MARKET DEVELOPMENT
VEGOILS-Palm Oil Falls on Weak Export Data, Technical Reaction
VEGOILS-Palm Oil Falls on Weak Export Data, Technical Reaction
27/03/2014 (Reuters) - Malaysian palm oil futures ended lower on Wednesday after export data led to worries of lagging demand by major buyers and in a technical reaction after a gain early in the session failed to break a technical resistance level.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange closed down 0.7 percent to 2,690 ringgit ($816) per tonne after falling from an intraday high of 2,732 ringgit.
"Technicals' weak picture is pushing prices lower. Today morning prices opened higher, but it was unable to cross the strong resistance at 2,730 ringgit, so it fell again," a trader with a local commodities brokerage said.
"There's also the weak palm oil exports this month," the trader added.
Cargo surveyor data for the March 1-25 period showed that while demand for crude palm oil remained robust, total Malaysian exports of palm products to major buyers India and China had nearly halved from a month ago, raising worries that they could be turning to other, cheaper oils. [PALM/ITS/
Total traded volume stood at 58,950 lots of 25 tonnes, higher than the average 35,000 lots.
The Malaysian palm oil market, which sets the tone for global prices, has fallen nearly 4 percent so far this month, the biggest drop since July 2013, and is set for its third straight weekly loss.
The Malaysian Palm Oil Association, a group of planters, estimated that palm oil production rose only 2 percent in the period March 1-20, after dry weather hindered growth of fresh fruit bunches.
Some market participants expected output for the whole of March to rise 8 percent, although planters said it would take time for drought-affected yields to recover.
Malaysia's Felda Global Ventures Holdings Bhd the world's third-largest palm plantation operator, said its palm output may fall short of the target by 3-5 percent this year after dry weather hit yields.
In other markets, Brent crude oil rose above $107 per barrel on Wednesday as a disruption in supply from Nigeria and Libya supported prices, while promising data from top consumer the United States also boosted investor sentiment.
In other vegetable oil markets, the U.S. soyoil contract for May rose 0.3 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.9 percent.
Palm, soy and crude oil prices at 1102 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2770 -27.00 2768 2810 278
MY PALM OIL MAY4 2710 -30.00 2706 2758 7790
MY PALM OIL JUN4 2690 -20.00 2688 2732 24343
CHINA PALM OLEIN SEP4 6196 +82.00 6136 6230 495586
CHINA SOYOIL SEP4 6922 +62.00 6866 6934 533772
CBOT SOY OIL MAY4 40.86 +0.12 40.68 41.05 5280
NYMEX CRUDE MAY4 99.23 +0.04 99.10 99.54 10485
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 = 3.2960 Malaysian ringgit)
($1 = 6.2094 Chinese yuan)
The benchmark June contract on the Bursa Malaysia Derivatives Exchange closed down 0.7 percent to 2,690 ringgit ($816) per tonne after falling from an intraday high of 2,732 ringgit.
"Technicals' weak picture is pushing prices lower. Today morning prices opened higher, but it was unable to cross the strong resistance at 2,730 ringgit, so it fell again," a trader with a local commodities brokerage said.
"There's also the weak palm oil exports this month," the trader added.
Cargo surveyor data for the March 1-25 period showed that while demand for crude palm oil remained robust, total Malaysian exports of palm products to major buyers India and China had nearly halved from a month ago, raising worries that they could be turning to other, cheaper oils. [PALM/ITS/
Total traded volume stood at 58,950 lots of 25 tonnes, higher than the average 35,000 lots.
The Malaysian palm oil market, which sets the tone for global prices, has fallen nearly 4 percent so far this month, the biggest drop since July 2013, and is set for its third straight weekly loss.
The Malaysian Palm Oil Association, a group of planters, estimated that palm oil production rose only 2 percent in the period March 1-20, after dry weather hindered growth of fresh fruit bunches.
Some market participants expected output for the whole of March to rise 8 percent, although planters said it would take time for drought-affected yields to recover.
Malaysia's Felda Global Ventures Holdings Bhd the world's third-largest palm plantation operator, said its palm output may fall short of the target by 3-5 percent this year after dry weather hit yields.
In other markets, Brent crude oil rose above $107 per barrel on Wednesday as a disruption in supply from Nigeria and Libya supported prices, while promising data from top consumer the United States also boosted investor sentiment.
In other vegetable oil markets, the U.S. soyoil contract for May rose 0.3 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.9 percent.
Palm, soy and crude oil prices at 1102 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2770 -27.00 2768 2810 278
MY PALM OIL MAY4 2710 -30.00 2706 2758 7790
MY PALM OIL JUN4 2690 -20.00 2688 2732 24343
CHINA PALM OLEIN SEP4 6196 +82.00 6136 6230 495586
CHINA SOYOIL SEP4 6922 +62.00 6866 6934 533772
CBOT SOY OIL MAY4 40.86 +0.12 40.68 41.05 5280
NYMEX CRUDE MAY4 99.23 +0.04 99.10 99.54 10485
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 = 3.2960 Malaysian ringgit)
($1 = 6.2094 Chinese yuan)