MARKET DEVELOPMENT
VEGOILS-Palm Edges up on Crude Oil Recovery; Heavy Rains Eyed
VEGOILS-Palm Edges up on Crude Oil Recovery; Heavy Rains Eyed
(Updates prices, adds line on palm's biodiesel demand)
* Heavy rain warning across parts of Malaysia -met dept
* Palm oil to test resistance at 2,178 ringgit -technicals
19/12/2014 (Reuters) - Malaysian palm oil futures edged up on Thursday, swelled by a jump in crude oil prices, while wet weather warnings across parts of the second-largest grower stoked concern that yields of the tropical oil will drop this month.
Malaysia's weather department issued an "orange" warning on its website for heavy rain across the states of Sabah, Kelantan, and Terengganu, expected to persist until the end of the week.
Rains are also expected across Pahang.
Sabah is Malaysia's top growing palm state, and together with Pahang, accounts for about 45 percent of the country's supply of crude palm oil.
Prolonged rains can cause flooding of palm estates, complicating harvesting and transport of fresh fruit to mills.
A Malaysian palm oil trader with a foreign commodities brokerage told Reuters palm prices are edging up on concerns over the wet weather and floods in some areas, alongside hopes of a recovery in crude oil prices.
Brent crude jumped 2 percent to above $62 a barrel on Thursday, as some traders bet a six-month price rout could be ending as more energy firms cut investment budgets.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,147 ringgit ($621) per tonne by Thursday's close. Total traded volume stood at 52,238 lots of 25 tonnes, above the average 35,000 lots.
Oil this week hit a five-year low of $58.50 a barrel as fast-growing U.S. shale output overwhelmed demand, with losses deepening after OPEC said it would not cut output.
The plunge in oil prices wiped out profitable margins to blend palm oil into biodiesel, pressuring futures.
Some market players said the contract was also supported by a technical rebound that kicked in after prices touched 2-week lows of 2,103 ringgit in the previous session.
"The market has a trading range of 2,100 ringgit to about 2,200 ringgit. The last few days it came off quite a bit so there is some technical rebound," said a second Kuala Lumpur-based trader.
"You can see that as the market goes closer to 2,100 ringgit there is a buying opportunity."
In competing vegetable oil markets, the most active May soybean oil contract on the Dalian Commodity Exchange shed 0.1 percent in late Asian trade, while the U.S. soyoil contract for January 1.0 percent.
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 = 3.464 Malaysian ringgit)
($1 = 6.2163 Chinese yuan)
($1 = 63.18 Indian rupee)
* Heavy rain warning across parts of Malaysia -met dept
* Palm oil to test resistance at 2,178 ringgit -technicals
19/12/2014 (Reuters) - Malaysian palm oil futures edged up on Thursday, swelled by a jump in crude oil prices, while wet weather warnings across parts of the second-largest grower stoked concern that yields of the tropical oil will drop this month.
Malaysia's weather department issued an "orange" warning on its website for heavy rain across the states of Sabah, Kelantan, and Terengganu, expected to persist until the end of the week.
Rains are also expected across Pahang.
Sabah is Malaysia's top growing palm state, and together with Pahang, accounts for about 45 percent of the country's supply of crude palm oil.
Prolonged rains can cause flooding of palm estates, complicating harvesting and transport of fresh fruit to mills.
A Malaysian palm oil trader with a foreign commodities brokerage told Reuters palm prices are edging up on concerns over the wet weather and floods in some areas, alongside hopes of a recovery in crude oil prices.
Brent crude jumped 2 percent to above $62 a barrel on Thursday, as some traders bet a six-month price rout could be ending as more energy firms cut investment budgets.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,147 ringgit ($621) per tonne by Thursday's close. Total traded volume stood at 52,238 lots of 25 tonnes, above the average 35,000 lots.
Oil this week hit a five-year low of $58.50 a barrel as fast-growing U.S. shale output overwhelmed demand, with losses deepening after OPEC said it would not cut output.
The plunge in oil prices wiped out profitable margins to blend palm oil into biodiesel, pressuring futures.
Some market players said the contract was also supported by a technical rebound that kicked in after prices touched 2-week lows of 2,103 ringgit in the previous session.
"The market has a trading range of 2,100 ringgit to about 2,200 ringgit. The last few days it came off quite a bit so there is some technical rebound," said a second Kuala Lumpur-based trader.
"You can see that as the market goes closer to 2,100 ringgit there is a buying opportunity."
In competing vegetable oil markets, the most active May soybean oil contract on the Dalian Commodity Exchange shed 0.1 percent in late Asian trade, while the U.S. soyoil contract for January 1.0 percent.
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 = 3.464 Malaysian ringgit)
($1 = 6.2163 Chinese yuan)
($1 = 63.18 Indian rupee)