MARKET DEVELOPMENT
VEGOILS-Palm Snaps Four Days of Gains as Investors Bank Profits
VEGOILS-Palm Snaps Four Days of Gains as Investors Bank Profits
17/05/2014 (Reuters) - Malaysian palm oil futures snapped a four-day gaining streak on Friday as investors booked profits ahead of the weekend, although optimism that festival-driven consumption will bolster exports of the vegetable oil capped losses.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange fell 1.3 percent to 2,580 ringgit ($800) per tonne by Friday's close, with prices trading between 2,573-2,608 ringgit.
Total traded volume stood at 30,881 lots of 25 tonnes, slightly below the average 35,000 lots.
"It's purely profit-taking after the market was up for four days," said a trader with a foreign commodities brokerage. Palm prices gained 0.1 percent this week, their first rise in three after stronger-than-expected export data lifted the market to its highest in over two weeks.
"Exports should be strong because we're moving into the festive season, this should be supportive for the palm market," the Kuala Lumpur-based trader added.
Cargo surveyor data showed that shipments of Malaysian palm products jumped between 23-28 percent in the first half of May compared with a month ago, with bigger purchases from India, Pakistan, and Europe.
Demand for edible oils, including palm oil, typically climbs ahead of the Muslim Ramadan and Eid al-Fitr festivals as buyers restock ahead of a month of communal fasting and feasting.
Technicals, however, were bearish. Palm oil may end its current pullback around 2,609 ringgit per tonne before testing support at 2,587 ringgit, said Reuters market analyst Wang Tao, as a rebound from the May 9 low of 2,552 ringgit has completed. Malaysia has kept its crude palm oil export tax for June at 5.5 percent, a circular showed on Friday, while top producer Indonesia will decide on its own rate later in May.
The duty set by the world's No.2 palm producer has been left unchanged since April, and is at a more competitive rate compared to the 13.5 percent in April and 12 percent in May set by rival Indonesia.
Indonesia's April exports of crude palm oil and its derivatives fell 23 percent to 1.38 million tonnes from March, the Indonesian Palm Oil Association said on Friday. Malaysia's overseas sales for the same month was 1.26 million tonnes.
Traders said weaker comparative soyoil markets in the U.S. and China also weighed on palm prices in Friday's trade. Palm typically tracks soy markets as both vegetable oils are common food and fuel substitutes.
The U.S. soyoil contract for July edged up 0.05 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange fell 0.75 percent.
In other markets, Brent crude oil eased below $109 a barrel on Friday, pressured by a gradual return of Libyan oil supply although tension over Ukraine kept losses in check.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 2625 -37.00 2623 2656 1582
MY PALM OIL JUL4 2592 -35.00 2587 2622 9548
MY PALM OIL AUG4 2580 -34.00 2573 2608 16403
CHINA PALM OLEIN SEP4 6002 -44.00 5966 6034 288144
CHINA SOYOIL SEP4 6842 -52.00 6812 6884 281168
CBOT SOY OIL JUL4 41.07 +0.02 41.02 41.29 3954
NYMEX CRUDE JUN4 101.58 +0.08 101.39 102.04 16069
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 = 6.2316 Chinese yuan)
($1 = 3.2260 Malaysian ringgit)
The benchmark August contract on the Bursa Malaysia Derivatives Exchange fell 1.3 percent to 2,580 ringgit ($800) per tonne by Friday's close, with prices trading between 2,573-2,608 ringgit.
Total traded volume stood at 30,881 lots of 25 tonnes, slightly below the average 35,000 lots.
"It's purely profit-taking after the market was up for four days," said a trader with a foreign commodities brokerage. Palm prices gained 0.1 percent this week, their first rise in three after stronger-than-expected export data lifted the market to its highest in over two weeks.
"Exports should be strong because we're moving into the festive season, this should be supportive for the palm market," the Kuala Lumpur-based trader added.
Cargo surveyor data showed that shipments of Malaysian palm products jumped between 23-28 percent in the first half of May compared with a month ago, with bigger purchases from India, Pakistan, and Europe.
Demand for edible oils, including palm oil, typically climbs ahead of the Muslim Ramadan and Eid al-Fitr festivals as buyers restock ahead of a month of communal fasting and feasting.
Technicals, however, were bearish. Palm oil may end its current pullback around 2,609 ringgit per tonne before testing support at 2,587 ringgit, said Reuters market analyst Wang Tao, as a rebound from the May 9 low of 2,552 ringgit has completed. Malaysia has kept its crude palm oil export tax for June at 5.5 percent, a circular showed on Friday, while top producer Indonesia will decide on its own rate later in May.
The duty set by the world's No.2 palm producer has been left unchanged since April, and is at a more competitive rate compared to the 13.5 percent in April and 12 percent in May set by rival Indonesia.
Indonesia's April exports of crude palm oil and its derivatives fell 23 percent to 1.38 million tonnes from March, the Indonesian Palm Oil Association said on Friday. Malaysia's overseas sales for the same month was 1.26 million tonnes.
Traders said weaker comparative soyoil markets in the U.S. and China also weighed on palm prices in Friday's trade. Palm typically tracks soy markets as both vegetable oils are common food and fuel substitutes.
The U.S. soyoil contract for July edged up 0.05 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange fell 0.75 percent.
In other markets, Brent crude oil eased below $109 a barrel on Friday, pressured by a gradual return of Libyan oil supply although tension over Ukraine kept losses in check.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 2625 -37.00 2623 2656 1582
MY PALM OIL JUL4 2592 -35.00 2587 2622 9548
MY PALM OIL AUG4 2580 -34.00 2573 2608 16403
CHINA PALM OLEIN SEP4 6002 -44.00 5966 6034 288144
CHINA SOYOIL SEP4 6842 -52.00 6812 6884 281168
CBOT SOY OIL JUL4 41.07 +0.02 41.02 41.29 3954
NYMEX CRUDE JUN4 101.58 +0.08 101.39 102.04 16069
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 = 6.2316 Chinese yuan)
($1 = 3.2260 Malaysian ringgit)