MARKET DEVELOPMENT
VEGOILS-Palm Slips, Comes Off 5-week Top on Worries Over Export Demand
VEGOILS-Palm Slips, Comes Off 5-week Top on Worries Over Export Demand
* Prices touch 2,233 ringgit, highest since April 6
* Palm feels pressure due to profit-taking - trader
* Palm oil faces resistance at 2,235 ringgit -technicals
14/05/2015 (Reutes) - Malaysian palm oil futures briefly touched a five-week top on Wednesday on worries an El Nino weather pattern would curb yields, but expectations of weaker export demand in the second half of the month kept a lid on gains.
In 2009, the El Nino brought the worst drought in four decades to India. It razed wheat fields in Australia and damaged huge swathes of rice, corn and palm crops across Southeast Asia.
Forecasts by weather bureaus in Japan and Australia on Tuesday confirmed the return of the El Nino this year.
While very dry weather due to an El Nino can hurt ripening palm fruits, stress due to the dry spell in oil palm trees can typically only be seen nine to 12 months later.
"The market over-reacted on the news of El Nino, so now it's correcting itself," said a trader with a foreign commodities brokerage in Kuala Lumpur. "There's some profit-taking because of the overbought situation in the short-term (technical) chart," the trader added.
The benchmark July contract on the Bursa Malaysia Derivatives exchange rose to 2,233 ringgit a tonne in early trade, the highest since April 6.
But by the midday break, palm had slipped 0.1 percent to 2,222 ringgit ($617.22), the first drop in three days. Total traded volume stood at 15,002 lots of 25 tonnes each, above the average 12,500 lots.
Traders are now waiting for indications on the strength of export demand for further cues.
While export data from cargo surveyors reported an up to 45 percent increase in shipments from Malaysia in the first ten days of the month from April, some traders say the surge could be due to buyers rushing to export palm before additional levies from top producer Indonesia kick in.
Oil extended gains on Wednesday after posting its strongest daily rise in weeks in the previous session, supported by bets that U.S. crude stockpiles will fall for a second straight week as production slows.
In other markets, the U.S. July soyoil contract rose 0.9 percent in early Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange was nearly flat.
Palm, soy and crude oil prices at 0449 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY5 0 +0.00 0 0 0
MY PALM OIL JUN5 2225 -4.00 2225 2236 569
MY PALM OIL JUL5 2222 -3.00 2215 2233 7002
CHINA PALM OLEIN SEP5 5146 +44.00 5114 5172 782174
CHINA SOYOIL SEP5 5910 +2.00 5894 5942 764546
CBOT SOY OIL JUL5 33.25 +1.50 32.98 33.36 3177
INDIA PALM OIL MAY5 455.50 +1.50 454.00 455.90 82
INDIA SOYOIL JUN5 607.85 +2.55 606.80 608.50 4340
NYMEX CRUDE JUN5 61.37 +0.62 61.10 61.83 10016
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 = 3.6000 Malaysian ringgit)
($1 = 6.2062 Chinese yuan)
($1 = 64.12 Indian rupees)
* Palm feels pressure due to profit-taking - trader
* Palm oil faces resistance at 2,235 ringgit -technicals
14/05/2015 (Reutes) - Malaysian palm oil futures briefly touched a five-week top on Wednesday on worries an El Nino weather pattern would curb yields, but expectations of weaker export demand in the second half of the month kept a lid on gains.
In 2009, the El Nino brought the worst drought in four decades to India. It razed wheat fields in Australia and damaged huge swathes of rice, corn and palm crops across Southeast Asia.
Forecasts by weather bureaus in Japan and Australia on Tuesday confirmed the return of the El Nino this year.
While very dry weather due to an El Nino can hurt ripening palm fruits, stress due to the dry spell in oil palm trees can typically only be seen nine to 12 months later.
"The market over-reacted on the news of El Nino, so now it's correcting itself," said a trader with a foreign commodities brokerage in Kuala Lumpur. "There's some profit-taking because of the overbought situation in the short-term (technical) chart," the trader added.
The benchmark July contract on the Bursa Malaysia Derivatives exchange rose to 2,233 ringgit a tonne in early trade, the highest since April 6.
But by the midday break, palm had slipped 0.1 percent to 2,222 ringgit ($617.22), the first drop in three days. Total traded volume stood at 15,002 lots of 25 tonnes each, above the average 12,500 lots.
Traders are now waiting for indications on the strength of export demand for further cues.
While export data from cargo surveyors reported an up to 45 percent increase in shipments from Malaysia in the first ten days of the month from April, some traders say the surge could be due to buyers rushing to export palm before additional levies from top producer Indonesia kick in.
Oil extended gains on Wednesday after posting its strongest daily rise in weeks in the previous session, supported by bets that U.S. crude stockpiles will fall for a second straight week as production slows.
In other markets, the U.S. July soyoil contract rose 0.9 percent in early Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange was nearly flat.
Palm, soy and crude oil prices at 0449 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY5 0 +0.00 0 0 0
MY PALM OIL JUN5 2225 -4.00 2225 2236 569
MY PALM OIL JUL5 2222 -3.00 2215 2233 7002
CHINA PALM OLEIN SEP5 5146 +44.00 5114 5172 782174
CHINA SOYOIL SEP5 5910 +2.00 5894 5942 764546
CBOT SOY OIL JUL5 33.25 +1.50 32.98 33.36 3177
INDIA PALM OIL MAY5 455.50 +1.50 454.00 455.90 82
INDIA SOYOIL JUN5 607.85 +2.55 606.80 608.50 4340
NYMEX CRUDE JUN5 61.37 +0.62 61.10 61.83 10016
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 = 3.6000 Malaysian ringgit)
($1 = 6.2062 Chinese yuan)
($1 = 64.12 Indian rupees)