MARKET DEVELOPMENT
VEGOILS-Palmoil Pares Gains on Poor Export Data; Near 2-Mth Low
VEGOILS-Palmoil Pares Gains on Poor Export Data; Near 2-Mth Low
16/01/2014 (Reuters) - Malaysian palm oil futures gave up early gains on Wednesday, hovering near their weakest in more than two months as falling exports stoked fears about a build-up in inventory in the world's second-largest producer.
Exports of palm oil products from Jan. 1 to 15 fell 28.1 percent to 460,248 tonnes from 640,240 tonnes shipped during Dec. 1 to 15, cargo surveyor Intertek Testing Services said.
Another surveyor, SGS, will issue its data later in the day.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange hit an intraday high of 2,516 ringgit a tonne ($767) but stood at 2,494 ringgit by midday, up just 1 ringgit. Volumes were moderate at 6,859 lots.
The contract, which sets the tone for global prices, fell to 2,486 ringgit on Tuesday, its lowest since Oct. 29, on concerns over rising supply.
"There's a bit of upward correction, but then the exports data came out. The market is a bit depressed, although it may also be a bit oversold," said a dealer with a foreign commodities brokerage in Kuala Lumpur.
"I would say support for the third month contract is still at 2,480 ringgit, while resistance is at 2,550 ringgit."
On the technical front, Reuters market analyst Wang Tao said palm oil looks exhausted and may bottom very soon.
"Palm oil had experienced rising stockpiles despite a sharp fall in production in December. Depressed soybean oil prices coupled with initial high palm oil prices will result in parity price between the two vegetable oils," said Phillip Futures in a report.
"Narrowing palm oil discount to soybean oil had reduced the attractiveness of palm oil, hence shift demand away from palm oil to soybean oil, causing substitution to take place."
Malaysia's palm oil inventories rose to a nine-month high in December, industry data showed, missing expectations for a drop as lacklustre demand offset a fall in output caused by floods.
In competing vegetable oil markets, the U.S. soyoil contract for March added 0.16 percent, while the most active May soybean oil contract on the Dalian Commodities Exchange dropped 0.42 percent.
Palm, soy and crude oil prices at 0437 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 0 +0.00 0 0 0
MY PALM OIL FEB4 2478 +6.00 2472 2491 932
MY PALM OIL MAR4 2494 +1.00 2492 2516 6859
CHINA PALM OLEIN MAY4 5818 -10.00 5812 5854 191062
CHINA SOYOIL MAY4 6612 -28.00 6608 6662 247646
CBOT SOY OIL MAR4 37.82 +0.06 37.66 37.96 3004
NYMEX CRUDE FEB4 92.57 -0.02 92.43 92.69 2687
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=3.28 ringgit)
Exports of palm oil products from Jan. 1 to 15 fell 28.1 percent to 460,248 tonnes from 640,240 tonnes shipped during Dec. 1 to 15, cargo surveyor Intertek Testing Services said.
Another surveyor, SGS, will issue its data later in the day.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange hit an intraday high of 2,516 ringgit a tonne ($767) but stood at 2,494 ringgit by midday, up just 1 ringgit. Volumes were moderate at 6,859 lots.
The contract, which sets the tone for global prices, fell to 2,486 ringgit on Tuesday, its lowest since Oct. 29, on concerns over rising supply.
"There's a bit of upward correction, but then the exports data came out. The market is a bit depressed, although it may also be a bit oversold," said a dealer with a foreign commodities brokerage in Kuala Lumpur.
"I would say support for the third month contract is still at 2,480 ringgit, while resistance is at 2,550 ringgit."
On the technical front, Reuters market analyst Wang Tao said palm oil looks exhausted and may bottom very soon.
"Palm oil had experienced rising stockpiles despite a sharp fall in production in December. Depressed soybean oil prices coupled with initial high palm oil prices will result in parity price between the two vegetable oils," said Phillip Futures in a report.
"Narrowing palm oil discount to soybean oil had reduced the attractiveness of palm oil, hence shift demand away from palm oil to soybean oil, causing substitution to take place."
Malaysia's palm oil inventories rose to a nine-month high in December, industry data showed, missing expectations for a drop as lacklustre demand offset a fall in output caused by floods.
In competing vegetable oil markets, the U.S. soyoil contract for March added 0.16 percent, while the most active May soybean oil contract on the Dalian Commodities Exchange dropped 0.42 percent.
Palm, soy and crude oil prices at 0437 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 0 +0.00 0 0 0
MY PALM OIL FEB4 2478 +6.00 2472 2491 932
MY PALM OIL MAR4 2494 +1.00 2492 2516 6859
CHINA PALM OLEIN MAY4 5818 -10.00 5812 5854 191062
CHINA SOYOIL MAY4 6612 -28.00 6608 6662 247646
CBOT SOY OIL MAR4 37.82 +0.06 37.66 37.96 3004
NYMEX CRUDE FEB4 92.57 -0.02 92.43 92.69 2687
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=3.28 ringgit)