Malaysian crude palm oil futures rose 1.3 percent on Monday, but came off a one-week high hit earlier in the day following market talk of a drop in palm oil exports for the August 1-25 period, traders said. Palm gave up about half of the day's gain after news leaked out that Malaysian palm oil exports in the August 1-25 period dropped 12 percent from the previous month to 986,000 tonnes.
"This is the main reason why the market failed to move up higher after going above 2,400 ringgit early," said a trader at a Kuala Lumpur-based commodities brokerage. "I would say the market has to digest poor export numbers but, on the other hand, production is also declining so stock should stay low, below 1.4 million tonnes," the trader said, referring the minimum stocks requirement seen as needed for the processing industry to function normally.
Palm prices are inversely correlated with palm oil stocks. Benchmark November palm oil futures on the Bursa Malaysia Derivatives Exchange settled up 30 ringgit to 2,375 ($677.0) per tonne, after rising as high as 2,402 ringgit, a level not seen since August 14.
Overall volume was 17,937 lots of 25 tonnes each. The market's strong run early in the day was inspired by a rally in other commodities and stock markets, following upbeat US housing data and optimistic comments from Federal Reserve Chairman Ben Bernanke on the health of the US economy, which raised hopes for an economic recovery. In the Malaysian physical market, palm oil for August and September delivery was traded at 2,460-2,470 ringgit in the southern and central regions.
INDONESIA PALM TRADE: In Indonesia, the state marketing centre based in Jakarta, which normally sells palm oil from state plantations, sold palm oil at a top price of 7,539 rupiah ($0.755) per kg, up from 7,234 rupiah on Friday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold a palm oil tender. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 7,400-7,450 rupiah per kg, against 7,400 rupiah on Friday.
Comments
Comments are closed.