Malaysian palm oil futures ended slightly lower on Friday, as traders booked profits ahead of the weekend, although losses were capped by an export jump in the second half of July that could keep a lid on stocks in the world's No 2 producer. Prices gained 3.4 percent this week, the biggest weekly jump since early February, after data showed July's full-month exports rose 4-5 percent, surpassing estimates and easing fears of a sudden spike in inventories.
Palm oil stocks in Malaysia stood at more than two-year lows of 1.65 million tonnes in June, and could edge lower to 1.6 million tonnes in July, a Reuters poll showed on Friday. Industry regulator data for stocks, output and exports in July will be delayed to August 14 due to the Eid-ul-Fitr holiday. Traders say the weak ringgit, which plunged to three-year lows after Fitch Ratings downgraded Malaysia's credit outlook, will spur demand for the tropical oil as its ringgit-priced feedstock becomes cheaper for overseas buyers. "Exports are good, that's why the market ran up more than 100 ringgit. The end-stocks are not expected to be that bearish now," said a trader with a foreign commodities brokerage.
At market close, the benchmark October contract on the Bursa Malaysia Derivatives Exchange had eased just 0.1 percent to 2,257 ringgit ($693) per tonne. Prices earlier hit 2,284 ringgit, their highest since July 19. Palm oil futures are up more than 100 ringgit from a nearly four-year low of 2,137 ringgit hit in two sessions at end-July. Total traded volume on Friday stood at 25,420 lots of 25 tonnes each, below the average 35,000 lots. Technicals suggest Malaysian palm oil is set to retrace to 2,221 ringgit per tonne, as it faces a resistance at 2,272 ringgit, said Reuters analyst Wang Tao.
Prices remain under pressure as crop-friendly weather forecasts crimp US soy markets tracked by palm. The projections for bumper crops could yield bigger soybean oil supplies and snatch demand away from competing palm oil. In vegetable oil markets, the US soyoil contract for December rose 0.1 percent in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange closed 0.2 percent higher.
Comments
Comments are closed.