JAKARTA: Malaysian palm oil futures edged lower on Wednesday as worries over increased production and a stronger ringgit dampened buying.
“Strong growth in March and April production is seen as a bearish factor.
The March Southern Palm Oil Millers Association figures released today showed and increase of a whopping 48 percent,” a trader with a local commodities brokerage in Kuala Lumpur said.
By the day’s close, the benchmark June contract on Bursa Malaysia Derivatives was down 0.51 percent at 2,152 ringgit ($582) a tonne. Total traded volume stood at 29,973 lots of 25 tonnes, below the average 35,000 lots.
“The SPOMA figures are having an impact. In April onwards, seasonal production will pick up, hence the outlook is weaker for the rest of the year,” a second trader with a foreign commodities brokerage in Kuala Lumpur said.
Increased production without matching demand can lead to an abundance of palm oil in the market and drive down prices.
Prices also came under pressure from gains in the ringgit, which can curb interest from overseas buyers on the Malaysian market by making palm oil effectively more expensive.
Indonesia, the world’s biggest producer of palm oil, will extend a 2011 ban on forest clearing beyond its May 2015 deadline, a government official said on Wednesday.
Technical charts show that palm oil is expected to test support at 2,146 ringgit per tonne, a break below which will lead to a further loss to 2,106 ringgit, Reuters market analyst Wang Tao said.
Brent crude oil futures slipped below $55 a barrel on Wednesday on speculation that a last-minute deal over Iran’s nuclear programme would be reached, opening the way for more Iranian crude to come into world markets.
Palm, soy and crude oil prices at 1030 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR5 0 +0.00 0 2142 0
MY PALM OIL MAY5 2160 -9.00 2154 2184 3331
MY PALM OIL JUN5 2154 -11.00 2148 2180 17119
CHINA PALM OLEIN SEP5 4650 -10.00 4620 4696 398886
CHINA SOYOIL SEP5 5360 -12.00 5326 5404 548278
CBOT SOY OIL MAY5 30.49 -1.80 30.39 30.73 6178
INDIA PALM OIL APR5 433.20 -1.80 432.60 437.10 984
INDIA SOYOIL APR5 587.30 +3.70 584.90 589.00 19520
NYMEX CRUDE MAY5 47.23 -0.37 47.05 47.80 35428
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.6975 ringgit)
($1 = 6.1976 Chinese yuan)
($1 = 62.3150 Indian rupees)- Reuters
Source : The Star]]>