MARKET DEVELOPMENT
VEGOILS-Palm Oil Hits 2-week High on Export Data, Demand Hopes
VEGOILS-Palm Oil Hits 2-week High on Export Data, Demand Hopes
15/05/2014 (Reuters) - Malaysian palm oil futures rose to their highest in two weeks on Wednesday, boosted by a combination of data showing a rise in exports and expectations for an uptick in demand ahead of the Muslim holy month of Ramadan.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended 0.7 percent higher at 2,604 ringgit ($809) per tonne after climbing to 2,614 ringgit, its highest since April 30.
Total traded volume amounted to 32,399 lots of 25 tonnes, below the usual 35,000 lots.
"It has a lot to do with good export data for the first 10 days and also demand and restocking ahead of the fasting month - it (restocking) should have started in India and Pakistan," said Alan Lim, an analyst with Kenanga Investment Bank.
The Muslim holy month of Ramadan, which begins in late June and is followed by the Eid al-Fitr celebration in July, typically drives up consumption of palm oil, which is used for cooking and as an ingredient in a wide range of foodstuffs.
After market hours on Monday, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products had risen 25.9 percent for May 1-10. Malaysian markets were closed on Tuesday for Wesak Day.
Intertek Testing Services, another cargo surveyor, had earlier reported that exports of Malaysian palm oil products for May 1-10 surged about 28 percent to 391,856 tonnes compared with a month earlier on the back of stronger demand from India, China and Europe.
Technicals showed that palm oil was expected to rise to 2,609 ringgit per tonne, as it has cleared a resistance at 2,587 ringgit, Reuters market analyst Wang Tao said.
India's palm oil imports are expected to rise in May to up to 600,000 tonnes as the world's biggest buyer rushes to meet demand for cooking oil ahead of the Muslim festival, according to the Sandeep Bajoria, chief executive of Mumbai-based brokerage Sunvin Group.
Its palm imports had fallen by more than expected to 536,175 tonnes in April, data from the Solvent Extractors' Association of India showed on Wednesday.
Traders are now looking ahead to Intertek Testing Services and Societe Generale de Surveillance to release Malaysia's May 1-15 export data on May 15, added Lim, who forecasts an average CPO price of 2,800 ringgit per tonne.
In other news, Golden Agri-Resources Ltd, Indonesia's largest palm oil firm, said net profit dropped 8 percent for the quarter ended March 31 on the year as lower contributions from downstream businesses more than offset the boost from higher palm oil prices.
In competing vegetable oil markets, the U.S. soyoil contract for July added 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange climbed 0.7 percent.
In other markets, Brent futures rose above $109.50 a barrel, reaching a two-week high, on the deteriorating situation in the Ukraine and expectations of a fall in U.S. crude oil inventories.
Palm, soy and crude oil prices at 1031 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2650 +0.00 2650 2655 11
MY PALM OIL JUN4 2641 +19.00 2624 2645 1543
MY PALM OIL JUL4 2604 +14.00 2592 2614 16393
CHINA PALM OLEIN SEP4 6022 +30.00 5994 6052 368846
CHINA SOYOIL SEP4 6888 +48.00 6868 6916 321820
CBOT SOY OIL JUL4 41.54 +0.33 41.26 41.79 8087
NYMEX CRUDE JUN4 101.95 +0.25 101.83 102.18 16250
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 = 3.217 Malaysian Ringgits)
($1 = 6.2289 Chinese Yuan)
The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended 0.7 percent higher at 2,604 ringgit ($809) per tonne after climbing to 2,614 ringgit, its highest since April 30.
Total traded volume amounted to 32,399 lots of 25 tonnes, below the usual 35,000 lots.
"It has a lot to do with good export data for the first 10 days and also demand and restocking ahead of the fasting month - it (restocking) should have started in India and Pakistan," said Alan Lim, an analyst with Kenanga Investment Bank.
The Muslim holy month of Ramadan, which begins in late June and is followed by the Eid al-Fitr celebration in July, typically drives up consumption of palm oil, which is used for cooking and as an ingredient in a wide range of foodstuffs.
After market hours on Monday, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products had risen 25.9 percent for May 1-10. Malaysian markets were closed on Tuesday for Wesak Day.
Intertek Testing Services, another cargo surveyor, had earlier reported that exports of Malaysian palm oil products for May 1-10 surged about 28 percent to 391,856 tonnes compared with a month earlier on the back of stronger demand from India, China and Europe.
Technicals showed that palm oil was expected to rise to 2,609 ringgit per tonne, as it has cleared a resistance at 2,587 ringgit, Reuters market analyst Wang Tao said.
India's palm oil imports are expected to rise in May to up to 600,000 tonnes as the world's biggest buyer rushes to meet demand for cooking oil ahead of the Muslim festival, according to the Sandeep Bajoria, chief executive of Mumbai-based brokerage Sunvin Group.
Its palm imports had fallen by more than expected to 536,175 tonnes in April, data from the Solvent Extractors' Association of India showed on Wednesday.
Traders are now looking ahead to Intertek Testing Services and Societe Generale de Surveillance to release Malaysia's May 1-15 export data on May 15, added Lim, who forecasts an average CPO price of 2,800 ringgit per tonne.
In other news, Golden Agri-Resources Ltd, Indonesia's largest palm oil firm, said net profit dropped 8 percent for the quarter ended March 31 on the year as lower contributions from downstream businesses more than offset the boost from higher palm oil prices.
In competing vegetable oil markets, the U.S. soyoil contract for July added 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange climbed 0.7 percent.
In other markets, Brent futures rose above $109.50 a barrel, reaching a two-week high, on the deteriorating situation in the Ukraine and expectations of a fall in U.S. crude oil inventories.
Palm, soy and crude oil prices at 1031 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2650 +0.00 2650 2655 11
MY PALM OIL JUN4 2641 +19.00 2624 2645 1543
MY PALM OIL JUL4 2604 +14.00 2592 2614 16393
CHINA PALM OLEIN SEP4 6022 +30.00 5994 6052 368846
CHINA SOYOIL SEP4 6888 +48.00 6868 6916 321820
CBOT SOY OIL JUL4 41.54 +0.33 41.26 41.79 8087
NYMEX CRUDE JUN4 101.95 +0.25 101.83 102.18 16250
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 = 3.217 Malaysian Ringgits)
($1 = 6.2289 Chinese Yuan)