Malaysian palm oil futures ended off a three-week high on Monday as higher than expected stocks erased earlier gains driven by competing vegetable oil markets and crude oil. March palm oil stocks in Malaysia rose to a three-month high on production surging nearly 30 percent. The higher production comes as the South American soy crop get harvested, crushed and channelled into vegetable oil markets.
"There will be some profit taking across the commodity markets after crude oil's decline. Palm oil will turn negative in the days to come," said a trader with a foreign commodities brokerage. The benchmark June crude palm oil contract on Bursa Malaysia Derivatives settled up 0.5 percent, or 18 ringgit, at 3,417 ringgit ($1,131). It earlier went as high as 3,454 ringgit - a level unseen since March 21.
Overall traded volume was at 27,224 lots of 25 tonnes each, higher than the usual 25,000 lots. Technicals are still positive. Reuters analysis showed palm oil is expected to rise 3,470 ringgit per tonne based on a Fibonacci retracement analysis. Traders are now eyeing a higher palm oil stock build this month, after cargo surveyors reported a decline in Malaysian shipments for the first ten days of April.
Other vegetable oil markets declined later on Monday as crude oil futures fell on hopes of a Libyan peace deal and profit taking after the market rallied hard last week. US soyoil for May delivery fell 0.6 percent in late Asian trading hours. There may be some further selling pressure in the global soy complex after an official with China's state owned trading house COFCO Co. Ltd said the country may cancel or defer some soy cargoes due to poor crushing margins. The most-active January 2012 soyoil on the Dalian Commodity Exchange settled up 1.3 percent but gains may get erased the next day after COFCO also said Beijing had started selling its rapeseed oil reserves to some state owned firms.
Comments
Comments are closed for this article.