KUALA LUMPUR: Malaysian palm oil futures inched down 1.4 percent on Thursday, reversing gains clocked in the previous session to fall six out of seven days, as the ringgit advanced and investors fretted about waning demand for the tropical oil.
Traders say weaker soyoil prices have narrowed palm's discount to the rival edible oil,
prompting price-sensitive buyers to switch to soy instead. Palm olein's
to soyoil
"Right now there's less demand, while production is picking up," said a trader with a
commodities brokerage in Singapore.
"That's the reason the market cannot hold. Even if you want to push it up, how much can you
push? It has to be supported by demand."
After recording its worst export volumes since 2007 in February, Malaysian overseas sales of
palm oil products continued to decline this month, dropping between 12 and 19 percent in March
1-10 versus a month ago, cargo surveyors said.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange lost 1.4
percent to 2,243 ringgit ($608) a tonne, cutting short a rally on Wednesday that had lifted
prices to as high as 2,280 ringgit.
"Rallies are more of short-covering versus genuine buying," a second palm trader said in
Kuala Lumpur.
Total traded volume stood at 38,166 lots of 25 tonnes, just above the average 35,000 lots.
The Malaysian ringgit meanwhile strengthened to 3.6890 per dollar on Thursday, after
sliding to fresh six-year lows of 3.7170 in the previous session.
On the technical front, palm oil may fall to a support at 2,218 ringgit per tonne, as it
could have completed a rebound triggered by this level, Reuters market analyst Wang Tao said.
Palm oil traders are keeping watch on a three-day strike in Argentina that began on
Wednesday. Argentine farmers, including three of the four largest farming groups in the top
soymeal exporter, will halt crop sales aimed at reducing the delivery of grains to port.
The most active May soybean oil contract on the Dalian Commodity Exchange rose 0.2
percent in late Asian trade, while the U.S. soyoil contract for May was down 0.1 percent.
In other markets, Brent oil futures rose above $58 a barrel on Thursday as the dollar
weakened and speculators covered their positions ahead of the April contract's expiry, while a
build in U.S. crude stocks capped prices.
Palm, soy and crude oil prices at 1019 GMT
Contract Month Last Change Low High Volume
MY PALM OIL MAR5 0 +0.00 0 0 0
MY PALM OIL APR5 2239 -39.00 2236 2273 3449
MY PALM OIL MAY5 2243 -33.00 2234 2271 23793
CHINA PALM OLEIN SEP5 4748 +22.00 4732 4776 316596
CHINA SOYOIL SEP5 5474 +12.00 5450 5500 386024
CBOT SOY OIL MAY5 31.08 -2.50 31.00 31.20 3878
INDIA PALM OIL MAR5 445.80 -2.50 445.00 447.00 460
INDIA SOYOIL APR5 574.85 -1.75 574.00 576.80 11510
NYMEX CRUDE APR5 48.53 +0.36 48.03 48.70 30697
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 = 3.6890 Malaysian ringgit)
($1 = 6.2624 Chinese yuan)
($1 = 62.57 Indian rupee)- Reuters
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