Malaysian crude palm oil futures ended down on Thursday, extending their weakness of the previous day, after a drop in rival soyaoil futures on the Chicago Board of Trade. "We're just following the CBOT now, there's no other guide," said a dealer. Soya and palm compete for export destinations and their prices often move in step. On Thursday's e-CBOT trade, July soyaoil fell as much as 0.20 cent per lb. in a setback to Wednesday's rebound.
Talk that few shipments of palm oil were booked for the second half of June, compared with voluminous loading in the same period of last month, also depressed the market. At the close, the benchmark third-month crude palm oil on Bursa Malaysia Derivatives, August, closed 3 ringgit down at 1,390 ringgit ($365.79) a tonne.
It had fallen as much as 8 ringgit or half percent other traded months ended down 1 to 3 ringgit.
Volume totalled 4,869 lots of 25 tonnes each. The market typically sees 6,000 lots or more on a busy day.
Dealers said investors were worried that palm oil production could surge in coming months, overtaking demand.
Constant speculation that Malaysia will revalue its ringgit from the present fixed rate of 3.8 to the dollar was also weighing on the market, dealers said. A higher ringgit will make palm oil, sold in dollars, more expensive.
Malaysia is the largest palm oil producer and can influence the global prices of the commodity.
In physical trade crude of palm oil, the June contract saw bids at 1,395 ringgit a tonne in Malaysia's southern region, against offers at 1,400.
In the central region, the same contract was bid/offered at 1,390/1,395 ringgit. Trades were reported for June at 1,400-1,395 ringgit in the south and 1,395-1,390 in the central region. The July contract saw bids/offers at 1,395/1,400 in the south and 1,390/1,400 in the central region. Trade was reported at 1,400 ringgit in the south.
PALM OIL FUTURES:
June (south): 1400
Open/High/Low: 1397/1399/1385
Previous closes: 1405
PALM OIL PHYSICALS:
August (third month): 1390
Previous settlement: 1393
FUTURES: Benchmark third-month August down 3 ringgit at 1,390 ringgit ($365.79) a tonne.
PHYSICALS: Offers for June were down 5 ringgit at 1,400 ringgit a tonne.
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