May 22, 2013
Malaysian palm oil futures ended flat on Tuesday, as hopes for a recovery in demand ahead of the Muslim holy month of Ramazan offset lower exports in the first 20 days of May. Lacklustre exports data dragged prices lower in the morning session, but expectations that buyers would stock up ahead of Ramazan that starts early in July, when communal feasting typically drives up consumption, helped stem the drop.
“Classically, export demand from the Middle East and South Asia usually surges before the Muslim fasting month,” said Singapore-based Phillip Futures in a note to clients. At market close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange was unchanged at 2,335 ($774) ringgit per tonne. Prices touched a high of 2,352 ringgit on Monday, a level last seen on April 12.
Total traded volumes stood at 37,995 lots of 25 tonnes each, slightly higher than the average 35,000 lots. Technicals showed mixed signals for palm oil as it is not clear if a rebound from the May 6 low of 2,230 ringgit has completed, Reuters market analyst Wang Tao said. The news from the fundamental side was also mixed. Malaysian palm oil stocks fell to 1.93 million tonnes in April, crossing below the psychological 2-million-tonne mark for the first time since last July, but exports over May 1-20 dropped by as much as 9.4 percent from a month ago as demand from major buyers China and India eased.
But traders said stocks could edge lower in May as production remains stagnant and exports pick up. In vegetable oil markets, US soyaoil for July delivery fell 0.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange fell 0.5 percent. Reuters