August 22, 2017 / 6:02 AM / 10 months ago

VEGOILS-Palm oil climbs to 5-month high on output concerns

    * Palm oil on track for a fourth consecutive session of
    * Market also tracks gain in palm olein on Dalian - trader
    * Palm may gain more to 2,744 ringgit/tonne - Technicals

    By Emily Chow
    KUALA LUMPUR, Aug 22 (Reuters) - Malaysian palm oil futures
extended gains on Tuesday to hit five-month highs on concerns
about production, and tracking gains in related edible oils.
    The benchmark palm oil contract for November delivery
 on the Bursa Malaysia Derivatives Exchange was up 1.4
percent at 2,748 ringgit ($642.06) at the midday break, its
highest since March 24, and heading for a fourth straight
session of gains.
    Traded volumes stood at 23,622 lots of 25 tonnes each at
    "Demand (for palm oil) is still the same but local
production is not coming up, which is the main reason why the
market is holding up," said a trader from Kuala Lumpur, adding
that he did not expect the strong surge to continue.
    "Market gains have been very volatile, when the fall comes
it will be equally drastic."
    The market could be "drawing strength" from palm olein on
China's Dalian Commodity Exchange, said another trader, adding
that production remained a bullish factor for palm oil as output
remains lower than expected in Sabah, the largest producing
state in Malaysia. 
    Malaysia's palm oil output is seen rising in the second half
of the year, in line with seasonal trend and as the dry weather
effects of a crop-damaging El Nino weather phenomenon wear off.
    Production in 2017 is estimated to rise 15.5 percent from
the previous year to reach 20 million tonnes, according to
industry body the Malaysian Palm Oil Board on Monday.

    However, a Reuters survey of traders, planters and analysts
pegged production at lower levels, between 18.7 million to 19.5
million tonnes.
    Palm oil may rise more to 2,744 ringgit per tonne, according
to Wang Tao, a Reuters market analyst for commodities and energy
    In related vegetable oils, the October soybean oil contract
 on the Chicago Board of Trade rose 0.6 percent, while the
January soybean oil on the Dalian Commodity Exchange
was up 1.1 percent.
    The January palm olein contract on Dalian was also
up 1.8 percent.
    Palm oil prices are impacted by the movements in related
edible oils, as they compete for a share in the global vegetable
oils market. 
 Palm, soy and crude oil prices at 0530 GMT
 Contract          Month    Last   Change     Low   High  Volume
 MY PALM OIL       SEP7     2733   +30.00    2717   2733     760
 MY PALM OIL       OCT7     2738   +35.00    2712   2738    1275
 MY PALM OIL       NOV7     2748   +37.00    2721   2748   11407
 CHINA PALM OLEIN  JAN8     5540  +100.00    5442   5554  654244
 CHINA SOYOIL      JAN8     6364   +68.00    6284   6374  419762
 CBOT SOY OIL      DEC7    34.36    +0.21   34.06   34.4    4090
 INDIA PALM OIL    AUG7   518.50    +3.70  516.40  519.3     229
 INDIA SOYOIL      SEP7    661.8    +2.70   655.2    662    6290
 NYMEX CRUDE       SEP7    47.53    +0.16   47.40  47.57     409
 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
 India soy oil in Indian rupee per 10 kg
 Crude in U.S. dollars per barrel
($1 = 4.2800 ringgit)
($1 = 64.1175 Indian rupees)
($1 = 6.6570 Chinese yuan)

 (Reporting by Emily Chow; Editing by Subhranshu Sahu)
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