GLOBAL MARKETS-Asia shares mostly higher, U.S. crude powers past $70 - Reuters News
07-May-2018 01:48:33 PM
- Asia share markets mostly firmer, Nikkei flat as yen seesaws
- Oil prices firm ahead of White House call on Iran deal
- Relief on US wages data tempered by emerging market strains
- Dollar uptrend pauses, supported by outlook for Fed hikes
By Wayne Cole
SYDNEY, May 7 (Reuters) - Most Asia markets firmed on Monday after a tame reading on U.S. wages lessened the risk of faster rate hikes by the Federal Reserve, although Sino-U.S. trade tensions and a looming deadline for an Iranian nuclear deal lurked in the background.
Energy shares were on a roll as oil prices hit their highest in more than three years amid strains in Venezuela's output and talk of possible new U.S. sanctions against Iran.
President Donald Trump has set a May 12 deadline for Europeans to "fix" the deal with Iran over its nuclear program or he would refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic.
Brent crude futures added 76 cents to $75.63 a barrel, while U.S. crude climbed 64 cents to $70.36 to finally crack the $70 barrier.
The week ahead also has important readings on the health of the Chinese economy, and hence global demand, as well as the latest data on U.S. consumer price inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan put on 0.2 percent, while Chinese blue chips rose 1.2 percent.
E-Mini futures for the S&P 500 inched up 0.36 percent and spread betters pointed to opening gains for the European bourses. Japan's Nikkei was flat, recouping losses as the yen shed its early gains.
Friday's U.S. jobs report showed unemployment dropping to a new cycle low of 3.9 percent yet wages remained benign, suggesting the Federal Reserve would keep raising rates but at a gradual pace.
That outlook cheered Wall Street where the Dow ended Friday up 1.39 percent, while the S&P 500 rose 1.28 percent and the Nasdaq 1.71 percent.
Apple Inc hit a record high after Warren Buffett's Berkshire Hathaway Inc disclosed that it had raised its stake in the iPhone maker.
The recent run of solid U.S. economic news contrasts with a softer turn in European data and lifted the dollar to its highest for the year so far against the euro.
The single currency was last at $1.1957, having been down as deep as $1.1911 on Friday. The dollar also reached its highest since December against a basket of currencies and was last trading at 92.609.
It had less luck against the Japanese yen, in part because strains in emerging market currencies were supporting safe havens such as the yen. The dollar steadied at 109.14, having topped out around 110.05 last week.
"It's this recovery in the U.S. dollar – one based on the data flow in the U.S. against the rest of the world – which is catching many by surprise and causing ructions across emerging markets," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
Markets from Argentina to Turkey have been under intense pressure, in part because many of these countries have large amounts of U.S. dollar debt which gets more expensive to finance as the currency rises.
A firming U.S. dollar has also been negative for some commodities, with gold falling for a third straight week before bouncing slightly on Monday to $1,315.12 an ounce.
(Editing by Sam Holmes & Shri Navaratnam)
UPDATE 5-Oil prices reach highest since Nov 2014 on Venezuela, Iran worries - Reuters News
07-May-2018 03:00:22 PM
- Brent jumps to over $75 a barrel, WTI rises above $70 per barrel
- Shanghai futures hit record price, volume and open interest
- Economic crisis in Venezuela threatens its oil exports
- U.S. deadline over Iran looms on May 12
- But highest U.S. oil drilling since 2015 holds back market
Adds China crude open interest and volume record; updates prices
By Henning Gloystein
SINGAPORE, May 7 (Reuters) - Key crude oil prices rose by 1 percent to their highest levels since late-2014 on Monday, pushed up by a deepening economic crisis in Venezuela and a looming decision on whether the United States will re-impose sanctions against Iran.
Brent crude oil futures were at $75.57 per barrel at 0650 GMT, up 70 cents, or 0.9 percent, from their last close. Earlier in the session, they touched their highest since November 2014 at $75.89 a barrel.
U.S. West Texas Intermediate (WTI) crude futures rose 70 cents, or 1 percent, to $70.42 per barrel. Monday was the first time since November 2014 that WTI had climbed above $70 per barrel.
