Malaysian crude palm oil futures fell 1.2 percent to hit a fresh 5-week low as prospects of higher global vegetable oil supplies as well as uncertain financial markets and weak technicals sapped sentiment. Weaker US soyoil on account of favourable weather leading to a record US soy crop has weighed on palm oil, which has lost nearly 4 percent so far this week and moved into its third straight day of losses.
The benchmark November palm oil contract on the Bursa Malaysia Derivatives Exchange settled down 27 ringgit to 2,218 ringgit ($628.3) per tonne, a level unseen since July 31. "We are heading down but it does not really make sense because exports are still rather good and stocks are going to be tight," said a trader with a local commodities broker.
"This just goes to show that external markets are becoming more important than our fundamentals." Cargo surveyors have reported 1.3 million tonnes and above of exports last month, off 1.4 million shipped in July but demand is still resilient and expected to cut into August palm oil closing stocks that traders say could range between 1.28-1.30 million tonnes.
But palm oil's technicals remain weak. Analysts say there might be some momentum to push palm oil towards its 200-day moving average, which stood at just under 2,100 ringgit on Thursday. The resistance is the 30-day moving average of 2,300 ringgit, which palm oil fell below this week.
INDONESIA PALM TRADES: In Indonesia, the state marketing centre based in Jakarta, sold 14,000 tonnes of palm oil at a top price of 7,204 rupiah ($0.713) per kg, against 7,185 rupiah on Wednesday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold palm oil at 7,206 rupiah per kg. A day earlier they did not hold a palm oil tender. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 7,200 rupiah per kg, against 7,200-7,250 rupiah per kg a day ago.
Comments
Comments are closed.