SINGAPORE: Malaysian palm oil futures edged up on Thursday after a drop to a four-month low earlier in the session lured back buyers, though gains were capped by persistent worries about the health of the global economy.
Recent data from the US and China — the world’s top two economies — that fell short of expectations and raised concerns over slowing global growth have triggered this week’s sell-off across markets from crude oil to gold.
Palm oil futures have come under pressure as investors took cues from these factors, with the benchmark contract dropping below RM2,300 on Monday for the first time this year.
“The sentiment in overall commodities markets remains weak, especially as crude oil prices posted six straight sessions of loss while gold prices still struggle to recover,” said Ker Chung Yang, investment analyst with Phillip Futures in Singapore.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange edged up 1.5 per cent to close at RM2,309 per tonne. Prices fell to as low as RM2,265, a level last seen on December 14.
Total traded volumes stood at 38,072 lots of 25 tonnes each, higher than the average 35,000 lots.
Technical analysis showed palm oil is expected to drop to RM2,249, as it has broken a support at RM2,289, Reuters market analyst Wang Tao said.
Palm oil traders are now waiting for export numbers as stocks of the edible oil could ease further on higher shipments and weak production. Inventory levels fell to 2.17 million tonnes in March, the lowest in seven months.
Cargo surveyor Intertek Testing Services will release Malaysia’s April 1-20 export data on Saturday while another surveyor, Societe Generale de Surveillance, is expected to do the same on Monday.
In other markets, Brent crude oil jumped by more than a dollar to US$99 a barrel on Thursday, snapping a six-session losing streak, with dealers saying it looked oversold after losing 10 per cent this month.
In other vegetable oil markets, US soyoil for May delivery edged up 0.3 per cent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange lost one per cent.– Reuters
Source : Business Times