MARKET DEVELOPMENT
VEGOILS-Palm Rises to Near 3-wk High, Lifted by Soyoil Rally
VEGOILS-Palm Rises to Near 3-wk High, Lifted by Soyoil Rally
11/02/2014 (Reuters) - Malaysian palm oil futures edged higher on Monday, stretching gains into a fourth straight session to touch a near three-week high as a rally in overseas soy markets continued to lift prices of the tropical oil.
The most active May soybean oil contract on the Dalian Commodities Exchange rose 1.4 percent early Monday, extending gains after surging as much as 3.7 percent on Friday. The U.S. soyoil contract for March gained 0.8 percent.
"There is a heatwave in Brazil and soybeans have been rallying for the past week. Soyoil got a free ride from there, and palm oil is following through," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"I believe prices will trade within a range of 2,500-2,620 ringgit."
By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had gained 0.4 percent to 2,588 ringgit ($777) per tonne. Prices earlier touched 2,602 ringgit, their highest since Jan. 23.
Total traded volume stood at 14,851 lots of 25 tonnes, above the average 12,500 lots.
Market players will also be watching for key data on January-end stocks, exports, and output in the world's second-largest producer, which will be released by industry regulator the Malaysian Palm Oil Board after Monday's afternoon break.
Chicago soybeans were little changed on Monday, holding on to last week's biggest gain in more than five months on expectations the U.S. government will reduce its supply estimates in a key report due later in the day.
Tighter supplies of the competing oilseed for crushing would lift soyoil prices, and could cause buyers to switch to the cheaper palm oil instead, as both edible oils are commonly substituted with each other.
A slight recovery in exports in the first 10 days of February also raised hopes of improving food and fuel demand for palm, although traders said export volumes will have to pick up faster to have any bigger impact on prices.
Cargo surveyor Intertek Testing Services showed that Malaysia's Feb. 1-10 exports rose 4.1 percent to 309,455 tonnes from 297,308 shipped in the same period in January.
"Exports are slightly better but I don't think they are very bullish. If you compare them to last month it is up four percent, but then the export volumes were very low in January," the trader added.
Another cargo surveyor Societe Generale de Surveillance will release export data for the same period later Monday.
Technicals were bullish. Malaysian palm oil is expected to test a resistance at 2,597 ringgit per tonne, with a good chance of breaking above this level and rising more to 2,623 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent crude eased back after hitting a five-week high above $109 a barrel on Monday as investors look ahead to more U.S. and Chinese economic data this week that could shed greater light on the demand outlook in the world's two largest oil consumers.
Palm, soy and crude oil prices at 0430 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2597 +20.00 2592 2597 6
MY PALM OIL MAR4 2586 +11.00 2585 2598 772
MY PALM OIL APR4 2588 +10.00 2587 2602 7886
CHINA PALM OLEIN MAY4 5882 +68.00 5790 5892 240380
CHINA SOYOIL MAY4 6682 +94.00 6602 6690 351798
CBOT SOY OIL MAR4 38.83 +0.27 38.61 38.92 2330
NYMEX CRUDE MAR4 99.83 -0.05 99.82 100.46 6795
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 = 3.33 Malaysian ringgit)
The most active May soybean oil contract on the Dalian Commodities Exchange rose 1.4 percent early Monday, extending gains after surging as much as 3.7 percent on Friday. The U.S. soyoil contract for March gained 0.8 percent.
"There is a heatwave in Brazil and soybeans have been rallying for the past week. Soyoil got a free ride from there, and palm oil is following through," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"I believe prices will trade within a range of 2,500-2,620 ringgit."
By the midday break, the benchmark April contract on the Bursa Malaysia Derivatives Exchange had gained 0.4 percent to 2,588 ringgit ($777) per tonne. Prices earlier touched 2,602 ringgit, their highest since Jan. 23.
Total traded volume stood at 14,851 lots of 25 tonnes, above the average 12,500 lots.
Market players will also be watching for key data on January-end stocks, exports, and output in the world's second-largest producer, which will be released by industry regulator the Malaysian Palm Oil Board after Monday's afternoon break.
Chicago soybeans were little changed on Monday, holding on to last week's biggest gain in more than five months on expectations the U.S. government will reduce its supply estimates in a key report due later in the day.
Tighter supplies of the competing oilseed for crushing would lift soyoil prices, and could cause buyers to switch to the cheaper palm oil instead, as both edible oils are commonly substituted with each other.
A slight recovery in exports in the first 10 days of February also raised hopes of improving food and fuel demand for palm, although traders said export volumes will have to pick up faster to have any bigger impact on prices.
Cargo surveyor Intertek Testing Services showed that Malaysia's Feb. 1-10 exports rose 4.1 percent to 309,455 tonnes from 297,308 shipped in the same period in January.
"Exports are slightly better but I don't think they are very bullish. If you compare them to last month it is up four percent, but then the export volumes were very low in January," the trader added.
Another cargo surveyor Societe Generale de Surveillance will release export data for the same period later Monday.
Technicals were bullish. Malaysian palm oil is expected to test a resistance at 2,597 ringgit per tonne, with a good chance of breaking above this level and rising more to 2,623 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent crude eased back after hitting a five-week high above $109 a barrel on Monday as investors look ahead to more U.S. and Chinese economic data this week that could shed greater light on the demand outlook in the world's two largest oil consumers.
Palm, soy and crude oil prices at 0430 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB4 2597 +20.00 2592 2597 6
MY PALM OIL MAR4 2586 +11.00 2585 2598 772
MY PALM OIL APR4 2588 +10.00 2587 2602 7886
CHINA PALM OLEIN MAY4 5882 +68.00 5790 5892 240380
CHINA SOYOIL MAY4 6682 +94.00 6602 6690 351798
CBOT SOY OIL MAR4 38.83 +0.27 38.61 38.92 2330
NYMEX CRUDE MAR4 99.83 -0.05 99.82 100.46 6795
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 = 3.33 Malaysian ringgit)