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Vegoils Palm ends lower as competing soy market drag
by Cals Thu 19 Dec 2013, 01:16
Vegoils Palm ends lower as competing soy market drag
Business & Markets 2013
Written by Reuters
Wednesday, 18 December 2013 18:19
KUALA LUMPUR (Dec 18): Malaysian palm oil futures ended lower on Wednesday, following weaker competing soy markets in China and the United States, but prices were held up by the ringgit's poor performance and concerns of another wave of floods disrupting output of the tropical oil.
The U.S. soyoil contract for January fell 0.7 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange lost 0.4 percent.
Lower soyoil prices could channel food and fuel demand away from palm, a rival edible oil.
But the Malaysian ringgit, which fell 0.26 percent to trade at 3.2555 against the U.S. dollar late Wednesday, attracted buying interest from overseas investors and refiners as it made the ringgit-priced feedstock cheaper.
"The market went down because of the external bad news from China and the U.S. soybean oil markets," said a trader with a foreign commodities brokerage in Malaysia.
"But we have positive news from the ringgit weakness, and fear of another round of monsoon floods, which is keeping the market in range-trading between 2,550 and 2,600 ringgit," the trader added.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange had dropped 1.0 percent to 2,550 ringgit ($782) per tonne by Wednesday's close. Prices traded in a range between 2,545 ringgit and 2,583.
Total traded volume stood at 38,116 lots of 25 tonnes, slightly above the usual 35,000 lots.
A second wave of monsoon rains is expected to hit several states in Peninsular Malaysia, including palm-growing Johor and Pahang, Malaysia's Meteorological Department's website showed on Wednesday.
The department has pegged a "yellow stage" advisory for these areas where rains are expected to drag on until next Monday, and warned of floods in low-lying areas.
The first wave of floods two weeks ago forced nearly 60,000 people to evacuate.
Floods could tighten palm oil supplies by disrupting harvesting and transportation of palm fruit to mills. Fresh fruit that are not crushed in the same day have higher levels of free fatty acids, reducing its quality.
In other markets, Brent futures held steady above $108 a barrel on Wednesday after sliding the previous day, with investors reluctant to lock in positions ahead of a U.S. Federal Reserve briefing that is expected to shed light on a plan to taper its monetary stimulus.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2502 -30.00 2502 2535 1019
MY PALM OIL FEB4 2530 -31.00 2527 2565 8391
MY PALM OIL MAR4 2550 -26.00 2545 2583 18581
CHINA PALM OLEIN MAY4 6088 +0.00 5984 6088 886816
CHINA SOYOIL MAY4 7008 -26.00 6930 7010 790586
CBOT SOY OIL JAN4 38.98 -0.33 38.96 39.45 4969
NYMEX CRUDE JAN4 97.16 -0.06 97.02 97.56 3711
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 = 3.26 Malaysian ringgit)
Business & Markets 2013
Written by Reuters
Wednesday, 18 December 2013 18:19
KUALA LUMPUR (Dec 18): Malaysian palm oil futures ended lower on Wednesday, following weaker competing soy markets in China and the United States, but prices were held up by the ringgit's poor performance and concerns of another wave of floods disrupting output of the tropical oil.
The U.S. soyoil contract for January fell 0.7 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange lost 0.4 percent.
Lower soyoil prices could channel food and fuel demand away from palm, a rival edible oil.
But the Malaysian ringgit, which fell 0.26 percent to trade at 3.2555 against the U.S. dollar late Wednesday, attracted buying interest from overseas investors and refiners as it made the ringgit-priced feedstock cheaper.
"The market went down because of the external bad news from China and the U.S. soybean oil markets," said a trader with a foreign commodities brokerage in Malaysia.
"But we have positive news from the ringgit weakness, and fear of another round of monsoon floods, which is keeping the market in range-trading between 2,550 and 2,600 ringgit," the trader added.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange had dropped 1.0 percent to 2,550 ringgit ($782) per tonne by Wednesday's close. Prices traded in a range between 2,545 ringgit and 2,583.
Total traded volume stood at 38,116 lots of 25 tonnes, slightly above the usual 35,000 lots.
A second wave of monsoon rains is expected to hit several states in Peninsular Malaysia, including palm-growing Johor and Pahang, Malaysia's Meteorological Department's website showed on Wednesday.
The department has pegged a "yellow stage" advisory for these areas where rains are expected to drag on until next Monday, and warned of floods in low-lying areas.
The first wave of floods two weeks ago forced nearly 60,000 people to evacuate.
Floods could tighten palm oil supplies by disrupting harvesting and transportation of palm fruit to mills. Fresh fruit that are not crushed in the same day have higher levels of free fatty acids, reducing its quality.
In other markets, Brent futures held steady above $108 a barrel on Wednesday after sliding the previous day, with investors reluctant to lock in positions ahead of a U.S. Federal Reserve briefing that is expected to shed light on a plan to taper its monetary stimulus.
Palm, soy and crude oil prices at 1007 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JAN4 2502 -30.00 2502 2535 1019
MY PALM OIL FEB4 2530 -31.00 2527 2565 8391
MY PALM OIL MAR4 2550 -26.00 2545 2583 18581
CHINA PALM OLEIN MAY4 6088 +0.00 5984 6088 886816
CHINA SOYOIL MAY4 7008 -26.00 6930 7010 790586
CBOT SOY OIL JAN4 38.98 -0.33 38.96 39.45 4969
NYMEX CRUDE JAN4 97.16 -0.06 97.02 97.56 3711
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 = 3.26 Malaysian ringgit)
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