MARKET DEVELOPMENT
VEGOILS-Palm Ends Flat After Ringgit Hits Near 7-Mth High
VEGOILS-Palm Ends Flat After Ringgit Hits Near 7-Mth High
10/06/2014 (Reuters) - Malaysian palm oil ended flat on Monday after the ringgit advanced to its highest in nearly seven months, with a stronger overseas soy market helping to offset losses and keep prices locked in a tight trading range.
The Malaysian ringgit rose as much as 0.6 percent to 3.1930 per dollar, its strongest since Nov. 21, tracking its strength in non-deliverable forwards (NDFs) on hedge funds demand.
A stronger ringgit squeezes margins and makes the locally-priced palm feedstock more expensive for overseas buyers and refiners, putting pressure on palm prices that have declined nearly 10 percent so far this year.
"The ringgit is pressuring the Malaysian derivatives exchange," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"External markets are doing quite well, and there are no other new factors that indicate why the market is coming down instead of following these markets."
The benchmark August contract on the Bursa Malaysia Derivatives Exchange ended at 2,414 ringgit ($755) per tonne by Monday's close, unchanged from the previous session, with prices stuck in a range of 2,391-2,423 ringgit.
Total traded volume stood at 27,327 lots of 25 tonnes, below the usual 35,000 lots.
Technicals showed that palm oil may edge up to 2,446 ringgit per tonne, as it has not completed a rebound from the June 3 low of 2,375 ringgit, said Reuters market analyst Wang Tao.
"Classified as a wave 4, the rebound will look different from the preceding wave 2 which is sharp. This wave 4 may adopt a sideways mode," he said.
The U.S. soyoil contract for July inched up 1.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange was 0.3 percent higher.
Higher prices of the rival edible oils could potentially channel demand to palm, a common substitute.
Market players were also looking to industry data on Malaysia's end-May palm oil stocks, as well as export and output volumes, that is due to be released on Tuesday.
A Reuters survey last week showed that palm oil stocks in Malaysia likely rose to a four-month high of 1.81 million tonnes at end-May, after an uptick in production to 1.67 million tonnes outpaced export demand.
Malaysia, the world's second-largest palm producer, will launch a palm olein futures contract on June 16, a senior official from its derivatives exchange said on Monday.
Bursa Malaysia's RBD palm olein futures contract, which will trade in U.S. dollars, will provide a new path to hedge and lock in refining margins of palm oil - the world's most traded vegetable oil.
In other markets, Brent crude oil rose above $109 a barrel on Monday as strong Chinese trade data and U.S. jobs figures pointed to healthy economic growth and higher oil demand from the world's top two consumers.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 2400 -20.00 2380 2400 12
MY PALM OIL JUL4 2418 -4.00 2399 2427 1441
MY PALM OIL AUG4 2414 +0.00 2391 2423 14992
CHINA PALM OLEIN SEP4 5858 +34.00 5832 5872 118450
CHINA SOYOIL SEP4 6736 +22.00 6722 6756 165734
CBOT SOY OIL JUL4 39.40 +0.39 38.99 39.50 6432
NYMEX CRUDE JUL4 103.24 +0.58 102.62 103.25 13572
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 = 3.1965 Malaysian ringgit)
($1 = 6.2404 Chinese yuan)
The Malaysian ringgit rose as much as 0.6 percent to 3.1930 per dollar, its strongest since Nov. 21, tracking its strength in non-deliverable forwards (NDFs) on hedge funds demand.
A stronger ringgit squeezes margins and makes the locally-priced palm feedstock more expensive for overseas buyers and refiners, putting pressure on palm prices that have declined nearly 10 percent so far this year.
"The ringgit is pressuring the Malaysian derivatives exchange," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"External markets are doing quite well, and there are no other new factors that indicate why the market is coming down instead of following these markets."
The benchmark August contract on the Bursa Malaysia Derivatives Exchange ended at 2,414 ringgit ($755) per tonne by Monday's close, unchanged from the previous session, with prices stuck in a range of 2,391-2,423 ringgit.
Total traded volume stood at 27,327 lots of 25 tonnes, below the usual 35,000 lots.
Technicals showed that palm oil may edge up to 2,446 ringgit per tonne, as it has not completed a rebound from the June 3 low of 2,375 ringgit, said Reuters market analyst Wang Tao.
"Classified as a wave 4, the rebound will look different from the preceding wave 2 which is sharp. This wave 4 may adopt a sideways mode," he said.
The U.S. soyoil contract for July inched up 1.1 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange was 0.3 percent higher.
Higher prices of the rival edible oils could potentially channel demand to palm, a common substitute.
Market players were also looking to industry data on Malaysia's end-May palm oil stocks, as well as export and output volumes, that is due to be released on Tuesday.
A Reuters survey last week showed that palm oil stocks in Malaysia likely rose to a four-month high of 1.81 million tonnes at end-May, after an uptick in production to 1.67 million tonnes outpaced export demand.
Malaysia, the world's second-largest palm producer, will launch a palm olein futures contract on June 16, a senior official from its derivatives exchange said on Monday.
Bursa Malaysia's RBD palm olein futures contract, which will trade in U.S. dollars, will provide a new path to hedge and lock in refining margins of palm oil - the world's most traded vegetable oil.
In other markets, Brent crude oil rose above $109 a barrel on Monday as strong Chinese trade data and U.S. jobs figures pointed to healthy economic growth and higher oil demand from the world's top two consumers.
Palm, soy and crude oil prices at 1025 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN4 2400 -20.00 2380 2400 12
MY PALM OIL JUL4 2418 -4.00 2399 2427 1441
MY PALM OIL AUG4 2414 +0.00 2391 2423 14992
CHINA PALM OLEIN SEP4 5858 +34.00 5832 5872 118450
CHINA SOYOIL SEP4 6736 +22.00 6722 6756 165734
CBOT SOY OIL JUL4 39.40 +0.39 38.99 39.50 6432
NYMEX CRUDE JUL4 103.24 +0.58 102.62 103.25 13572
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 = 3.1965 Malaysian ringgit)
($1 = 6.2404 Chinese yuan)