MARKET DEVELOPMENT
VEGOILS-Palm Falls to Near 2 Week-low as Equity Markets Drop
VEGOILS-Palm Falls to Near 2 Week-low as Equity Markets Drop
28/01/2014 (Reuters) - Malaysian palm oil futures fell to their lowest in nearly two weeks on Monday as a fall in global shares curbed appetite for risky assets, but weak local currency reined in losses.
Palm was hit as the U.S. soyoil contract for March slipped 0.5 percent in late Asian trade and the most active May soybean oil contract on the Dalian Commodities Exchange declined 1.5 percent.
"Most equity markets in Europe, the U.S. and Asia dropped sharply. That caused the grain complex and soybean oil markets to drop, which depressed the palm market," said a trader with at a foreign commodity firm in Malaysia.
"The only thing that is holding up palm is the ringgit-factor."
Emerging markets led a global sell-off on Monday, with the U.S. Federal Reserve poised to continue tapering its stimulus. Tighter credit conditions in China also raised fears of a slowdown in the world's No.2 edible oil consumer.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange dipped 1.4 percent to 2,556 ringgit ($765) per tonne by Monday's close. Prices in late trade dipped as far as 2,551 ringgit, the lowest since Jan. 16.
Total traded volume stood at 38,992 lots of 25 tonnes, slightly above the usual 35,000 lots.
The Malaysian ringgit fell as much as 0.4 percent to 3.3455 per dollar on Monday, its lowest since May 2010, pressured by selling by offshore funds. A weaker ringgit improves margins for overseas buyers and refiners, lifting demand for the tropical oil.
Market participants are looking for more clues on global demand for palm oil, used in a wide variety of household products from soaps to cookies and chocolate.
Cargo surveyor Intertek Testing Services said that Malaysian exports of palm oil products from Jan. 1-25 fell 9.4 percent compared to a month ago as traders cut back purchases of crude palm kernel oil.
The fall in exports were less steep than declines recorded in early January, signalling a small recovery in demand.
Another cargo surveyor Societe Generale de Surveillance will release data for the same period later on Monday.
In other markets, Brent futures eased towards $107 a barrel on Monday as concerns over a possible slowdown in China stoked demand-growth worries, but bitterly cold weather across the northern Hemisphere and simmering tensions in the Middle East curbed losses.
Technicals were bearish. Malaysian palm oil is expected to fall to 2,553 ringgit per tonne and then either hover around that level or rebound to 2,569 ringgit, said Reuters market analyst Wang Tao.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2540 -37.00 2540 2560 292
MY PALM OIL MAR4 2550 -33.00 2544 2571 3983
MY PALM OIL APR4 2556 -35.00 2551 2581 16799
CHINA PALM OLEIN MAY4 5774 -80.00 5752 5846 355894
CHINA SOYOIL MAY4 6536 -96.00 6522 6608 469168
CBOT SOY OIL MAR4 37.35 -0.19 37.31 37.69 6362
NYMEX CRUDE MAR4 97.03 +0.39 96.60 97.18 11377
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 = 3.34 Malaysian ringgit)
Palm was hit as the U.S. soyoil contract for March slipped 0.5 percent in late Asian trade and the most active May soybean oil contract on the Dalian Commodities Exchange declined 1.5 percent.
"Most equity markets in Europe, the U.S. and Asia dropped sharply. That caused the grain complex and soybean oil markets to drop, which depressed the palm market," said a trader with at a foreign commodity firm in Malaysia.
"The only thing that is holding up palm is the ringgit-factor."
Emerging markets led a global sell-off on Monday, with the U.S. Federal Reserve poised to continue tapering its stimulus. Tighter credit conditions in China also raised fears of a slowdown in the world's No.2 edible oil consumer.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange dipped 1.4 percent to 2,556 ringgit ($765) per tonne by Monday's close. Prices in late trade dipped as far as 2,551 ringgit, the lowest since Jan. 16.
Total traded volume stood at 38,992 lots of 25 tonnes, slightly above the usual 35,000 lots.
The Malaysian ringgit fell as much as 0.4 percent to 3.3455 per dollar on Monday, its lowest since May 2010, pressured by selling by offshore funds. A weaker ringgit improves margins for overseas buyers and refiners, lifting demand for the tropical oil.
Market participants are looking for more clues on global demand for palm oil, used in a wide variety of household products from soaps to cookies and chocolate.
Cargo surveyor Intertek Testing Services said that Malaysian exports of palm oil products from Jan. 1-25 fell 9.4 percent compared to a month ago as traders cut back purchases of crude palm kernel oil.
The fall in exports were less steep than declines recorded in early January, signalling a small recovery in demand.
Another cargo surveyor Societe Generale de Surveillance will release data for the same period later on Monday.
In other markets, Brent futures eased towards $107 a barrel on Monday as concerns over a possible slowdown in China stoked demand-growth worries, but bitterly cold weather across the northern Hemisphere and simmering tensions in the Middle East curbed losses.
Technicals were bearish. Malaysian palm oil is expected to fall to 2,553 ringgit per tonne and then either hover around that level or rebound to 2,569 ringgit, said Reuters market analyst Wang Tao.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2540 -37.00 2540 2560 292
MY PALM OIL MAR4 2550 -33.00 2544 2571 3983
MY PALM OIL APR4 2556 -35.00 2551 2581 16799
CHINA PALM OLEIN MAY4 5774 -80.00 5752 5846 355894
CHINA SOYOIL MAY4 6536 -96.00 6522 6608 469168
CBOT SOY OIL MAR4 37.35 -0.19 37.31 37.69 6362
NYMEX CRUDE MAR4 97.03 +0.39 96.60 97.18 11377
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 = 3.34 Malaysian ringgit)