MARKET DEVELOPMENT
VEGOILS-Palm up for 4th Day on Strong Export Demand
VEGOILS-Palm up for 4th Day on Strong Export Demand
16/05/2014 (Reuters) - Malaysian palm oil futures stretched gains into a fourth straight session on Thursday, touching their highest in more than two weeks as a jump in export volumes in the first half of the month underpinned prices.
Edible oil buyers in India, Pakistan and the Middle East typically replenish stocks of the tropical oil ahead of the Muslim Ramadan and Eid al-Fitr festivals which is celebrated with communal fasting and feasting.
Cargo surveyor Intertek Testing Services (ITS) data showed that exports of Malaysian palm oil products for May 1-15 rose 22.5 percent to 639,414 tonnes due to bigger purchases from the Indian region as well as Europe.
"Exports are better than expected. Maybe the numbers could be even better throughout the second half of the month," said a trader with a foreign commodities brokerage.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended up 0.8 percent at 2,627 ringgit ($815) per tonne by Thursday's close, the highest since April 30. Prices traded in a range between 2,603 ringgit and 2,630 ringgit.
Total traded volume stood at 29,706 lots of 25 tonnes, just below the average 35,000 lots.
Technicals showed that palm oil may break resistance at 2,626 ringgit per tonne and rise further to 2,643 ringgit, said Reuters market analyst Wang Tao.
A firm ringgit however, capped buying interest as it made the ringgit-priced feedstock more expensive for refiners and overseas investors. The Malaysian currency was trading at 3.2215 per dollar late Thursday, having gained 1.7 percent this year.
"The ringgit is deteriorating refiners' margins and that is one of the reasons why refiners are not chasing for crude palm oil," the Kuala Lumpur-based trader added.
"For the next one month, margins will be squeezed. I don't think margins can improve that much unless CPO prices drop and their product prices go up."
A return of the crop-damaging El Nino weather phenomenon would hinder production and boost prices, growers said, although the impact would depend on the severity of the drought in Southeast Asia.
"Up to end 2012, CPO prices were consistently above $1,000 per tonne. We certainly think those numbers could return if El Nino happens and if it's a serious El Nino," Richard Fung, director of investor relations at Indonesia's biggest palm firm Golden Agri-Resources Ltd told reporters on Wednesday.
In competing vegetable oil markets, the U.S. soyoil contract for July rose 0.2 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange edged up 0.1 percent.
In other markets, Brent crude stayed above $110 a barrel on Thursday, near a two-and-a-half-week high, bolstered by concerns over the crisis in Ukraine and evidence of a tightening global oil market.
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 0 +0.00 0 0 0
MY PALM OIL JUN4 2660 +16.00 2643 2663 2339
MY PALM OIL JUL4 2627 +20.00 2603 2630 14843
CHINA PALM OLEIN SEP4 6052 +34.00 6010 6068 367312
CHINA SOYOIL SEP4 6892 +4.00 6872 6908 270444
CBOT SOY OIL JUL4 41.51 +0.13 41.33 41.58 3141
NYMEX CRUDE JUN4 101.89 -0.48 101.74 102.13 18807
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 = 3.2245 Malaysian Ringgit)
($1 = 6.2306 Chinese Yuan)
Edible oil buyers in India, Pakistan and the Middle East typically replenish stocks of the tropical oil ahead of the Muslim Ramadan and Eid al-Fitr festivals which is celebrated with communal fasting and feasting.
Cargo surveyor Intertek Testing Services (ITS) data showed that exports of Malaysian palm oil products for May 1-15 rose 22.5 percent to 639,414 tonnes due to bigger purchases from the Indian region as well as Europe.
"Exports are better than expected. Maybe the numbers could be even better throughout the second half of the month," said a trader with a foreign commodities brokerage.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange ended up 0.8 percent at 2,627 ringgit ($815) per tonne by Thursday's close, the highest since April 30. Prices traded in a range between 2,603 ringgit and 2,630 ringgit.
Total traded volume stood at 29,706 lots of 25 tonnes, just below the average 35,000 lots.
Technicals showed that palm oil may break resistance at 2,626 ringgit per tonne and rise further to 2,643 ringgit, said Reuters market analyst Wang Tao.
A firm ringgit however, capped buying interest as it made the ringgit-priced feedstock more expensive for refiners and overseas investors. The Malaysian currency was trading at 3.2215 per dollar late Thursday, having gained 1.7 percent this year.
"The ringgit is deteriorating refiners' margins and that is one of the reasons why refiners are not chasing for crude palm oil," the Kuala Lumpur-based trader added.
"For the next one month, margins will be squeezed. I don't think margins can improve that much unless CPO prices drop and their product prices go up."
A return of the crop-damaging El Nino weather phenomenon would hinder production and boost prices, growers said, although the impact would depend on the severity of the drought in Southeast Asia.
"Up to end 2012, CPO prices were consistently above $1,000 per tonne. We certainly think those numbers could return if El Nino happens and if it's a serious El Nino," Richard Fung, director of investor relations at Indonesia's biggest palm firm Golden Agri-Resources Ltd told reporters on Wednesday.
In competing vegetable oil markets, the U.S. soyoil contract for July rose 0.2 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange edged up 0.1 percent.
In other markets, Brent crude stayed above $110 a barrel on Thursday, near a two-and-a-half-week high, bolstered by concerns over the crisis in Ukraine and evidence of a tightening global oil market.
Palm, soy and crude oil prices at 1008 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 0 +0.00 0 0 0
MY PALM OIL JUN4 2660 +16.00 2643 2663 2339
MY PALM OIL JUL4 2627 +20.00 2603 2630 14843
CHINA PALM OLEIN SEP4 6052 +34.00 6010 6068 367312
CHINA SOYOIL SEP4 6892 +4.00 6872 6908 270444
CBOT SOY OIL JUL4 41.51 +0.13 41.33 41.58 3141
NYMEX CRUDE JUN4 101.89 -0.48 101.74 102.13 18807
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 = 3.2245 Malaysian Ringgit)
($1 = 6.2306 Chinese Yuan)