JAKARTA: Malaysian palm oil futures flirted with one-month lows on Tuesday, falling as much as 2 percent with sentiment hit by the collapse of Greek bailout talks.
The September palm oil contract on the Bursa Malaysia Derivatives
exchange ended down 1.7 percent at 2,229 ringgit ($591) a tonne at the close
after trading in a range between 2,221 and 2,247 ringgit.
Palm prices were little changed throughout June but currently trade near a
one-month low last breached on June 22 at 2,218 ringgit.
"It's initially because the stock market in China has dropped sharply," said
a palm trader with a foreign commodities brokerage in Malaysia. "The equity
market in China is indirectly impacting commodity prices."
Eurozone stocks, low-rated bonds and the euro weakened as Greece looked set
to default on a repayment due to the International Monetary Fund and to plunge
deeper into financial crisis.
China stocks ended Tuesday sharply higher, however, reversing a tumble in
morning trade, as a slew of government measures to stem a two-week-long market
tumble appeared to win back some investor confidence.
Total traded volume for palm at the midday break was 52,147 lots of 25
tonnes each, compared with the usual 35,000 lots.
Palm oil may break support at 2,216 ringgit per tonne and fall more to the
next support at 2,182 ringgit, according to Reuters market analyst Wang Tao.
The Malaysian ringgit traded at a 10-year low and is the currency
that benchmark palm is priced in.
In other vegetable oils, the U.S. July soyoil contract eased 0.7
percent, while the most active January soybean oil contract on the
Dalian Commodity Exchange fell 1.9 percent.
"The key issue is the macro event that is going on in Greece," said Ivy Ng,
regional head of plantations research at CIMB Investment Bank.
On the data front, exports of Malaysian palm oil products in June rose 6.2
percent to 1.65 million tonnes from 1.55 million tonnes shipped in May, cargo
surveyor Intertek Testing Services said.
In related news, top palm oil producer Indonesia said on Monday it would now
introduce a levy on palm exports on July 16, instead of July 1.
"The strong (June) demand could be partly due to buying on concerns that El
Nino could effect supplies," Ng said, adding that the planned Indonesian levy
may be supported by major palm planters but could hurt smallholders.
Separately, Indonesia will keep its export tax for crude palm unchanged at
zero in July.
Palm, soy and crude oil prices at 1011 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL5 2220 -58.00 2220 2249 78
MY PALM OIL AUG5 2230 -37.00 2222 2244 4157
MY PALM OIL SEP5 2230 -37.00 2221 2247 26137
CHINA PALM OLEIN JAN6 5014 -130.00 4960 5120 836276
CHINA SOYOIL JAN6 5716 -112.00 5666 5816 631540
CBOT SOY OIL DEC5 33.11 -0.90 33.07 33.42 8716
INDIA PALM OIL JUN5 451.50 -0.90 451.10 451.80 318
INDIA SOYOIL AUG5 582.00 -3.25 580.60 583.50 29900
NYMEX CRUDE AUG5 58.71 +0.38 57.94 58.76 25393
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 = 3.7740 ringgit)
($1 = 6.2000 Chinese yuan renminbi)
($1 = 63.6700 Indian rupees)- Reuters
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