MARKET DEVELOPMENT
VEGOILS-Palm Lifted by Soy and Better Exports, But Hovers Near 5-1/2-Yr Lows
VEGOILS-Palm Lifted by Soy and Better Exports, But Hovers Near 5-1/2-Yr Lows
* Malaysia's August palm oil exports fall 4.8 pct m/m-ITS
* Exports improve, but rising edible oil supply continues toweigh
* Prices dip to March 2009 low of 1,914 rgt in early trade
* Palm oil to retest support at 1,920 ringgit -technicals (Updates prices)
03/09/2014 (Reuters) - Malaysian palm oil futuresedged up on Tuesday, lifted by gains in overseas soy oil marketsand on better-than-expected exports in August, although concernsabout higher edible oil supplies kept prices nearfive-and-a-half-year lows.
Shipments of Malaysian palm oil products fell 4.8 percentfrom a month earlier to 1,288,117 tonnes in August, cargosurveyor Intertek Testing Services said, but recovered fromsteeper losses earlier in the month as a surge in demand fromIndia offset weaker imports by China and Europe.
In overseas markets commonly tracked by palm, the U.S.soyoil contract for December rose 0.78 percent in Asiantrade, while the most active January soybean oil contract on the Dalian Commodities Exchange gained 1.2 percent.
"Exports are better than anticipated - the market wasexpecting volumes between 1.2 and 1.25 million tonnes," said atrader with a foreign commodities brokerage in Kuala Lumpur.
"Also, soybean oil is up over 40 points, the Dalian is up,and the ringgit weakened. All this contributed (to the rise)."
The Malaysian ringgit fell 0.46 percent to 3.1665per dollar.
By Tuesday's close, the benchmark November contract on the Bursa Malaysia Derivatives Exchange had gained 1.2percent to 1,952 ringgit ($613) per tonne, pulling up from aMarch 2009 low of 1,914 ringgit hit earlier in the day.
Total traded volume stood at 55,627 lots of 25 tonnes, wellabove the daily average of 35,000 lots.
Technicals showed that Malaysian palm oil may retest supportat 1,920 ringgit per tonne and fall further to 1,890 ringgit, tocomplete a downtrend that started from the June 25 high of 2,511ringgit, said Reuters market analyst Wang Tao.
Palm prices in August recorded their biggest monthly losssince September 2012 with a 14.5 percent drop, dragged byworries over bumper crops of competing oilseeds, as well as apick-up in Southeast Asian palm output.
"It's a struggle for the market to rebound from currentlevels," said another Malaysia-based palm trader.
"Our palm crops are also picking up, and end-stocks couldreach 2 million tonnes by September. Demand is not good enough,and funds have gone short on all agriculture commodities," thetrader added.
Some market participants, however, say the current weaklevels of palm prices may not hold for long, leading to a gapwhere prices in nearby contracts are trading much lower thanforward contracts.
Palm prices on the November 2015 contract weretrading between 2,149 and 2,211 ringgit, compared to 1,914-1,963ringgit on the November 2014 contract.
"Players might be bearish in the nearby, or might have someconcentrated effort to push the nearby contract to create anartificial bearish market, but in the forwards, people are notso bearish," the first Kuala Lumpur-based trader said.
"That's why forward prices are at such a huge carry -- theyfeel the current low prices cannot sustain and the forwards willgo up."
Societe Generale de Surveillance, another cargo surveyor,will release August export data later on Tuesday.
In other markets, Brent crude dipped below $102 a barrel,pressured by worries about slowing oil demand growth in Chinaand Europe, a strong U.S. dollar and ample supplies.
