MARKET DEVELOPMENT
VEGOILS-Palm Rises to More Than 1-week High on Strong Crude, Better Export Outlook
VEGOILS-Palm Rises to More Than 1-week High on Strong Crude, Better Export Outlook
15/04/2014 (Reuters) - Malaysian palm oil futures rose to their highest in more than a week on Monday, lifted by strong crude and soy oil markets overseas, and on investor anticipation that festival-driven consumption will stoke demand for the tropical oil.
Market players are watching for cargo surveyor export data for the first half of April, due on Tuesday, to gauge global demand for palm. Shipments of palm products between April 1-10 rose 3-5 percent compared with the same period a month ago.
Palm's consumption in India, Pakistan and the Middle East typically rises ahead of the Muslim holy month of Ramadan which is followed by the Eid al-Fitr celebrations.
"The palm market is pulling up on the back of expectations of slightly better exports this month," said a trader with a foreign commodities brokerage. "Prices have been at the low side -- this should encourage more buying."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged up 0.2 percent to 2,621 ringgit ($807) per tonne by Monday's close. Intraday prices earlier touched 2,665 ringgit, their highest since April 4.
Benchmark palm prices lost nearly two percent last week, falling for four out of five weeks on worries of slackening exports and an unexpected jump in production in the world's No.2 grower which pushed up inventory levels.
Total traded volume stood at 34,738 lots of 25 tonnes, slightly below the average 35,000 lots.
Technicals showed Malaysian palm oil is expected to test resistance at 2,651 ringgit per tonne, with a good chance of breaking above this level and rising further to 2,676 ringgit, said Reuters market analyst Wang Tao.
Oil rose above $108 a barrel on Monday, on concerns that escalating tension between Russia and Ukraine could lead to supply disruption. Brent crude rose 80 cents to $108.13 by 0808 GMT, while U.S. oil climbed 70 cents to $104.44 after settling 34 cents up in the previous session.
Higher crude oil prices would channel biofuel demand to palm, as it makes the tropical oil a more attractive option as a biodiesel feedstock.
Firm soyoil prices in the U.S. and China also provided support to palm, a rival vegetable oil.
The U.S. soyoil contract for May rose 0.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.2 percent.
"The palm market is strong today because of gains in the soyoil markets on Friday and today," the Kuala Lumpur-based trader added. "Crude oil is around $104, which means that biofuel demand is coming into play again."
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2670 +10.00 2670 2685 35
MY PALM OIL MAY4 2666 +25.00 2654 2699 1237
MY PALM OIL JUN4 2621 +6.00 2618 2665 18875
CHINA PALM OLEIN SEP4 6112 +36.00 6082 6136 416928
CHINA SOYOIL SEP4 6992 +14.00 6966 7016 397122
CBOT SOY OIL MAY4 42.12 +0.02 42.07 42.34 4090
NYMEX CRUDE MAY4 103.48 -0.26 103.39 104.55 22336
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 = 3.245 Malaysian ringgit)
($1 = 6.2119 Chinese yuan)
Market players are watching for cargo surveyor export data for the first half of April, due on Tuesday, to gauge global demand for palm. Shipments of palm products between April 1-10 rose 3-5 percent compared with the same period a month ago.
Palm's consumption in India, Pakistan and the Middle East typically rises ahead of the Muslim holy month of Ramadan which is followed by the Eid al-Fitr celebrations.
"The palm market is pulling up on the back of expectations of slightly better exports this month," said a trader with a foreign commodities brokerage. "Prices have been at the low side -- this should encourage more buying."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged up 0.2 percent to 2,621 ringgit ($807) per tonne by Monday's close. Intraday prices earlier touched 2,665 ringgit, their highest since April 4.
Benchmark palm prices lost nearly two percent last week, falling for four out of five weeks on worries of slackening exports and an unexpected jump in production in the world's No.2 grower which pushed up inventory levels.
Total traded volume stood at 34,738 lots of 25 tonnes, slightly below the average 35,000 lots.
Technicals showed Malaysian palm oil is expected to test resistance at 2,651 ringgit per tonne, with a good chance of breaking above this level and rising further to 2,676 ringgit, said Reuters market analyst Wang Tao.
Oil rose above $108 a barrel on Monday, on concerns that escalating tension between Russia and Ukraine could lead to supply disruption. Brent crude rose 80 cents to $108.13 by 0808 GMT, while U.S. oil climbed 70 cents to $104.44 after settling 34 cents up in the previous session.
Higher crude oil prices would channel biofuel demand to palm, as it makes the tropical oil a more attractive option as a biodiesel feedstock.
Firm soyoil prices in the U.S. and China also provided support to palm, a rival vegetable oil.
The U.S. soyoil contract for May rose 0.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.2 percent.
"The palm market is strong today because of gains in the soyoil markets on Friday and today," the Kuala Lumpur-based trader added. "Crude oil is around $104, which means that biofuel demand is coming into play again."
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2670 +10.00 2670 2685 35
MY PALM OIL MAY4 2666 +25.00 2654 2699 1237
MY PALM OIL JUN4 2621 +6.00 2618 2665 18875
CHINA PALM OLEIN SEP4 6112 +36.00 6082 6136 416928
CHINA SOYOIL SEP4 6992 +14.00 6966 7016 397122
CBOT SOY OIL MAY4 42.12 +0.02 42.07 42.34 4090
NYMEX CRUDE MAY4 103.48 -0.26 103.39 104.55 22336
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 = 3.245 Malaysian ringgit)
($1 = 6.2119 Chinese yuan)