MARKET DEVELOPMENT
VEGOILS-Palm Ends Lower on Profit-taking, Tighter Supplies Eyed
VEGOILS-Palm Ends Lower on Profit-taking, Tighter Supplies Eyed
12/03/2014 (Reuters) - Malaysian palm oil futures ended lower on Tuesday on profit-taking after the tropical oil surged to a 17-month high in the previous session, although worries of dry weather tightening supplies curbed losses and kept prices propped up.
Benchmark prices on Monday had hit 2,910 ringgit per tonne, their highest since mid-September 2012, after industry data showed that end-stocks in the world's No.2 producer fell steeply to an eight-month low of 1.66 million tonnes.
"There's a little bit of profit-taking but there is still concern over the weather, and whether yields will pull down further this month," said a trader with a foreign commodities brokerage.
"There could be a further drawdown in stocks in March, unless we see good rains in the next 48 hours," said the trader. Prices will likely trade between 2,850-2,920 ringgit in the next two days, the trader added.
Malaysia's total output in February was only 1.28 million tonnes, industry regulator the Malaysian Palm Oil Board also reported, after dry and hazy weather interrupted growth of fresh fruit bunches and complicated harvesting.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange had inched down 1.0 percent to 2,872 ringgit ($876) per tonne by Tuesday's close.
Total traded volume stood at 51,903 lots of 25 tonnes, much higher than the average 35,000 lots.
Technicals show that Malaysian palm oil looks exhausted and is due for a deep correction, Reuters market analyst Wang Tao said, adding that a fall below 2,860 ringgit could be the very early signal for such a correction.
High prices of palm oil, the world's most traded vegetable oil, could cause key consumers to switch to competing edible oils instead.
Cargo surveyor data reported that Malaysian palm oil products in the first 10 days of March fell between 4-5 percent from a month ago, as top buyers India, China and Pakistan cut back purchases.
In other markets, Brent futures recovered on Tuesday and held above $108 a barrel as a worsening crisis over Ukraine stoked supply disruption fears, while concerns over demand growth from the world's two biggest oil consumers kept
prices under pressure.
In other competing vegetable oil markets, the U.S. soyoil contract for May fell 0.2 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange gained 1.6 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR4 2897 -7.00 2883 2912 30
MY PALM OIL APR4 2895 -8.00 2873 2917 2321
MY PALM OIL MAY4 2872 -29.00 2861 2916 27299
CHINA PALM OLEIN SEP4 6518 +154.00 6322 6546 1082688
CHINA SOYOIL SEP4 7220 +116.00 7052 7246 1022076
CBOT SOY OIL MAY4 43.78 -0.08 43.63 44.32 9065
NYMEX CRUDE APR4 101.50 +0.38 100.86 101.50 20996
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 = 6.1402 Chinese yuan)
Benchmark prices on Monday had hit 2,910 ringgit per tonne, their highest since mid-September 2012, after industry data showed that end-stocks in the world's No.2 producer fell steeply to an eight-month low of 1.66 million tonnes.
"There's a little bit of profit-taking but there is still concern over the weather, and whether yields will pull down further this month," said a trader with a foreign commodities brokerage.
"There could be a further drawdown in stocks in March, unless we see good rains in the next 48 hours," said the trader. Prices will likely trade between 2,850-2,920 ringgit in the next two days, the trader added.
Malaysia's total output in February was only 1.28 million tonnes, industry regulator the Malaysian Palm Oil Board also reported, after dry and hazy weather interrupted growth of fresh fruit bunches and complicated harvesting.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange had inched down 1.0 percent to 2,872 ringgit ($876) per tonne by Tuesday's close.
Total traded volume stood at 51,903 lots of 25 tonnes, much higher than the average 35,000 lots.
Technicals show that Malaysian palm oil looks exhausted and is due for a deep correction, Reuters market analyst Wang Tao said, adding that a fall below 2,860 ringgit could be the very early signal for such a correction.
High prices of palm oil, the world's most traded vegetable oil, could cause key consumers to switch to competing edible oils instead.
Cargo surveyor data reported that Malaysian palm oil products in the first 10 days of March fell between 4-5 percent from a month ago, as top buyers India, China and Pakistan cut back purchases.
In other markets, Brent futures recovered on Tuesday and held above $108 a barrel as a worsening crisis over Ukraine stoked supply disruption fears, while concerns over demand growth from the world's two biggest oil consumers kept
prices under pressure.
In other competing vegetable oil markets, the U.S. soyoil contract for May fell 0.2 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange gained 1.6 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR4 2897 -7.00 2883 2912 30
MY PALM OIL APR4 2895 -8.00 2873 2917 2321
MY PALM OIL MAY4 2872 -29.00 2861 2916 27299
CHINA PALM OLEIN SEP4 6518 +154.00 6322 6546 1082688
CHINA SOYOIL SEP4 7220 +116.00 7052 7246 1022076
CBOT SOY OIL MAY4 43.78 -0.08 43.63 44.32 9065
NYMEX CRUDE APR4 101.50 +0.38 100.86 101.50 20996
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 = 6.1402 Chinese yuan)