KUALA LUMPUR: Malaysian palm oil futures fell on Friday and hit their lowest level in 3 weeks, snapping a two-week uptrend, on rising scepticism among investors about the sustainability of the robust export demand seen this month.
Palm futures in Malaysia, which set the tone for global
prices of the tropical oil, have dropped for four out of the
past five sessions, although data showing a surge in May exports
by the second-biggest producer limited losses.
The contract clawed back some gains on Thursday as weak
prices attracted bargain hunters, but brewing doubts on demand
from key buyers in the coming months weighed.
"Things are a little on the negative side, but export
numbers have been awesome of late. That has provided some
support," said a trader with a foreign commodities brokerage in
Kuala Lumpur. Cargo surveyor data showed an up to 53 percent
surge in shipments of Malaysian palm oil between May 1-20.
"But some people feel that the good exports will taper off
at the end of the month and it would not remain at this pace ...
this pace is just too good to be true," the trader added.
The benchmark August contract on the Bursa
Malaysia Derivatives exchange had sunk 1.02 percent to 2,136
ringgit ($596.31) a tonne. In afternoon trading prices touched
the 2,127 ringgit level, their lowest in three weeks.
Palm is down 1.4 percent for the week, its first decline
after two weeks of gains.
Total traded volume stood at 34,598 lots of 25 tonnes each,
below the average 35,000 lots.
The El Nino weather phenomenon predicted by meteorologists
could push depressed palm oil prices as high as $700 a tonne
this year, an industry group in top producer Indonesia said on
Friday, although any impact on production would not come until
early 2016.
Meanwhile, Malaysia's Sime Darby Bhd
, the world's
largest listed palm oil producer, reported a 54.7 percent drop
in its third-quarter net profit amid weaker prices of the
tropical oil and lower earnings at its industrial and motors
businesses.
In other markets, oil prices steadied on Friday as worries
over the impact on crude supplies of war in the Middle East were
balanced by reports of profit-taking ahead of a long weekend.
The U.S. July soyoil contract was down 0.31 percent
by 1036 GMT, while the most active September soybean oil
contract on the Dalian Commodity Exchange inched down
0.07 percent.
Palm, soy and crude oil prices at 1038 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN5 2132 -22.00 2125 2147 404
MY PALM OIL JUL5 2139 -24.00 2129 2157 7207
MY PALM OIL AUG5 2136 -22.00 2127 2156 17288
CHINA PALM OLEIN SEP5 4938 +12.00 4912 4966 450228
CHINA SOYOIL SEP5 5706 +4.00 5684 5750 528966
CBOT SOY OIL JUL5 32.16 -2.20 32.05 32.36 5656
INDIA PALM OIL MAY5 447.50 -2.20 447.00 451.60 219
INDIA SOYOIL JUN5 596.10 -2.25 594.20 600.30 24625
NYMEX CRUDE JUL5 60.41 -0.31 60.27 60.80 21755
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 = 3.5820 ringgit)
($1 = 6.1972 Chinese yuan)
($1 = 63.5400 Indian rupees)- Reuters
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