KUALA LUMPUR: Malaysian palm oil futures slipped at the midday break on Monday and were on track for a second day of declines, as traders were bearish ahead of an official data release during the market’s midday break.
Industry regulator Malaysian Palm Oil Board (MPOB) announced November data for Malaysia’s stockpiles, production and exports at the market’s break. Inventories at end-November rose above 3 million tonnes, the highest in at least 18 years, as a steep decline in exports boosted reserves.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange declined 0.2 percent to 1,994 ringgit ($479) a tonne at the midday break.
Trading volumes stood at 5,342 lots of 25 tonnes each at the midday break. <1FCPO-TOT>
“Trading sentiment is cautious ahead of MPOB’s report on November palm oil supply and demand,” said a Kuala Lumpur based trader.
“Trading sentiment for the week is likely to mirror MPOB’s
November palm oil supply and demand report as analysts’ forecasts are pointing to record high end-stocks,” the trader added.
Palm oil stocks last month rose 10.5 percent from October to 3.007 million tonnes, while production in November slid 6.09 percent from the previous month to 1.85 million tonnes.
Exports fell 12.9 percent to 1.375 million tonnes.
In other related oils, the Chicago December soybean oil contract was down 0.5 percent, while the January soybean oil contract on the Dalian Commodity Exchange fell 1.9 percent.
Meanwhile, the Dalian January palm oil contract declined 1.1 percent.
Palm oil is impacted by movements of other edible oils, as they compete for a share in the global vegetable oil market.
A bearish target range of 1,956-1,972 ringgit per tonne has been aborted for palm oil, said Wang Tao, a Reuters market analyst for commodities and energy technicals.