KUALA LUMPUR: The following factors
are likely to influence Malaysian palm oil futures and other vegetable
oil markets on Tuesday.
FUNDAMENTALS
* Malaysian palm oil was flat on Monday as traders awaited clearer signals on
whether prices would extend last week's fall to near five year lows, pushing the
market into oversold territory.
* U.S. wheat futures slid on Monday, giving back some of the strong gains made
in the previous two sessions as fears of potential supply disruptions from the
Black Sea region eased.
* Brent crude oil shed nearly $2 a barrel to reach its lowest price in over a
year on Monday as investor concerns over conflict in Ukraine and Iraq eased, and
as higher Libyan oil output added to already ample supplies.
MARKET NEWS
* U.S. and European stock prices surged on Monday, taking a leading U.S.
equities index to a 14-year high, as investors breathed easier over the Ukraine
crisis and knocked oil prices to lows not seen in more than a year.
RELATED
> Big corn, soy yields seen in Ohio and Indiana -crop tour
> U.S. corn, soy conditions seen steady to slightly down -analysts
> U.S. farmers fight poisonous wheat fungus with cleaning, waiting
> Wheat dips on easing Black Sea fears; corn eyes big U.S. crop
> Russian wheat prices fall on USDA's crop estimate upgrade
DATA/EVENTS
> Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance
to release August 1-20 palm oil export data on August 20.
Palm, soy and crude oil prices at 0024 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP4 0 +0.00 0 0 0
MY PALM OIL OCT4 0 +0.00 0 0 0
MY PALM OIL NOV4 0 +0.00 0 0 0
CHINA PALM OLEIN JAN5 5308 -4.00 5288 5312 154360
CHINA SOYOIL JAN5 0 +0.00 0 0 0
CBOT SOY OIL DEC4 33.15 -0.18 33.13 33.26 597
NYMEX CRUDE SEP4 96.66 +0.25 96.54 96.72 495
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
- Reuters
Reuters also reported that Malaysian palm oil was flat on Monday as
traders awaited clearer signals on whether prices would extend last
week's fall to near five year lows, pushing the market into oversold
territory.
By Monday's close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange had inched down 0.29 percent to 2,087 ringgit ($661) per tonne.
"This is very reflective of the indecisiveness that the market has," said a trader with foreign commodities brokerage in Kuala Lumpur.
"The market does not want to go down from here because the fundamentals do not warrant, but cannot go higher unless there's a sign of increased demand," the trader said.
Prices of palm oil, the world's most traded vegetable oil, fell 6.2 percent last week, notching their biggest weekly drop since March 2013, dragged down by projections of abundant supplies of soybeans.
Palm typically tracks soyoil, a rival edible oil and common food and fuel substitute. Soy markets are facing pressure over forecasts of a bountiful soybean crop from top exporter the United States.
Traders said the market was now heavily oversold.
One trader described the relative strength index reading for Malaysian palm oil prices as "way beyond belief. Normally it becomes oversold when it is 30, or lower than 30. This market is very heavily oversold ... you don't get to see this very often. It looks like prices should recover very quickly."
Declining US soyoil prices could only impact palm prices to a certain point, beyond which palm becomes more attractive, one trader said.
He said he expected to see an increase in palm prices over the next two months.
"The world still has to live with palm oil for their fat needs. Technically (soy oil prices) are coming off and they are putting pressure on our side, but if you see the differential between palm olein and soybean oil, we are back to about $100, which fundamentally doesn't bode well for soybean oil."
"The market is looking for a new lead to see if prices will decline further," the trader said, noting that participants would be monitoring the performance of soybean oil trade on the Dalian Commodities Exchange.
"The market will start recovering when people see signs of exports growing and demand there," another trader said.
Total traded volume on Monday stood at 39,948 lots of 25 tonnes, above the average 35,000 lots.
Technical charts showed palm oil prices may fall to 2,046 ringgit per tonne, after breaking below support at 2,094 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent crude fell more than $1 to trade below $102.5 a barrel on Monday, as the threat of wider conflict in Ukraine diminished, oil output increased in Libya and worries eased over supply from key producer Iraq.
In other competing vegetable oil markets, the U.S. soyoil contract for August remained steady, slipping 0.06 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange fell 1.35 percent.- Reuters
FUNDAMENTALS
* Malaysian palm oil was flat on Monday as traders awaited clearer signals on
whether prices would extend last week's fall to near five year lows, pushing the
market into oversold territory.
* U.S. wheat futures slid on Monday, giving back some of the strong gains made
in the previous two sessions as fears of potential supply disruptions from the
Black Sea region eased.
