MARKET DEVELOPMENT
VEGOILS-Palm Drops, Tracking Reverse in Oil Prices
VEGOILS-Palm Drops, Tracking Reverse in Oil Prices
* Oil prices drop after supply concerns due to Middle East conflict ease
* Concerns over increase in palm supply, uncertain demand - trader
27/03/2015 (Reuters) - Malaysian palm oil futures fell on Friday, tracking oil prices which reversed after a rally on Thursday due to conflict concerns in the Middle East.
"The cause of this drop is that the crude oil rally halted and eased from yesterday's highs," said a trader with a local commodities brokerage based in Kuala Lumpur.
Brent prices shot up nearly 6 percent on Thursday, but then fell more than $1 on Friday as traders estimated that the threat of a disruption to world crude supplies from the Saudi Arabia-led air strikes in Yemen was low.Worries about oversupply also dragged on prices.
"The bigger picture is that palm stock is expected to rise fast in coming months. Supply is good. Demand is uncertain," the trader added.
Strong supply without matching demand can lead to an over-abundance of palm oil in the market and drive down prices.
The Malaysian Palm Oil Association, a group of growers, estimates that the country's crude palm oil production climbed 16.8 percent in the March 1-20 period, as yields in the flood-hit Borneo region recovered.
By Friday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 1 percent to 2,170 ringgit ($589) a tonne. The contract snapped three weeks of losses to make a modest weekly gain of 0.46 percent.
Total traded volume stood at 35,587 lots of 25 tonnes, just above the average 35,000 lots.
In competing vegetable oil markets, the U.S. soyoil May contract fell 0.38 percent, while the most active September soybean oil contract on the Dalian Commodity Exchange lost 0.26 percent.
Palm, soy and crude oil prices at 1021 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2160 -14.00 2160 2184 49
MY PALM OIL MAY5 2173 -25.00 2155 2190 2041
MY PALM OIL JUN5 2170 -22.00 2148 2183 25367
CHINA PALM OLEIN SEP5 4688 -48.00 4674 4762 514884
CHINA SOYOIL SEP5 5436 -24.00 5416 5480 426910
CBOT SOY OIL MAY5 31.06 -2.10 30.94 31.20 4346
INDIA PALM OIL MAR5 436.00 -2.10 433.30 436.90 166
INDIA SOYOIL APR5 586.90 -0.10 582.80 587.50 8030
NYMEX CRUDE MAY5 50.50 -0.93 50.05 51.38 43269
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 = 3.6830 ringgit)
($1 = 6.2145 Chinese yuan)
($1 = 62.5625 Indian rupees)
* Concerns over increase in palm supply, uncertain demand - trader
27/03/2015 (Reuters) - Malaysian palm oil futures fell on Friday, tracking oil prices which reversed after a rally on Thursday due to conflict concerns in the Middle East.
"The cause of this drop is that the crude oil rally halted and eased from yesterday's highs," said a trader with a local commodities brokerage based in Kuala Lumpur.
Brent prices shot up nearly 6 percent on Thursday, but then fell more than $1 on Friday as traders estimated that the threat of a disruption to world crude supplies from the Saudi Arabia-led air strikes in Yemen was low.Worries about oversupply also dragged on prices.
"The bigger picture is that palm stock is expected to rise fast in coming months. Supply is good. Demand is uncertain," the trader added.
Strong supply without matching demand can lead to an over-abundance of palm oil in the market and drive down prices.
The Malaysian Palm Oil Association, a group of growers, estimates that the country's crude palm oil production climbed 16.8 percent in the March 1-20 period, as yields in the flood-hit Borneo region recovered.
By Friday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 1 percent to 2,170 ringgit ($589) a tonne. The contract snapped three weeks of losses to make a modest weekly gain of 0.46 percent.
Total traded volume stood at 35,587 lots of 25 tonnes, just above the average 35,000 lots.
In competing vegetable oil markets, the U.S. soyoil May contract fell 0.38 percent, while the most active September soybean oil contract on the Dalian Commodity Exchange lost 0.26 percent.
Palm, soy and crude oil prices at 1021 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2160 -14.00 2160 2184 49
MY PALM OIL MAY5 2173 -25.00 2155 2190 2041
MY PALM OIL JUN5 2170 -22.00 2148 2183 25367
CHINA PALM OLEIN SEP5 4688 -48.00 4674 4762 514884
CHINA SOYOIL SEP5 5436 -24.00 5416 5480 426910
CBOT SOY OIL MAY5 31.06 -2.10 30.94 31.20 4346
INDIA PALM OIL MAR5 436.00 -2.10 433.30 436.90 166
INDIA SOYOIL APR5 586.90 -0.10 582.80 587.50 8030
NYMEX CRUDE MAY5 50.50 -0.93 50.05 51.38 43269
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 = 3.6830 ringgit)
($1 = 6.2145 Chinese yuan)
($1 = 62.5625 Indian rupees)