Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Morning markets: palm stars as Chicago crops sag

Twitter Linkedin

Once again, Chicago crops found the limelight stolen by other destinations, with Kuala Lumpur palm oil proving the food commodity of choice early on Thursday.

While Chicago's headline stars struggled against the strong dollar, Bursa Malaysia palm oil hit its highest for more than six months, supported by, well, not crude.

Oil, whose strong performance was viewed as sparking palm's strong performance in the last session, down 0.6% at 07:45 GMT.

Technical factors were more promising, after palm managed to close the last session above a key resistance level of 2,550 ringgit a tonne.

And the price of Chinese soyoil, a key vegetable oil rival in a key palm export market for Malaysia, maintained gradual upward progress on Thursday on the Dalian exchange.

Kuala Lumpur's benchmark March palm oil contract jumped 1.6% to 2,628 ringgit a tonne in early deals, its highest since the beginning of June, before retreating to 2,607 ringgit a tonne.

Strong dollar

In Chicago, even soyoil, palm's most direct competitor, couldn't match that, falling 0.36 cents to 39.97 cents a pound for January delivery.

But then US crops had a reinvigorated dollar to deal with – the strongest indeed for more than two months, with the rise attributed to an upbeat statement from the Federal Reserve late on Wednesday, viewed as raising the chances of a relatively near-term rise in US interest rates.

Against the euro, the dollar hit $1.4370 at one point, its best since early September, before retreating to 1.4410.

A rising dollar makes commodities denominated in the currency less affordable on export markets.

'Fundamentals remain negative'

Soybeans were weaker too, down 4 cents at $10.55 ½ a bushel for January, despite Wednesday's fresh Chinese order,

Corn for March dipped 4 cents to $10.55 ½ a bushel, while wheat for the same month lost 4.75 cents to $5.32 ½ a bushel.

Part of the trouble was a dearth of supply-and-demand reasons to buy.

"Fundamentals remain negative with weak basis levels and slow export business except in soybeans," Darrell Holaday at Country Futures said.

'Just because it can'

And matters of stocks, production and exports may be having a greater influence as the Christmas season approaches.

"As trading desks thin out for the holidays, macro influences seem to be having less and less bearing on prices leaving the fundamental trader to try and press the market," Kim Rugel, at Benson Quinn Commodities, said.

What of the January fund buying story, and reallocation to grains from energy?

Rugel's colleague Jon Michalscheck said: "We are not sure we totally buy into that concept. But it does give the market participants a reason for why it's going up, rather than a 'just because it can' answer."


Twitter Linkedin
Related Stories

Abares lifts hopes for sugar futures, but cuts its cotton price forecast

A downgrade to Australia curtails an upgrade in world sugar output expectations. But for cotton, Abares ditches ideas of a global production deficit

Evening markets: Ags poop party lifting other commodities, shares

Wheat futures set another contract low, while arabica coffee hits its weakest close but one in 19 months, despite buying in other asset classes

Australia cuts wheat export hopes, pegs canola shipments at 7-year low

The country’s Abares bureau sees a dent to wheat shipment prospects from a smaller harvest, but lifts expectations for coarse grain exports

Hedge funds turn net bullish on ags - ahead of price drop to historic low

Speculators are wrong-footed in soymeal, in which they hike bullish bets just before a price tumble. But they fare better in cotton and cocoa
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069