Reuters logo
VEGOILS-Palm oil edges down on U.S., Europe worries
November 8, 2012 / 6:02 AM / 5 years ago

VEGOILS-Palm oil edges down on U.S., Europe worries

* Palm oil tracks losses in global markets
    * Prices must stay near 2,200 ringgit for 2 mths to
stimulate demand -Mistry
    * Palm oil to keep rebounding to 2,453 ringgit -technicals

 (Updates prices, adds details)
    By Chew Yee Kiat
    SINGAPORE, Nov 8 (Reuters) - Malaysian palm oil futures
edged down on Thursday, tracking losses in global markets on
renewed worries that economic woes in the United States and
Europe could hurt commodity demand.
    Crude oil and equities slumped as euphoria faded after
President Barack Obama's re-election on Wednesday, with the
world's biggest economy now facing a so-called fiscal cliff of
$600 billion in automatic tax increases and spending cuts.
 
    Sentiment was also dented by a gloomy outlook for Europe
after the European Commission said the euro zone economy would
barely grow next year.     
    "There is a lot of uncertainty after the U.S. election, you
have all these problems in Europe, and then there's also the
fiscal cliff," said a trader with a foreign commodities
brokerage in Malaysia.
    "Local sentiment for palm is also bearish, because of high
stocks. I don't think palm has any support until you can see
very strong demand followed by a drawdown in stocks, then the
market will stabilise."
    By the midday break, the benchmark January contract 
on the Bursa Malaysia Derivatives Exchange had lost 0.4 percent
to 2,387 ringgit ($780) per tonne. 
    Total traded volumes stood at 10,994 lots of 25 tonnes each,
lower than the usual 12,500 lots.
    Technicals showed palm oil was expected to keep rebounding
to 2,453 ringgit, said Reuters market analyst Wang Tao, based on
a wave analysis. 
    Palm oil prices must stay at around 2,200 ringgit a tonne
for two months in order to stimulate demand for the edible oil
and reduce high stock levels, leading industry analyst Dorab
Mistry said at a conference in China on Thursday.
 
    Malaysian palm oil futures have lost almost 25 percent so
far this year, weighed by record high stocks and global economy
uncertainty.
    Stock levels in Malaysia, the world's No.2 palm oil
producer, may reach a new record at 2.67 million tonnes in
October, a Reuters survey showed on Tuesday.    
    Traders will be watching Malaysian exports data for Nov.
1-10 from cargo surveyor Intertek Testing Services, due to be
released on Saturday, and October stocks data from industry
regulator, the Malaysian Palm Oil Board, on Monday.      
    In related markets, Brent crude rose above $107 a barrel in
Asia on Thursday as a slump of almost 4 percent in the previous
session, its biggest fall in about a year, lured in some buyers,
although worries over the U.S. fiscal cliff and Europe's woes
kept a lid on gains. 
    In other vegetable oil markets, U.S. soyoil for December
delivery inched up 0.1 percent in early Asian trade. The
most active May 2013 soybean oil contract on the Dalian
Commodity Exchange edged down 0.1 percent.    
    
  Palm, soy and crude oil prices at 0549 GMT
                                                                        
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV2    2280   -10.00    2280    2284     100
  MY PALM OIL      DEC2    2328    -2.00    2315    2331     588
  MY PALM OIL      JAN3    2387   -10.00    2378    2399    5377
  CHINA PALM OLEIN MAY3    6812   -20.00    6780    6868  337452
  CHINA SOYOIL     MAY3    8760   +10.00    8690    8796  492692
  CBOT SOY OIL     DEC2   48.72    +0.10   48.45   48.86    4127
  NYMEX CRUDE      DEC2   85.05    +0.61   84.51   85.09    8346
                                                                        
  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
 ($1=3.06 ringgit)

 (Editing by Clarence Fernandez)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below