MARKET DEVELOPMENT
VEGOILS-Palm Snaps 4 Days of Gains on Profit-Taking
VEGOILS-Palm Snaps 4 Days of Gains on Profit-Taking
18/04/2014 (Reuters) - Malaysian palm oil futures eased for the first time in five days on Thursday as investors banked profits after prices hit a three-week high, although optimism of improving food and fuel demand kept stemmed losses.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange touched 2,700 ringgit in early Thursday trade, but then fell to 2,648 ringgit ($817) per tonne by the day's close, down 1.3 percent.
"The market open higher but then went down on profit-taking, and it's facing some resistance around the 2,700 ringgit level," said a trader with a foreign commodities brokerage.
"It's a correction after a run up of more than 120 ringgit, from the low of 2,572 ringgit four days ago," the Kuala Lumpur-based trader added.
Total traded volume stood at 40,587 lots of 25 tonnes, above the average 35,000 lots.
Third-month prices surged to an intraday high of 2,691 ringgit on Wednesday, its highest since March 27, as better-than-expected economic data from China soothed fears about slowing demand from the world's No. 2 consumer of the tropical oil.
Technicals showed that Malaysian palm oil faces a resistance at 2,703 ringgit per tonne and may retrace to 2,653 ringgit before retesting this barrier, said Reuters market analyst Wang Tao.
Market players anticipate palm oil demand to pick up as buyers restock ahead of the Muslim holy month of Ramadan at end-June, and Eid al-Fitr celebrations in July.
Festivals typically drive up consumption of the tropical oil used as cooking as oil, and also as an ingredient in food ranging from cookies to chocolate.
A possible return of the crop-damaging El Nino weather phenomenon also raised fears of a supply squeeze from the world's top palm producers Indonesia and Malaysia, which analysts say could bolster prices above 3,000 ringgit.
The U.N. World Meteorological Organization said on Tuesday that a majority of weather forecasting models indicate that an El Nino may develop around the middle of the year, but it is too early to assess its likely strength.
In other markets, Brent crude rose to nearly $110 a barrel on Thursday, trading just below a six-week high hit in the previous session, with rising tensions in Ukraine heightening concerns over Russian supplies, and robust U.S. and Chinese demand supporting prices.
In competing vegetable oil markets, the U.S. soyoil contract for May slipped 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange rose 1.1 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2705 -31.00 2705 2745 732
MY PALM OIL JUN4 2653 -47.00 2653 2712 6366
MY PALM OIL JUL4 2648 -36.00 2640 2700 20611
CHINA PALM OLEIN SEP4 6238 +70.00 6218 6286 378724
CHINA SOYOIL SEP4 7076 +78.00 7054 7094 421874
CBOT SOY OIL MAY4 43.49 -0.22 43.44 43.70 4254
NYMEX CRUDE MAY4 103.91 +0.15 103.63 104.28 15845
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 = 3.24 Malaysian ringgit)
($1 = 6.2190 Chinese yuan)
The benchmark July contract on the Bursa Malaysia Derivatives Exchange touched 2,700 ringgit in early Thursday trade, but then fell to 2,648 ringgit ($817) per tonne by the day's close, down 1.3 percent.
"The market open higher but then went down on profit-taking, and it's facing some resistance around the 2,700 ringgit level," said a trader with a foreign commodities brokerage.
"It's a correction after a run up of more than 120 ringgit, from the low of 2,572 ringgit four days ago," the Kuala Lumpur-based trader added.
Total traded volume stood at 40,587 lots of 25 tonnes, above the average 35,000 lots.
Third-month prices surged to an intraday high of 2,691 ringgit on Wednesday, its highest since March 27, as better-than-expected economic data from China soothed fears about slowing demand from the world's No. 2 consumer of the tropical oil.
Technicals showed that Malaysian palm oil faces a resistance at 2,703 ringgit per tonne and may retrace to 2,653 ringgit before retesting this barrier, said Reuters market analyst Wang Tao.
Market players anticipate palm oil demand to pick up as buyers restock ahead of the Muslim holy month of Ramadan at end-June, and Eid al-Fitr celebrations in July.
Festivals typically drive up consumption of the tropical oil used as cooking as oil, and also as an ingredient in food ranging from cookies to chocolate.
A possible return of the crop-damaging El Nino weather phenomenon also raised fears of a supply squeeze from the world's top palm producers Indonesia and Malaysia, which analysts say could bolster prices above 3,000 ringgit.
The U.N. World Meteorological Organization said on Tuesday that a majority of weather forecasting models indicate that an El Nino may develop around the middle of the year, but it is too early to assess its likely strength.
In other markets, Brent crude rose to nearly $110 a barrel on Thursday, trading just below a six-week high hit in the previous session, with rising tensions in Ukraine heightening concerns over Russian supplies, and robust U.S. and Chinese demand supporting prices.
In competing vegetable oil markets, the U.S. soyoil contract for May slipped 0.5 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange rose 1.1 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2705 -31.00 2705 2745 732
MY PALM OIL JUN4 2653 -47.00 2653 2712 6366
MY PALM OIL JUL4 2648 -36.00 2640 2700 20611
CHINA PALM OLEIN SEP4 6238 +70.00 6218 6286 378724
CHINA SOYOIL SEP4 7076 +78.00 7054 7094 421874
CBOT SOY OIL MAY4 43.49 -0.22 43.44 43.70 4254
NYMEX CRUDE MAY4 103.91 +0.15 103.63 104.28 15845
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 = 3.24 Malaysian ringgit)
($1 = 6.2190 Chinese yuan)