Malaysian crude palm oil futures ended off their lows on Monday after tracking pre-market gains in rival Chicago soyaoil. Dealers said resumption of business on the Chicago Board of Trade later on Monday after being closed since on Friday for the Easter weekend should provide more leads. Soya and palm compete for similar export destinations and their prices often move in step.
May soyaoil on the Chicago Board of Trade was up 0.15 cent a pound in electronic or pre-market trading ahead of Monday's official business. Third-month crude palm oil on Bursar Malaysia Derivatives, June, ended 2 ringgit down at 1,442 ringgit ($379.47) a tonne.
It had fallen as much as 20 ringgit during the day. Other traded months settled down 7 ringgit to up 2 ringgit. Volume was below average at 4,071 lots of 25 tonnes each. The market usually sees 6,000 lots or more on a busy day.
Palm oil futures rallied 2 percent at the close of last week, spurred by friendly export estimates of palm oil. Despite on Monday's weak start, dealers said futures could still breach the 1,450 and 1,480 ringgit levels this week as expected by market bulls if exports remained strong. Society General de Surveillance, a leading independent surveyor of Malaysian oil palm products exports, said shipments for March 1 to 25 stood at 924,212 tonnes, up 8.3 percent from the 853,759 tonnes it saw for February 1-25.
The cargo surveyor is scheduled to release on Thursday shipment estimates for the whole of March.
Aside from the euphoria over exports, dealers said there were concerns that output of palm oil for March could be higher than initially thought. Five plantation houses surveyed by Reuters last week put March production at a median of 1,089,321 tonnes, up 4 percent from February's official numbers. A higher output could add to stocks of palm oil and put pressure on prices. Stocks reached 1.54 million tonnes in February among their highest levels ever as exports slowed.
The Reuters survey put closing stocks of palm oil for March at a median of 1.46 million tonnes down 5.3 percent from February.
On Monday's physical crude palm oil market in the southern region, March saw bids peaking at 1,430 ringgit a tonne, against offers as low as 1,435. Bids versus offers stood at 1,440/1,445 ringgit in the south on Friday.
In the central region on Monday, March's highest bids stood at 1,427.50 ringgit. The lowest offer was 1,435. Trades were reported on Monday at 1,430 ringgit in the south and 1,425-1,430 in the central region.
PALM OIL FUTURES:
March (south): 1435
Open/High/Low: 1439/1445/1424
Previous closes: 1445
PALM OIL PHYSICALS:
June (third month): 1442
Previous settlement: 1444
FUTURES: Benchmark third-month June down 2 ringgit at 1,442 ringgit ($379.47) a tonne.
PHYSICALS: Lowest offers for March south at 1,435 ringgit a tonne, down 10 ringgit from Friday.
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