Thursday, September 13, 2012

20120913 1518 Palm Oil Related News.

VEGOILS-Rising stocks to drag on palm oil futures
Climbing palm oil output to weigh on prices
Palm oil to end rebound around 2,960 ringgit-technicals
Prices downside limited by palm oil's widening discount to soyoil

By Anuradha Raghu
KUALA LUMPUR, Sept 13 (Reuters) - Malaysian palm oil futures dropped on Thursday on expectations of output rising this month that could lead to a stock build-up, although losses were limited by expectations of strong Asian demand and tight supply of competing soyoil.
Palm oil prices have lost 8 percent so far this year thanks to the euro zone debt crisis stirring concerns of weaker global growth and commodity demand. In recent weeks, palm oil has dropped below 3,000 ringgit on rising stocks.
"The market is bearish. There's no doubt about it because fundamentally stocks are very high and there is no sign that production is slowing down," said a trader with a local commodities brokerage.
"Everybody knows at the back of their mind that production is climbing higher towards the peak, maybe in October," the trader added.
By the midday break, the benchmark November contract on the Bursa Malaysia Derivatives Exchange slipped 0.3 percent to 2,922 ringgit ($947.7) per tonne.
Total traded volume stood at 11,325 lots of 25 tonnes each, slightly lower than the usual 12,500 lots.
Technicals showed palm oil will end its current rebound around a resistance at 2,960 ringgit per tonne and drop back to its Sept. 11 low of 2,874 ringgit, said Reuters market analyst Wang Tao.
Traders have said the palm oil's widening discount to soyoil limit prices from falling as consumers shift their purchases to the tropical oil produced in Indonesia and Malaysia.
"Palm oil is now so much discounted against soy bean oil with the cap reaching $300. The market is just waiting for the time to bounce back and climb higher. Eventually, demand will start setting in," said the trader.
For now, palm oil's discount to soyoil could widen further after the U.S. Department of Agriculture cut its estimate of the soybean crop in the world's top grain-exporting nation.
The USDA pegged the soybean harvest at 2.634 billion bushels, down from last month's 2.692 billion and below analysts' average estimate of 2.657 billion. Ending stocks next summer were projected to be the lowest in nine years at 115 million, unchanged from August' s estimate.
Brent crude steadied near $116 a barrel on Thursday, as traders awaited a U.S. Federal Reserve policy decision that is expected to include further stimulus action to bolster the world's largest economy.
In other vegetable oil markets, U.S. soyoil for December delivery rose 0.5 percent. The most active January 2013 soyoil contract on the Dalian Commodity Exchange rose 1.4 percent. (Editing by Niluksi Koswanage)

VEGOILS-Palm oil ends higher on euro zone bailout approval
Wed Sep 12, 2012 6:51am EDT
German court approval of 700 billion euro bailout fund boosts markets
Prices likely to drop to 2,869 ringgit per tonne-technicals
Markets eye U.S. Agriculture report that may show tightening soy supply
By Anuradha Raghu
KUALA LUMPUR, Sept 12 (Reuters) - Malaysia crude palm oil futures edged up on Wednesday after Germany's top court backed a euro zone bailout fund, raising hopes that the debt crisis will not spread further and hurt global economic growth.
German's top court had earlier ruled in favour of a 700 billion euro bailout fund, lifting global stocks and shoring up Brent crude oil prices.
"I think what happened just now on the German court ruling is something that is quite encouraging for the commodity market although it comes with conditions," said Phillip Futures analyst Ker Chung Yang.
"The approval of the European Stability Mechanism (ESM) is something we have been waiting for. It is a breakthrough for the crisis," he added.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to close at 2,930 ringgit ($950) per tonne. Earlier in the day, the market dropped on concerns of higher production fuelling a stock build up.
Total traded volume stood at 46,120 lots of 25 tonnes each, nearly double the usual 25,000 lots as traders piled back into the market to take positions.
Reuters technicals market analyst Wang Tao said palm oil is likely to drop to 2,869 ringgit per tonne, driven by a downward wave. A rebound from the current level will be limited to 2,947 ringgit.
Industry analyst James Fry told an industry seminar earlier in the day that palm oil prices could fall to 2,450 ringgit per tonne in the first quarter of 2013 if Brent crude dropped to $80 a barrel.
Palm oil stocks in August surged to a 10-month high of 2.1 million tonnes, exceeding market expectations, the Malaysian Palm Oil Board (MPOB) said earlier in the week.
While production is expected to be stronger, cargo surveyors have pointed to stronger demand this month. For the first ten days of September, Malaysian palm oil exports jumped 30 percent as the country shipped out more crude to India thanks to a bigger tax free quota of the grade.
India's palm oil imports in the new marketing year will rise 7.9 percent to 7.5 million tonnes as the world's top edible oil buyer struggles to meet demand due to faltering local oilseed output, an industry official told Reuters.
Brent crude oil rose for a fifth straight session on Wednesday, lifted by the German court decision on the giant bailout and hopes the Federal Reserve will ease monetary policy this week.
In other vegetable oil markets, U.S. soyoil for December delivery rose 1 percent with some traders expecting the U.S. Department of Agriculture to slash soybean production estimates following a crop-damaging historic Midwest drought.
The most active January 2013 soyoil contract on the Dalian Commodity Exchange fell 0.2 percent.

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