Meanwhile, China's Shanghai crude oil futures, launched in March, broke their dollar-converted record-high of $71.32 per barrel by rising as far as $72.54 on Monday.
Open interest and traded volumes for Shanghai crude also hit a fresh record on Monday.
Analysts warned that the deepening economic crisis in major oil exporter Venezuela threatened to further crimp its production and exports.
Shannon Rivkin, investment director of Australia's Rivkin Securities, said that oil prices had been driven up due to "growing concerns over the economic collapse of Venezuela and its oil industry, plus possible new sanctions against Iran from the Trump administration".
U.S. oil firm ConocoPhillips has moved to take key Caribbean assets of Venezuela's state-run PDVSA to enforce a $2 billion arbitration award, actions that could further impair PDVSA's declining oil production and exports.
Venezuela's oil output has halved since the early 2000s to just 1.5 million barrels per day (bpd), as the South American country has failed to invest enough to maintain its petroleum industry.
Beyond Venezuela's woes, Greg McKenna, chief market strategist at futures brokerage AxiTrader, said "the big story this week is going to be about oil and the Iran Nuclear deal". Most market participants expect Trump to withdraw from the pact, he said.
Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on Iran's nuclear programme.
Expressing doubts over Iran's sincerity, Trump has threatened to walk away from the 2015 agreement by not extending sanctions waivers when they expire on May 12, which would likely result in a reduction of Iran's oil exports.
Looming over markets, however, is surging U.S. output, which has soared by more than a quarter in the last two years, to 10.62 million bpd.
U.S. output will likely rise further this year, towards or past Russia's 11 million bpd, as its energy firms keep drilling for more.
U.S. energy companies added nine oil rigs looking for new production in the week to May 4, bringing the total count to 834, the highest level since March 2015, energy services firm Baker Hughes said last Friday.
(Reporting by Henning Gloystein and Roslan Khasawneh; Editing by Richard Pullin and Joseph Radford)
FOREX-Dollar index at near 4-month high after U.S. jobs data - Reuters News
07-May-2018 12:24:14 PM
- Dollar near 4-month high against basket of major currencies
- Uncertainties on trade frictions, Iran nuclear deal hamper trade
By Hideyuki Sano
TOKYO, May 7 (Reuters) - The dollar stayed near its 2018 peak on Monday after U.S. jobs and wages data did little to temper perceptions of strength in the U.S. economy, though renewed concerns about trade frictions could cloud its outlook.
The dollar index, stood at 92.461, down 0.1 percent but still near Friday's high of 92.908, which was its firmest level since late December.
The dollar index has risen for three straight weeks, maintaining its strength after Friday's mixed U.S. data.
The U.S. economy added fewer jobs than expected and the average hourly earnings, closely watched for signs of inflationary pressures, rose a less-than-expected 0.1 percent in April, leaving the annual increase at 2.6 percent.
The unemployment rate dropped to near a 17-1/2-year low of 3.9 percent, although this was driven in part by Americans leaving the labour force.
None of this changed the perception that the Federal Reserve will likely hike interest rates at least twice, and possibly three times, by year-end.
In contrast, recent data suggested Europe's stellar growth last year is losing momentum, leading speculators to trim bets on the single currency on expectations the European Central Bank will wind down its stimulus.
The euro changed hands at $1.1962, not far from Friday's four-month low of $1.1910.
Data from U.S. financial watchdog published late on Friday showed speculators' net long position in the euro in Chicago's futures exchange declined only slightly in the latest week.
They held 120,568 contracts of net short positions, down from a record 151,476 set last month but still at a high level.
A wider measure of dollar positioning that includes contracts on some emerging market currencies showed net dollar shorts shrank to $18.32 billion, from a seven-year high of $28.18 billion two weeks earlier.
"Speculators' positioning has gone to extreme levels as they had been selling the dollar continuously," Yukio Ishizuki, senior strategist at Daiwa Securities.
Concerns about U.S. President Donald Trump's protectionism was one big reason many investors had shied away from the dollar earlier.
Some market participants expect worries over a trade war could return after talks between the United States and China produced little apparent progress.
