solidifies in winter, but investors expect palm-damaging monsoon floods to tighten supplies and support prices.
Exports of Malaysian palm products from Dec. 1-10 plunged 20 percent from last month, cargo surveyor Intertek Testing Services reported. Another cargo surveyor, Societe Generale de Surveillance, showed exports fell 26.1 percent in the same period.
"The price ended a tad lower because there was some sell-off after the stocks report," said a trader with a local commodities brokerage in Malaysia.
"The worry now is that December exports won't be that good, but production for the past few days has also been very bad. So whenever prices move to 2,600 ringgit, they bounce back," the trader added.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange had edged down 0.3 percent to 2,638 ringgit ($822) per tonne by Tuesday's close. Prices were choppy in a range of 2,627-2,664 ringgit.
Total traded volume stood at 36,776 lots of 25 tonnes, slightly above the average 35,000 lots.
Severe flooding in several parts of Peninsular Malaysia, which forced about 60,000 people to be evacuated, triggered fears of tighter supplies of the edible oil and propped up palm prices.
Malaysia's Metrological Department on Tuesday issued warnings of thunderstorms and heavy rain over the palm-growing states of Perak and Pahang that could cause floods in low-lying areas.
Floods disrupt harvesting and transportation of fresh fruit, and could damage the quality of palm oil.
"The weather is still bad. There's not much oil available and we could even see a double-digit drop in production in December," the trader added.
In other markets, Brent crude oil rose above $110 a barrel on Tuesday, recouping some of the previous session's losses - the sharpest in over five weeks.
In competing vegetable oil markets, the U.S. soyoil contract for January rose 0.2 percent in late Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange was flat.
Palm, soy and crude oil prices at 1038 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2620 -6.00 2610 2620 80
MY PALM OIL JAN4 2626 -6.00 2615 2651 2699
MY PALM OIL FEB4 2638 -6.00 2627 2664 17816
CHINA PALM OLEIN MAY4 6242 +0.00 6190 6256 888952
CHINA SOYOIL MAY4 7228 -2.00 7184 7232 581402
CBOT SOY OIL JAN4 40.42 +0.20 40.21 40.50 5628
NYMEX CRUDE JAN4 98.63 +1.29 97.24 98.74 22624
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=3.21 Malaysian ringgit)
Inventories at end-November rose to 1.98 million tonnes, from 1.85 million tonnes in October, industry regulator the Malaysian Palm Oil Board (MPOB) said, as seasonally weaker output did little to offset a lull in exports last month.
Demand for palm oil could decline further in December as top consumers cut back purchases of the tropical oil that solidifies in winter, but investors expect palm-damaging monsoon floods to tighten supplies and support prices.
Exports of Malaysian palm products from Dec. 1-10 plunged 20 percent from last month, cargo surveyor Intertek Testing Services reported. Another cargo surveyor, Societe Generale de Surveillance, showed exports fell 26.1 percent in the same period.
"The price ended a tad lower because there was some sell-off after the stocks report," said a trader with a local commodities brokerage in Malaysia.
"The worry now is that December exports won't be that good, but production for the past few days has also been very bad. So whenever prices move to 2,600 ringgit, they bounce back," the trader added.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange had edged down 0.3 percent to 2,638 ringgit ($822) per tonne by Tuesday's close. Prices were choppy in a range of 2,627-2,664 ringgit.
Total traded volume stood at 36,776 lots of 25 tonnes, slightly above the average 35,000 lots.
Severe flooding in several parts of Peninsular Malaysia, which forced about 60,000 people to be evacuated, triggered fears of tighter supplies of the edible oil and propped up palm prices.
Malaysia's Metrological Department on Tuesday issued warnings of thunderstorms and heavy rain over the palm-growing states of Perak and Pahang that could cause floods in low-lying areas.
Floods disrupt harvesting and transportation of fresh fruit, and could damage the quality of palm oil.
"The weather is still bad. There's not much oil available and we could even see a double-digit drop in production in December," the trader added.
In other markets, Brent crude oil rose above $110 a barrel on Tuesday, recouping some of the previous session's losses - the sharpest in over five weeks.
In competing vegetable oil markets, the U.S. soyoil contract for January rose 0.2 percent in late Asian trade. The most-active May soybean oil contract on the Dalian Commodities Exchange was flat.
Palm, soy and crude oil prices at 1038 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 2620 -6.00 2610 2620 80
MY PALM OIL JAN4 2626 -6.00 2615 2651 2699
MY PALM OIL FEB4 2638 -6.00 2627 2664 17816
CHINA PALM OLEIN MAY4 6242 +0.00 6190 6256 888952
CHINA SOYOIL MAY4 7228 -2.00 7184 7232 581402
CBOT SOY OIL JAN4 40.42 +0.20 40.21 40.50 5628
NYMEX CRUDE JAN4 98.63 +1.29 97.24 98.74 22624
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=3.21 Malaysian ringgit)