MARKET DEVELOPMENT
VEGOILS-Palm Oil in Biggest Weekly Drop in 1-1/2 Years to Near Five-year Low
VEGOILS-Palm Oil in Biggest Weekly Drop in 1-1/2 Years to Near Five-year Low
* Palm prices records biggest weekly fall since March 2013
* Prices dip to 2,085 rgt in late trade, lowest since Oct.9, 2009
* Ringgit near 10-month high after surprise economic growth
* Malaysia's Aug. 1-15 palm oil exports down 15-16 pct m/m-cargo surveyors
16/08/2014 (Reuters) - Malaysian palm oil futures tumbled to their lowest in nearly five years on Friday to record their biggest weekly fall since March 2013, under pressure from a surge in the ringgit as well as concerns over food and fuel demand.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange slid to 2,085 ringgit in late trade, an Oct. 9, 2009 low, before ending 1.8 percent down at 2,094 ringgit ($664) per tonne on Friday.
Market players said palm prices were weighed down by worries of slackening demand, as well as a government crackdown in China which put pressure Chinese commodity markets.
"Prices plunged at close, on signs of poor demand, stronger ringgit and on rumours about Chinese government cracking down on agencies and people who avoid the value-added-tax on consumption tax," said a trader with a commodities brokerage in Malaysia.
The most active January soybean oil contract on the Dalian Commodities Exchange hit a new contract low of 6,028 yuan, shedding 2.0 percent in late Asian trade, while the U.S. soyoil contract for December fell 0.5 percent.
Prices of palm oil, the world's most traded vegetable oil, are down 6.2 percent this week, notching their biggest weekly drop since March 2013 - dragged down by projections of abundant supplies of soybeans.
"Record corn and soybean production, coupled with anticipated peak production (for palm) locally are limiting attempts for a recovery," the trader added.
Palm typically tracks soyoil, a rival edible oil and common food and fuel substitute. Soy markets are facing pressure over forecasts of a bountiful soybean crop from top exporter the United States.
Total traded volume stood at 43,566 lots of 25 tonnes on Friday, above the average 35,000 lots.
Technicals earlier showed that Malaysian palm oil may have found a support at 2,124 ringgit per tonne and may hover around this level or rebound to 2,172 ringgit, said Reuters market analyst Wang Tao.
The Malaysian ringgit jumped to a near 10-month high on Friday following data that showed stronger-than-expected second-quarter economic growth in the Southeast Asian country, rising as much as 0.8 percent to 3.1540 per dollar.
"The ringgit caught many people by surprise, strengthening by 0.8 percent - that's a lot for day-to-day trade," another Kuala Lumpur-based trader said.
A stronger ringgit squeezes margins for overseas investors and refiners looking to purchase the ringgit-denominated palm feedstock, curbing buying interest.
Cargo surveyor data from Intertek Testing Services showed Malaysian shipments of palm oil products fell 15.3 percent to 570,761 tonnes in the first half of August compared with the same period in July, as purchases from Europe and China nearly halved.
Another cargo surveyor Societe Generale de Surveillance reported that exports for the same period dropped 15.9 percent from a month ago.
Malaysia, the second-largest palm grower, lowered its crude palm oil export tax for September to 4.5 percent, a government circular showed on Friday, the first cut in two months.
In other markets, Brent crude stabilised below $103 a barrel on Friday, close to a 13-month low, on ample supplies of high-quality oil and signs faltering global economic growth may be capping fuel demand.
