KUALA LUMPUR: Malaysian palm oil futures ended higher for the third straight day on Monday but trade was thin, with most investors steering clear of risky bets as they waited for an industry report on palm stocks and production in
the world's second-biggest producer.
Stocks in September may have jumped to 1.91 million tonnes,
their highest in six months, as strong seasonal output trumped
robust export demand, a Reuters survey showed on Monday.
Production is expected to surge 15 percent in September from
a month before as oil palm trees seasonally produce more fruit.
Stockpiles could climb above 2.0 million tonnes again, putting
more downward pressure on prices, which have lost 5 percent so
far this year.
Stocks surged to a record high of 2.67 million tonnes last
December but had shrunk to 1.67 million tonnes at the end of
August.
Official data for September's end-stocks, exports and output
will be released by the industry regulator, the Malaysian Palm
Oil Board (MPOB), on Thursday, Oct. 10.
"Markets are quiet today, especially with Dalian closed.
Traders are preparing for the MPOB release," said a trader with
a local commodities brokerage.
Chinese markets, including the Dalian Commodities Exchange,
are closed for a public holiday and will reopen on Tuesday.
By Monday's close, the benchmark December contract
on the Bursa Malaysia Derivatives Exchange had edged up 0.6
percent to 2,318 ringgit ($726) per tonne. Prices traded in a
tight range between 2,303 and 2,329 ringgit.
Total traded volume was thin at 26,984 lots of 25 tonnes
each, much lower than the average 35,000 lots.
Technicals showed that Malaysian palm oil remained neutral
in a range of 2,270 ringgit to 2,334 ringgit per tonne, Reuters
market analyst Wang Tao said.
The shutdown of the U.S government could weigh on palm
prices if the situation is prolonged.
The uncertainty could drag on the U.S. dollar against
the ringgit, making the ringgit-priced palm feedstock
more expensive for overseas buyers and refiners. The ringgit was
trading slightly lower at 3.1880 per dollar late on Monday.
"It may indirectly affect palm in the sense that the U.S.
dollar will weaken, and in turn strengthen the ringgit, which
will put pressure on the palm oil market," said a Kuala
Lumpur-based trader.
In other markets, Brent crude fell more than 1 percent to
below $108 a barrel on Monday as oil production resumed in the
Gulf of Mexico after a tropical storm, while concern over the
U.S. government shutdown clouded the outlook for demand.
In competing vegetable oil markets, the U.S. soyoil contract
for December edged down 0.2 percent in late Asian trade.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT3 2350 +11.00 2310 2353 343
MY PALM OIL NOV3 2320 +5.00 2308 2332 1981
MY PALM OIL DEC3 2318 +13.00 2303 2329 13842
CHINA PALM OLEIN JAN4 - - - - -
CHINA SOYOIL JAN4 - - - - -
CBOT SOY OIL DEC3 40.17 -0.07 40.06 40.49 4679
NYMEX CRUDE NOV3 102.61 -1.23 102.50 103.59 19244
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=3.191 Malaysian ringgit)
- Reuters
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