Malaysian palm futures closed lower for a second consecutive day on Friday, wiping out earlier gains of up to 2.6 percent, as volatile soy prices overshadowed the impact of strong exports, traders said. The benchmark July contract settled down 21 ringgit, or 0.78 percent, at 2,663 ringgit ($750.77) per tonne, after running as high as 2,753 ringgit.
Overall volume was 14,855 lots of 25 tonnes each. "Palm market is basically tracking volatility in soy prices, which have also come off highs today," a trader at a Kuala Lumpur-based brokerage said. The market staged an early rally after cargo surveyor Intertek Testing Services and Societe Generale de Surveillance said palm oil exports for May 1-15 rose between 2 and 8 percent to above 624,000 tonnes.
Healthy demand from main buyers China and India could bring Malaysia's palm stocks down further at the end of this month from a 22-month low in April. But the second day of losses, however, made the week the worst in nearly three months, with the benchmark contract losing 0.82 percent in the week after hitting a nine-month closing high on Wednesday. Traders said the profit-taking was an indication that the market lacked fresh leads, with supply tightness already reflected in prices.
"The thing is the bullish news has already been discounted. Everybody knows that the availability of palm oils is less but the price is already high enough," another Malaysian trader said. US soyoil for July shipment was up 0.03 percent at 38.85 cents per pound in Asian trade, off a high of 39.55 cents per pound, and the most-active September soyoil contract on Dalian's Commodity Exchange was down 0.89 percent.
INDONESIA PALM TRADES In Indonesia, the world's top producer of palm oil, the Jakarta-based state marketing centre sold crude palm oil at 8,670 rupiah per kg, against 8,675 rupiah ($0.836) per kg on Thursday. Producers in Medan - home to Belawan port, Indonesia's main palm oil export port - did not hold palm oil tender. On Thursday, they sold palm oil at 8,600 rupiah per kg.
Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 8,550 rupiah per kg, down from 8,700 rupiah a kg on Thursday. In the Malaysian physical market, palm oil for May and June were traded at 2,800-2,850 ringgit per tonne in the southern region due to weak margin.