In a sign that the trade tension is spilling over to other issues, Beijing and Washington came to loggerheads over how to refer to Taiwan, Hong Kong and Macau.
"Trade issues are likely to persist towards the U.S. mid-term elections. So in the long run, the dollar is likely to decline," said a currency trader at a Japanese bank.
Traders also kept an eye on the fate of Iran's 2015 nuclear deal, from which Trump has threatened to pull out.
An escalating diplomatic standoff could have innumerable repercussions, including a further rise in oil prices and damage to investors' risk appetite.
Trump has said that unless European allies rectify "flaws" in Tehran's deal with world powers by May 12 he will refuse to extend U.S. sanctions relief for Iran.
Elsewhere, the British pound traded at $1.3538, near its four-month low of $1.3487 touched on Tuesday.
The dollar stood little changed at 109.10 yen, off its three-month high of 110.05 yen.
The yen's rebound was in part driven by short-covering by Japanese margin traders, especially against the Turkish lira, which fell to record lows during Japan's Golden Week holidays.
The lira fell more than 4 percent last week versus the dollar.
(Editing by Sam Holmes & Shri Navaratnam)
ANALYSIS-Dollar surge bringing emerging market rate cut cycle to a halt - Reuters News
07-May-2018 02:00:00 PM
- Surging dollar comes back to haunt emerging markets
- Argentina facing classic currency attack
- Expectations of more interest rate cuts being scaled back
- Bond exodus faster than during 2013 'taper tantrum'
By Marc Jones and Karin Strohecker
LONDON, May 7 (Reuters) - A resurgent dollar and higher borrowing costs are smashing through Argentina and Turkey's currencies like a wrecking ball and raising the likelihood more broadly that emerging markets' three-year long interest rate cutting cycle is at an end.
Emerging markets came into the year flying, riding on the back of a healthy global economy and rising commodity prices alongside tame inflation and a weak dollar. It looked more than likely that a wave of rate cuts would keep rolling, allowing a bond rally to continue.
From Brazil and Russia to Armenia and Zambia, developing countries, big and small, have been on a rate cutting spree. With hundreds of rate cuts since Jan. 2015, the average emerging market borrowing cost fell under 6 percent earlier this year from over 7 percent at the time.
Fund managers' profits too have soared in this time, with emerging local currency debt among the best performing asset classes, with dollar-based returns of 14 percent last year. Even in the first quarter of 2018, returns were a buoyant 4.3 percent
Now though, almost exactly five years since the so-called taper tantrum shook an emerging market rally, these gains appear to be on the cusp of reversal.
Argentina has jacked up its interest rates to 40 percent in response to a rout in its peso currency, while Turkey was also forced into a rate rise as its lira hit record lows against the dollar. Indonesia, after heavy interventions to stem rupiah bleeding, has also said it could resort to policy tightening.
As emerging currencies slide almost everywhere, yields on bonds denominated in emerging market currencies are back up near 6.2 percent and returns are now negative for 2018.
"The rate cut trade has unwound," Naveen Kunam, a portfolio manager at Allianz Global Investors said, citing the increased uncertainty on monetary policy.
For decades, a rising dollar has spelt bad news for emerging markets and despite all the progress in the developing world in recent years, latest price moves show not that much has changed.
With the dollar on the rise, emerging currencies have weakened some 3 percent in the past two weeks, as measured by a JPMorgan index.
Figures from the Institute of International Finance this week showed that the result has been a faster exodus from EM debt than at a similar stage of the 2013 taper tantrum. At $5.5 billion in two weeks the IIF described it as the "ghost of tantrums past".
RATE EXPECTATIONS
It has looked as though emerging economies had the upper hand over their old enemy -- inflation. Inflation has fallen below target to record lows in Russia, slipped to five-month lows in India and is projected at a below-target 3.8 percent in Brazil this year.
Indonesian inflation in April was a 100 bps off year ago levels, data last week showed.
But the shifts of recent weeks have prompted some analysts to reassess whether interest rate cuts can continue. In Russia for instance, analysts have reduced their bets on rate cuts after the central bank held rates in late April and now predict only one or two moves this year versus earlier calls for deeper cuts.
