MARKET DEVELOPMENT
VEGOILS-Palm Falls to More Than 11-mth Low; Global Oilseed Supply Weighs
VEGOILS-Palm Falls to More Than 11-mth Low; Global Oilseed Supply Weighs
* Prices dip to 2,247 rgt late Wednesday, lowest since Aug.12
* Malaysia's July 1-20 palm output seen up 16.3 pct - growers' estimates
* Palm oil to test support at 2,250 ringgit -technicals
24/07/2014 (Reuters) - Malaysian palm oil futures slid to their lowest in more than 11 months on Wednesday, dragged by fears of abundant global oilseed supplies, and as estimates for an uptick in palm oil output this month turned investors wary.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell to 2,247 ringgit in late trade, a level last seen on Aug. 12, 2013, before settling at 2,254 ringgit ($712) per tonne by the day's close, a 1.1 percent drop.
Total traded volume stood at 48,914 lots of 25 tonnes, above the daily average of 35,000 lots.
The Malaysian Palm Oil Association, a group of growers, forecast palm oil output in the world's No. 2 producer to rise 16.3 percent between July 1-20 compared to a month ago, raising investor concerns and pressuring palm prices that have chalked up losses of nearly 7 percent in July.
Some market participants, however, said the higher output could be due to early harvesting of palm fruit before plantation workers go on holiday for the Eid al-Fitr celebrations.
"Prices came down because of talks that the first twenty days' production is higher," said a trader with a local commodities brokerage in Kuala Lumpur. "But not everyone is really convinced to sell, because there's usually some early harvesting."
"Production will most likely fall during the last five days of July. For the full month, we expect production to be unchanged (from last month)," the trader added.
Malaysia churned out 1.57 million tonnes of crude palm oil in June.
Strength in the Malaysian ringgit, which advanced 0.24 percent to 3.1685 per dollar in late trade also dampened buying interest for the ringgit-priced palm feedstock.
Technicals show Malaysian palm oil is expected to test a support at 2,250 ringgit per tonne, with a good chance of breaking below this level and falling more towards 2,220 ringgit, said Reuters market analyst Wang Tao.
Improving conditions for a bumper U.S. soybean harvest and prospects of rising global oilseed stocks also weighed on palm.
Higher supplies of the competing oilseed for crushing could weaken soyoil prices, and in turn water down food and fuel demand for palm.
"The rise in global oilseed output is keeping buyers on the sidelines, buying only when the need arises," said a second Kuala Lumpur-based dealer. "This invariably has resulted in a huge stock build-up in origin countries."
In competing vegetable oil markets, the U.S. soyoil contract edged down 0.1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange fell 0.5 percent.
In other markets, Brent crude steadied above $107 a barrel on Wednesday as a stronger dollar and weak demand offset threats to supplies from oil-producing regions.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2344 -21.00 2330 2365 558
MY PALM OIL SEP4 2284 -28.00 2271 2311 6730
MY PALM OIL OCT4 2254 -25.00 2247 2278 19169
CHINA PALM OLEIN JAN5 5594 -38.00 5558 5644 687958
CHINA SOYOIL JAN5 6378 -32.00 6366 6418 310822
CBOT SOY OIL DEC4 35.99 -0.04 35.90 36.31 5999
NYMEX CRUDE SEP4 102.36 -0.03 101.79 102.42 16892
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 = 3.1665 Malaysian ringgit)
($1 = 6.1983 Chinese yuan)
* Malaysia's July 1-20 palm output seen up 16.3 pct - growers' estimates
* Palm oil to test support at 2,250 ringgit -technicals
24/07/2014 (Reuters) - Malaysian palm oil futures slid to their lowest in more than 11 months on Wednesday, dragged by fears of abundant global oilseed supplies, and as estimates for an uptick in palm oil output this month turned investors wary.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell to 2,247 ringgit in late trade, a level last seen on Aug. 12, 2013, before settling at 2,254 ringgit ($712) per tonne by the day's close, a 1.1 percent drop.
Total traded volume stood at 48,914 lots of 25 tonnes, above the daily average of 35,000 lots.
The Malaysian Palm Oil Association, a group of growers, forecast palm oil output in the world's No. 2 producer to rise 16.3 percent between July 1-20 compared to a month ago, raising investor concerns and pressuring palm prices that have chalked up losses of nearly 7 percent in July.
Some market participants, however, said the higher output could be due to early harvesting of palm fruit before plantation workers go on holiday for the Eid al-Fitr celebrations.
"Prices came down because of talks that the first twenty days' production is higher," said a trader with a local commodities brokerage in Kuala Lumpur. "But not everyone is really convinced to sell, because there's usually some early harvesting."
"Production will most likely fall during the last five days of July. For the full month, we expect production to be unchanged (from last month)," the trader added.
Malaysia churned out 1.57 million tonnes of crude palm oil in June.
Strength in the Malaysian ringgit, which advanced 0.24 percent to 3.1685 per dollar in late trade also dampened buying interest for the ringgit-priced palm feedstock.
Technicals show Malaysian palm oil is expected to test a support at 2,250 ringgit per tonne, with a good chance of breaking below this level and falling more towards 2,220 ringgit, said Reuters market analyst Wang Tao.
Improving conditions for a bumper U.S. soybean harvest and prospects of rising global oilseed stocks also weighed on palm.
Higher supplies of the competing oilseed for crushing could weaken soyoil prices, and in turn water down food and fuel demand for palm.
"The rise in global oilseed output is keeping buyers on the sidelines, buying only when the need arises," said a second Kuala Lumpur-based dealer. "This invariably has resulted in a huge stock build-up in origin countries."
In competing vegetable oil markets, the U.S. soyoil contract edged down 0.1 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange fell 0.5 percent.
In other markets, Brent crude steadied above $107 a barrel on Wednesday as a stronger dollar and weak demand offset threats to supplies from oil-producing regions.
Palm, soy and crude oil prices at 1004 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2344 -21.00 2330 2365 558
MY PALM OIL SEP4 2284 -28.00 2271 2311 6730
MY PALM OIL OCT4 2254 -25.00 2247 2278 19169
CHINA PALM OLEIN JAN5 5594 -38.00 5558 5644 687958
CHINA SOYOIL JAN5 6378 -32.00 6366 6418 310822
CBOT SOY OIL DEC4 35.99 -0.04 35.90 36.31 5999
NYMEX CRUDE SEP4 102.36 -0.03 101.79 102.42 16892
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 = 3.1665 Malaysian ringgit)
($1 = 6.1983 Chinese yuan)