Malaysian crude palm oil ended off five-week lows on Wednesday as traders rebalanced their positions ahead of a slew of industry data. The market shifted its focus from bullish forecasts from a price outlook conference to Malaysian industry data due on Thursday as well as a US Department of Agriculture report showing global demand and supply scenario for food commodities.
For stories on the conference, see "We are expecting higher palm oil production for February but stocks will remain tight in Malaysia," said a trader with a local commodities brokerage. "The headline figure will be March 1-10 palm oil exports and I suspect there will be a drop as big buyers are waiting for further price falls." The Malaysian Palm Oil Board will issue February palm oil stocks, production and exports on Thursday. Cargo surveyors will issue March 1-10 export data on the same day.
The benchmark May palm oil contract on the Bursa Malaysia Derivatives Exchange fell as much as 27 ringgit to 3,557 ringgit per tonne, a level not seen since February 3, before settling nearly flat at 3,585 ringgit. Traded volume stood at 13,566 lots at 25 tonnes versus the usual 15,000 lots as most market participants were at the Bursa Malaysia palm oil conference.
Palm oil appears to be following soybeans. US soybean futures edged down on Wednesday, dropping for a third straight day as forecasts of higher South American output pressured the market ahead of a key government report on global demand and supply of agricultural products due on Thursday. US soyoil for May delivery dropped 0.1 percent on expectations the USDA will raise its forecast of ending stocks for the first time in 11 months. China's most active soybean oil contract for September delivery followed suit, falling 1.1 percent.
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