Palm Futures Moving Sideways to Downward

MALAYSIAN crude palm oil futures fell more than 1 per cent yesterday,

tracking volatile crude oil and equity markets, on signs China’s

economic growth was slowing.

Investors gave stocks and

commodities a wide berth yesterday on mounting worries about the

strength of the global economic recovery after manufacturing data showed

China’s rapid growth was slowing.

The China Federation of

Logistics and Purchasing (CFLP) showed China’s official purchasing

managers’ index (PMI) fell to 52.1 in June compared to 53.9 in May

yesterday.

“The market is still very weak and prices are temporarily moving

sideways to downward,” said a trader with Kuala Lumpur based-foreign

brokerage.

Benchmark September crude palm oil contract on Bursa

Malaysia Derivatives Exchange fell RM27 at RM2,346 a tonne. The same

contract hit a lowest point since November 17, 2009 at RM2,338 the

previous day.

Overall traded volume stood at 13,224 lots of 25

tonnes, well above the usual 10,000 lots.

Wang Tao, a Reuters

market analyst for commodities and energy, sees Malaysian palm oil to

come down to RM2,338, a low touched on Wednesday, as it completed a

pullback towards a resistance at RM2,375 per tonne.

Oil fell

below US$75 a barrel in Asian hours, beginning the second half of the

year on a weak note after falling nearly 5 per cent in the first half,

as signs of slowing economic growth in China fuelled energy demand

doubts. Yesterday, other vegetable oils followed the weaker crude.

Both

US soyoil for July delivery and most-active January soyoil contract on

China’s Dalian Commodity Exchange fell 0.7 per cent.

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