Palm oil falls to six-week low

Malaysian palm oil futures fell to its lowest in six weeks on Tuesday, recording a fourth consecutive day of declines, due to a bearish outlook for stocks from a leading palm oil analyst. Dorab Mistry had forecast on Monday evening that Malaysia's palm oil output will rise to 20 million tonnes in 2019, up from earlier estimates of 19-19.5 million tonnes.
He also estimated that Malaysian stocks should fall from April to June before recovering. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was last down 0.6 percent at 2,095 ringgit ($507.02) a tonne at the close of trade. It earlier fell to a low of 2,092 ringgit, its weakest level since March 19. It is also down 0.5 percent for April to mark its third consecutive monthly decline.
"Mistry sounds bearish, it sounds like prices will trade sideways, that is why the market dropped," said a Kuala Lumpur- based futures trader. "End-stocks are also expected to increase later." Palm oil stockpiles in Malaysia, the world's second-largest producer, had climbed to its highest in at least 19 years in December.
It last eased 4.6 percent to 2.92 million tonnes, the first time since October 2018 that stocks were less than 3 million tonnes, data from the Malaysian Palm Oil Board (MPOB) showed. Palm oil may either consolidate within a narrow range of 2,099-2,122 ringgit per tonne, or bounce towards 2,145 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Malaysian palm oil demand for April also barely grew, adding more pressure to the market. Exports for the full month of April only rose 0.5-2 percent from the previous month, according to cargo surveyors Societe Generale de Surveillance and Amspec Agri Malaysia. Another cargo surveyor, Intertek Testing Services, reported that exports in April remained unchanged from March.
In other related oils, the Chicago May soyabean oil contract was up 0.2 percent, while the May soyaoil contract on the Dalian Commodity Exchange rose 1.1 percent. Meanwhile, the Dalian May palm oil contract declined 0.6 percent.