Saturday 20 Jul 2024
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KUALA LUMPUR (Oct 20): Malaysian palm oil futures ended lower on Monday, recording falls in six out of eight sessions as losses in comparative soy markets weighed on sentiment, although hopes for weaker output to rein in stockpiles capped losses.
Investors were jittery over prospects that bigger supplies of soybeans for crushing into soyoil, a rival edible oil, would channel food and fuel demand away from palm.
Soybean futures fell on Monday on prospects that farmers in the U.S. Midwest would speed up harvesting. They were further pressured after private analytics firm Informa Economics forecast U.S. 2015 soybean plantings to hit a record 88.5 million acres.  
The U.S. soyoil contract for December fell 0.5 percent in late Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange tumbled 2.2 percent.     
"Today the market fell because U.S. soybean oil and Dalian soy prices are down," said a trader with a foreign commodities brokerage in Kuala Lumpur, who expects palm to trade between 2,100-2,200 ringgit.     
The benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged down 0.5 percent to 2,131 ringgit ($651) per tonne by Monday's close, with prices trading between 2,112-2,132 ringgit.
Total traded volume stood at 31,849 lots of 25 tonnes, slightly below the average 35,000 lots.    
Technicals showed palm is expected to retest resistance at 2,150 ringgit per tonne, a break above which will lead to a further gain to 2,178 ringgit, said Reuters market analyst Wang Tao.
Cargo surveyor Intertek Testing Services reported that exports of Malaysian palm oil products for Oct. 1-20 fell 10.2 percent to 894,697 tonnes compared with the same period in September, recording a slight improvement from steeper losses earlier in the month.
But traders said the pace of exports was still sluggish and could provide little relief to prices of the tropical oil, which have lost 4 percent so far this month.
Instead, market players were looking to weaker production of crude palm oil to prevent another rise in inventories. Palm oil stocks in No.2 producer Malaysia swelled to an 18-month high of 2.09 million tonnes at end-September.
"Exports will definitely be weaker in October. So production will play an important part to decide whether there's any drawdown, or increase, in stocks," the Kuala Lumpur-based trader added.
Another cargo surveyor, Societe Generale de Surveillance, will release export figures for the same period later on Monday.
Palm, soy and crude oil prices at 1006 GMT
  Contract        Month    Last   Change     Low    High  Volume
  MY PALM OIL      NOV4    2147   -18.00    2140    2151     224
  MY PALM OIL      DEC4    2135   -12.00    2117    2135    5470
  MY PALM OIL      JAN5    2131   -11.00    2112    2132   15829
  CHINA PALM OLEIN JAN5    5138   -62.00    5128    5208  514696
  CHINA SOYOIL     JAN5    5708  -126.00    5696    5802  609480
  CBOT SOY OIL     DEC4   31.88    -3.60   31.80   32.09    7067
  INDIA PALM OIL   OCT4  441.00    -3.60  440.80  443.00     515
  INDIA SOYOIL     OCT4  583.50    -7.50  581.50  591.50    2455
  NYMEX CRUDE      NOV4   82.93    +0.17   82.84   83.48    4530
  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 US dollar = 3.271 Malaysian ringgit)    
(1 US dollar = 6.1229 Chinese yuan)
(1 US dollar = 61.28 Indian rupee)

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