MARKET DEVELOPMENT
PREVIEW-Malaysia's May Palm Stocks Seen Easing As Exports Jump Nearly 40 Pct
PREVIEW-Malaysia's May Palm Stocks Seen Easing As Exports Jump Nearly 40 Pct
* May palm stocks seen down 2.4 pct m/m to 2.14 mln tonnes
* Exports seen up 36.6 pct, biggest m/m rise since Oct 2006
* Output seen rising 5.6 pct m/m to 1.79 mln tonnes
* Malaysian Palm Oil Board data due June 10 after 0430 GMT
05/06/2015 (Reuters) - Malaysian palm oil stocks likely eased in May, with exports of the tropical oil surging nearly 40 percent in their biggest monthly rise in 8-1/2 years, a Reuters poll showed on Friday.
The dip in inventories - which were at their loftiest since November at the beginning of last month - could underpin palm prices that shot to a three-month top this week to track soyoil. The rival edible oil rallied after increased biodiesel targets in the United States signalled greater use of soy, rapeseed and corn oil for biofuels.
Palm oil stocks in Malaysia, the world's second-largest producer, are forecast to fall 2.4 percent from a month ago to 2.14 million tonnes, according to a median survey of six planters, traders, and analysts.
The drop was attributed to a jump in export demand as key buyers snapped up supplies ahead of the Ramadan festive season, helped by a removal of Malaysian export taxes on crude palm oil.
"Overall, the rise in exports trumped output," said Ivy Ng, regional head of plantations research at CIMB Investment Bank.
"This will be a relief to the market, which had been concerned about the persistent weak demand in the first four months of 2015," she said.
The Muslim holy month of Ramadan, which begins in mid-June this year, is marked by communal fasting and feasting, and tends to drive up consumption of edible oils.
Ng said buyers will likely continue to restock in the coming weeks before the Eid al-Fitr celebrations in mid-July that mark the end of the festival month.
The poll forecast palm oil exports jumped 36.6 percent to 1.61 million tonnes, their largest month-on-month rise since October 2006. MYPOME-PO
Crude palm oil production is forecast to rise 5.6 percent to 1.79 million tonnes from April, suggesting a steady recovery from tree stress and crop-unfriendly weather that hindered yields between November and February.
The median figures from the survey imply domestic consumption of 294,688 tonnes in May.
PRICES SEEN SUPPORTED
Going forward, palm prices are expected to be supported on prospects the U.S. biofuel mandate will help soak up abundant supplies of soy, as well as on anticipation that the ringgit will stay weak, traders said.
But prices may still struggle to cross over the 2,400 ringgit ($646) a tonne level without new bullish factors.
"For the past four months prices were holding very well at 2,100 ringgit despite bearish stocks reports. The news of the higher biofuel mandate for soyoil gave the push," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But to cross 2,400 ringgit we need new bullish input, and at the moment we don't have any," the trader said, adding that concrete signs of an El Nino hurting palm output may also boost prices.
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GRAPHICS:
Edible oil consumption reut.rs/1B4ORQN
Edible oil production reut.rs/1BCaBFl
Edible oil prices reut.rs/1GLFUxw
Global edible oil stocks reut.rs/1wGzgIJ
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Breakdown of May estimates (in tonnes):
Range Median
Production 1,740,000 - 1,828,914 1,788,990
Exports 1,481,000 - 1,701,000 1,605,000
Imports 47,500 - 100,000 57,500
Closing stocks 2,072,000 - 2,330,000 2,141,000
($1 = 3.7140 ringgit)
* Exports seen up 36.6 pct, biggest m/m rise since Oct 2006
* Output seen rising 5.6 pct m/m to 1.79 mln tonnes
* Malaysian Palm Oil Board data due June 10 after 0430 GMT
05/06/2015 (Reuters) - Malaysian palm oil stocks likely eased in May, with exports of the tropical oil surging nearly 40 percent in their biggest monthly rise in 8-1/2 years, a Reuters poll showed on Friday.
The dip in inventories - which were at their loftiest since November at the beginning of last month - could underpin palm prices that shot to a three-month top this week to track soyoil. The rival edible oil rallied after increased biodiesel targets in the United States signalled greater use of soy, rapeseed and corn oil for biofuels.
Palm oil stocks in Malaysia, the world's second-largest producer, are forecast to fall 2.4 percent from a month ago to 2.14 million tonnes, according to a median survey of six planters, traders, and analysts.
The drop was attributed to a jump in export demand as key buyers snapped up supplies ahead of the Ramadan festive season, helped by a removal of Malaysian export taxes on crude palm oil.
"Overall, the rise in exports trumped output," said Ivy Ng, regional head of plantations research at CIMB Investment Bank.
"This will be a relief to the market, which had been concerned about the persistent weak demand in the first four months of 2015," she said.
The Muslim holy month of Ramadan, which begins in mid-June this year, is marked by communal fasting and feasting, and tends to drive up consumption of edible oils.
Ng said buyers will likely continue to restock in the coming weeks before the Eid al-Fitr celebrations in mid-July that mark the end of the festival month.
The poll forecast palm oil exports jumped 36.6 percent to 1.61 million tonnes, their largest month-on-month rise since October 2006. MYPOME-PO
Crude palm oil production is forecast to rise 5.6 percent to 1.79 million tonnes from April, suggesting a steady recovery from tree stress and crop-unfriendly weather that hindered yields between November and February.
The median figures from the survey imply domestic consumption of 294,688 tonnes in May.
PRICES SEEN SUPPORTED
Going forward, palm prices are expected to be supported on prospects the U.S. biofuel mandate will help soak up abundant supplies of soy, as well as on anticipation that the ringgit will stay weak, traders said.
But prices may still struggle to cross over the 2,400 ringgit ($646) a tonne level without new bullish factors.
"For the past four months prices were holding very well at 2,100 ringgit despite bearish stocks reports. The news of the higher biofuel mandate for soyoil gave the push," said a trader with a foreign commodities brokerage in Kuala Lumpur.
"But to cross 2,400 ringgit we need new bullish input, and at the moment we don't have any," the trader said, adding that concrete signs of an El Nino hurting palm output may also boost prices.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHICS:
Edible oil consumption reut.rs/1B4ORQN
Edible oil production reut.rs/1BCaBFl
Edible oil prices reut.rs/1GLFUxw
Global edible oil stocks reut.rs/1wGzgIJ
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Breakdown of May estimates (in tonnes):
Range Median
Production 1,740,000 - 1,828,914 1,788,990
Exports 1,481,000 - 1,701,000 1,605,000
Imports 47,500 - 100,000 57,500
Closing stocks 2,072,000 - 2,330,000 2,141,000
($1 = 3.7140 ringgit)