MARKET DEVELOPMENT
Palm Rises on Dalian's Gains, Output Data Meets Expectations
Palm Rises on Dalian's Gains, Output Data Meets Expectations
27/10/2016 (Reuters) - Malaysian palm oil futures ended higher on Wednesday as prices tracked rival oils on China's Dalian Commodity Exchange and production data released was within traders' expectations.
Benchmark palm oil futures for January on the Bursa Malaysia Derivatives Exchange trended higher by 1.23% at RM2,794 (US$671.80) a tonne at the close.
Traded volumes stood at 47,125 lots of 25 tonnes each at noon.
A Kuala Lumpur-based trader said the tropical oil rose in tandem with price gains on the Dalian.
"Prices are up, tracking the strong movement on Dalian. And production did not rise as much, which people already expected," he said.
The January soybean oil contract on the Dalian climbed as much as 0.5% and the January contract for palm olein on the same exchange was up as much as 1%.
In another related vegetable oil, Chicago Board of Trade's December soybean oil rose as much as 0.53%.
Palm oil is impacted by movements of related vegetable oils as they compete for a share in the global edible oils market.
A second trader said that although output data released today showed an increase in production, the numbers did not spur selling by traders.
"The market had expected output to be lower but while the data showed an increase, it was marginal. Generally, production for the year is expected to be low," he said.
Southern Palm Oil Millers Association released data noting a 2.83% increase in production for the Oct 1-25 period.
Leading analysts said at a recent industry conference that output was expected to fall this year due to a lingering impact of the crop-damaging El Nino weather pattern.
The futures contract surged to a more than two-year high of RM2,822 on Monday, on lower output data and tracking the uptrend in Chinese vegetable oils, which also rose to its highest levels in about two years.
Reuters market analyst for commodities and energy technicals Wang Tao said palm oil may retest resistance at RM2,822 per tonne, as it has steadied around support at RM2,753.
Palm, soy and crude oil prices at 1050 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV6 2794 +34.00 2761 2802 269
MY PALM OIL DEC6 2794 +31.00 2750 2805 8932
MY PALM OIL JAN7 2794 +34.00 2768 2806 22003
CHINA PALM OLEIN JAN7 6062 +60.00 5876 6064 1559104
CHINA SOYOIL JAN7 6806 +34.00 6682 6810 876254
CBOT SOY OIL DEC6 35.97 +3.00 35.77 36.02 7616
INDIA PALM OIL OCT6 538.50 +3.00 536.50 539.2 1193
INDIA SOYOIL NOV6 676.15 +5.05 672.1 679.7 48100
NYMEX CRUDE DEC6 49.27 -0.69 49.16 49.51 71931
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel
(US$1 = RM4.1805)
(US$1 = 66.8900 Indian rupees)
(US$1 = 6.7730 Chinese yuan)
Benchmark palm oil futures for January on the Bursa Malaysia Derivatives Exchange trended higher by 1.23% at RM2,794 (US$671.80) a tonne at the close.
Traded volumes stood at 47,125 lots of 25 tonnes each at noon.
A Kuala Lumpur-based trader said the tropical oil rose in tandem with price gains on the Dalian.
"Prices are up, tracking the strong movement on Dalian. And production did not rise as much, which people already expected," he said.
The January soybean oil contract on the Dalian climbed as much as 0.5% and the January contract for palm olein on the same exchange was up as much as 1%.
In another related vegetable oil, Chicago Board of Trade's December soybean oil rose as much as 0.53%.
Palm oil is impacted by movements of related vegetable oils as they compete for a share in the global edible oils market.
A second trader said that although output data released today showed an increase in production, the numbers did not spur selling by traders.
"The market had expected output to be lower but while the data showed an increase, it was marginal. Generally, production for the year is expected to be low," he said.
Southern Palm Oil Millers Association released data noting a 2.83% increase in production for the Oct 1-25 period.
Leading analysts said at a recent industry conference that output was expected to fall this year due to a lingering impact of the crop-damaging El Nino weather pattern.
The futures contract surged to a more than two-year high of RM2,822 on Monday, on lower output data and tracking the uptrend in Chinese vegetable oils, which also rose to its highest levels in about two years.
Reuters market analyst for commodities and energy technicals Wang Tao said palm oil may retest resistance at RM2,822 per tonne, as it has steadied around support at RM2,753.
Palm, soy and crude oil prices at 1050 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV6 2794 +34.00 2761 2802 269
MY PALM OIL DEC6 2794 +31.00 2750 2805 8932
MY PALM OIL JAN7 2794 +34.00 2768 2806 22003
CHINA PALM OLEIN JAN7 6062 +60.00 5876 6064 1559104
CHINA SOYOIL JAN7 6806 +34.00 6682 6810 876254
CBOT SOY OIL DEC6 35.97 +3.00 35.77 36.02 7616
INDIA PALM OIL OCT6 538.50 +3.00 536.50 539.2 1193
INDIA SOYOIL NOV6 676.15 +5.05 672.1 679.7 48100
NYMEX CRUDE DEC6 49.27 -0.69 49.16 49.51 71931
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel
(US$1 = RM4.1805)
(US$1 = 66.8900 Indian rupees)
(US$1 = 6.7730 Chinese yuan)