April 4, 2013 / 10:16 AM / in 4 years

VEGOILS-Palm weighed down by weak soy; focus on March stocks data

4 Min Read

* Exports and stocks data for March awaited, due on April 10
    * Palm oil to drop to 2,335 ringgit -technicals

 (Updates prices)
    By Anuradha Raghu
    KUALA LUMPUR, April 4 (Reuters) - Malaysian palm oil futures
inched lower on Thursday, tracking weakness in competing soy
markets, with many investors preferring to stay on the sidelines
ahead of key industry data due next week.
    Industry regulator Malaysian Palm Oil Board (MPOB) will
release on Wednesday official figures of March's output levels
and palm inventories, an important indicator that could help
gauge the direction of the world's most traded edible oil.
    Cargo surveyor data out earlier this week showed better
exports in March than February, marking the first monthly rise
in four months, boosted by higher shipments of refined products.
  
    On Thursday, however, investors focused on soybean's fall
for a second straight session. Lower soybean prices could wean
away demand from palm oil.
    "The external implications are bearish and that is going to
put a lot of influence on the market even though the local front
is supportive," said a trader with a foreign commodities
brokerage in Kuala Lumpur.
    By market close, the benchmark June contract on the
Bursa Malaysia Derivatives Exchange had edged down 0.2 percent
to 2,392 ringgit ($777) per tonne. Prices on Monday fell to
2,335 ringgit, the lowest in nearly three months.
    Total traded volume stood at 23,044 lots of 25 tonnes each,
thinner than the average 35,000 lots seen so far this year.
    "We're waiting for next week when the MPOB figures will be
announced. I'm looking at a short term range of 2,350 to 2,400
ringgit," the Kuala Lumpur trader added.
    Technical analysis showed palm oil is expected to drop to
its Monday low of 2,335 ringgit per tonne, as indicated by its
wave pattern and a Fibonacci retracement analysis, said Reuters
market analyst Wang Tao. 
    Stockpiles in Malaysia, the world's No.2 producer of the
tropical oil, currently stand at 2.44 million tonnes. Investors
are pinning hopes that the higher exports in March would ease
stocks to at least 2.35 million tonnes, despite expectations
that production levels could have risen as well.
    In other markets, Brent crude oil steadied at around $107
per barrel on Thursday after its biggest fall in five months on
signs of faltering economic growth and rising stocks of fuel.
 
    In vegetable oil markets, U.S. soyoil for May delivery
 gained 0.2 percent in late Asian trade. The Dalian
Commodities Exchange will be closed until Monday for a public
holiday in China.     
  Palm, soy and crude oil prices at 1006 GMT
                                                                                   
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      APR3    2380    +9.00    2370    2380      20
  MY PALM OIL      MAY3    2383    -5.00    2351    2384    1338
  MY PALM OIL      JUN3    2392    -4.00    2360    2394   12582
  CHINA PALM OLEIN SEP3    6216   +54.00    6166    6300  851898
  CHINA SOYOIL     SEP3    7858   +12.00    7802    7914  708660
  CBOT SOY OIL     MAY3   49.23    +0.09   48.96   49.25    4691
  NYMEX CRUDE      MAY3   94.45    +0.00   94.23   94.65   21794
                                                                                   
  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=3.079 ringgit)   

 (Editing by Muralikumar Anantharaman)

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