Malaysian crude palm oil futures ended with pared gains on Monday as players quickly booked profits amid concerns over rising domestic stocks. Gains in rival Chicago soyaoil and official data showing a smaller-than-expected rise in stocks had underpinned the market.
"People are still worried about stocks as exports are not encouraging, and this will keep the market under pressure," said one trader. The Malaysian Palm Oil Board (MPOB) said on Monday that Malaysia's palm oil stocks stood at 1.04 million tonnes at end-May, up 4.1 percent from 1.0 million tonnes at end-April.
The end-May stock level was lower than the 1.12 million tonnes estimated by crop analyst Ivan Wong on Friday. The benchmark third-month palm oil futures contract, August, ended up 10 ringgit at 1,507 ringgit ($396.58) a tonne after trading as high as 1,523.
Other traded contracts were up between two and nine ringgit. Overall volume stood at 4,452 lots. Traders said any upside is likely to be limited by worries that stocks will rise further in coming months as exports slow and production enters a seasonal peak.
Society Generale de Surveillance, the leading cargo surveyor for Malaysian palm oil, has estimated exports for June 1-10 at 268,230 tonnes, against 334,522 tonnes in the same period in May and 373,695 tonnes a year ago. Export figures for the first 15 days of June are due on Tuesday. Edible oil imports by India, the world's largest buyer, fell by a sharp 65 percent in May from a year because of a significant rise in domestic output, the Solvent Extractors' Association of India said on Monday.
India imports nearly half of its edible oil needs, mainly from Malaysia, Indonesia, Argentina and Brazil. Chicago Board of Trade (CBOT) soyaoil futures rose in Asian screen trade on Monday, with July contract up 0.10 cent at 27.93 cents per lb.
US markets were closed on Friday for the funeral of former President Ronald Reagan.
Physical crude palm oil prices reversed their trend to close slightly lower. June saw bids/offers at 1,530/1,535 ringgit a tonne in the southern region, compared with Friday's close of 1,535/1,540.
In the central region, the contract was quoted at 1,525/1,535. Trades were reported at 1,545-1,535 ringgit in both regions. July saw buyers/sellers at 1,525/1,530 ringgit a tonne in the south and 1,520/1,530 in the central region. No trade was reported.
PALM OIL FUTURES:
June (south): 1535.
Open/High/Low: 1491/1523/1491.
Previous closes: 1540.
PALM OIL PHYSICALS:
August (3rd month): 1507.
Previous settlement: 1497.
FUTURES: Benchmark third-month August up 10 ringgit, or 0.7 percent, to 1,507 ringgit ($396.58) a tonne.
PHYSICALS: Closed slightly down.
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