KUALA LUMPUR: Malaysian palm oil futures ended lower on Wednesday as the contract succumbed to selling pressure in late afternoon trade, reversing gains stemming from a weak ringgit which had lifted the tropcial oil to a near two-week high.
Benchmark prices have pulled up from over three-week lows
earlier this week, following a surge in Chinese and U.S. soy
markets, with robust export demand so far in May also fuelling
the rise. But whether prices can continue to climb will hinge on
strong demand stretching into next month, traders said.
"The demand, and the soybean oil rally, it all came in
unison. But the moment prices touched 2,190 ringgit, there was
some resistance," said a trader with a local commodities
brokerage in Malaysia.
"The big question mark is whether this export momentum will
sustain in the month of June," the trader said.
"Today they might try again to see whether prices can
sustain at 2,190 and 2,200 ringgit ... but I foresee a lot of
selling pressure."
A second Malaysian-based palm trader said selling pressure
towards the day's close forced prices to end lower, but prices
were still in a range between 2,150 and 2,200 ringgit.
The August contract on the Bursa Malaysia
Derivatives exchange had edged down 0.3 percent to 2,176 ringgit
($598.62) a tonne by Wednesday's close. Prices earlier touched
2,198 ringgit, their highest since May 15.
Total traded volume stood at 29,325 lots of 25 tonnes each,
below the average 35,000 lots.
The Malaysian ringgit was down 0.2 percent to
3.6350 per U.S. dollar by 1038 GMT.
Meanwhile, Indonesia's finance minister, Bambang
Brodjonegoro, told Reuters on Wednesday that the implementation
date for its crude palm oil levies would likely be early June.
The regulation, which will force exporters in Indonesia to
pay a levy of $50 per tonne on shipments of crude palm oil and
$30 for processed palm oil, was initially slated to kick off in
the fourth week of May.
The U.S. July soyoil contract was nearly flat in late
Asian trade, while the most active September soybean oil
contract on the Dalian Commodity Exchange was up 0.1
percent.
In other markets, crude futures rose about 1 percent on
Wednesday to recover some ground after steep drops in the
previous session, boosted by a weaker dollar and expectations
that U.S. crude stocks fell for a fourth straight week.
Palm, soy and crude oil prices at 1040 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN5 2145 -22.00 2141 2180 420
MY PALM OIL JUL5 2179 -7.00 2166 2197 3929
MY PALM OIL AUG5 2176 -7.00 2168 2198 14864
CHINA PALM OLEIN SEP5 5084 +62.00 5040 5120 972186
CHINA SOYOIL SEP5 5756 +6.00 5744 5806 714074
CBOT SOY OIL JUL5 32.15 +2.50 32.02 32.30 5093
INDIA PALM OIL MAY5 455.30 +2.50 453.40 456.00 278
INDIA SOYOIL JUN5 598.40 +2.85 596.00 599.70 16425
NYMEX CRUDE JUL5 58.25 +0.22 58.16 58.95 30635
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 = 3.6350 ringgit)
($1 = 6.2014 Chinese yuan)
($1 = 64.07 Indian rupees)- Reuters
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