MARKET DEVELOPMENT
VEGOILS-Palm Oil Hits 2-week High on Supply Worries, Weak Ringgit
VEGOILS-Palm Oil Hits 2-week High on Supply Worries, Weak Ringgit
26/12/2013 (Reuters) - Malaysian palm oil futures rose to their highest in nearly two weeks on Tuesday, shrugging off declines in competing soyoil markets, as supply concerns following monsoon floods and a weak ringgit supported prices of the tropical oil.
While a strike at Indonesia's biggest port in Jakarta has not yet hurt commodity trading in the world's top palm oil producer, worries it could ultimately disrupt supplies have helped the Malaysian benchmark recover from a near one-month low hit last week.
The March palm oil contract on the Bursa Malaysia Derivatives Exchange ended 5 ringgit firmer at 2,622 ringgit ($796) a tonne after touching 2,635 ringgit earlier, its highest since Dec. 12.
"I am looking at a resistance level of 2,700 ringgit. The market has tried to test it twice, but couldn't break through, so it shows there's a very strong resistance there," said Phillip Futures analyst Tan Chee Tat.
"For support, we are looking at 2,500 ringgit. One thing to notice is that production has been curbed in Malaysia because of heavy rains. Earlier, concerns over rising stockpiles have contributed to the bearish tone in the palm oil market."
The Malaysian ringgit held near a three-month low struck on Monday, making palm cheaper for overseas buyers and refiners.
In other competing vegetable oil markets, the U.S. soyoil contract for January was down 0.18 percent, while the May soybean oil contract on the Dalian Commodities Exchange dropped almost half a percent.
U.S. soybeans fell for a second session, extending two-day losses to nearly 1 percent on expectations of improved crop weather in South America and talk of decreased demand from China for U.S. stocks.
Brent crude, which often influences palm oil futures, stayed above $111 a barrel as conflict in South Sudan threatened its oil output at a time when production cuts in Libya are already curbing global supply.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2598 +5.00 2575 2600 58
MY PALM OIL FEB4 2616 +9.00 2593 2625 1440
MY PALM OIL MAR4 2622 +5.00 2603 2635 7227
CHINA PALM OLEIN MAY4 6010 -24.00 6000 6056 663666
CHINA SOYOIL MAY4 6940 -34.00 6914 6976 574462
CBOT SOY OIL MAR4 39.54 -0.04 39.36 39.59 3522
NYMEX CRUDE FEB4 98.93 +0.02 98.53 98.95 3392
($1 = 3.29 Malaysian ringgit)
While a strike at Indonesia's biggest port in Jakarta has not yet hurt commodity trading in the world's top palm oil producer, worries it could ultimately disrupt supplies have helped the Malaysian benchmark recover from a near one-month low hit last week.
The March palm oil contract on the Bursa Malaysia Derivatives Exchange ended 5 ringgit firmer at 2,622 ringgit ($796) a tonne after touching 2,635 ringgit earlier, its highest since Dec. 12.
"I am looking at a resistance level of 2,700 ringgit. The market has tried to test it twice, but couldn't break through, so it shows there's a very strong resistance there," said Phillip Futures analyst Tan Chee Tat.
"For support, we are looking at 2,500 ringgit. One thing to notice is that production has been curbed in Malaysia because of heavy rains. Earlier, concerns over rising stockpiles have contributed to the bearish tone in the palm oil market."
The Malaysian ringgit held near a three-month low struck on Monday, making palm cheaper for overseas buyers and refiners.
In other competing vegetable oil markets, the U.S. soyoil contract for January was down 0.18 percent, while the May soybean oil contract on the Dalian Commodities Exchange dropped almost half a percent.
U.S. soybeans fell for a second session, extending two-day losses to nearly 1 percent on expectations of improved crop weather in South America and talk of decreased demand from China for U.S. stocks.
Brent crude, which often influences palm oil futures, stayed above $111 a barrel as conflict in South Sudan threatened its oil output at a time when production cuts in Libya are already curbing global supply.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2598 +5.00 2575 2600 58
MY PALM OIL FEB4 2616 +9.00 2593 2625 1440
MY PALM OIL MAR4 2622 +5.00 2603 2635 7227
CHINA PALM OLEIN MAY4 6010 -24.00 6000 6056 663666
CHINA SOYOIL MAY4 6940 -34.00 6914 6976 574462
CBOT SOY OIL MAR4 39.54 -0.04 39.36 39.59 3522
NYMEX CRUDE FEB4 98.93 +0.02 98.53 98.95 3392
($1 = 3.29 Malaysian ringgit)