MARKET DEVELOPMENT
VEGOILS-Palm Slips on Surprise Rise in Stocks, Ringgit Drags
VEGOILS-Palm Slips on Surprise Rise in Stocks, Ringgit Drags
11/04/2014 (Reuters) - Malaysian palm oil futures ended lower on Thursday after an industry report showed that stocks in world's second-largest grower unexpectedly rose, and as a firm ringgit continued to drag on prices.
Inventories in Malaysia rose to 1.69 million tonnes in March, missing market estimates for a drop to a three-year low of 1.58 million tonnes as the effect of crop-damaging weather wore off and yields surged.
The Malaysian Palm Oil Board (MPOB) data showed that crude palm oil production jumped 17 percent from a month ago, while export demand slackened by about 8 percent to only 1.30 million tonnes.
"The export figure was quite scary. Production seems to be picking up, and stocks could build up fast," said a trader with a local commodities brokerage in Kuala Lumpur. "Ramadan is coming, exports must go up higher."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.2 percent to 2,607 ringgit ($810) per tonne by Thursday's close, with prices trading between 2,580-2,617 ringgit.
Prices on Wednesday late session had risen nearly 2 percent to 2,624 ringgit, lifted by gains in competing soy markets and on anticipation of tighter soybean stocks in the United States.
Total traded volume stood at 28,904 lots of 25 tonnes, slightly below the average 35,000 lots.
Technicals showed Malaysian palm oil may have completed a weak rebound from the April 8 low of 2,573 ringgit per tonne and is expected to drop towards the Jan. 28 low of 2,519 ringgit, said Reuters market analyst Wang Tao.
A small recovery in demand, however, stemmed losses.
Exports of Malaysian palm oil products for April 1-10 rose 4.4 percent to 306,765 tonnes compared to the same period a month ago, cargo surveyor Intertek Testing Services reported, as demand for refined palm olein climbed.
Another cargo surveyor Societe Generale de Surveillance showed shipments for same period rose 3.2 percent.
The Malaysian ringgit was firm on Thursday, inching up 0.2 percent to trade at 3.2225 against the U.S. dollar. The currency has gained 1.6 percent so far this year, making the ringgit-denominated feedstock more expensive for overseas buyers and investors.
The U.S. Department of Agriculture cut its forecast for the 2013-2014 soybean carry over to 135 million bushels, according to its monthly supply and demand report late Wednesday, bringing stocks below trade estimates of 139 million bushels.
Smaller supplies of the oilseed for crushing could potentially channel food and fuel demand to palm, a common substitute.
The U.S. soyoil contract for May fell 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange slipped 0.4 percent.
In other markets, global oil prices slipped towards $107 a barrel on Thursday as Chinese data stoked concerns over demand growth in the world's second-largest economy while markets watched for evidence of a resumption in Libyan exports.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2655 +5.00 2640 2657 42
MY PALM OIL MAY4 2625 -6.00 2596 2634 2008
MY PALM OIL JUN4 2607 -6.00 2580 2617 15774
CHINA PALM OLEIN SEP4 6144 -72.00 6144 6270 531234
CHINA SOYOIL SEP4 7038 -30.00 7034 7134 690084
CBOT SOY OIL MAY4 42.57 -0.34 42.30 42.89 6263
NYMEX CRUDE MAY4 103.42 -0.18 103.20 103.81 19663
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 = 3.22 Malaysian ringgit)
($1 = 6.2125 Chinese yuan)
Inventories in Malaysia rose to 1.69 million tonnes in March, missing market estimates for a drop to a three-year low of 1.58 million tonnes as the effect of crop-damaging weather wore off and yields surged.
The Malaysian Palm Oil Board (MPOB) data showed that crude palm oil production jumped 17 percent from a month ago, while export demand slackened by about 8 percent to only 1.30 million tonnes.
"The export figure was quite scary. Production seems to be picking up, and stocks could build up fast," said a trader with a local commodities brokerage in Kuala Lumpur. "Ramadan is coming, exports must go up higher."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.2 percent to 2,607 ringgit ($810) per tonne by Thursday's close, with prices trading between 2,580-2,617 ringgit.
Prices on Wednesday late session had risen nearly 2 percent to 2,624 ringgit, lifted by gains in competing soy markets and on anticipation of tighter soybean stocks in the United States.
Total traded volume stood at 28,904 lots of 25 tonnes, slightly below the average 35,000 lots.
Technicals showed Malaysian palm oil may have completed a weak rebound from the April 8 low of 2,573 ringgit per tonne and is expected to drop towards the Jan. 28 low of 2,519 ringgit, said Reuters market analyst Wang Tao.
A small recovery in demand, however, stemmed losses.
Exports of Malaysian palm oil products for April 1-10 rose 4.4 percent to 306,765 tonnes compared to the same period a month ago, cargo surveyor Intertek Testing Services reported, as demand for refined palm olein climbed.
Another cargo surveyor Societe Generale de Surveillance showed shipments for same period rose 3.2 percent.
The Malaysian ringgit was firm on Thursday, inching up 0.2 percent to trade at 3.2225 against the U.S. dollar. The currency has gained 1.6 percent so far this year, making the ringgit-denominated feedstock more expensive for overseas buyers and investors.
The U.S. Department of Agriculture cut its forecast for the 2013-2014 soybean carry over to 135 million bushels, according to its monthly supply and demand report late Wednesday, bringing stocks below trade estimates of 139 million bushels.
Smaller supplies of the oilseed for crushing could potentially channel food and fuel demand to palm, a common substitute.
The U.S. soyoil contract for May fell 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange slipped 0.4 percent.
In other markets, global oil prices slipped towards $107 a barrel on Thursday as Chinese data stoked concerns over demand growth in the world's second-largest economy while markets watched for evidence of a resumption in Libyan exports.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2655 +5.00 2640 2657 42
MY PALM OIL MAY4 2625 -6.00 2596 2634 2008
MY PALM OIL JUN4 2607 -6.00 2580 2617 15774
CHINA PALM OLEIN SEP4 6144 -72.00 6144 6270 531234
CHINA SOYOIL SEP4 7038 -30.00 7034 7134 690084
CBOT SOY OIL MAY4 42.57 -0.34 42.30 42.89 6263
NYMEX CRUDE MAY4 103.42 -0.18 103.20 103.81 19663
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 = 3.22 Malaysian ringgit)
($1 = 6.2125 Chinese yuan)