MARKET DEVELOPMENT
VEGOILS-Palm Slips to 1-Yr Low as Technical Selling Adds Pressure
VEGOILS-Palm Slips to 1-Yr Low as Technical Selling Adds Pressure
(Updates prices, adds Reuters palm stocks survey)
* Prices slip to 2,239 rgt, lowest since Aug. 12
* Technical selling pushed palm to break critical support-trader
* Palm oil's target of 2,220 ringgit unchanged -technicals
* Malaysia July palm stocks seen falling to more than 3-yr low Reuters survey
07/08/2014 (Reuters) - Malaysian palm oil futures slipped to a near-one-year low on Wednesday, stretching losses into a third straight session as a bout of technical selling dragged on prices that were already under pressure from weaker competing edible oils.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell to 2,239 ringgit in late trade, a level last seen on Aug. 12, before settling 0.2 percent lower at 2,249 ringgit ($703) per tonne by the day's close. Market players said technical selling pushed the palm market lower, adding to the more-than-15 percent losses chalked up this year.
"The bears are having the upper hand, and they keep pressuring prices lower and lower," said a trader with a local commodities brokerage in Kuala Lumpur.
"Today the market broke the nine-day critical support of 2,245 ringgit, and it's maintaining below that with expectations of some long liquidation to come in."
Total traded volume on Wednesday was thin at 25,731 lots of 25 tonnes, much lower than the daily average of 35,000 lots. Technicals showed that Malaysian palm oil prices may drop further.
"A bearish target at 2,220 ringgit per tonne remains unchanged for palm oil as it approaches a support at 2,250 ringgit again," said Reuters market analyst Wang Tao.
Losses in comparative U.S. and China soy markets tracked by palm also weighed on the tropical oil.
The U.S. soyoil contract for December fell 0.2 percent in Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange lost 0.5 percent.
Anticipation of record production of soybeans in the U.S., the top exporter, has kept up pressure on the oilseed, with both government and private agencies forecasting a bumper crop ahead.
Bigger supplies of soybeans for crushing would weaken soyoil prices, narrowing palm's discount to the rival edible oil and potentially channelling food and fuel demand away.
Investors are also looking to industry data on Malaysia's palm oil end-stocks and supply at the end of July, which will be released by the Malaysian Palm Oil Board next Monday.
A Reuters survey on Wednesday showed that Malaysian end-July palm stocks likely tightened to a more than 3-year low of 1.64 million tonnes after a festive season curbed output, although market players expect the squeeze to be short-lived.
In other markets, Brent crude oil rose towards $105 a barrel on Wednesday, bouncing from its lowest close in nine months after industry data showed a large drop in U.S. crude stocks last week.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2320 -8.00 2313 2320 55
MY PALM OIL SEP4 2283 -6.00 2274 2294 1202
MY PALM OIL OCT4 2249 -5.00 2239 2262 14259
CHINA PALM OLEIN JAN5 5606 -26.00 5600 5624 206854
CHINA SOYOIL JAN5 6382 -32.00 6380 6406 162610
CBOT SOY OIL DEC4 35.81 -0.06 35.79 35.97 2676
NYMEX CRUDE SEP4 97.62 +0.24 97.38 97.72 12186
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 = 3.1985 Malaysian ringgit)
($1 = 6.1633 Chinese yuan)
($1= 61.3600 Indian rupee)
* Prices slip to 2,239 rgt, lowest since Aug. 12
* Technical selling pushed palm to break critical support-trader
* Palm oil's target of 2,220 ringgit unchanged -technicals
* Malaysia July palm stocks seen falling to more than 3-yr low Reuters survey
07/08/2014 (Reuters) - Malaysian palm oil futures slipped to a near-one-year low on Wednesday, stretching losses into a third straight session as a bout of technical selling dragged on prices that were already under pressure from weaker competing edible oils.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell to 2,239 ringgit in late trade, a level last seen on Aug. 12, before settling 0.2 percent lower at 2,249 ringgit ($703) per tonne by the day's close. Market players said technical selling pushed the palm market lower, adding to the more-than-15 percent losses chalked up this year.
"The bears are having the upper hand, and they keep pressuring prices lower and lower," said a trader with a local commodities brokerage in Kuala Lumpur.
"Today the market broke the nine-day critical support of 2,245 ringgit, and it's maintaining below that with expectations of some long liquidation to come in."
Total traded volume on Wednesday was thin at 25,731 lots of 25 tonnes, much lower than the daily average of 35,000 lots. Technicals showed that Malaysian palm oil prices may drop further.
"A bearish target at 2,220 ringgit per tonne remains unchanged for palm oil as it approaches a support at 2,250 ringgit again," said Reuters market analyst Wang Tao.
Losses in comparative U.S. and China soy markets tracked by palm also weighed on the tropical oil.
The U.S. soyoil contract for December fell 0.2 percent in Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange lost 0.5 percent.
Anticipation of record production of soybeans in the U.S., the top exporter, has kept up pressure on the oilseed, with both government and private agencies forecasting a bumper crop ahead.
Bigger supplies of soybeans for crushing would weaken soyoil prices, narrowing palm's discount to the rival edible oil and potentially channelling food and fuel demand away.
Investors are also looking to industry data on Malaysia's palm oil end-stocks and supply at the end of July, which will be released by the Malaysian Palm Oil Board next Monday.
A Reuters survey on Wednesday showed that Malaysian end-July palm stocks likely tightened to a more than 3-year low of 1.64 million tonnes after a festive season curbed output, although market players expect the squeeze to be short-lived.
In other markets, Brent crude oil rose towards $105 a barrel on Wednesday, bouncing from its lowest close in nine months after industry data showed a large drop in U.S. crude stocks last week.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 2320 -8.00 2313 2320 55
MY PALM OIL SEP4 2283 -6.00 2274 2294 1202
MY PALM OIL OCT4 2249 -5.00 2239 2262 14259
CHINA PALM OLEIN JAN5 5606 -26.00 5600 5624 206854
CHINA SOYOIL JAN5 6382 -32.00 6380 6406 162610
CBOT SOY OIL DEC4 35.81 -0.06 35.79 35.97 2676
NYMEX CRUDE SEP4 97.62 +0.24 97.38 97.72 12186
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 = 3.1985 Malaysian ringgit)
($1 = 6.1633 Chinese yuan)
($1= 61.3600 Indian rupee)