Palm oil rises to end near 10-week high

Published: Tuesday February 18, 2014 MYT 7:46:00 AM
Updated: Tuesday February 18, 2014 MYT 10:15:03 AM

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JAKARTA: Malaysian palm oil futures reversed earlier losses to extend gains into a fourth straight session on Monday as expectations of rising demand and of falling output and exports offset a stronger ringgit.
By the close, the benchmark May contract on the Bursa Malaysia Derivatives Exchange was up 0.6% at RM2,682 (US$810) per tonne. Earlier, prices rose to a high of RM2,684, just under Friday's peak at RM2,688, the highest level since Dec 9.
"Anticipation of lower production in February and improving demand," a trader with a foreign
commodities brokerage said. "There has also been flooding in some (Malaysian) palm growing
areas."

Total traded volume stood at 32,658 lots of 25 tonnes, below the average 35,000 lots.
Exports of Malaysian palm oil products from Feb 1 to Feb 15 rose 31.7% compared with the same period in January, cargo surveyor Intertek Testing Services said on Saturday. After the close, data from Societe Generale de Surveillance showed that exports of Malaysian palm oil products for Feb 1-15 rose 27.2%.
Capping price rises was a firmer ringgit, a second trader added. The Malaysian ringgit rose as much as 0.6% to 3.2855 per dollar, its strongest since Jan 16, on demand from leveraged funds.

A firmer ringgit eats into margins for overseas buyers and refiners. 

In comparative vegetable oils, the most active May soybean oil contract on the Dalian Commodities Exchange was little changed. Higher soyoil prices may push buyers towards cheaper palm instead.

Malaysia, the world's No 2 palm oil producer, kept its crude palm oil export tax unchanged for March at 5%, a government circular showed on Monday.

In technicals, Malaysian palm oil may break a support level at RM2,648 per tonne and fall more to RM2,624 as indicated by its wave pattern and a Fibonacci retracement analysis, said Reuters market analyst Wang Tao.

In other markets, Brent crude steadied above $109 a barrel, supported by a weak dollar, supply disruptions and a severe winter across North America that has boosted heating demand.
   

Palm, soy and crude oil prices at 1039 GMT                                                    
                                                                                                 
  Contract        Month    Last   Change     Low    High  Volume                                
  MY PALM OIL      MAR4    2684   +23.00    2645    2684     631                                
  MY PALM OIL      APR4    2685   +20.00    2648    2687    8059                                
  MY PALM OIL      MAY4    2682   +19.00    2646    2684   14913                                
  CHINA PALM OLEIN MAY4    6010   +20.00    5950    6020  318374                                
  CHINA SOYOIL     MAY4    6728    -8.00    6686    6734  320978                                
  CBOT SOY OIL     MAR4   39.15    +0.00             0                                          
  NYMEX CRUDE      MAR4  100.72    +0.41  100.23  101.13   12045 - Reuters