KUALA LUMPUR: Malaysian palm oil futures closed lower on Thursday, retreating from a one-week high as investors turned cautious over fading export demand, though a weak ringgit currency limited losses.
Investors are watching for data on demand and crude palm output in Malaysia,
the world's second-largest producer, for indication on whether stockpiles could
continue to swell after hitting a six-month high of 2.24 million tonnes at the
end of May.
Cargo surveyor Intertek Testing Services reported that exports of Malaysian
palm oil products for June 1-25 rose 1.3 percent to 1,400,162 tonnes compared
with May 1-25.
Fellow cargo surveyor Societe Generale de Surveillance, however, reported
shipment volumes eased 0.8 percent in the period as top buyers India and China
cut back purchases, signalling that demand growth may fizzle out.
"Good exports were noted in May and June ... Exports in July are estimated
to be lower," said one trader with a foreign commodities brokerage in Malaysia.
The Malaysian Palm Oil Association, a group of growers, estimates that
production dipped by 1.8 percent between June 1-20 from a month earlier, with a
drop in yields in top-growing state Sabah.
The September palm oil contract on the Bursa Malaysia Derivatives
exchange ended 0.3 percent lower at 2,264 ringgit ($603) a tonne on Thursday,
shaving off gains after climbing to their highest since June 17 at 2,285 ringgit
earlier in the day.
Total traded volume was 31,280 lots of 25 tonnes each, below the usual
35,000 lots.
Palm received some support from the Malaysian ringgit, which fell
for a third session to as low as 3.7670 per dollar, stoking buying interest from
foreign customers.
Elsewhere, reports of laggard soybean planting in parts of the United
States' main grain belt helped to underpin soyoil markets tracked by palm,
though the edible oil struggled to hold on to gains.
The U.S. July soyoil contract was down 0.2 percent at 33.20 U.S.
cents a pound in late Asian trade, having earlier touched 33.47 U.S. cents. The
most active January soybean oil contract on the Dalian Commodity
Exchange gained 0.1 percent.
Soybean planting is behind in several key states, including Missouri, Kansas
and top grower Illinois. Smaller amounts of soybeans for crushing into soyoil
could channel demand to palm oil, a common food and fuel substitute.
In other markets, oil prices were steady on Thursday as an unexpected build
in U.S. gasoline inventories offset a higher than forecast draw in crude stocks.
Palm, soy and crude oil prices at 1022 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL5 2260 +2.00 2258 2265 34
MY PALM OIL AUG5 2265 -3.00 2263 2282 2504
MY PALM OIL SEP5 2264 -6.00 2263 2285 16153
CHINA PALM OLEIN JAN6 5152 +52.00 5140 5210 812734
CHINA SOYOIL JAN6 5864 +4.00 5862 5942 594190
CBOT SOY OIL JUL5 33.21 -0.30 33.17 33.47 5869
INDIA PALM OIL JUN5 452.40 -0.30 452.00 453.80 651
INDIA SOYOIL AUG5 584.30 -1.70 584.30 587.50 30795
NYMEX CRUDE AUG5 60.12 -0.15 60.05 60.46 21128
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 = 3.7560 ringgit)
($1 = 6.2094 Chinese yuan)
($1 = 63.60 Indian rupees)- Reuters
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
