Malaysian palm oil futures reversed early gains on Friday to close in negative territory, tracking declines in soyaoil on the US Chicago Board of Trade. The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,257 ringgit ($552.50) a tonne at the close. It earlier rose to 2,278 ringgit, its highest in three sessions and is up 0.1 percent for the week after two previous straight weeks of declines.
Trading volumes stood at 32,041 lots of 25 tonnes each. "Palm fell, tracking easier external markets," one Kuala Lumpur trader said, referring to US soyaoil. Another trader had said that earlier market gains were capped by forecasts for higher than usual output. Palm oil generally registers production declines in the first quarter. Official data last showed that January output in Malaysia fell 3.9 percent from the previous month to 1.74 million tonnes.
The levels, however, were higher than the 1.59 million tonnes of recorded production in January last year and 1.28 million tonnes in 2017. Traders are also forecasting February output to fall from January but remain up year on year. In related oils, the Chicago March soyabean oil contract was down by 0.5 percent on Friday.
The May soyaoil contract on the Dalian Commodity Exchange rose 0.5 percent and the Dalian May palm oil contract was up 0.1 percent. Palm oil prices are affected by movements in soyaoil, which competes for a share in the global vegetable oil market.
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