Vegoils Palm oil edges down after hitting 3-week high

Vegoils Palm oil edges down after hitting 3-week high
Business & Markets 2013
Written by Reuters
Thursday, 02 January 2014 19:21

SINGAPORE (Jan 2): Malaysian palm oil futures jumped to their highest in three weeks on Thursday before falling back in the negative territory on renewed concerns over demand and thin trading at the start of the new year.

The Malaysian market, which sets the tone for global prices, ended 9 percent higher in 2013, its first annual gain since 2010.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange, closed down 11 ringgit at 2,648 ringgit ($804.9) per tonne after rising as high as 2,669 ringgit, its strongest since Dec. 9.

On the technical front, Reuters market analyst Wang Tao expects palm oil to drop to 2,620 ringgit per tonne, as an uptrend from 2,540 ringgit, an hourly chart low on Dec. 16, 2013, has temporarily completed.

Exports of Malaysian palm oil products for December fell 3.3 percent to 1,423,644 tonnes from 1,472,694 tonnes shipped during
November, cargo surveyor Societe Generale de Surveillance said
on Tuesday.

"Going forward in 2014, palm oil prices may face some headwinds on the demand-side. Expected output expansion in global oilseeds is likely to drive down prices," said Phillip Futures analyst Tan Chee Tat, who pegged resistance at 2,700 ringgit and support at 2,500 ringgit.

"India, the world's largest consumer for palm oil, is likely to trim on their palm oil imports as the nation pushes for domestic oilseed production through giving incentives to local farmers with higher purchase prices, a move to improve the current account deficit."

India fills more than half its edible oil demand through imports, consisting mainly of palm oil sourced from Indonesia and Malaysia. It also buys soyoil from Argentina and Brazil, and sunflower oil from Ukraine.

In other competing vegetable oil markets, the most active May soybean oil contract on the Dalian Commodities Exchange rose 0.8 percent.

Brent crude rose past $111 a barrel on Thursday on a drop in U.S. inventories and output cuts in Libya and South Sudan, but slowing economic expansion in China capped gains.
($1 = 3.29 Malaysian ringgit)

Palm, soy and crude oil prices at 1001 GMT

Contract Month Last Change Low High Volume
M'ASIA PALM OIL JAN4 2619 -9.00 2619 2630 386
M'ASIA PALM OIL FEB4 2638 -11.00 2636 2659 2743
M'ASIA PALM OIL MAR4 2648 -11.00 2646 2669 9900
M'ASIA PALM OIL APR4 2651 -11.00 2650 2670 2390
DALIAN SOY OIL MAY4 6922 +56.00 6866 6936 465014
CBOT SOY OIL MAR4 39.20 +0.07 0.00 0.00 0
NYMEX CRUDE FEB4 98.72 +0.30 98.50 98.97 7022

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil in Chinese yuan per tonne
Crude in U.S. dollars per barrel