Malaysian palm oil futures fell on Thursday evening, ending the day slightly weaker after posting gains at noon, as market sentiment turned bearish on a less than expected drop in output. The market was up earlier on the back of a weaker ringgit and overnight gains in soyaoil on the US Chicago Board of Trade (CBOT).
A weaker ringgit, palm's currency of trade, typically makes the tropical oil cheaper for holders of foreign currencies. The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.04 percent at 2,488 ringgit ($635.50) a tonne at the close of trade.
Trading volumes stood at 40,154 lots of 25 tonnes each on Thursday evening. "Malaysian Palm Oil Association's output drop is less than expected," said a Kuala Lumpur-based trader, referring to Feb. 1-20 output data which she said showed a 6.4 percent decline versus the corresponding period last month.
"The market was expecting a double-digit or high single-digit fall." Output in Malaysia, the world's second largest palm producer, is forecast to decline from a month earlier, in line with seasonal trend and on fewer working days in February.
In other related oils, the Chicago Board of Trade's March soyabean oil contract was down 0.3 percent, while the May soyabean oil on China's Dalian Commodity Exchange rose 0.6 percent. The Dalian May palm oil contract was up 0.2 percent.
Palm oil prices are impacted by rival edible oils as they compete for a share in the global vegetable oils market. Technical signals are mixed for palm oil and will become clearer when the chart develops further, said Reuters market analyst for commodities and energy technicals Wang Tao.
Comments
Comments are closed.