MARKET DEVELOPMENT
VEGOILS-Palm Rises to Near 3-wk High on Technical Buying; Malaysia Biodiesel Plan Eyed
VEGOILS-Palm Rises to Near 3-wk High on Technical Buying; Malaysia Biodiesel Plan Eyed
(Updates prices, adds new milestone)
* Prices touch 2,216 rgt in late trade, highest since Oct. 9
* Technical buying pushes up prices - trader
* Malaysia to roll out new biodiesel plan from Nov
29/10/2014 (Reuters) - Malaysian palm oil futures rose to a near-three-week high on Tuesday on a bout of technical buying, traders said, while plans to increase the use of palm oil in biodiesel by the world's No.2 grower received a lukewarm response from market players.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose to 2,216 ringgit in late trade, the highest since Oct, 9, before ending up 2.1 percent to 2,212 ringgit ($676) per tonne by the day's close.
"Technical buying is keeping the market on the supportive side after some mild correction yesterday," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Total traded volume stood at 51,423 lots of 25 tonnes, above the usual 35,000 lots.
Malaysia, the world's second-largest palm producer, on Tuesday said it would increase the amount of palm oil in biodiesel to 7 percent from November onwards, up from 5 percent now.
The "B7" biodiesel mandate, targeted to be fully implemented nationwide by December this year, is expected to boost the domestic use of biodiesel to 575,000 tonnes a year, Malaysia's plantation industries and commodities minister said.
Crude palm oil is increasingly being used as a "green" additive to fossil fuels as it can reduce costs and cut environmentally damaging emissions.
"The news is friendly to planters - it will help attract interest from biodiesel producers and is supportive to the market in the long term," the trader added.
But market players will be looking to see whether the B7 biodiesel programme will eat into stockpiles of palm - which rose to an 18-month high of 2.09 million tonnes at end-September - and support prices which have dropped nearly 20 percent this year.
"There are still many things that are unknown, so even if everything comes into play, it will still have a minimum impact on prices," said a second Kuala Lumpur-based dealer. "We need to quantify how much palm is actually being used."
Technicals showed that palm oil looks neutral in a range of 2,164-2,195 ringgit per tonne, with any escape pointing its likely direction, said Reuters market analyst Wang Tao.
But Tao added that the bias seemed to be towards the upside, which means palm oil may rise above 2,195 ringgit and then gain further to 2,223 ringgit.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 1.4 percent in late Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange eased 0.1 percent.
In other markets, Brent crude oil steadied below $86 a barrel on Tuesday, after dipping close to $85 earlier in the day, as a falling U.S. dollar provided support against weak demand and abundant supply.
Palm, soy and crude oil prices at 1021 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV4 2220 +32.00 2189 2225 1124
MY PALM OIL DEC4 2218 +46.00 2178 2220 8972
MY PALM OIL JAN5 2212 +46.00 2171 2216 24771
CHINA PALM OLEIN JAN5 5150 -2.00 5114 5152 277966
CHINA SOYOIL JAN5 5748 -6.00 5732 5796 277102
CBOT SOY OIL DEC4 32.65 +3.20 32.16 32.70 9001
INDIA PALM OIL OCT4 444.50 +3.20 438.90 445.20 278
#VALUE!
NYMEX CRUDE DEC4 81.06 +0.06 80.36 81.15 22075
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 = 3.273 Malaysian ringgit)
(1 US dollar = 6.1133 Chinese yuan)
(1 US dollar = 61.36 Indian rupee)
* Prices touch 2,216 rgt in late trade, highest since Oct. 9
* Technical buying pushes up prices - trader
* Malaysia to roll out new biodiesel plan from Nov
29/10/2014 (Reuters) - Malaysian palm oil futures rose to a near-three-week high on Tuesday on a bout of technical buying, traders said, while plans to increase the use of palm oil in biodiesel by the world's No.2 grower received a lukewarm response from market players.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose to 2,216 ringgit in late trade, the highest since Oct, 9, before ending up 2.1 percent to 2,212 ringgit ($676) per tonne by the day's close.
"Technical buying is keeping the market on the supportive side after some mild correction yesterday," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Total traded volume stood at 51,423 lots of 25 tonnes, above the usual 35,000 lots.
Malaysia, the world's second-largest palm producer, on Tuesday said it would increase the amount of palm oil in biodiesel to 7 percent from November onwards, up from 5 percent now.
The "B7" biodiesel mandate, targeted to be fully implemented nationwide by December this year, is expected to boost the domestic use of biodiesel to 575,000 tonnes a year, Malaysia's plantation industries and commodities minister said.
Crude palm oil is increasingly being used as a "green" additive to fossil fuels as it can reduce costs and cut environmentally damaging emissions.
"The news is friendly to planters - it will help attract interest from biodiesel producers and is supportive to the market in the long term," the trader added.
But market players will be looking to see whether the B7 biodiesel programme will eat into stockpiles of palm - which rose to an 18-month high of 2.09 million tonnes at end-September - and support prices which have dropped nearly 20 percent this year.
"There are still many things that are unknown, so even if everything comes into play, it will still have a minimum impact on prices," said a second Kuala Lumpur-based dealer. "We need to quantify how much palm is actually being used."
Technicals showed that palm oil looks neutral in a range of 2,164-2,195 ringgit per tonne, with any escape pointing its likely direction, said Reuters market analyst Wang Tao.
But Tao added that the bias seemed to be towards the upside, which means palm oil may rise above 2,195 ringgit and then gain further to 2,223 ringgit.
In competing vegetable oil markets, the U.S. soyoil contract for December rose 1.4 percent in late Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange eased 0.1 percent.
In other markets, Brent crude oil steadied below $86 a barrel on Tuesday, after dipping close to $85 earlier in the day, as a falling U.S. dollar provided support against weak demand and abundant supply.
Palm, soy and crude oil prices at 1021 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV4 2220 +32.00 2189 2225 1124
MY PALM OIL DEC4 2218 +46.00 2178 2220 8972
MY PALM OIL JAN5 2212 +46.00 2171 2216 24771
CHINA PALM OLEIN JAN5 5150 -2.00 5114 5152 277966
CHINA SOYOIL JAN5 5748 -6.00 5732 5796 277102
CBOT SOY OIL DEC4 32.65 +3.20 32.16 32.70 9001
INDIA PALM OIL OCT4 444.50 +3.20 438.90 445.20 278
#VALUE!
NYMEX CRUDE DEC4 81.06 +0.06 80.36 81.15 22075
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 = 3.273 Malaysian ringgit)
(1 US dollar = 6.1133 Chinese yuan)
(1 US dollar = 61.36 Indian rupee)