Malaysian palm futures fell 1.6 percent on Wednesday, retreating from the previous day's surge as weakening soyoil prices prompted some investors to take profits. Sentiment remained buoyant as Malaysian palm oil shipments were expected to show improvement in the June 1-25 reporting period in data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance that is due on Thursday.
The benchmark September palm oil contract on the Bursa Malaysia Derivatives Exchange settled down 36 ringgit at 2,250 ringgit ($637) per tonne, having closed six percent higher the previous day. Overall traded volume stood at 11,380 lots of 25 tonnes each. Open interest dropped to 68,421 lots, from 73,086 lots on Tuesday. "The market needs to take a breather and weaker soyoil gave the best excuse.
Expect further consolidation as export hopes have been largely priced in," said a trader with a local commodities broker. Export trends appear to be recovering with cargo surveyor Intertek Testing Services reporting a smaller decline of 3.4 percent to 786,591 tonnes in June 1-20 compared with a 28.3 percent slump in the June 1-10 period. Order growth was driven mostly by European Union countries while China and India, the world's top two buyers of vegetable oil, slowed purchases slightly.
Although palm oil production is expected to increase in the second half as biological tree stress starts to fade, some traders were looking out for an El Nino weather event developing. El Nino brings hotter weather to top palm oil producers Malaysia and Indonesia, causing lower palm oil yields 12 months later, planters say.
Oil dropped under $69 a barrel, weighing on vegetable oil markets. US soyoil futures lost 1.2 percent while the most-active January 2010 soyoil contract on Dalian Commodity Exchange, which gives some direction to Malaysian palm futures, inched up.
INDONESIA PALM TRADES In Indonesia, the world's top producer, the Jakarta-based state marketing centre sold 3,500 tonnes out of 13,500 tonnes of palm oil it offered at 6,910 rupiah ($0.668) per kg. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold palm oil tender. Meanwhile, refiners in Jakarta offered the price of refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 7,000 rupiah per kg, down from 7,100 rupiah per kg on Tuesday.
Comments
Comments are closed.