Palm, soy and crude oil prices at 1047 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 0 +0.00 0 0 0
MY PALM OIL SEP4 2110 -40.00 2099 2157 1740
MY PALM OIL OCT4 2094 -39.00 2085 2140 18856
CHINA PALM OLEIN JAN5 5382 -88.00 5376 5466 730258
CHINA SOYOIL JAN5 6032 -122.00 6028 6122 528832
CBOT SOY OIL DEC4 33.70 -0.16 33.62 33.96 6295
NYMEX CRUDE SEP4 95.67 +0.09 95.32 95.74 18592
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 = 3.153 Malaysian ringgit)
($1 = 6.1470 Chinese yuan)
($1 = 60.76 Indian rupees)
* Prices dip to 2,085 rgt in late trade, lowest since Oct.9, 2009
* Ringgit near 10-month high after surprise economic growth
* Malaysia's Aug. 1-15 palm oil exports down 15-16 pct m/m-cargo surveyors
16/08/2014 (Reuters) - Malaysian palm oil futures tumbled to their lowest in nearly five years on Friday to record their biggest weekly fall since March 2013, under pressure from a surge in the ringgit as well as concerns over food and fuel demand.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange slid to 2,085 ringgit in late trade, an Oct. 9, 2009 low, before ending 1.8 percent down at 2,094 ringgit ($664) per tonne on Friday.
Market players said palm prices were weighed down by worries of slackening demand, as well as a government crackdown in China which put pressure Chinese commodity markets.
"Prices plunged at close, on signs of poor demand, stronger ringgit and on rumours about Chinese government cracking down on agencies and people who avoid the value-added-tax on consumption tax," said a trader with a commodities brokerage in Malaysia.
The most active January soybean oil contract on the Dalian Commodities Exchange hit a new contract low of 6,028 yuan, shedding 2.0 percent in late Asian trade, while the U.S. soyoil contract for December fell 0.5 percent.
Prices of palm oil, the world's most traded vegetable oil, are down 6.2 percent this week, notching their biggest weekly drop since March 2013 - dragged down by projections of abundant supplies of soybeans.
"Record corn and soybean production, coupled with anticipated peak production (for palm) locally are limiting attempts for a recovery," the trader added.
Palm typically tracks soyoil, a rival edible oil and common food and fuel substitute. Soy markets are facing pressure over forecasts of a bountiful soybean crop from top exporter the United States.
Total traded volume stood at 43,566 lots of 25 tonnes on Friday, above the average 35,000 lots.
Technicals earlier showed that Malaysian palm oil may have found a support at 2,124 ringgit per tonne and may hover around this level or rebound to 2,172 ringgit, said Reuters market analyst Wang Tao.
The Malaysian ringgit jumped to a near 10-month high on Friday following data that showed stronger-than-expected second-quarter economic growth in the Southeast Asian country, rising as much as 0.8 percent to 3.1540 per dollar.
"The ringgit caught many people by surprise, strengthening by 0.8 percent - that's a lot for day-to-day trade," another Kuala Lumpur-based trader said.
A stronger ringgit squeezes margins for overseas investors and refiners looking to purchase the ringgit-denominated palm feedstock, curbing buying interest.
Cargo surveyor data from Intertek Testing Services showed Malaysian shipments of palm oil products fell 15.3 percent to 570,761 tonnes in the first half of August compared with the same period in July, as purchases from Europe and China nearly halved.
Another cargo surveyor Societe Generale de Surveillance reported that exports for the same period dropped 15.9 percent from a month ago.
Malaysia, the second-largest palm grower, lowered its crude palm oil export tax for September to 4.5 percent, a government circular showed on Friday, the first cut in two months.
In other markets, Brent crude stabilised below $103 a barrel on Friday, close to a 13-month low, on ample supplies of high-quality oil and signs faltering global economic growth may be capping fuel demand.
Palm, soy and crude oil prices at 1047 GMT
Contract Month Last Change Low High Volume
MY PALM OIL AUG4 0 +0.00 0 0 0
MY PALM OIL SEP4 2110 -40.00 2099 2157 1740
MY PALM OIL OCT4 2094 -39.00 2085 2140 18856
CHINA PALM OLEIN JAN5 5382 -88.00 5376 5466 730258
CHINA SOYOIL JAN5 6032 -122.00 6028 6122 528832
CBOT SOY OIL DEC4 33.70 -0.16 33.62 33.96 6295
NYMEX CRUDE SEP4 95.67 +0.09 95.32 95.74 18592
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 = 3.153 Malaysian ringgit)
($1 = 6.1470 Chinese yuan)
($1 = 60.76 Indian rupees)