KUALA LUMPUR: Malaysian palm oil futures edged lower on Tuesday, extending a losing streak into a fifth straight day as weakness in comparable markets overseas weighed on the tropical oil.
Uncertainty ahead of a key industry report due next week
kept prices locked in a tight range between 2,558 and 2,586
ringgit, with most investors avoiding risky bets. The Malaysian
Palm Oil Board (MPOB) data will detail palm production, exports
and stocks in the second-largest grower on Monday.
"Sentiment is a bit weak currently. There is some weakness
coming in from the soft oils side, mainly from soy, that is
depressing the market," said a trader with a foreign commodities
brokerage in Malaysia.
"At this moment, I think prices will trade sideways, unless
we see some Ramadan demand coming in, or some unexpected MPOB
data," the trader added.
The benchmark July contract on the Bursa Malaysia
Derivatives Exchange had lost 0.6 percent to 2,568 ringgit
($790) per tonne by Tuesday's close.
Total traded volumes stood at 30,988 lots of 25 tonnes,
below the average 35,000 lots.
Technicals were bearish. Malaysian palm oil is expected to
drop to 2,519 ringgit per tonne, as it has broken below a
support at 2,587 ringgit, said Reuters market analyst Wang Tao.
Market players had expected demand for palm oil, used in
foods ranging from margarine to cookies and chocolates, to
increase from April onwards as buyers restock ahead of the
Muslim festival of Eid al-Fitr and the holy month of Ramadan.
But export demand for Malaysian palm products only picked up
marginally in April compared with a month ago, according to
cargo surveyor data. Traders now say stronger demand will only
kick in later on.
"Although we can still see some increased buying, Ramadan
demand has not really materialized yet," the trader added.
In other markets, Brent crude rose above $108 per barrel on
Tuesday, supported by clashes across Ukraine and lingering
uncertainty over Libya's supply recovery.
In competing vegetable oil markets, the U.S. soyoil contract
for July edged up 0.2 percent in late Asian trade, while
the most active September soybean oil contract on the
Dalian Commodities Exchange fell 0.7 percent.
Palm, soy and crude oil prices at 1002 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAY4 2632 -8.00 2610 2633 288
MY PALM OIL JUN4 2592 -13.00 2580 2609 2459
MY PALM OIL JUL4 2568 -15.00 2558 2586 18168
CHINA PALM OLEIN SEP4 5988 -48.00 5966 6006 314340
CHINA SOYOIL SEP4 6822 -48.00 6808 6844 348152
CBOT SOY OIL JUL4 41.25 +0.08 41.07 41.48 7266
NYMEX CRUDE JUN4 99.72 +0.24 99.32 99.86 14211
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
Crude in U.S. dollars per barrel- Reuters
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