Palm, soy and crude oil prices at 1005 GMT Contract Month Last Change Low High Volume MY PALM OIL SEP4 1964 +27.00 1930 1964 115 MY PALM OIL OCT4 1950 +21.00 1914 1962 3461 MY PALM OIL NOV4 1952 +23.00 1914 1963 23041 CHINA PALM OLEIN JAN5 5182 +36.00 5140 5196 435856 CHINA SOYOIL JAN5 6068 +70.00 5984 6090 635108 CBOT SOY OIL DEC4 32.39 +0.25 31.96 32.60 8823 NYMEX CRUDE OCT4 95.18 -0.78 95.18 95.91 43710 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 = 3.17 Malaysian ringgit) ($1 = 6.1455 Chinese yuan) ($1 = 60.57 Indian rupee)
* Exports improve, but rising edible oil supply continues toweigh
* Prices dip to March 2009 low of 1,914 rgt in early trade
* Palm oil to retest support at 1,920 ringgit -technicals (Updates prices)
03/09/2014 (Reuters) - Malaysian palm oil futuresedged up on Tuesday, lifted by gains in overseas soy oil marketsand on better-than-expected exports in August, although concernsabout higher edible oil supplies kept prices nearfive-and-a-half-year lows.
Shipments of Malaysian palm oil products fell 4.8 percentfrom a month earlier to 1,288,117 tonnes in August, cargosurveyor Intertek Testing Services said, but recovered fromsteeper losses earlier in the month as a surge in demand fromIndia offset weaker imports by China and Europe.
In overseas markets commonly tracked by palm, the U.S.soyoil contract for December rose 0.78 percent in Asiantrade, while the most active January soybean oil contract on the Dalian Commodities Exchange gained 1.2 percent.
"Exports are better than anticipated - the market wasexpecting volumes between 1.2 and 1.25 million tonnes," said atrader with a foreign commodities brokerage in Kuala Lumpur.
"Also, soybean oil is up over 40 points, the Dalian is up,and the ringgit weakened. All this contributed (to the rise)."
The Malaysian ringgit fell 0.46 percent to 3.1665per dollar.
By Tuesday's close, the benchmark November contract on the Bursa Malaysia Derivatives Exchange had gained 1.2percent to 1,952 ringgit ($613) per tonne, pulling up from aMarch 2009 low of 1,914 ringgit hit earlier in the day.
Total traded volume stood at 55,627 lots of 25 tonnes, wellabove the daily average of 35,000 lots.
Technicals showed that Malaysian palm oil may retest supportat 1,920 ringgit per tonne and fall further to 1,890 ringgit, tocomplete a downtrend that started from the June 25 high of 2,511ringgit, said Reuters market analyst Wang Tao.
Palm prices in August recorded their biggest monthly losssince September 2012 with a 14.5 percent drop, dragged byworries over bumper crops of competing oilseeds, as well as apick-up in Southeast Asian palm output.
"It's a struggle for the market to rebound from currentlevels," said another Malaysia-based palm trader.
"Our palm crops are also picking up, and end-stocks couldreach 2 million tonnes by September. Demand is not good enough,and funds have gone short on all agriculture commodities," thetrader added.
Some market participants, however, say the current weaklevels of palm prices may not hold for long, leading to a gapwhere prices in nearby contracts are trading much lower thanforward contracts.
Palm prices on the November 2015 contract weretrading between 2,149 and 2,211 ringgit, compared to 1,914-1,963ringgit on the November 2014 contract.
"Players might be bearish in the nearby, or might have someconcentrated effort to push the nearby contract to create anartificial bearish market, but in the forwards, people are notso bearish," the first Kuala Lumpur-based trader said.
"That's why forward prices are at such a huge carry -- theyfeel the current low prices cannot sustain and the forwards willgo up."
Societe Generale de Surveillance, another cargo surveyor,will release August export data later on Tuesday.
In other markets, Brent crude dipped below $102 a barrel,pressured by worries about slowing oil demand growth in Chinaand Europe, a strong U.S. dollar and ample supplies.
Palm, soy and crude oil prices at 1005 GMT Contract Month Last Change Low High Volume MY PALM OIL SEP4 1964 +27.00 1930 1964 115 MY PALM OIL OCT4 1950 +21.00 1914 1962 3461 MY PALM OIL NOV4 1952 +23.00 1914 1963 23041 CHINA PALM OLEIN JAN5 5182 +36.00 5140 5196 435856 CHINA SOYOIL JAN5 6068 +70.00 5984 6090 635108 CBOT SOY OIL DEC4 32.39 +0.25 31.96 32.60 8823 NYMEX CRUDE OCT4 95.18 -0.78 95.18 95.91 43710 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 = 3.17 Malaysian ringgit) ($1 = 6.1455 Chinese yuan) ($1 = 60.57 Indian rupee)