Vegoils Palm ends lower on bigger stockpile worry, but monsoon floods support

Business & Markets 2013
Written by Reuters
Wednesday, 11 December 2013 18:51
A + A - Reset
(11/12/13 18:17:45)
* Prices stuck in tight range between 2,627-2,650 ringgit
* Malaysia Dec 1-10 palm exports fall 20-26 pct m/m -cargo surveyors
* High palm stocks and weak exports hurt, but monsoon floods support market
-trader
KUALA LUMPUR (Dec 11): Malaysian palm oil futures ended lower in tight
trade on Wednesday, weighed by worries that sluggish export demand will
inflate stockpiles of the tropical oil, although market players expect floods in
palm-growing areas to curb supply.
Exports of Malaysian palm oil fell 8.7 percent in November, from a month ago,
industry regulator data showed on Tuesday, causing end-stocks in the world's
second-largest producer to grow to an eight-month high of 1.98 million tonnes.
Investor sentiment was also dampened after cargo surveyor data showed that palm's weak demand could potentially worsen this month,
with shipment volumes in Dec 1-10, plunging as much as 26 percent from the same period in November.
But prices were supported as monsoon rains in several parts of Malaysia — including major palm-growing states of Johor and Pahang —
hampered production of palm oil from flood-hit plantations.
Malaysia's Meteorological Department on Wednesday issued a "yellow stage" advisory of heavy rain in Pahang, that is expected to last
until Thursday, and warned of floods in low-lying ground.
"The exports were disappointing and the stocks figure bearish, so there's some pressure on the market," said a trader with a foreign
commodities brokerage.
"But there's some supply disruption from the floods, and things are more or less balanced out," the Kuala Lumpur-based trader added.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange fell 0.3 percent to 2,630 ringgit ($819) per tonne, by
Wednesday's close. Prices were stuck in a range between 2,627-2,650 ringgit.
Total traded volume stood at 22,117 lots of 25 tonnes, below the average 35,000 lots.
Forecasts for bumper crops of competing global oilseeds also weighed on palm prices. Larger supplies of soybean for crushing, could
bring down prices of soyoil and channel demand away from rival palm oil.
The U.S. Department of Agriculture (USDA) put U.S. soybean inventories at 150 million bushels, but raised its estimates for Argentina's
soy crop by 1 million tonnes, to 54.5 million.
Brazil's government crop supply agency on Tuesday, forecast a record 2013/2014 soybean harvest of 90 million tonnes, compared with a
range of 87.9 million to 90.2 million tonnes predicted earlier.
The U.S. soyoil contract for January rose 0.1 percent in late Asian trade. The most active May soybean oil contract on the Dalian
Commodities Exchange gained 0.6 percent.
In other markets, Brent held steady above $109 a barrel on Wednesday, as traders focused on the narrowing of its spread with U.S.
futures ahead of U.S. inventory data, that is forecast to show a drop in crude stockpiles.
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Palm, soy and crude oil prices at 1005 GMT
Contract Month Last Change Low High Volume
MY PALM OIL DEC3 0 +0.00 0 0 0
MY PALM OIL JAN4 2619 -7.00 2615 2634 953
MY PALM OIL FEB4 2630 -9.00 2627 2650 12485
CHINA PALM OLEIN MAY4 6260 +34.00 6200 6260 644756
CHINA SOYOIL MAY4 7254 +44.00 7198 7264 712480
CBOT SOY OIL JAN4 40.41 +0.30 40.12 40.56 7744
NYMEX CRUDE JAN4 98.54 +0.03 98.33 98.75 10036
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=3.21 Malaysian ringgit)