Heavy selling drags down palm oil prices
Heavy selling drags down palm oil prices
KUALA LUMPUR (Reuter): Heavy selling pressure in spot futures
month, a bearish crop report and technical selling dragged down
Malaysian palm oil prices, traders said.
Despite a rebound in the Chicago soyoil futures overnight, the
market reversed the earlier steady trend and selling appeared and
continued into the afternoon session.
"Sentiment looks weak today particularly in the afternoon
trade, with a bearish Ivan report hitting sentiment in late
trade," a trader said.
Ivan Wong said yesterday Malaysia's palm oil output in May was
estimated to have risen by 7.0 percent to 784,000 tons over
April.
He put palm oil stocks at the end of May at 745,000 tons,
compared with the Palm Oil Registration and Licensing Authority's
(PORLA) 697,714 tons at end-April. Exports in May were estimated
at 635,000 tons against 570,067 in April.
"Strong selling in spot futures has caused other futures
months to fall sharply," a trader said, adding that players also
liquidated for fear that prices may dip further in the near-term.
"We thought prices could rebound today after a higher opening
on soyoil's gains and recent days' decline," a trader said. But
thereafter the market eased off on lack of follow-through
support.
Thursday's gains were also attributed to speculation that
Indonesia's Joint Marketing Board which markets all crude palm
oil produced by state plantations, reduced exports by half in
April due to low output.
Third month August futures broke the 1,200 ringgit and
weakened further as sentiment was depressed by the weak spot
month which fell 31 ringgit to 1,182 ringgit a ton.
"As long as August futures fell below the psychological level
of 1,200 ringgit, we are a bit nervous on belief that the market
tone is bearish," a technical analyst said.
The contract, which closed today at 1,182 ringgit, will trade
in the range of 1,170 and 1,220 next week. It was down 17 ringgit
from Thursday's close.
Other futures contracts months also posted sharp falls.
Physicals June (south) saw offers at 1,220 ringgit against bids
at 1,217.50 after trading from 1,222.50 and 1,215, and June
(central) at 1,210 versus 1,200 with earlier trades at 1,225 and
1,205.
July (south) saw offers at 1,220 after bids of 1,217.50 and
trade of 1,222.50 and 1,217.50.
July (central) saw offers at 1,210 against bids of 1,200.
In refined products, June RBD palm oil was offered at $517.50,
July at $515 and Aug/Sept at $512.50.
June RBD palm olein saw offers at $560, July at $552.50 and
Aug/Sept at $547.50. July was traded at $552.50.
July RBD palm stearin was offered at $380 and June/July palm
fatty acid distillate saw sellers at $270..