Malaysian crude palm oil futures ended down on Monday after a slump in rival Chicago soya made players ignore better-than-anticipated exports of palm oil in July.
The benchmark palm oil contract on the Malaysia Derivatives Exchange, October, closed 22 ringgit, or 1.6 percent, down at the day's low of 1,397 ringgit ($367.63) a tonne. Other traded contracts ended 16 to 23 ringgits down.
Trade totalled 4,775 lots of 25 tonnes each. The market usually sees a volume of 6,000 lots or more on a busy day.
Dealers had initially expected the market to ends off its lows after cargo surveyor Society Generale de Surveillance (SGS) said it tracked 1,114,671 tonnes of oil palm products in July up 16.6 percent from June.
Another cargo surveyor, Interlake Testing Services, said on Saturday that exports of Malaysian oil palm products for July stood at 1,098,057 tonnes, up 14.2 percent from the 961,936 tonnes it tracked for June.
Until last week, players had only been expecting an export of 1.05-1.07 million tonnes for July, although some analysts were saying that at least 1.1 million tonnes were needed to offset month-end stocks seen at 1.32-1.33 million tonnes.
"The export numbers were better than we thought, but I guess the losses in soya were just too overwhelming for the market to turn around," said a trader. Soyaoil futures on the Chicago Board of Trade (CBOT) ended 0.82 to 1.13 cent a lb lower on Friday, touching contract lows on some months, due to increasingly better weather in US soyabean growing areas.
Soyaoil and palm oil compete for the same export markets and their prices often move in step.
Dealers in Kuala Lumpur said crude palm oil was currently trading at a discount of $80 a tonne to crude soyaoil. "But this discount could be halved very soon with the way the CBOT is performing," said a dealer, adding that good crop weather was also boosting palm oil supply, already at seasonal highs.
Physical crude palm oil prices also fell on Monday. Physical oil for August saw buyers/sellers at 1,440/1,445 ringgit a tonne in Malaysia's southern region, against on Friday's close of 1,460/1,465.
In the central region, bids/offers for August stood at 1,430/1,435 ringgit a tonne. Trade for August was reported at 1,440 in the south and 1,435-1,432.50 in the central zone. The physical contract for September was quoted at 1,425/1,435 in both the central and southern regions. No trade was reported.
PALM OIL FUTURES:
July (south): 1445.
Open/High/Low: 1410/1414/1397.
Previous closes: 1465.
PALM OIL PHYSICALS:
October (3rd month): 1397.
Previous settlement: 1419.
FUTURES:
Benchmark third-month September down 22 ringgit at 1,397 ringgit ($367.63) a tonne.
PHYSICALS:
August bids/offers down 20 ringgit a tonne.
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