* Brent crude oil shed nearly $2 a barrel to reach its lowest price in over a
year on Monday as investor concerns over conflict in Ukraine and Iraq eased, and
as higher Libyan oil output added to already ample supplies.
MARKET NEWS
* U.S. and European stock prices surged on Monday, taking a leading U.S.
equities index to a 14-year high, as investors breathed easier over the Ukraine
crisis and knocked oil prices to lows not seen in more than a year.
RELATED
> Big corn, soy yields seen in Ohio and Indiana -crop tour
> U.S. corn, soy conditions seen steady to slightly down -analysts
> U.S. farmers fight poisonous wheat fungus with cleaning, waiting
> Wheat dips on easing Black Sea fears; corn eyes big U.S. crop
> Russian wheat prices fall on USDA's crop estimate upgrade
DATA/EVENTS
> Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance
to release August 1-20 palm oil export data on August 20.
Palm, soy and crude oil prices at 0024 GMT
Contract Month Last Change Low High Volume
MY PALM OIL SEP4 0 +0.00 0 0 0
MY PALM OIL OCT4 0 +0.00 0 0 0
MY PALM OIL NOV4 0 +0.00 0 0 0
CHINA PALM OLEIN JAN5 5308 -4.00 5288 5312 154360
CHINA SOYOIL JAN5 0 +0.00 0 0 0
CBOT SOY OIL DEC4 33.15 -0.18 33.13 33.26 597
NYMEX CRUDE SEP4 96.66 +0.25 96.54 96.72 495
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
- Reuters
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By Monday's close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange had inched down 0.29 percent to 2,087 ringgit ($661) per tonne.
"This is very reflective of the indecisiveness that the market has," said a trader with foreign commodities brokerage in Kuala Lumpur.
"The market does not want to go down from here because the fundamentals do not warrant, but cannot go higher unless there's a sign of increased demand," the trader said.
Prices of palm oil, the world's most traded vegetable oil, fell 6.2 percent last week, notching their biggest weekly drop since March 2013, dragged down by projections of abundant supplies of soybeans.
Palm typically tracks soyoil, a rival edible oil and common food and fuel substitute. Soy markets are facing pressure over forecasts of a bountiful soybean crop from top exporter the United States.
Traders said the market was now heavily oversold.
One trader described the relative strength index reading for Malaysian palm oil prices as "way beyond belief. Normally it becomes oversold when it is 30, or lower than 30. This market is very heavily oversold ... you don't get to see this very often. It looks like prices should recover very quickly."
Declining US soyoil prices could only impact palm prices to a certain point, beyond which palm becomes more attractive, one trader said.
He said he expected to see an increase in palm prices over the next two months.
"The world still has to live with palm oil for their fat needs. Technically (soy oil prices) are coming off and they are putting pressure on our side, but if you see the differential between palm olein and soybean oil, we are back to about $100, which fundamentally doesn't bode well for soybean oil."
"The market is looking for a new lead to see if prices will decline further," the trader said, noting that participants would be monitoring the performance of soybean oil trade on the Dalian Commodities Exchange.
"The market will start recovering when people see signs of exports growing and demand there," another trader said.
Total traded volume on Monday stood at 39,948 lots of 25 tonnes, above the average 35,000 lots.
Technical charts showed palm oil prices may fall to 2,046 ringgit per tonne, after breaking below support at 2,094 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent crude fell more than $1 to trade below $102.5 a barrel on Monday, as the threat of wider conflict in Ukraine diminished, oil output increased in Libya and worries eased over supply from key producer Iraq.
In other competing vegetable oil markets, the U.S. soyoil contract for August remained steady, slipping 0.06 percent in early Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange fell 1.35 percent.- Reuters
The Malaysian Palm Oil Council wanted a strong palm oil brand. — Reuters picKOTA
KINABALU, Aug 19 — The Malaysian Palm Oil Council (MPOC) is of the
opinion that the time is now opportune to create a strong Malaysian palm
oil brand.“We actually regard the International Palm oil Sustainability Conference (IPOSC) 2014 as part of these aspirations, since we are hopeful that the new information, as well as, new ideas will be generated from this conference,” he said when opening the two-day event here today.
Lee hoped the Malaysian palm oil industry would use new ideas to improve the many facets of sustainability in producing palm oil and create the branded Malaysian palm oil.
“On this note I urge all of you to generously contribute your views over the next two days.
“IPOSC is precisely the platform to showcase such effort, as well as, share new challenges faced by us with all the stakeholders,” Lee said.
About 200 local and international participants from France, Bangladesh and Indonesia are attending the conference which will showcase the latest developments and technologies related to the sustainable development of the palm oil industry.
The conference will focus on current issues including wildlife conservation, deforestation, indirect land use change, biomass potential and international sustainability policies and certification. — Bernama
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