Sberbank CIB analysts said they did not now expect a Russian rate cut to come before September.
India, like all energy-importing emerging economies, is being hit also by the oil price rise -- each $10 rise in oil prices adds 0.8 percent to inflation there, analysts at TS Lombard calculate.
In the past week, expectations for an interest rate hike in India over the coming 12 months have jumped -- markets now price more than two rate hikes compared to just over one, a week ago. Last year it was cutting rates.
The question emerging market policymakers may ask themselves has changed, said Sebastien Barbe, global head of EM research and strategy at Credit Agricole.
"Now the question for many central banks is: should they increase (rates) more quickly?" he said.
It is not only those that are normally vulnerable either. Even in the relatively calm backwaters of eastern Europe, the Czech central bank has warned it may have to raise rates again following a sudden slump in the crown.
All that is a huge blow to fund managers who have piled into the EM asset class in anticipation the returns would continue. It may be especially painful for newcomers -- a raft of new funds have launched this year, including one from Franklin Templeton's high-profile portfolio manager Michael Hasenstab.
Countries such as Indonesia where foreigners own a large share of their local bond markets have consequently been among the worst hit as investors jostle to sell.
"If there are worries, this money will get out," Credit Agricole's Barbe said.
(Additional reporting by Sujata Rao
Editing by Keith Weir)
PRECIOUS-Gold rises to 1-week high as dollar pauses rally - Reuters News
07-May-2018 12:12:41 PM
- Dollar index eases from 4-month high hit on Friday
- SPDR Gold holdings down 0.17 percent on Friday
- Speculators cut net long positions in gold in week to May 1
- Spot gold may bounce to resistance at $1,326/oz -technicals
(Adds comment, updates prices)
By Apeksha Nair
BENGALURU, May 7 (Reuters) - Gold prices hit their highest in a week on Monday, buoyed as the dollar slipped after marking its strongest level this year in the previous session.
Spot gold had risen 0.3 percent to $1,318.46 per ounce by 0332 GMT, after earlier touching its highest since late-April at $1,318.85.
U.S. gold futures for June delivery were up 0.3 percent at $1,319.10 per ounce.
"The dollar is a little bit under pressure. The key driver still remains the dollar and that is what we see," said Dominic Schnider at UBS Wealth Management in Hong Kong.
The dollar index traded slightly below its 2018-peak early on Monday, after disappointing U.S. employment data for April and as concerns about trade frictions weighed on upward momentum.
Gold prices were also drawing support from political uncertainty surrounding markets, Schnider said, pointing to concurrent gains in the Japanese yen, which also tends to appreciate with higher uncertainty.
"The fact that the trade negotiations between the U.S. and China for some ended up on the disappointing side could have added a little bit of support for gold."
Meanwhile, ANZ analysts said in note that gold prices pushed higher as investors focused on the relatively benign level of wage growth in the United States.
"This eased concerns that had built up over the past few weeks about a quicker rate hike cycle. The tepid economic data should see the U.S. Federal Reserve remain on a gradual tightening phase, and support investor sentiment for gold," ANZ said.
Two Federal Reserve officials on Friday said they were keeping an open mind on the total number of interest rate rises needed this year.
U.S. interest rate futures rose modestly on Friday, as traders still expect the Fed to raise key borrowing costs at its June 12-13 policy meeting in the wake of weaker-than-forecast growth in domestic payrolls and wages in April.
Gold is highly-sensitive to rising U.S. rates as these tend to boost the dollar in which it is priced.
Spot gold may bounce more to resistance at $1,326 per ounce, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.17 percent to 864.13 tonnes on Friday.
Hedge funds and money managers trimmed their net long positions in COMEX gold by 62,378 contracts to 51,985 contracts in the week to May 1, U.S. data showed on Friday.
In other precious metals, spot silver gained 0.5 percent to $16.56 an ounce.
Platinum advanced 1.3 percent to $917.60 an ounce, having earlier hit its highest since April 25 at $918.70.
Palladium rose 1 percent to $976.50 an ounce, after earlier reaching its strongest since April 27 at $977.20.
