MARKET DEVELOPMENT
VEGOILS-Palm Eases in Rangebound Trade, Chinese Demand Hopes Lend Support
VEGOILS-Palm Eases in Rangebound Trade, Chinese Demand Hopes Lend Support
(Updates prices)
* Cheaper palm, weak ringgit seen attracting Chinese buyers
* Short-covering to support benchmark futures
* India's rapeseed output to fall; Malaysia, Indonesia to gain
05/12/2014 (Reuters) - Malaysian palm oil futures fell in rangebound trade on Thursday as crude price volatility kept investors on edge, although optimism that cheaper palm prices would attract buying interest limited losses.
Market players said palm prices, which plunged 7 percent from last Thursday's top to 2,083 ringgit on Monday, would draw in bookings especially from China as the world's No.2 edible oil consumer stocks up ahead of the festive season in February.
"China needs to buy to replenish their stocks, and with the weak ringgit and low prices, it is a really good time for them to buy," said a trader with a foreign commodities firm in Kuala Lumpur.
The steep fall in palm prices had come after OPEC decided not to curb output despite a supply glut, sending crude oil markets crashing and the ringgit to suffer its largest two-day loss since the 1997-98 Asian financial crisis.
By Thursday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had eased 0.1 percent to 2,169 ringgit ($630) per tonne, with prices trading between 2,152 ringgit and 2,189 ringgit. Total traded volume stood at 44,200 lots of 25 tonnes, above the usual 35,000 lots.
Some traders said short-covering by investors after the sudden plunge in prices would also lend support to the benchmark contract in the near term.
"We assume that crude palm oil futures bears are taking advantage of crude oil weakening to pocket in profits," said a second Kuala Lumpur-based dealer.
Market participants are watching for signs of December's monsoon rains and flooding to curb yields of palm fruit and reduce oil extraction rates.
"You can see that the weather market has not really taken effect yet. This month's production is definitely going to go down ... you can already see off and on floods," the first trader added.
Elsewhere, traders and industry players said an imminent fall in India's rapeseed output in 2014/15 will prompt the top edible oil buyer to turn to palm oil imports from Indonesia and Malaysia.
In other markets, Brent crude steadied around $70 a barrel on Thursday as investors searched for a stable price range after a near 40 percent fall since June.
In competing vegetable oil markets, the U.S. soyoil contract for December shed 0.1 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange rose 1.4 percent.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC4 2152 -8.00 2150 2185 110
MY PALM OIL JAN5 2171 -13.00 2161 2195 2348
MY PALM OIL FEB5 2169 -3.00 2152 2189 23257
CHINA PALM OLEIN MAY5 5038 -8.00 5022 5084 1157050
CHINA SOYOIL MAY5 5682 +78.00 5654 5706 439348
CBOT SOY OIL JAN5 31.88 -3.30 31.76 32.03 4846
INDIA PALM OIL DEC4 431.70 -3.30 431.10 435.50 700
INDIA SOYOIL DEC4 573.75 -0.10 573.30 575.60 10375
NYMEX CRUDE JAN5 67.70 +0.32 67.28 68.22 19867
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 = 3.445 Malaysian ringgit)
($1 = 6.1546 Chinese yuan)
($1 = 61.92 Indian rupee)
* Cheaper palm, weak ringgit seen attracting Chinese buyers
* Short-covering to support benchmark futures
* India's rapeseed output to fall; Malaysia, Indonesia to gain
05/12/2014 (Reuters) - Malaysian palm oil futures fell in rangebound trade on Thursday as crude price volatility kept investors on edge, although optimism that cheaper palm prices would attract buying interest limited losses.
Market players said palm prices, which plunged 7 percent from last Thursday's top to 2,083 ringgit on Monday, would draw in bookings especially from China as the world's No.2 edible oil consumer stocks up ahead of the festive season in February.
"China needs to buy to replenish their stocks, and with the weak ringgit and low prices, it is a really good time for them to buy," said a trader with a foreign commodities firm in Kuala Lumpur.
The steep fall in palm prices had come after OPEC decided not to curb output despite a supply glut, sending crude oil markets crashing and the ringgit to suffer its largest two-day loss since the 1997-98 Asian financial crisis.
By Thursday's close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had eased 0.1 percent to 2,169 ringgit ($630) per tonne, with prices trading between 2,152 ringgit and 2,189 ringgit. Total traded volume stood at 44,200 lots of 25 tonnes, above the usual 35,000 lots.
Some traders said short-covering by investors after the sudden plunge in prices would also lend support to the benchmark contract in the near term.
"We assume that crude palm oil futures bears are taking advantage of crude oil weakening to pocket in profits," said a second Kuala Lumpur-based dealer.
Market participants are watching for signs of December's monsoon rains and flooding to curb yields of palm fruit and reduce oil extraction rates.
"You can see that the weather market has not really taken effect yet. This month's production is definitely going to go down ... you can already see off and on floods," the first trader added.
Elsewhere, traders and industry players said an imminent fall in India's rapeseed output in 2014/15 will prompt the top edible oil buyer to turn to palm oil imports from Indonesia and Malaysia.
In other markets, Brent crude steadied around $70 a barrel on Thursday as investors searched for a stable price range after a near 40 percent fall since June.
In competing vegetable oil markets, the U.S. soyoil contract for December shed 0.1 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange rose 1.4 percent.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC4 2152 -8.00 2150 2185 110
MY PALM OIL JAN5 2171 -13.00 2161 2195 2348
MY PALM OIL FEB5 2169 -3.00 2152 2189 23257
CHINA PALM OLEIN MAY5 5038 -8.00 5022 5084 1157050
CHINA SOYOIL MAY5 5682 +78.00 5654 5706 439348
CBOT SOY OIL JAN5 31.88 -3.30 31.76 32.03 4846
INDIA PALM OIL DEC4 431.70 -3.30 431.10 435.50 700
INDIA SOYOIL DEC4 573.75 -0.10 573.30 575.60 10375
NYMEX CRUDE JAN5 67.70 +0.32 67.28 68.22 19867
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 = 3.445 Malaysian ringgit)
($1 = 6.1546 Chinese yuan)
($1 = 61.92 Indian rupee)