MARKET DEVELOPMENT
VEGOILS-Palm Oil Ends Lower as Crude Prices Begin to Ease
VEGOILS-Palm Oil Ends Lower as Crude Prices Begin to Ease
* Oil steady around $114 as Iraq exports in focus
* June 1-20 output seen unchanged from May - growers
* Indonesia cuts July palm export tax - minister
* India's 2014/15 edible oil imports seen up 5.4 pct
26/06/2014 (Reuters) - Malaysian palm oil futures ended lower on Thursday to snap a three-day winning streak as crude oil prices began to ease, although losses were capped by an uptick in exports and anticipation that hot weather would trim palm output.
The benchmark September contract on the BursaMalaysia Derivatives Exchange had edged down 0.5 percent to 2,471 ringgit ($768) per tonne by the day's close, reversing gains in the morning session.
Total traded volume stood at 43,886 lots of 25 tonnes, muchhigher than the average 35,000 lots.
"You can see that there's some fall in energy prices, especially on the WTI side this afternoon," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"This market has tried the 2,500 ringgit level twice, but itdid not manage to stay above that. If it attempts the third time and still can't stay above 2,500 ringgit, then the market will probably see some correction," the trader added.
Brent crude oil slipped 15 cents to $113.85 a barrel by 0825
GMT, having fallen in the past four sessions. Traders, however,are watching developments in Iraq for the possibility of export disruption from OPEC's second-largest producer.
Oil prices rose sharply after violence in Iraq spiked fearsof supply disruption, which in turn made palm oil a cheaper option to produce biodiesel.
Technicals showed palm oil faces a resistance at 2,513-2,554ringgit, while its support level is at 2,472-2,422 ringgit, according to Reuters market analyst Wang Tao.
But hot and dry weather in Malaysia this month could be anearly sign of the drought-inducing El Nino weather pattern, market participants said, keeping palm prices propped up.
"A lot of people see June production going up, but becauseof the weather, it is not," another Kuala Lumpur-based trader said.
"You can see that towards the end of the month, exports arecreeping up, and production is coming down. The market is friendly based on these data."
Traders said the Malaysian Palm Oil Association, a group ofgrowers, estimates palm output in the first twenty days of the month to be relatively unchanged from May.
Short spells of dry weather would hinder growth and qualityof yields, while a prolonged drought could disrupt fruit formation, affecting output six to seven months later.
Cargo surveyors on Wednesday reported that exports ofMalaysian palm oil products rose 0.4-3.0 percent during June 1-25 compared to the same period a month ago, the first sign of improvement after recording weaker shipment volumes throughout the month.
India's edible oil imports, including palm oil, may rise 5.4percent to 11.7 million tonnes in 2014/15 as a weak monsoon hurts domestic oilseeds production, Govindbhai Patel, a trade expert from India's western city of Rajkot, said at a regional palm oil conference in Mumbai on Thursday.
Bigger demand from the world's leading cooking oil importercould support palm prices which have shed more than 7 percent so far this year.
Indonesia, the world's top palm grower, lowered its exporttax for crude palm oil to 10.5 percent in July from 12 percent in June, an industry official said on Thursday. Malaysia will cut its own duty for July to a more competitive 5 percent from 5.5 percent a month ago.
In competing vegetable oil markets, the U.S. soyoil contractrose 0.1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange was nearly flat.
Palm, soy and crude oil prices at 1030 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL4 2493 -4.00 2493 2515 670
MY PALM OIL AUG4 2483 -8.00 2480 2509 1951
MY PALM OIL SEP4 2471 -12.00 2469 2502 23364
CHINA PALM OLEIN JAN5 6058 -18.00 6034 6076 254678
CHINA SOYOIL JAN5 7052 -2.00 7026 7062 310948
CBOT SOY OIL JUL4 40.68 +0.03 40.62 40.89 1961
NYMEX CRUDE AUG4 106.45 -0.05 106.35 106.81 14447
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 = 3.216 Malaysian ringgit)
($1 = 6.2251 Chinese yuan)
* June 1-20 output seen unchanged from May - growers
* Indonesia cuts July palm export tax - minister
* India's 2014/15 edible oil imports seen up 5.4 pct
26/06/2014 (Reuters) - Malaysian palm oil futures ended lower on Thursday to snap a three-day winning streak as crude oil prices began to ease, although losses were capped by an uptick in exports and anticipation that hot weather would trim palm output.
