MARKET DEVELOPMENT
VEGOILS-Palm Falls to More Than 3-wk Low as Crude Oil Slides
VEGOILS-Palm Falls to More Than 3-wk Low as Crude Oil Slides
(Updates prices, adds graf on Reuters poll)
* Brent crude falls to Nov 2010 low of $82.72/barrel as economic worries mount
* Palm oil to test support at 2,105 ringgit - technicals
* Palm prices seen rising from current levels by end-2014 - Reuters poll
17/10/2014 (Reuters) - Malaysian palm oil futures fell to their lowest in more than three weeks on Thursday, dragged by sliding crude prices and worries that bigger supplies of rival edible oils would snatch food and fuel demand away from palm.
Brent crude for November delivery dropped to $82.72 a barrel, the lowest since November 2010, while U.S. crude fell $1.01 to $80.77 a barrel, as growing concerns over the global economy stretched a four-month rout.
Palm oil competes with the energy market for its increasing use as a renewable fuel.
"Energy demand took a hit," said a trader with a foreign commodities brokerage in Kuala Lumpur. "Energy prices are very, very bearish. The palm oil-gas oil spread is going down to $80-$90 levels, which is crazy."
The spread between Malaysian crude palm oil and gasoil quoted in Singapore was a much wider $260 earlier in August.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange was down 0.8 percent to 2,116 ringgit ($645) per tonne by Thursday's close, and was facing its biggest weekly fall in seven.
Prices earlier touched 2,104 ringgit, their lowest since Sept. 23.
Total traded volume stood at 50,959 lots of 25 tonnes, much higher than the usual average of 35,000 lots.
Technicals showed palm is expected to test a support at 2,105 ringgit per tonne, a break below which will lead to a further loss to 2,069 ringgit, said Reuters market analyst Wang Tao.
Palm oil futures may end the year 2 percent above current levels due to lower output in second-biggest producer Malaysia, but abundant supplies of rival oilseeds mean prices will still close down about 19 percent for the year, a Reuters poll showed on Thursday.
While the median survey of planters, analysts and traders pegged prices at 2,161 ringgit per tonne for the end of this year, forecasts ranging between 1,900 ringgit and 2,600 ringgit indicate sentiments remain mixed on how the market would react to high soybean supplies and weak crude oil prices.
Investors are bracing for a bumper supply of soybeans from the U.S. and South America that could overwhelm global edible oil consumption needs, and potentially water down demand for palm oil.
Farmers in Argentina are expected to plant from 20.6 million to 20.9 million hectares with soybeans this year, up from 20.2 million hectares in the previous season, the Rosario grains exchange said in its monthly crop report on Wednesday.
"Worries about demand, plunging crude oil prices and another record crop in South America triggered the selling in palm prices today," said a second Kuala Lumpur-based trader.
"Prices tumbled in unison with the sell-off in both the Chicago Board of Trade and Dalian," he added.
The U.S. soyoil contract for December fell 0.4 percent in late Asian trade, while the most active January
soybean oil contract on the Dalian Commodities Exchange fell nearly 2 percent.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV4 2137 -16.00 2120 2150 1290
MY PALM OIL DEC4 2120 -13.00 2107 2132 11959
MY PALM OIL JAN5 2116 -21.00 2104 2131 25020
CHINA PALM OLEIN JAN5 5188 -68.00 5180 5232 650980
CHINA SOYOIL JAN5 5828 -116.00 5826 5900 401926
CBOT SOY OIL DEC4 31.85 -3.00 31.78 32.21 11213
INDIA PALM OIL OCT4 443.00 -3.00 440.50 443.40 563
INDIA SOYOIL OCT4 589.30 -0.35 586.00 590.20 6580
NYMEX CRUDE NOV4 80.32 -1.46 80.26 81.18 32739
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(1 US dollar = 3.278 Malaysian ringgit)
(1 US dollar = 6.1231 Chinese yuan)
(1 US dollar = 61.85 Indian rupee)
* Brent crude falls to Nov 2010 low of $82.72/barrel as economic worries mount
* Palm oil to test support at 2,105 ringgit - technicals
* Palm prices seen rising from current levels by end-2014 - Reuters poll
17/10/2014 (Reuters) - Malaysian palm oil futures fell to their lowest in more than three weeks on Thursday, dragged by sliding crude prices and worries that bigger supplies of rival edible oils would snatch food and fuel demand away from palm.
Brent crude for November delivery dropped to $82.72 a barrel, the lowest since November 2010, while U.S. crude fell $1.01 to $80.77 a barrel, as growing concerns over the global economy stretched a four-month rout.
Palm oil competes with the energy market for its increasing use as a renewable fuel.
"Energy demand took a hit," said a trader with a foreign commodities brokerage in Kuala Lumpur. "Energy prices are very, very bearish. The palm oil-gas oil spread is going down to $80-$90 levels, which is crazy."
The spread between Malaysian crude palm oil and gasoil quoted in Singapore was a much wider $260 earlier in August.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange was down 0.8 percent to 2,116 ringgit ($645) per tonne by Thursday's close, and was facing its biggest weekly fall in seven.
Prices earlier touched 2,104 ringgit, their lowest since Sept. 23.
Total traded volume stood at 50,959 lots of 25 tonnes, much higher than the usual average of 35,000 lots.
Technicals showed palm is expected to test a support at 2,105 ringgit per tonne, a break below which will lead to a further loss to 2,069 ringgit, said Reuters market analyst Wang Tao.
Palm oil futures may end the year 2 percent above current levels due to lower output in second-biggest producer Malaysia, but abundant supplies of rival oilseeds mean prices will still close down about 19 percent for the year, a Reuters poll showed on Thursday.
While the median survey of planters, analysts and traders pegged prices at 2,161 ringgit per tonne for the end of this year, forecasts ranging between 1,900 ringgit and 2,600 ringgit indicate sentiments remain mixed on how the market would react to high soybean supplies and weak crude oil prices.
Investors are bracing for a bumper supply of soybeans from the U.S. and South America that could overwhelm global edible oil consumption needs, and potentially water down demand for palm oil.
Farmers in Argentina are expected to plant from 20.6 million to 20.9 million hectares with soybeans this year, up from 20.2 million hectares in the previous season, the Rosario grains exchange said in its monthly crop report on Wednesday.
"Worries about demand, plunging crude oil prices and another record crop in South America triggered the selling in palm prices today," said a second Kuala Lumpur-based trader.
"Prices tumbled in unison with the sell-off in both the Chicago Board of Trade and Dalian," he added.
The U.S. soyoil contract for December fell 0.4 percent in late Asian trade, while the most active January
soybean oil contract on the Dalian Commodities Exchange fell nearly 2 percent.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV4 2137 -16.00 2120 2150 1290
MY PALM OIL DEC4 2120 -13.00 2107 2132 11959
MY PALM OIL JAN5 2116 -21.00 2104 2131 25020
CHINA PALM OLEIN JAN5 5188 -68.00 5180 5232 650980
CHINA SOYOIL JAN5 5828 -116.00 5826 5900 401926
CBOT SOY OIL DEC4 31.85 -3.00 31.78 32.21 11213
INDIA PALM OIL OCT4 443.00 -3.00 440.50 443.40 563
INDIA SOYOIL OCT4 589.30 -0.35 586.00 590.20 6580
NYMEX CRUDE NOV4 80.32 -1.46 80.26 81.18 32739
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
(1 US dollar = 3.278 Malaysian ringgit)
(1 US dollar = 6.1231 Chinese yuan)
(1 US dollar = 61.85 Indian rupee)