KUALA LUMPUR: Malaysian palm oil futures inched down on Wednesday, retreating further from sharp gains made earlier in the week as a firm ringgit and concerns over rising palm supplies stifled buying interest.
Benchmark prices on Monday rose above a 3-week top of 2,250
ringgit, partly fuelled by anticipation Indonesia was close to
imposing levies on crude and processed palm oil exports, traders
say. The proposal will likely be approved this week, pending
President Joko Widodo's signature.
"People jumped the gun. Some took advantage to try and push
prices up," said one trader with a foreign commodities brokerage
in Kuala Lumpur. "These two days things cooled down a bit
because there's no follow-through."
A firm Malaysian currency, in which the palm
feedstock is priced, muted buying interest from overseas buyers.
The ringgit was trading at 3.6270 per dollar by 1005 GMT,
stronger than the 3.7211 on March 30.
"The strong ringgit also put a dampener on things, because a
week before the ringgit was much weaker," the trader added.
The benchmark June contract on the Bursa Malaysia
Derivatives dropped 1.8 percent to 2,168 ringgit ($598) a tonne
by Wednesday's close, settling at the lower end of the day's
trading range between 2,165-2,204 ringgit.
Total traded volume stood at 45,771 lots of 25 tonnes, more
than the usual 35,000 lots.
The contract was also weighed by expectations of a strong
recovery in Malaysia's crude palm oil production in March and
April, after bouts of droughts and monsoon flooding in 2014
stressed trees and hindered fresh fruit growth.
A Reuters poll forecast output in the No.2 grower to surge
18 percent in March from a month ago to 1.32 million tonnes -
its first rise since August.
The pick up in output is expected to overtake export sales,
and may lead to end-stocks increasing for the first time in four
months to 1.75 million tonnes, the poll showed.
In other markets, oil prices fell towards $58 a barrel on
Wednesday as industry data showed a larger-than-expected weekly
increase in U.S. stockpiles and as Saudi Arabia reported record
output in March.
In other vegetable oil markets, the U.S. soyoil May contract
fell 0.4 percent in late Asian trade, reversing earlier
gains, while the most active September soybean oil contract
on the Dalian Commodity Exchange lost 0.6 percent.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 2160 -34.00 2160 2160 30
MY PALM OIL MAY5 2172 -40.00 2171 2204 2031
MY PALM OIL JUN5 2168 -39.00 2165 2204 26849
CHINA PALM OLEIN SEP5 4714 -24.00 4692 4730 303586
CHINA SOYOIL SEP5 5414 -30.00 5392 5446 364436
CBOT SOY OIL MAY5 30.90 -1.80 30.87 31.09 6966
INDIA PALM OIL APR5 440.00 -1.80 439.30 442.80 466
INDIA SOYOIL APR5 605.45 -0.45 604.50 609.40 8580
NYMEX CRUDE MAY5 52.82 -1.16 52.56 53.23 35363
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 = 3.6270 Malaysian ringgit)
($1 = 6.2032 Chinese yuan)
($1 = 62.27 Indian rupee)- Reuters
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