Palm oil climbs
July 31, 2013
Malaysian palm oil futures posted their biggest daily rise in almost seven months on Tuesday amid hopes exports would improve in the second half of July, although lacklustre US soy markets dragged on the tropical oil. Cargo surveyors will release data on Malaysian palm oil shipments for July on Wednesday. While the exports are expected to fall, traders say the drop could be less steep than initially estimated.
Palm prices, which typically track overseas soy markets in the United States and China, have been depressed after forecasts of ideal weather conditions in the US Midwest bolstered hopes for a bumper harvest that would raise global oilseed supplies. “Exports should be quite good for July, not withstanding that July has one extra day,” said a trader with a foreign commodities brokerage in Kuala Lumpur.
By Tuesday’s close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange had climbed 2.2 percent to 2,215 ringgit ($684) per tonne, its biggest daily percentage rise since early January. Prices had slipped to 2,137 ringgit earlier in the session. Total traded volume stood at 57,149 lots of 25 tonnes each, much higher than the average 35,000 lots.
Technicals showed palm oil seems to be forming a temporary bottom around a support at 2,136 ringgit, and may hover above this level for one more trading session, Reuters market analyst Wang Tao said. Phillip Futures analyst Sim Han Qiang said the weakening ringgit could be due to the country’s foreign outflows which were the highest among Asian currencies after the Indonesian rupiah and Indian rupee.
“With US tapering in sight, outflows from emerging markets are likely to exacerbate and the US dollar is set to rally against most currencies. The ringgit is likely to sustain further loss going forward,” he said in a note on Tuesday. In vegetable oil markets, the US soyoil contract for December rose 0.4 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange fell 0.2 percent. Courtesy Reuters
Published in ZaraiMedia.com