MARKET DEVELOPMENT
UPDATE 2-VEGOILS-Palm Off 17-Month Peak as Competing Soy Markets Add Pressure
UPDATE 2-VEGOILS-Palm Off 17-Month Peak as Competing Soy Markets Add Pressure
10/03/2014 (Reuters) - Malaysian palm oil futures edged down on Monday, coming off a 17-month peak as investors booked profits from big gains made last week, with losses in competing soy markets adding pressure to prices.
The U.S. soyoil contract for May fell 0.8 percent in early Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange dropped 1.4 percent.
Weaker prices of soyoil narrow palm oil's discount to the rival edible oil, potentially channelling demand away from palm.
"The U.S. and Dalian soybean oil markets are down," said a trader with a foreign commodities brokerage. "And with the high price of palm oil, it's normal for people to take profits."
Benchmark palm oil rallied to 2,896 ringgit on Friday, a level not seen since September 2012, to post its fifth straight week of gains on fears that dry weather will hurt output and squeeze stocks of the tropical oil.
By the midday break, the benchmark May contract on the Bursa Malaysia Derivatives Exchange had edged down 0.5 percent to 2,873 ringgit ($876) per tonne.
"Prices are now trading between 2,850 and 2,900 ringgit. If prices break the 2,850 ringgit level, the next support will be 2,800 ringgit," the trader added.
Total traded volume stood at 11,222 lots of 25 tonnes, slightly below the average 12,500 lots.
Technicals show that Malaysian palm oil could have peaked at the March 7 high of 2,896 ringgit per tonne and may test a support at 2,829 ringgit, Reuters market analyst Wang Tao said.
A report by industry regulator Malaysian Palm Oil Board after Monday's midday break showed that stocks at the end of
February fell 14.3 percent to 1.66 million tonnes in the second-largest producer, missing market estimates for inventories to fall to 1.79 million tonnes.
Cargo surveyor Intertek Testing Services (ITS) reported that Malaysian palm oil products in the first 10 days of March fell 5 percent to 293,879 tonnes, as top buyers and price-sensitive India and China cut back purchases.
Another cargo surveyor, Societe Generale de Surveillance, will release data for the same period later on Monday.
In other markets, Brent futures slipped below $109 a barrel as data showing an unexpected fall in China's exports added to fears of a slowdown in the world's No. 2 economy, though geopolitical tensions in Ukraine and Libya limited the falls.
Palm, soy and crude oil prices at 0518 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR4 2875 -15.00 2875 2875 12
MY PALM OIL APR4 2876 -13.00 2862 2882 272
MY PALM OIL MAY4 2873 -13.00 2861 2880 5923
CHINA PALM OLEIN MAY4 6238 -62.00 6222 6312 86152
CHINA SOYOIL MAY4 6970 -100.00 6958 7052 86404
CBOT SOY OIL MAY4 44.00 -0.32 43.90 44.56 3976
NYMEX CRUDE APR4 102.36 -0.22 102.30 102.82 3942
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 Malaysian ringgit)
($1 = 6.1391 Chinese yuan)
The U.S. soyoil contract for May fell 0.8 percent in early Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange dropped 1.4 percent.
Weaker prices of soyoil narrow palm oil's discount to the rival edible oil, potentially channelling demand away from palm.
"The U.S. and Dalian soybean oil markets are down," said a trader with a foreign commodities brokerage. "And with the high price of palm oil, it's normal for people to take profits."
Benchmark palm oil rallied to 2,896 ringgit on Friday, a level not seen since September 2012, to post its fifth straight week of gains on fears that dry weather will hurt output and squeeze stocks of the tropical oil.
By the midday break, the benchmark May contract on the Bursa Malaysia Derivatives Exchange had edged down 0.5 percent to 2,873 ringgit ($876) per tonne.
"Prices are now trading between 2,850 and 2,900 ringgit. If prices break the 2,850 ringgit level, the next support will be 2,800 ringgit," the trader added.
Total traded volume stood at 11,222 lots of 25 tonnes, slightly below the average 12,500 lots.
Technicals show that Malaysian palm oil could have peaked at the March 7 high of 2,896 ringgit per tonne and may test a support at 2,829 ringgit, Reuters market analyst Wang Tao said.
A report by industry regulator Malaysian Palm Oil Board after Monday's midday break showed that stocks at the end of
February fell 14.3 percent to 1.66 million tonnes in the second-largest producer, missing market estimates for inventories to fall to 1.79 million tonnes.
Cargo surveyor Intertek Testing Services (ITS) reported that Malaysian palm oil products in the first 10 days of March fell 5 percent to 293,879 tonnes, as top buyers and price-sensitive India and China cut back purchases.
Another cargo surveyor, Societe Generale de Surveillance, will release data for the same period later on Monday.
In other markets, Brent futures slipped below $109 a barrel as data showing an unexpected fall in China's exports added to fears of a slowdown in the world's No. 2 economy, though geopolitical tensions in Ukraine and Libya limited the falls.
Palm, soy and crude oil prices at 0518 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR4 2875 -15.00 2875 2875 12
MY PALM OIL APR4 2876 -13.00 2862 2882 272
MY PALM OIL MAY4 2873 -13.00 2861 2880 5923
CHINA PALM OLEIN MAY4 6238 -62.00 6222 6312 86152
CHINA SOYOIL MAY4 6970 -100.00 6958 7052 86404
CBOT SOY OIL MAY4 44.00 -0.32 43.90 44.56 3976
NYMEX CRUDE APR4 102.36 -0.22 102.30 102.82 3942
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 Malaysian ringgit)
($1 = 6.1391 Chinese yuan)