MARKET DEVELOPMENT
VEGOILS-Palm Slips to Lowest in Nearly A Week, Hurt by Falling Crude Prices
VEGOILS-Palm Slips to Lowest in Nearly A Week, Hurt by Falling Crude Prices
(Updates prices)
* Brent hits 5-yr low, drags on palm
* But weak ringgit cushions fall
* Key industry data due Wed
10/12/2014 (Reuters) - Malaysian palm oil futures dropped to their weakest in nearly a week on Tuesday, as plunging crude oil markets and falling soy prices stoked worries that buyers could shift food and fuel demand away from palm.
But a soft local currency helped cushion palm's fall, traders said. Malaysia's ringgit was trading at 3.4820
on Tuesday, after sliding to 3.5030 per dollar in Monday's session - its lowest since September 2009.
"Palm is now following weak external factors, and everything is pointing downwards. The only supportive factor is the currency," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But it all boils down to demand and supply. Even though we can buy cheaper (palm), if there are a lot of cheaper products elsewhere, there's no reason to rush and buy Malaysian palm."
The benchmark February contract on the Bursa Malaysia Derivatives Exchange had inched down 1.9 percent to 2,129 ringgit ($611) per tonne by Tuesday's close, after touching 2,119 ringgit, the lowest since Dec. 3.
Total traded volume stood at 43,120 lots of 25 tonnes, above the daily average of 35,000 lots.
Trade was also thinner than usual as market players waited for Wednesday's official data on November end-stocks, crude palm oil output and exports in Malaysia, the world's No. 2 grower.
A poll of planters, traders and analysts forecast Malaysia's inventories would hit a 21-month high of 2.29 million tonnes, as November supplies outstripped export demand.
Benchmark Brent crude slipped on Tuesday to hit a five-year low before steadying near $66 a barrel. Worries of a swelling supply glut have pushed prices down by more than 40 percent since June.
"If crude oil comes down, there will be an impact on biofuels especially in voluntary, or discretionary blending," said Maybank Investment Bank analyst Ong Chee Ting. "Right now it is not economically feasible to encourage that voluntary demand."
In competing vegetable oil markets, the U.S. soyoil contract for January shed 0.5 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange lost 0.7 percent.
U.S. soybean futures also fell, for the first time in five sessions on Tuesday, as traders squared positions ahead of a widely watched U.S. government report on soy ending stocks.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC4 2125 -23.00 2120 2138 297
MY PALM OIL JAN5 2128 -43.00 2119 2165 1415
MY PALM OIL FEB5 2129 -42.00 2119 2168 22788
CHINA PALM OLEIN MAY5 5010 -40.00 4986 5030 1046450
CHINA SOYOIL MAY5 5716 -42.00 5652 5728 400250
CBOT SOY OIL JAN5 31.67 -4.10 31.58 31.85 5318
INDIA PALM OIL DEC4 420.90 -4.10 419.60 425.00 1263
INDIA SOYOIL DEC4 578.20 -2.95 578.00 582.70 10865
NYMEX CRUDE JAN5 63.58 +0.53 62.25 63.59 33551
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 = 3.482 Malaysian ringgit)
($1 = 6.1855 Chinese yuan)
($1 = 61.87 Indian rupee)
* Brent hits 5-yr low, drags on palm
* But weak ringgit cushions fall
* Key industry data due Wed
10/12/2014 (Reuters) - Malaysian palm oil futures dropped to their weakest in nearly a week on Tuesday, as plunging crude oil markets and falling soy prices stoked worries that buyers could shift food and fuel demand away from palm.
But a soft local currency helped cushion palm's fall, traders said. Malaysia's ringgit was trading at 3.4820
on Tuesday, after sliding to 3.5030 per dollar in Monday's session - its lowest since September 2009.
"Palm is now following weak external factors, and everything is pointing downwards. The only supportive factor is the currency," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But it all boils down to demand and supply. Even though we can buy cheaper (palm), if there are a lot of cheaper products elsewhere, there's no reason to rush and buy Malaysian palm."
The benchmark February contract on the Bursa Malaysia Derivatives Exchange had inched down 1.9 percent to 2,129 ringgit ($611) per tonne by Tuesday's close, after touching 2,119 ringgit, the lowest since Dec. 3.
Total traded volume stood at 43,120 lots of 25 tonnes, above the daily average of 35,000 lots.
Trade was also thinner than usual as market players waited for Wednesday's official data on November end-stocks, crude palm oil output and exports in Malaysia, the world's No. 2 grower.
A poll of planters, traders and analysts forecast Malaysia's inventories would hit a 21-month high of 2.29 million tonnes, as November supplies outstripped export demand.
Benchmark Brent crude slipped on Tuesday to hit a five-year low before steadying near $66 a barrel. Worries of a swelling supply glut have pushed prices down by more than 40 percent since June.
"If crude oil comes down, there will be an impact on biofuels especially in voluntary, or discretionary blending," said Maybank Investment Bank analyst Ong Chee Ting. "Right now it is not economically feasible to encourage that voluntary demand."
In competing vegetable oil markets, the U.S. soyoil contract for January shed 0.5 percent in late Asian trade. The most active May soybean oil contract on the Dalian Commodity Exchange lost 0.7 percent.
U.S. soybean futures also fell, for the first time in five sessions on Tuesday, as traders squared positions ahead of a widely watched U.S. government report on soy ending stocks.
Palm, soy and crude oil prices at 1017 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC4 2125 -23.00 2120 2138 297
MY PALM OIL JAN5 2128 -43.00 2119 2165 1415
MY PALM OIL FEB5 2129 -42.00 2119 2168 22788
CHINA PALM OLEIN MAY5 5010 -40.00 4986 5030 1046450
CHINA SOYOIL MAY5 5716 -42.00 5652 5728 400250
CBOT SOY OIL JAN5 31.67 -4.10 31.58 31.85 5318
INDIA PALM OIL DEC4 420.90 -4.10 419.60 425.00 1263
INDIA SOYOIL DEC4 578.20 -2.95 578.00 582.70 10865
NYMEX CRUDE JAN5 63.58 +0.53 62.25 63.59 33551
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 = 3.482 Malaysian ringgit)
($1 = 6.1855 Chinese yuan)
($1 = 61.87 Indian rupee)