Malaysian palm oil futures fell for a third session this week, tracking poor performing rival vegetable oils and on bearish local sentiment, driven by rising output and weak export demand. The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 1.2 percent at 2,602 ringgit ($669) per tonne at the end of trading, after earlier hitting a seven-week intraday low of 2,574 ringgit.
Traded volumes were 61,515 lots of 25 tonnes each, higher than the 2015 daily average of 44,600. "Palm is down on external markets, (such as) Chicago Board of Trade soyoil and this morning Dalian RBD (refined, bleached and deodorized) palm olien was down sharply," said a trader based in Kuala Lumpur.
"As for local sentiment, we're seeing the weather improve. Production is up and exports are only marginally up." The most actively traded September contract for palm olein on the Dalian Commodity exchange declined 3.3 percent on Thursday, while the May Chicago Board of Trade soyoil contract lost 0.7 percent. In other competing oils, the September soybean oil contract on the Dalian Commodity Exchange fell nearly 2 percent.
Improving weather conditions could reduce the impact of the crop-damaging El Nino phenomenon, which brings scorching heat across Southeast Asia. Leading industry analysts have forecast it would lower yields and reduce global output, pushing palm's benchmark prices up to 3,000 ringgit by mid-year.
Sluggish exports, however, could weigh on prices, as palm oil product shipments from Malaysia saw little to no growth in the April 1-25 period compared with a month ago, cargo surveyor data showed. The offer price for crude palm kernel oil stood at 4,778.50 ringgit per tonne in the evening, according to price assessments by Thomson Reuters.
Comments
Comments are closed.