Vegoils Palm snaps 3 days of losses ahead of Lunar New Year holidays

by **Cals** Thu 30 Jan 2014, 02:21

Vegoils Palm snaps 3 days of losses ahead of Lunar New Year holidays

Business & Markets 2014

Written by Reuters

Wednesday, 29 January 2014 18:35

KUALA LUMPUR (Jan 29): Malaysian palm oil futures ended higher on Wednesday after three days of losses, as investors squared positions ahead of a long weekend, although a stronger ringgit currency curbed some buying interest.

"There's book squaring ahead of the long holiday -- a lot of investors will want to cover their positions," said a trader with a local commodities brokerage in Malaysia.

Palm oil futures and physical markets in Malaysia will be closed from mid-day Jan. 30 for the Lunar New Year and Federal Territories Day holidays, and will resume trade on Feb. 4.

Prices, however, were on track to fall more than 4 percent this month, their biggest monthly loss since July last year, as investors fretted that sluggish export demand would keep palm stocks in the world's second-largest producer elevated.

But some market players expect demand to pick up in the coming months as winter fades and the weather becomes warmer.

Buyers facing the northern winter had cut down purchases of palm as the tropical oil solidifies in cold temperatures.

"By March, the northern hemisphere will start buying more palm products. Investors are looking at a little recovery in the market," the trader added.

The benchmark April contract on the Bursa Malaysia Derivatives Exchange had edged up 0.5 percent to 2,542 ringgit ($761) per tonne by Wednesday's close. Prices were locked in a tight range between 2,528 and 2,552 ringgit.

Total traded volume stood at 37,453 lots of 25 tonnes, a tad higher than the usual 35,000 lots.

Technicals were bullish. Malaysian palm oil is expected to rise to 2,556 ringgit per tonne, driven by a wave c, said Reuters market analyst Wang Tao.

The stronger Malaysian ringgit during early trading narrowed margins and dampened buying interest for overseas buyers and refiners. The ringgit advanced 0.45 percent against the U.S. dollar early Wednesday, before giving up some gains to trade at 3.3300 by the day's close.

In other markets, Brent futures held steady above $107 a barrel on Wednesday as investors waited to hear the fate of the U.S. monetary stimulus, with prices supported as concerns of turmoil in emerging economies eased.

In other competing vegetable oil markets, both the U.S. soyoil contract for March and the most active May soybean oil contract on the Dalian Commodities Exchange lost 0.3 percent in late Asian trade.

Palm, soy and crude oil prices at 1008 GMT
Contract	Month	Last	Change	Low	High	Volume
MY PALM OIL	FEB4	2534	+14.00	2530	2549	180
MY PALM OIL	MAR4	2546	+25.00	2529	2546	2566
MY PALM OIL	APR4	2542	+13.00	2528	2552	14441
CHINA PALM OLEIN	MAY4	5672	-32.00	5662	5726	245736
CHINA SOY OIL	MAY4	6450	-20.00	6440	6494	218854
CBOT SOY OIL	MAR4	37.28	-0.12	37.22	37.45	4286
NYMEX CRUDE	FEB4	96.82	-0.60	96.81	97.37	10100

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