MARKET DEVELOPMENT
Palm Trades Near Two-Week High as Ringgit Decline Boosts Demand
Palm Trades Near Two-Week High as Ringgit Decline Boosts Demand
23/01/2014 (Bloomberg) - Palm oil traded near the highest level in more than two weeks on speculation that a weakening ringgit may bolster prospects for exports from Malaysia.
The contract for April delivery rose as much as 0.7 percent to 2,592 ringgit ($778) a metric ton on the Bursa Malaysia Derivatives and ended the morning session at 2,590 ringgit. Futures reached 2,597 ringgit yesterday, the highest level for most-active futures since Jan. 6.
The ringgit traded at 3.3317 per dollar as of 12:40 p.m. in Kuala Lumpur, near the weakest level since August on speculation investors are favoring the dollar because of an improving outlook for the U.S. economy. The currency fell 6.7 percent in 2013 and has lost 1.7 percent this year, according to data compiled by Bloomberg.
“The weakening ringgit garnered buying interest from overseas buyers and refiners,” Tan Chee Tat, an analyst at Phillip Futures Pte in Singapore, said in an e-mailed response to questions from Bloomberg. The widening discount of palm oil to soybean oil also lured buyers, he said.
Palm oil’s discount to soybean oil widened to $62.85 a ton today from an almost three-year low of $47.25 on Jan. 3. Soybean oil for March delivery gained 0.6 percent to 38.07 cents a pound on the Chicago Board of Trade. Soybeans rose 0.2 percent to $12.825 a bushel.
Malaysia’s output may climb to a record 19.5 million tons this year because of a recovery in fresh fruit bunch yields and an increase in new matured crop area, Malaysian Palm Oil Board Director-General Choo Yuen May told a conference in Kuala Lumpur today. Output totaled 19.2 million tons in 2013.
Prices may remain “firm” in 2014 on increasing demand by major importers, palm oil’s discount to soybean and rapeseed oil prices and rising biodiesel consumption, she said.
Refined palm oil for May delivery was little changed at 5,864 yuan ($969) a ton on the Dalian Commodity Exchange. Soybean oil was at 6,666 yuan from 6,662 yuan yesterday.
The contract for April delivery rose as much as 0.7 percent to 2,592 ringgit ($778) a metric ton on the Bursa Malaysia Derivatives and ended the morning session at 2,590 ringgit. Futures reached 2,597 ringgit yesterday, the highest level for most-active futures since Jan. 6.
The ringgit traded at 3.3317 per dollar as of 12:40 p.m. in Kuala Lumpur, near the weakest level since August on speculation investors are favoring the dollar because of an improving outlook for the U.S. economy. The currency fell 6.7 percent in 2013 and has lost 1.7 percent this year, according to data compiled by Bloomberg.
“The weakening ringgit garnered buying interest from overseas buyers and refiners,” Tan Chee Tat, an analyst at Phillip Futures Pte in Singapore, said in an e-mailed response to questions from Bloomberg. The widening discount of palm oil to soybean oil also lured buyers, he said.
Palm oil’s discount to soybean oil widened to $62.85 a ton today from an almost three-year low of $47.25 on Jan. 3. Soybean oil for March delivery gained 0.6 percent to 38.07 cents a pound on the Chicago Board of Trade. Soybeans rose 0.2 percent to $12.825 a bushel.
Malaysia’s output may climb to a record 19.5 million tons this year because of a recovery in fresh fruit bunch yields and an increase in new matured crop area, Malaysian Palm Oil Board Director-General Choo Yuen May told a conference in Kuala Lumpur today. Output totaled 19.2 million tons in 2013.
Prices may remain “firm” in 2014 on increasing demand by major importers, palm oil’s discount to soybean and rapeseed oil prices and rising biodiesel consumption, she said.
Refined palm oil for May delivery was little changed at 5,864 yuan ($969) a ton on the Dalian Commodity Exchange. Soybean oil was at 6,666 yuan from 6,662 yuan yesterday.