(Reporting by Apeksha Nair in Bengaluru; Editing by Richard Pullin and Joseph Radford)
EXCLUSIVE-World's biggest gold ETF launching new low-fee fund- source - Reuters News
05-May-2018 02:39:57 AM
By Peter Hobson
LONDON, May 4 (Reuters) - The World Gold Council, owner of the world's largest gold-backed exchange traded fund (ETF), is launching a new fund with a cut-price management fee to fend off rivals with lower charges, a source familiar with the matter told Reuters.
The move is a sign that cost competition among gold ETFs is heating up after a price war in the much larger equities ETF sector slashed management fees. Gold ETFs allow buyers to invest in physical gold without having to buy and store the metal.
The council's SPDR Gold Trust, which launched in 2004 and trades using the ticker GLD, dominates the industry but its share of total bullion held by gold-backed funds has slipped below 50 percent from 75 percent at the start of the decade, Reuters data show.
GLD's gold holdings have risen 5 percent since the start of last year while rival iShares Gold Trust, which is run by investment manager BlackRock with a lower management fee, has grown 47 percent, by far the fastest growth among the five biggest gold ETFs tracked by Reuters.
Other low-fee funds such as Deutsche Asset Management's Xtrackers Physical Gold ETC are growing rapidly and others such as GraniteShares, launched last year, are popping up.
GLD charges a fee of 40 basis points, or 0.4 percent, of the value of an investment, around the higher end of the market, while iShares Gold and Xtrackers take 25 basis points and GraniteShares 20 basis points, near the bottom.
The council's new fund will charge a fee of around 25 basis points, said the source, describing it as a "countermove" by the council to rivals' gains.
The source said the council's two funds were designed to appeal to different audiences, with the new product targeted at investors looking to buy and hold gold who want a low management fee, and GLD aimed at financial investors who use its scale and liquidity to trade in and out of positions cheaply.
"The idea is that the new product grows without damaging the existing product," the source said.
The World Gold Council declined to comment.
To keep the offerings separate, shares in the new fund will represent a smaller allocation of gold than shares in GLD. This smaller share size will make it more expensive to move in and out of positions, encouraging financial investors to stick with SPDR, the source said.
The World Gold Council filed for the new ETF in November last year with the U.S. Securities and Exchange Commission, but did not reveal its management fee or share size. It is expected to launch the fund in the second quarter.
(Reporting by Peter Hobson
Editing by Alexander Smith and Veronica Brown)
TECHNICALS-CBOT soybeans may test support at $10.29 - Reuters News
07-May-2018 02:26:01 PM
SINGAPORE, May 7 (Reuters) - The CBOT soybeans July contract may test a support at $10.29 per bushel, a break below which could cause a loss to $10.17-1/4.
The support is provided by 76.4 percent Fibonacci projection level of downward wave c from $10.67-1/2. This wave is capable of travelling to $10.17-1/4.
The contract has broken a rising trendline. The break makes the target at $10.17-1/4 more likely. A pullback towards the line may have completed and the wave c is expected to resume towards $10.17-1/4.
Resistance is at $10.42-1/4, a break above which may lead to a gain to $10.55-1/2.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
(Reporting by Wang Tao; Editing by Subhranshu Sahu)
COLUMN-Funds adopt record positions in both CBOT soymeal, soyoil -Braun - Reuters News
07-May-2018 01:00:00 PM
The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
CHICAGO, May 7 (Reuters) - Commodity funds opened the month holding record bullish views in Chicago-traded soybean meal and record bearish views in soybean oil, creating the most lopsided speculative positioning in history between the two soy products.
As of May 1, investors held an all-time bearish stance in the CBOT oilshare, which measures soyoil's share of value in the soy products. A lot of this has to do with a suspected tightening in global exportable soybean meal supply, led by both weather and logistical problems in lead exporter Argentina.
In the week ended May 1, hedge funds and other money managers boosted their CBOT soybean meal net long to a record 133,549 futures and options contracts from 105,421 in the prior week, according to data from the U.S. Commodity Futures Trading Commission.
The previous record for the managed money meal net long was 115,500 futures and options contracts set in the first week of March 2018.
