MARKET DEVELOPMENT
VEGOILS-Palm Edges up on Near 6-yr Low Ringgit, But Struggles With Grim Outlook
VEGOILS-Palm Edges up on Near 6-yr Low Ringgit, But Struggles With Grim Outlook
(Updates prices, recasts lede)
* Prices seen softening in second half of 2015 -analyst
* Malaysia's Jan 1-20 palm exports fall 22-23 pct m/m - cargo surveyors
* Malaysian ringgit weakens to 3.6140 against U.S. dollar
21/01/2015 (Reuters) - Malaysian palm futures slipped to a two-week low on Tuesday as lacklustre demand and a grim outlook on global commodity markets piled pressure, but prices pulled up in late trade as they clung onto support from the ringgit that slumped to near 6-year lows.
Industry experts say palm prices face a volatile year in 2015 and will be driven by global demand factors, including uncertain market movements in crude and rival edible oils. The Malaysian Palm Oil Board predicted that in its worst scenario, prices could drop to six-year lows of 1,820 ringgit a tonne.
"Going forward, we expect limited near-term catalysts as we gather that a possible weak El Nino and lacklustre biodiesel demand would limit immediate CPO price upside," Kenanga Investment Bank said in a note.
"...we believe that CPO prices are likely to soften in H2 2015 due to recovery in production as well as the effects of deteriorating crude oil prices and strengthening U.S. dollar."
The benchmark April contract gained 0.5 percent to 2,320 ringgit ($642) per tonne by Tuesday's close, after falling to 2,297 ringgit in early trade, its lowest since Jan. 7.
Traded volume stood at 48,169 lots of 25 tonnes, above the usual 35,000 lots.
The ringgit weakened to an April 2009 low of 3.6140 per U.S. dollar, after the government adjusted its economic growth targets and increased its fiscal deficit forecast to cope with sliding oil prices.
Analysts say while unfavourable weather in top growers Indonesia and Malaysia could tighten palm oil supply temporarily, the damage to output will not be as bad as initially feared with any El Nino weather phenomenon expected to be weak.
The Australian Bureau of Meteorology on Tuesday said that weather models show a low chance of an El Nino after indicators of the climate event eased in recent weeks.
In Malaysia, worries over monsoon flooding have begun to ease, despite occasional warnings by the country's weather office for rains over parts of palm-growing Sarawak.
"The flood issues are fading and have been mostly factored in," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Exports of Malaysian palm oil have been sluggish this month.
Cargo surveyor Intertek Testing Services showed that palm exports fell 22.9 percent between Jan. 1-20. Another cargo surveyor Societe Generale de Surveillance reported a 22 percrent drop for the same period.
Brent crude oil prices fell towards $48 a barrel on Tuesday after the International Monetary Fund cut its forecast for global economic growth in 2015 implying lower demand for fuel.
In vegetable oil markets, the U.S. soyoil contract for March fell 1.0 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange was nearly flat.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB5 2338 -4.00 2335 2358 528
MY PALM OIL MAR5 2336 +11.00 2315 2360 7082
MY PALM OIL APR5 2320 +11.00 2297 2346 25981
CHINA PALM OLEIN MAY5 4888 -26.00 4864 4912 295924
CHINA SOYOIL MAY5 5604 +0.00 5554 5614 342626
CBOT SOY OIL MAR5 33.07 -2.20 32.92 33.22 6231
INDIA PALM OIL JAN5 454.80 -2.20 453.50 456.80 380
INDIA SOYOIL JAN5 677.60 +0.35 675.20 677.80 5075
NYMEX CRUDE FEB5 47.33 -1.36 47.05 48.77 15083
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 = 3.6140 Malaysian ringgit)
($1 = 6.2142 Chinese yuan)
($1 = 61.76 Indian rupee)
* Prices seen softening in second half of 2015 -analyst
* Malaysia's Jan 1-20 palm exports fall 22-23 pct m/m - cargo surveyors
* Malaysian ringgit weakens to 3.6140 against U.S. dollar
21/01/2015 (Reuters) - Malaysian palm futures slipped to a two-week low on Tuesday as lacklustre demand and a grim outlook on global commodity markets piled pressure, but prices pulled up in late trade as they clung onto support from the ringgit that slumped to near 6-year lows.
Industry experts say palm prices face a volatile year in 2015 and will be driven by global demand factors, including uncertain market movements in crude and rival edible oils. The Malaysian Palm Oil Board predicted that in its worst scenario, prices could drop to six-year lows of 1,820 ringgit a tonne.
"Going forward, we expect limited near-term catalysts as we gather that a possible weak El Nino and lacklustre biodiesel demand would limit immediate CPO price upside," Kenanga Investment Bank said in a note.
"...we believe that CPO prices are likely to soften in H2 2015 due to recovery in production as well as the effects of deteriorating crude oil prices and strengthening U.S. dollar."
The benchmark April contract gained 0.5 percent to 2,320 ringgit ($642) per tonne by Tuesday's close, after falling to 2,297 ringgit in early trade, its lowest since Jan. 7.
Traded volume stood at 48,169 lots of 25 tonnes, above the usual 35,000 lots.
The ringgit weakened to an April 2009 low of 3.6140 per U.S. dollar, after the government adjusted its economic growth targets and increased its fiscal deficit forecast to cope with sliding oil prices.
Analysts say while unfavourable weather in top growers Indonesia and Malaysia could tighten palm oil supply temporarily, the damage to output will not be as bad as initially feared with any El Nino weather phenomenon expected to be weak.
The Australian Bureau of Meteorology on Tuesday said that weather models show a low chance of an El Nino after indicators of the climate event eased in recent weeks.
In Malaysia, worries over monsoon flooding have begun to ease, despite occasional warnings by the country's weather office for rains over parts of palm-growing Sarawak.
"The flood issues are fading and have been mostly factored in," said a trader with a foreign commodities brokerage in Kuala Lumpur.
Exports of Malaysian palm oil have been sluggish this month.
Cargo surveyor Intertek Testing Services showed that palm exports fell 22.9 percent between Jan. 1-20. Another cargo surveyor Societe Generale de Surveillance reported a 22 percrent drop for the same period.
Brent crude oil prices fell towards $48 a barrel on Tuesday after the International Monetary Fund cut its forecast for global economic growth in 2015 implying lower demand for fuel.
In vegetable oil markets, the U.S. soyoil contract for March fell 1.0 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange was nearly flat.
Palm, soy and crude oil prices at 1014 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB5 2338 -4.00 2335 2358 528
MY PALM OIL MAR5 2336 +11.00 2315 2360 7082
MY PALM OIL APR5 2320 +11.00 2297 2346 25981
CHINA PALM OLEIN MAY5 4888 -26.00 4864 4912 295924
CHINA SOYOIL MAY5 5604 +0.00 5554 5614 342626
CBOT SOY OIL MAR5 33.07 -2.20 32.92 33.22 6231
INDIA PALM OIL JAN5 454.80 -2.20 453.50 456.80 380
INDIA SOYOIL JAN5 677.60 +0.35 675.20 677.80 5075
NYMEX CRUDE FEB5 47.33 -1.36 47.05 48.77 15083
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 = 3.6140 Malaysian ringgit)
($1 = 6.2142 Chinese yuan)
($1 = 61.76 Indian rupee)