Malaysian palm oil futures eased 0.14 percent on Monday, falling for a third consecutive session to their lowest level since July 9 as poor exports and a stronger dollar dragged down the market. Exports of Malaysian palm oil products for July 1-20 fell 15.5 percent to 907,574 tonnes, from 1,074,410 tonnes shipped a month ago, cargo surveyor Intertek Testing Services said in its latest estimate on Monday. Another cargo surveyor, Societe Generale de Surveillance, reported a 16.1 percent drop in exports during the same period.
"Overseas demand is clearly weakening and we don't see any improvement soon," said one Kuala Lumpur-based trader. "There is a bit of currency play as well today as the US dollar is strengthening." Palm oil for October delivery on Bursa Malaysia Derivatives fell 3 ringgit, or 0.14 percent, to close at 2,187 ringgit a tonne, after hitting a low of 2,165 ringgit earlier in the day.
Volume stood at 30,024 lots of 25 tonnes each, lower than the roughly 35,000 lots typically traded. Several market participants were away because of Eid al-Fitr, the holiday at the end of the Muslim fasting month. The dollar hit a three-month high against a basket of major currencies on Monday, after solid US inflation and housing data supported expectations of the Federal Reserve raising interest rates in coming months.
There was additional pressure stemming from a decline in the value of Chicago soybeans. Chicago soybeans slid for a fifth consecutive session to their weakest level since June 30, with the outlook for warmer weather across the US Midwest expected to boost crop development.
The most-active soybean oil contract on the Dalian Commodity Exchange and US August soyoil both fell 1.1 percent. Palm oil may drop to 2,139 ringgit per tonne as it has breached support at 2,182 ringgit, according to Wang Tao, a Reuters market analyst for commodities technicals.
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