Malaysia crude palm oil futures ended 0.5 percent lower on Thursday, due to a weaker Dalian soyoil market, but strong crude oil prices limited losses. The benchmark June crude palm oil contract on Bursa Malaysia Derivatives Exchange fell 13 ringgit to settle at 2,543 ringgit ($780.3), after going as low as 2,532 ringgit.
Other contracts ended mixed, ranging from a fall of up to 43 ringgit to 20 ringgit gains. Overall trade more than doubled to 22,873 lots of 25 tonnes each, compared with the usual 10,000 lots. "The market is in a mixed situation with no clear direction. It is going sideways to downward," one Malaysian dealer said. He pegged support and resistance at 2,500 and 2,600 ringgit. The market is seeking more details about China's Ministry of Commerce urging traders in a meeting the previous day not to buy rival soyoil from Argentina in a trade dispute.
Chinese traders estimated that buyers will cancel almost all soyoil cargoes from Argentina after the verbal directive from Beijing, totalling about 200,000 tonnes per month booked between May and July. Some traders said palm oil may not immediately benefit from the move. "It won't spur buying of other vegetable oils now, because currently China has about 500,000 tonnes of palm oil stocks at the major ports," said a trader in Shanghai.
A Malaysian trader said the muted interest in palm oil was in part due to palm oil's narrowing differential with soyoil. "In fact, it is trading at a premium to soyoil from Brazil and Argentina today," he said. US crude futures hit a fresh 18-month high above $84 on Thursday, bolstered by talk of fresh inflows from investors at the start of the new quarter.
Some vegetable oil markets moved in tandem with crude oil. May soyoil on the Chicago Board of Trade rose 0.7 percent in Asian hours while the most active September soyoil delivery on China's Dalian Commodity Exchange fell 0.4 percent. A pivotal US government survey said on Wednesday that the country's farmers would plant enough soybeans this spring to produce a record-large crop.
"The major factors that influence Dalian's soyoil trading include the US prospective planting report and stock pressure in China ports," a trader in Shanghai said. Chinese traders are looking out for leads on official soyoil inventories data - a figure described as "quite unpredictable".
INDONESIA PALM TRADES Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 4,000 tonnes of crude palm oil offered in the auction at a top price of 7,349 rupiah ($0.809) per kg against 7,358 rupiah per kg on the previous day.
Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold crude palm oil at 7,282-7,289 rupiah per kg on Thursday. Producers did not hold any palm oil tenders on Wednesday. Refiners in Jakarta offered refined, bleached, deodorised (RBD) Palm Olein - used as cooking oil - at 7,650 rupiah per kg, against 7,600 rupiah per unchanged from previous day. Indonesian markets will be closed on Friday for Easter holidays.