KUALA LUMPUR: Malaysian palm oil futures bounced back on Tuesday after hitting a more than one-week low in the previous session, as a recovery in overseas soy markets and a weaker ringgit lifted the tropical oil.
Firm export data from Malaysia, the world's No.2 palm grower, also
supported.
Overseas sales of Malaysian palm oil products were 21-26 percent higher for
the Sept. 1-20 period compared with a month earlier, cargo surveyor data showed,
thanks to buoyant imports of crude palm oil.
The Malaysian currency fell 0.14 percent in early trade, and was
trading at 3.2470 per dollar late Tuesday, making the ringgit-priced palm
feedstock cheaper for overseas investors and refiners compared with other
dollar-priced edible oils.
"The ringgit is weakening, and the Dalian is marginally higher," said a
trader with a foreign commodities brokerage in Malaysia.
"Local sentiment is actually good - exports are good. But for external
factors, grains are looking very weak. So, you have a mixed market," the trader
added. He expects palm prices to be range-bound, with an immediate support level
at 2,070 ringgit and resistance at 2,150 ringgit.
The benchmark December contract on the Bursa Malaysia Derivatives
Exchange ended up 1.9 percent at 2,130 ringgit ($657) per tonne, trading in a
2,097 ringgit to 2,132 ringgit range. On Monday, the contract fell to 2064
ringgit, the lowest level since Sept. 12.
Total traded volume stood at 52,876 lots of 25 tonnes each on Tuesday, much
higher than the usual 35,000 lots.
In competing vegetable oil markets tracked by palm, the U.S. soyoil contract
for December rose 1.3 percent in late Asian trade, while the most active
January soybean oil contract on the Dalian Commodities Exchange edged
down 0.2 percent.
Technicals showed that palm oil has found support at 2,060 ringgit per tonne
and may consolidate above this level and below resistance at 2,150 ringgit for
one or more days, said Reuters market analyst Wang Tao.
"The rebound from 1,914 ringgit has ended around 2,150 ringgit and will be
partially or totally reversed by the correction from the Sept. 18 high of 2,173
ringgit," added Tao.
Anxiety over the prospect of bumper supplies of rival edible oils from the
United States and South America, however, lingered, curbing gains in palm
prices.
U.S. soybean futures hit a four-year low after the Department of Agriculture
said the maturity of this season's crop was above market expectations.
The Chicago Board Of Trade front-month soybeans was trading at $9.43 a
bushel at 1037 GMT. Earlier, the contract fell to $9.31, the lowest level since
2010.
Higher supplies of soybeans for crushing would weaken soyoil prices and
erode palm's discount to the competing vegetable oil, potentially shifting food
and fuel demand away from palm.
Leading industry analyst Dorab Mistry warned earlier this month that as
record supplies loom, palm oil prices should ease towards 1,900 ringgit over the
next few weeks to stay competitive and recapture market share from competing
oils.
In other markets, Brent crude rose above $97 a barrel on Tuesday as the
United States and several Gulf Arab allies launched strikes against Islamic
State strongholds in Syria, and as a surprise pick-up in China's factory
activity boosted the demand outlook.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT4 2152 +29.00 2125 2155 771
MY PALM OIL NOV4 2134 +41.00 2100 2134 4641
MY PALM OIL DEC4 2130 +39.00 2097 2132 28223
CHINA PALM OLEIN JAN5 5116 -18.00 5036 5138 1180588
CHINA SOYOIL JAN5 5830 -10.00 5790 5868 442852
CBOT SOY OIL DEC4 32.54 +5.70 31.95 32.56 7123
INDIA PALM OIL SEP4 464.00 +5.70 460.80 465.40 484
INDIA SOYOIL OCT4 601.00 +8.80 594.70 601.80 47280
NYMEX CRUDE NOV4 91.37 +0.50 90.58 91.48 21699
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
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.244 Malaysian ringgit)
($1 = 6.1378 Chinese yuan)
($1 = 60.95 Indian rupees)
- Reuters
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