Malaysian crude palm oil futures ended down on Monday in razor-thin trade after reacting to a weak soyaoil and talk of uninspiring export numbers for May. Two cargo surveyors followed by the market, Interlake Testing Services (ITS) and Society General de Surveillance (SGS), are due to release on Tuesday export estimates for May 1 to 31 versus April 1 to 30. ITS had put shipments for May at 1.19 million tonnes and SGS 1.15 million. Both are expected to declare around 1.4 million tonnes for May.
"There's no surprise in that, it's pretty well factored into the market," said a trader. Despite demand for palm oil appearing to have risen 17 to 20 percent from a month ago, market players were more worried about production, said dealers.
"If we have 1.5 million tonnes or above, then I guess people will be excited. But with production also growing, 1.4 million tonnes doesn't look very exciting," said one dealer.
Output of palm oil in Malaysia, the top producing country, could hit another record in May, with an estimated rise of 3 percent in production over April, a Reuters survey last week showed.
Analysts from five plantation companies forecast a median of 1,284,346 tonnes for may output, against a record 1,246,938 tonne officially seen in April.
Exports have been performing well since the start of May but market participants are worried that any slowdown could lead to a spike in stocks, pressuring prices.
The benchmark third-month crude palm oil on Bursar Malaysia Derivatives, August, closed down 6 ringgit at 1,411 ringgit ($371.32) a tonne.
Its high for the day was 1,418 ringgit and low 1,405. Other traded months settled down 6 to 7 ringgit. Volume was a mere 1,621 lot of 25 tonnes each.
The market usually sees 6,000 lots or more on a busy day. Weaker soyaoil futures on the Chicago Board of Trade on Friday depressed palm oil prices, dealers said.
Soya and palm compete for export destinations and their prices often move in step. Investors were wary of taking bulk positions in palm oil, should there be a sudden volatility in Chicago prices due to weather, dealers said.
"Fund managers on the CBOT have been known to swing positions and change the course of the whole market," said a dealer. In physical trade crude of palm oil, the June contract saw bids closing at 1,415 ringgit a tonne in Malaysia's southern region, against offers at 1,420.
In the central region, the same contract was bid/offered at 1,412.50/1,420 ringgit.
Trades were reported for June at 1,420-1,415 ringgit in the south and 1,415-1,412.50 in the central region. The July contract saw bids/offers at 1,420/1,425 in the south and 1,415/1,425 in the central region. No trades were reported.
PALM OIL FUTURES:
June (south): 1420.
Open/High/Low: 1408/1418/1405.
Previous closes: 1425.
PALM OIL PHYSICALS:
August (3rd month): 1411.
Previous settlement: 1417.
FUTURES:
Benchmark third-month August down 6 ringgit at 1,411 ringgit ($371.32) a tonne.
PHYSICALS:
Offers for June at 1,420 ringgit a tonne, down 5 ringgit from Friday.
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