Palm oil futures edged lower on Tuesday as the market took a breather after hitting its highest in almost three weeks in the last session with investors eyeing key data on Malaysian palm oil stocks and production for a price direction.
A decline in US soybean oil prices on expectations of record production added pressure on palm oil which dropped to its lowest in more than five years last week.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange fell 0.7%, or RM15, to RM2,030 (US$637) per tonne. On Monday, the market climbed to RM2,068 a tonne, its highest since August 21.
Traded volume stood at 14,166 lots of 25 tonnes each, slightly more than the average of 12,500 lots.
“Global edible oil supplies are rising and that is a bearish influence on palm oil,” said one trader with a foreign commodities brokerage in Kuala Lumpur. “We saw some recovery in prices last week and on Monday but market participants want to see data on stockpiles before making the next move.”
Traders said palm oil is likely to trade in a range of RM2,000 to RM2,070 ringgit a tonne until further direction.
Malaysian Palm Oil Board on Wednesday will issue data on the country’s August palm oil stocks, production and exports.
Malaysian palm oil stocks at the end of August likely jumped to their loftiest in seven months as higher output due to crop-friendly weather outstripped poor export demand, according to a Reuters survey.
Cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS) will also issue their numbers on Malaysia’s palm oil exports between September 1 and September 10.
Shipments of Malaysian palm oil products fell 4.8% from a month earlier to 1,288,117 tonnes in August, ITS said, but recovered from steeper losses earlier in the month as a surge in demand from India offset weaker imports by China and Europe.
SGS said shipments in August fell 5.0% to 1,282,597 tonnes.
Indonesia is expected to cut its crude palm oil export tax to zero for October, industry sources in the world’s top producer of the tropical oil said, after a similar move by Malaysia aimed at boosting overseas sales of the commodity amid weak demand.
The US soyoil contract for December fell 0.3% in Asian trade, while the most active soybean oil contract on the Dalian Commodities Exchange lost 0.4%.
In other markets, Brent crude eased for a fourth straight session but held above US$100 a barrel after dropping below that level on the previous day for the first time in 16 months, with prices supported by hopes of production cuts by OPEC. – Reuters, September 9, 2014.
Source : The Malaysian Insider