Vegoils Palm snaps six-session losing streak on technical bounce

by **Cals** Wed 19 Mar 2014, 22:13

Vegoils Palm snaps six-session losing streak on technical bounce

Business & Markets 2014

Written by Reuters

Wednesday, 19 March 2014 18:54

KUALA LUMPUR (Mar 19) Malaysian palm oil futures rose on Wednesday after six straight days of falls as a technical bounce gave some relief, although gains were held back by sluggish demand for the tropical oil.

A small recovery in overseas soy markets also provided some support to palm prices, which have fallen nearly 1 percent this month, largely due to profit-taking and worries about slackening demand from key consumers India and China.

"It's more of a technical correction after the market faced six days of continuous pressure," said a trader with a local commodities brokerage.

"But overall, the near-term trend is still heading lower to test the 2,650-2,680 ringgit level," the Kuala Lumpur-based trader added.

By Wednesday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had inched up 1.5 percent to 2,778 ringgit ($848) per tonne, with prices trading between 2,755-2,786 ringgit.

Total traded volume stood at 56,790 lots of 25 tonnes, much higher than the average 35,000 lots.

Technicals show Malaysian palm oil is expected to gain further to 2,822 ringgit per tonne, as it cleared a resistance at 2,764 ringgit, Reuters market analyst Wang Tao said.

Market players will be keeping an eye on cargo surveyor export data for the first 20 days of March to gauge demand for the tropical oil. Shipments of Malaysian palm oil products during March 1-15 plunged about 21 percent.

In competing vegetable oil markets, the U.S. soyoil contract for May rose 0.6 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange gained 0.1 percent.

Higher prices of rival soyoil would channel food and fuel demand to palm, a common substitute.

In other markets, Brent crude edged lower to hold near a six-week trough below $106 a barrel on Wednesday as worries about an escalation of the crisis in Ukraine eased and on expectations of a rise in U.S. oil stocks.

Palm, soy and crude oil prices at 1003 GMT
Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	APR4	2870	+31.00	2835	2885	381
MY PALM OIL	MAY4	2778	+44.00	2785	2820	14783
MY PALM OIL	JUN4	2778	+41.00	2755	2786	27259
CHINA PALM OLEIN	SEP4	6276	+48.00	6226	6286	595298
CHINA SOY OIL	SEP4	7002	+8.00	6972	7022	789036
CBOT SOY OIL	MAY4	42.53	+0.26	41.99	42.67	7840
NYMEX CRUDE	APR4	99.62	-0.08	99.34	99.71	6668

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
Crude in U.S. dollars per barrel
($1 = 3.276 Malaysian ringgit)
($1 = 6.1965 Chinese yuan)