Speculators in the "other reportables" category are not quite as bullish soybean meal as they had been back in February. But combining this position with the managed money position through May 1 yields a whopping 166,296 futures and options contracts.
Money managers' net short in CBOT soybean oil futures and options also hit a new record through May 1 of 73,540 contracts versus 52,726 in the week before. The previous record bean oil short was 64,537 contracts set in January 2014.
This was spurred on by strength in meal futures, which set across-the-board contract highs on Tuesday. Soybean oil had fallen victim to meal-oil spreads as well as healthy crush volumes out of the United States and weakness in other global vegoil markets.
But unlike the unanimous view toward meal, not all speculators are bearish soybean oil. Over the last couple of months, traders in the "other reportables" category have carried a record bullish stance toward the vegoil.
Soymeal futures on Tuesday hit their highest levels since June 2016, and in the days since, profit-taking and unwinding of long soymeal/short soyoil spreads have created a little more balance in the CBOT oilshare.
Traders estimate that commodity funds were straight sellers of soymeal and straight buyers of soyoil between Wednesday and Friday.
CORN AND SOYBEANS
In the week ended May 1, money managers increased their net long in CBOT corn futures and options to 186,317 contracts from 122,877 in the prior week.
U.S. corn plantings were already expected to be down on the year and as of April 29, planting pace was the slowest in five years. Speculators had also been eyeing drought development for Brazil's heavily exported winter corn crop.
Money managers also extended their net long in CBOT soybean futures and options through May 1, to 177,047 contracts from 170,094 a week earlier.
Last week's soybean gains were largely linked to strength in soybean meal, because otherwise, traders have had a rather tepid view on soybeans over China's slapping of tariffs on U.S. beans last month.
The U.S.-China issues got the better of soybeans late last week, especially on Friday, as market-watchers were hoping for more progress from trade talks between Beijing and Washington. China's Xinhua news agency reported on Friday that the talks had ended with "relatively big" disagreements.
Trade sources indicate that commodity funds were net sellers of soybeans and very slight net sellers of corn over the last three sessions.
WHEAT
Speculators last week adopted their least bearish stance toward soft red winter wheat since early August. Through May 1, money managers slashed their net short in CBOT wheat to 28,702 futures and options contracts from 54,713 in the prior week.
Although investors were covering CBOT wheat shorts last week amid U.S. crop uncertainties, the establishment of new longs was a bigger factor in money managers' latest move.
In the five days ended May 1, K.C. July wheat futures surged 8 percent as market participants awaited the start of the annual hard red winter wheat tour through the top U.S. wheat state of Kansas. However, speculators may have believed that the market had already accounted for crop losses stemming from a historically dry growing season in the Southern Plains.
Money managers slightly trimmed bullish bets in K.C. wheat futures and options through May 1 to 39,231 contracts from 40,698 a week earlier, the result of a slight reduction in longs and an even slighter increase in shorts.
They also flipped back to a bullish stance in Minneapolis wheat through the same period, establishing a new net long of 1,000 futures and options contracts versus the net short of 1,435 contracts in the previous week.
Although positioning changes in hard red spring wheat have appeared relatively slight over the last few months, the latest number of outright managed money longs – 9,032 – is the largest since the beginning of September.
The wheat contracts surged again on Thursday as Kansas crop tour scouts pegged state production at the smallest volume since 1989. But rains in the U.S. Plains and technical selling pressured prices on Friday.
Market estimates suggest that commodity funds were net sellers of CBOT wheat futures between Wednesday and Friday.
(Editing by Matthew Lewis)
VEGOILS-Palm sees strongest jump in 3 weeks tracking related oils - Reuters News
07-May-2018 12:47:14 PM
- Palm jumps tracking gains in crude oil, U.S. soyoil
- U.S. soyoil also lends support to palm - Trader
- Malaysia Palm Oil Board to release data on May 10
By Emily Chow
KUALA LUMPUR, May 7 (Reuters) - Malaysian palm oil futures clocked their highest gains in three weeks in early trade on Monday, tracking an uptrend in crude oil prices and supported by soyoil on the U.S. Chicago Board of Trade.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange jumped 1.6 percent to 2,377 ringgit ($603.30) a tonne at the midday break, its biggest gain since April 17.