The benchmark September contract on the BursaMalaysia Derivatives Exchange had edged down 0.5 percent to 2,471 ringgit ($768) per tonne by the day's close, reversing gains in the morning session.
Total traded volume stood at 43,886 lots of 25 tonnes, muchhigher than the average 35,000 lots.
"You can see that there's some fall in energy prices, especially on the WTI side this afternoon," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"This market has tried the 2,500 ringgit level twice, but itdid not manage to stay above that. If it attempts the third time and still can't stay above 2,500 ringgit, then the market will probably see some correction," the trader added.
Brent crude oil slipped 15 cents to $113.85 a barrel by 0825
GMT, having fallen in the past four sessions. Traders, however,are watching developments in Iraq for the possibility of export disruption from OPEC's second-largest producer.
Oil prices rose sharply after violence in Iraq spiked fearsof supply disruption, which in turn made palm oil a cheaper option to produce biodiesel.
Technicals showed palm oil faces a resistance at 2,513-2,554ringgit, while its support level is at 2,472-2,422 ringgit, according to Reuters market analyst Wang Tao.
But hot and dry weather in Malaysia this month could be anearly sign of the drought-inducing El Nino weather pattern, market participants said, keeping palm prices propped up.
"A lot of people see June production going up, but becauseof the weather, it is not," another Kuala Lumpur-based trader said.
"You can see that towards the end of the month, exports arecreeping up, and production is coming down. The market is friendly based on these data."
Traders said the Malaysian Palm Oil Association, a group ofgrowers, estimates palm output in the first twenty days of the month to be relatively unchanged from May.
Short spells of dry weather would hinder growth and qualityof yields, while a prolonged drought could disrupt fruit formation, affecting output six to seven months later.
Cargo surveyors on Wednesday reported that exports ofMalaysian palm oil products rose 0.4-3.0 percent during June 1-25 compared to the same period a month ago, the first sign of improvement after recording weaker shipment volumes throughout the month.
India's edible oil imports, including palm oil, may rise 5.4percent to 11.7 million tonnes in 2014/15 as a weak monsoon hurts domestic oilseeds production, Govindbhai Patel, a trade expert from India's western city of Rajkot, said at a regional palm oil conference in Mumbai on Thursday.
Bigger demand from the world's leading cooking oil importercould support palm prices which have shed more than 7 percent so far this year.
Indonesia, the world's top palm grower, lowered its exporttax for crude palm oil to 10.5 percent in July from 12 percent in June, an industry official said on Thursday. Malaysia will cut its own duty for July to a more competitive 5 percent from 5.5 percent a month ago.
In competing vegetable oil markets, the U.S. soyoil contractrose 0.1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange was nearly flat.
Palm, soy and crude oil prices at 1030 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL4 2493 -4.00 2493 2515 670
MY PALM OIL AUG4 2483 -8.00 2480 2509 1951
MY PALM OIL SEP4 2471 -12.00 2469 2502 23364
CHINA PALM OLEIN JAN5 6058 -18.00 6034 6076 254678
CHINA SOYOIL JAN5 7052 -2.00 7026 7062 310948
CBOT SOY OIL JUL4 40.68 +0.03 40.62 40.89 1961
NYMEX CRUDE AUG4 106.45 -0.05 106.35 106.81 14447
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 = 3.216 Malaysian ringgit)
($1 = 6.2251 Chinese yuan)