Malaysian crude palm oil futures closed at their lowest in more than seven months on Thursday as players were unnerved by fears of more cancellations of cargoes by China and a sharp drop in May exports.
"With prices coming down very fast, people are worried about more washouts by China. We may see a further sell-off," said a trader. Price declines had already led to some washouts or selling back to suppliers at a fee of Malaysian palm oil cargoes for May/June, traders said.
One trader estimated Chinese buyers were trying to sell back some 200,000 tonnes of palm oil after the market had fallen around $80 a tonne below their purchase price.
The benchmark third-month crude palm oil futures contract on the Malaysia Derivatives Exchange, August, ended down 37 ringgit at 1,534 ringgit ($403.68) a tonne, the lowest since October 9, 2003.
Traders pegged immediate support at 1,500 ringgit.
Other traded contracts were down between 14 and 94 ringgit. Overall market volume swelled to 11,986 lots from Wednesday's 7,693 lots. Malaysian palm oil output for May 1-25 was down 10 percent from a month earlier. Production data for the whole of May is due on Monday.
Physical palm oil prices were sharply down. May/June crude palm oil saw bids/offers at 1,590/1,600 ringgit a tonne in the southern and central regions, compared with Wednesday's close of 1,690/1,700.
Trades were reported at 1,650-1,600 ringgit.
PALM OIL FUTURES:
May (south): 1600.
Open/High/Low: 1577/1577/1529.
Previous closes: 1700.
PALM OIL PHYSICALS:
August (3rd month): 1534.
Previous settlement: 1571.
FUTURES: Benchmark third-month August down 37 ringgit at 1,534 ringgit ($403.68) a tonne.
PHYSICALS: Sharply down.
Comments
Comments are closed.