Palm up for third day, tracks external markets

-A +A

JAKARTA (Sept 1): Malaysian palm oil futures rose for a third day in strong trading on Tuesday after a jump in crude oil prices overnight and gains in competing vegetable oil markets.

A stronger ringgit had little impact.

By Tuesday's close, the benchmark November palm oil contract on the Bursa Malaysia Derivatives exchange was up 1.1% at 2,009 ringgit ($482), after trading in a range between 1,973 and 2,019 ringgit.

Total traded volume on Tuesday was high, at 63,004 lots of 25 tonnes each, compared to the usual daily average of 35,000 lots.

"Palm is up purely on the back of external market factors," a trader at a foreign commodities brokerage in Malaysia said, referring to the 8% gains in crude oil prices overnight and increases in vegetable oil contracts on China's Dalian Commodity Exchange.

"It's pretty strong," the trader said. A more than 1% rise in the Malaysian ringgit, which benchmark palm is priced in, on Tuesday was having no impact on palm oil prices.

"I think it has no bearing," the trader said, adding that recent export data was also having little impact.

The currency was up 0.67% at 4.16 per dollar by 1313 GMT, stretching gains into a third session. The ringgit has been emerging Asia's worst performing currency, losing nearly 17% this year, on weakness in global currencies and domestic political woes.

Exports of Malaysian palm oil products fell 1.2% in August to 1,525,389 tonnes, from 1,543,868 tonnes shipped during July, cargo surveyor Intertek Testing Services said on Monday.

However, another surveyor, Societe Generale de Surveillance, said Malaysia's palm exports over the same period rose 0.2% to 1,542,017 tonnes, from 1,539,583 tonnes shipped during July.

Wang Tao, a Reuters market analyst of commodities and energy technicals, said palm oil could fall to 1,936 ringgit per tonne, as it has failed to break a resistance at 1,981 ringgit.

In competing vegetable oil markets, the most active January soybean oil contract on the Dalian Commodity Exchange was flat in late Asian trade, while Dalian palmoil for January was up 0.42%. The US December soyoil contract was down 1.31%.

Oil prices fell sharply on Tuesday, after official data showed China's manufacturing sector contracted at its fastest pace in three years. The drop followed a more than 8% rally in Brent and US crude in the previous session.

Palm, soy and crude oil prices at 1306 GMT

Contract Month Last Change Low High Volume
MY PALM OIL SEP5 1915 +17.00 1915 1915 12
MY PALM OIL OCT5 1975 +24.00 1936 1980 2120
MY PALM OIL NOV5 2009 +22.00 1973 2019 30525
CHINA PALM OLEIN JAN6 4300 +10.00 4282 4302 32758
CHINA SOYOIL JAN6 5386 +0.00 5366 5388 17440
CBOT SOY OIL DEC5 27.88 +1.20 27.80 28.18 14233
INDIA PALM OIL SEP5 376.90 +1.20 376.50 382.00 2527
INDIA SOYOIL OCT5 574.50 +0.35 574.30 579.20 55540
NYMEX CRUDE OCT5 47.36 -1.84 46.77 48.87 174553

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel

($1 = 4.1640 ringgit)