Palm oil drops

September 12, 2013

Palm oil
Palm oil

Malaysian palm oil futures fell on Wednesday to the lowest in three weeks, weighed down by concerns of rising production pushing stocks higher this month. But losses were capped by some bargain-hunting in the morning session, while encouraging export figures and official data pointing to a lower-than-expected increase in August inventory level also provided some support.

“We see a slight reversal (in the morning session) today after yesterday’s loss. But there are still concerns about stronger production … and if demand cannot keep up with it, then stocks may climb again this month,” said a trader with a foreign commodities brokerage in Kuala Lumpur.

On Wednesday, the benchmark November contract on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to close at 2,330 ringgit ($715) per tonne, its lowest level since August 22. Total traded volumes were thin at 26,753 lots of 25 tonnes each, compared to the average 35,000 lots. Technicals showed palm oil may rebound to 2,385 ringgit per tonne before falling again, according to Reuters market analyst Wang Tao.

Malaysia’s palm oil end-stocks in August inched up 0.1 percent from a month ago to 1.67 million tonnes, with exports registering a 7.4 percent growth to 1.52 million tonnes, industry regulator Malaysian Palm Oil Board said on Tuesday. “Overall, we reckon the news is positive to crude palm oil prices as the good demand growth month-on-month so far has been able to absorb the additional supply,” Alam Lim Seong Chun, analyst with Malaysia’s Kenanga Investment Bank, said in a note to clients. Export demand continued to remain resilient in the first 10 days of September, with shipments rising 10.8 percent and 6.8 percent from the same period a month ago, according to cargo surveyors Intertek Testing Services and Societe Generale de Surveillance, respectively. In vegetable oil markets, the US soyaoil contract for December was almost flat in late Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange gained 0.4 percent. Courtesy Reuters

Published in ZaraiMedia.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More