JAKARTA: Malaysian palm oil futures fell on Friday as traders squared positions before the weekend and as weakness in competing oils weighed, but Indonesia's approval of export levies lifted the benchmark to its biggest weekly gain since February.
"The market has gone up quite a lot so there should be some
weekend position-squaring (and) profit-taking because on Monday
you have the MPOB numbers," said a trader with a foreign
commodities brokerage in Kuala Lumpur, referring to data from
the Malaysian Palm Oil Board on palm stocks due next week.
The benchmark July contract on the Bursa Malaysia
Derivatives Exchange edged down 0.5 percent to 2,162 ringgit
($601.39) per tonne by Friday's close. Palm prices climbed 3.4
percent this week, recording its biggest weekly gain in three
months.
Total traded volume stood at 37,581 lots of 25 tonnes each,
above the usual 35,000 lots.
Palm oil prices shot up to a one-month high from September
lows this week, largely as a result of news that top palm grower
Indonesia has approved a palm export levy to fund its biodiesel
policies.
Ratings agency Fitch said Indonesia's implementation of the
levies will be positive for the tropical commodity in the long
run, although it may weaken planters' earnings in the short
term.
"Fitch believes producers' financial metrics will weaken in
the short term because the benefits of increased demand and
pricing will take some time to flow through," it said in a
statement on Friday.
"Over the longer term, the levy will likely have a moderate
positive impact on producers with integrated downstream
operations," Fitch said, adding that the levies will "discourage
direct exports and improve domestic CPO supplies, which will
make domestic palm oil refining more profitable."
A Reuters poll estimates end-stocks rose to a five-month
high of 2.13 million tonnes, with crude palm output climbing
11.5 percent.
On the technical front, palm oil looks neutral in a range of
2,148-2,196 ringgit per tonne, and an escape will point a
direction, according to Reuters market analyst Wang Tao.
The most active September soybean oil contract on
the Dalian Commodity Exchange fell 1.5 percent in late Asian
trade.
In other markets, crude oil prices edged down on Friday, set
for their first weekly decline in more than a month as concerns
over a global supply glut outweighed strong Chinese crude
imports.
Palm, soy and crude oil prices at 1018 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY5 2140 -16.00 2130 2140 42
MY PALM OIL JUN5 2171 -8.00 2148 2171 1812
MY PALM OIL JUL5 2162 -11.00 2141 2163 17931
CHINA PALM OLEIN SEP5 5008 -108.00 5002 5098 860076
CHINA SOYOIL SEP5 5814 -90.00 5810 5886 934224
CBOT SOY OIL JUL5 32.58 -1.50 32.37 32.62 5970
INDIA PALM OIL MAY5 445.50 -1.50 443.90 449.50 797
INDIA SOYOIL JUN5 596.40 +0.85 593.40 598.80 30705
NYMEX CRUDE JUN5 59.08 +0.15 58.33 59.23 36016
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 = 3.5950 Malaysian ringgit)
($1 = 6.2094 Chinese yuan)
($1 = 63.96 Indian rupees)
- Reuters
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