It earlier rose as much as 1.7 percent to 2,379 ringgit, its highest level since May 2.
Trading volume stood at 15,684 lots of 25 tonnes each.
"Palm market rose tracking crude oil's price movement, which went up a lot on Friday. On a favourable palm oil to gas oil spread, there is new buying for crude palm oil," said a Kuala Lumpur based trader.
"Gains in rival oilseed are also lending support."
Palm oil prices are impacted by movements of crude oil, as it is used as feedstock to make biodiesel. Rising oil prices in recent weeks have made biodiesel production more economical, as gas oil's price premium over palm last widened to $56 per tonne on Monday.
Brent crude oil futures rose above $70 a barrel on Monday for the first time since November 2014, on the back of a deepening economic crisis in major oil exporter Venezuela.
In other related oils, gains in U.S. soyoil on the Chicago Board of Trade provided additional support to palm. The Chicago July soybean oil contract was last up 0.5 percent on Friday.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Meanwhile, the September soybean oil on China's Dalian Commodity Exchange rose 0.9 percent, while the Dalian September palm oil contract was up 0.8 percent.
Further movement in the palm market will depend on upcoming official data release by industry regulator the Malaysian Palm Oil Board.
Malaysian palm oil inventories at end-April are expected to fall 4.1 percent to 2.23 million tonnes, the lowest in six months, according to a Reuters poll of nine traders, planters and analysts.
Meanwhile, the survey respondents also forecast that April exports will fall 5.5 percent on-month to 1.48 million tonnes, but output will remain flat at 1.57 million tonnes.
Official data for the month of April is scheduled for release on Thursday, May 10 at around 0430 GMT.
(Reporting by Emily Chow; Editing by Sunil Nair)
GRAINS-Wheat drops for 2nd day as US weather improves; soybean prices rise - Reuters News
07-May-2018 11:34:31 AM
- Chicago wheat futures fall 0.7 pct, down for 2nd day
- Rains improve crop condition in drought-hit U.S. Plains
- Soybeans tick higher after Friday's losses, corn down
Adds comment, detail
By Naveen Thukral
SINGAPORE, May 7 (Reuters) - Chicago wheat futures slid 0.7 percent on Monday, falling for a second session as an improving weather outlook for the U.S. winter crop weighed on prices.
U.S. soybeans ticked higher, but gains were capped by a lack of demand from top importer China amid a trade dispute between the two nations.
The Chicago Board of Trade most-active wheat contract has dropped 0.7 percent to $5.22-3/4 a bushel by 0313 GMT, adding to Friday's 2.2-percent decline.
Soybeans climbed 0.2 percent to $10.38-1/2 a bushel, while corn slid 0.1 percent to $4.05-3/4 a bushel.
"It is a weather-driven market, prices are coming under pressure as there have been rains in some parts of the U.S. Plains and there are forecasts of more rains, but it is not a complete reversal of trend," said an India-based commodities analyst.
Recent rains have eased concerns over dryness hurting the Hard Red Winter wheat crop in the U.S. southern Plains.
However, scouts on an industry tour on Thursday projected that drought-hit Kansas, the top U.S. wheat-growing state, may produce its smallest crop since 1989.
Forecasts of bumper production in the Black Sea region are also pressuring wheat prices.
For soybeans, there is disappointment that trade talks between Washington and Beijing did not move closer to a deal to resolve the mounting dispute that has crimped U.S. crop sales to China.
The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies.
U.S. farmers were hoping for a quick resolution to the conflict after China last month threatened tariffs against a range of U.S. goods, including a 25-percent duty on soybeans.
U.S. soybean sales to China over the last four weeks are down 10 percent from a year ago, according to U.S. trade figures. This is a blow to farm country, which helped push President Donald Trump into office in the 2016 election.
Large speculators raised their net long position in CBOT corn futures in the week to May 1, regulatory data released on Friday showed.
The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans.
(Reporting by Naveen Thukral
Editing by Joseph Radford)
