JAKARTA: Malaysian palm oil futures edged lower on Wednesday after touching an eight-month high, as market players responded to mixed outlooks from leading analysts at a key industry meeting.
"The market is on a correction phase after a massive rally
from 2,216 to 2,400 in seven trading sessions," said a trader
with a foreign commodities brokerage in Kuala Lumpur.
The benchmark March contract slipped 0.59 percent
to 2,364 ringgit ($649) after touching 2,400, its highest level
since July 2014. Traded volume stood at 33,241 lots of 25 tonnes
each, below the usual 35,000 lots.
"There was some early euphoria, but fundamentals reign
supreme and the upside is being capped by subdued demand," said
a trader with a local commodities brokerage in Malaysia.
Leading industry analyst James Fry said at the Palm and
Lauric Oils Price Outlook Conference & Exhibition (POC) on
Wednesday that Malaysian crude palm oil prices will average
2,260 ringgit a tonne in the first half of 2015.
But he said they may drop to more than six-year lows later
in the year if biodiesel sector demand does not pick up.
Dorab Mistry, another leading vegetable oil analyst speaking
at the PoC, said palm prices were expected to rise about 5
percent from current levels to 2,500 ringgit per tonne by May as
global edible oil demand outstrips supply, but could drop later
in 2015 as output recovers.
"For the short term, it is quite friendly until May or June,
but I think what the concern is in the market today is the
second half," a senior Jakarta-based palm trader said.
Away from the conference, Indonesia, the world's largest
producer of palm oil, set its crude palm oil export tax for
March at zero, unchanged from February.
Palm is expected to test resistance at 2,408 ringgit per
tonne, a break above that level would open the way towards 2,467
ringgit, Reuters market analyst Wang Tao said.
In competing vegetable oil markets, the most active May
soybean oil contract on the Dalian Commodity Exchange
lost 0.45 percent, while the U.S. soyoil contract for May
edged up 0.12 percent.
In other markets, Brent crude futures dipped on Wednesday
but held above $60 a barrel, supported by a rise in Saudi crude
prices and air strikes and militant raids on oil facilities in
Libya.
Palm, soy and crude oil prices at 1042 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR5 2410 -11.00 2400 2410 51
MY PALM OIL APR5 2371 -12.00 2361 2404 954
MY PALM OIL MAY5 2364 -14.00 2354 2400 24045
CHINA PALM OLEIN MAY5 5142 -2.00 5100 5170 241488
CHINA SOYOIL SEP5 5704 -20.00 5654 5736 310000
CBOT SOY OIL MAY5 32.85 -0.80 32.79 33.11 3261
INDIA PALM OIL MAR5 464.20 -0.80 462.30 467.80 891
INDIA SOYOIL APR5 592.70 -0.50 592.00 595.50 14455
NYMEX CRUDE APR5 50.70 +0.18 50.38 50.95 29119
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 = 3.6445 ringgit)
($1 = 6.2701 Chinese yuan renminbi)
($1 = 62.1275 Indian rupees)
- Reuters
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