MARKET DEVELOPMENT
VEGOILS-Palm Oil at More Than Four-Month Low on Technical Selling
VEGOILS-Palm Oil at More Than Four-Month Low on Technical Selling
22/05/2014 (Reuters) - Malaysian palm oil futures fell for the fourth straight day on Wednesday, dropping to a more than four-month low after weak Chinese edible oil markets and a stronger ringgit triggered technical selling.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange slid to 2,492 ringgit in early trade, a Jan. 15 low, before settling at 2,505 ringgit ($780) per tonne by Wednesday's close, down 0.8 percent.
Total traded volume stood at 36,314 lots of 25 tonnes, higher than the average 35,000 lots.
"The market is a bit depressed. Palm is taking cues from weak external edible oil markets rather than its own export figures," said a trader with a foreign commodities brokerage.
"The Dalian soybean oil and palm olein prices are all trading lower," the Kuala Lumpur trader added.
The most active September soybean oil contract on the Dalian Commodities Exchange fell 0.8 percent in late Asian trade. September palm oil was also down 0.8 percent. The U.S. soyoil contract for July lost 0.1 percent.
Technicals showed palm oil was expected to fall more to 2,472 ringgit per tonne, as support at 2,513 ringgit may not hold, said Reuters market analyst Wang Tao.
Traders said palm prices slid to four-month lows after a "stop-loss order" was triggered, but later recovered as lower prices attracted bargain hunting.
"The market recovered after selling pressure exhausted below 2,500 ringgit," said another Malaysia-based trader. "Buyers took this opportunity as prices were looking relatively cheap to satisfy festive demand."
Exports of Malaysian palm oil products have rebounded 19 percent between May 1-20 compared with the same period a month earlier, cargo surveyor data show, as buyers in India, Pakistan and the Middle East replenish stocks of the tropical commodity ahead of a Muslim festival.
A strong ringgit, however, made the ringgit-denominated feedstock more expensive for overseas investors and refiners, pressuring prices.
The Malaysian ringgit rose 0.2 percent to 3.2140 against the U.S. dollar on Wednesday, versus 3.2205 in the previous session.
In other markets, oil rose to $110 a barrel on Wednesday, supported by an industry report showing U.S. crude inventories unexpectedly fell last week and persistent disruption to Libya's output amid renewed fighting.
Palm, soy and crude oil prices at 1004 GMT
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 = 3.213 Malaysian ringgit)
($1 = 6.2337 Chinese yuan)
The benchmark August contract on the Bursa Malaysia Derivatives Exchange slid to 2,492 ringgit in early trade, a Jan. 15 low, before settling at 2,505 ringgit ($780) per tonne by Wednesday's close, down 0.8 percent.
Total traded volume stood at 36,314 lots of 25 tonnes, higher than the average 35,000 lots.
"The market is a bit depressed. Palm is taking cues from weak external edible oil markets rather than its own export figures," said a trader with a foreign commodities brokerage.
"The Dalian soybean oil and palm olein prices are all trading lower," the Kuala Lumpur trader added.
The most active September soybean oil contract on the Dalian Commodities Exchange fell 0.8 percent in late Asian trade. September palm oil was also down 0.8 percent. The U.S. soyoil contract for July lost 0.1 percent.
Technicals showed palm oil was expected to fall more to 2,472 ringgit per tonne, as support at 2,513 ringgit may not hold, said Reuters market analyst Wang Tao.
Traders said palm prices slid to four-month lows after a "stop-loss order" was triggered, but later recovered as lower prices attracted bargain hunting.
"The market recovered after selling pressure exhausted below 2,500 ringgit," said another Malaysia-based trader. "Buyers took this opportunity as prices were looking relatively cheap to satisfy festive demand."
Exports of Malaysian palm oil products have rebounded 19 percent between May 1-20 compared with the same period a month earlier, cargo surveyor data show, as buyers in India, Pakistan and the Middle East replenish stocks of the tropical commodity ahead of a Muslim festival.
A strong ringgit, however, made the ringgit-denominated feedstock more expensive for overseas investors and refiners, pressuring prices.
The Malaysian ringgit rose 0.2 percent to 3.2140 against the U.S. dollar on Wednesday, versus 3.2205 in the previous session.
In other markets, oil rose to $110 a barrel on Wednesday, supported by an industry report showing U.S. crude inventories unexpectedly fell last week and persistent disruption to Libya's output amid renewed fighting.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 2546 -13.00 2529 2562 493
MY PALM OIL JUL4 2518 -18.00 2506 2537 6166
MY PALM OIL AUG4 2505 -19.00 2492 2525 19087
CHINA PALM OLEIN SEP4 5878 -46.00 5854 5904 306720
CHINA SOYOIL SEP4 6726 -54.00 6722 6756 262548
CBOT SOY OIL JUL4 40.03 -0.04 40.01 40.19 3424
NYMEX CRUDE JUL4 103.14 +0.81 102.78 103.25 21155
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 = 3.213 Malaysian ringgit)
($1 = 6.2337 Chinese yuan)