Malaysian palm oil futures ended up after earlier hitting a new three-month low on Thursday, tracking other vegetable oils, as traders waited for fresh cues and monthly export data due soon. By the close, benchmark palm oil for October on the Bursa Malaysia Derivatives Exchange ended 0.6 percent higher at 2,123 ringgit ($556) a tonne. Earlier, prices hit a low at 2,099 ringgit, its lowest level since April 30.
Palm prices have slipped 5 percent in July. "We are waiting for fresh leads," said a trader with a foreign commodities brokerage in Kuala Lumpur. "We are waiting for tomorrow's monthly export figure to see which direction it goes." Total traded volume on Thursday stood at 36,393 lots of 25 tonnes each, slightly above the roughly 35,000 lots usually traded daily. Palm oil is expected to fall to 2,088 ringgit per tonne, as it has broken a support at 2,115 ringgit, Reuters market analyst Wang Tao said.
In other vegetable oils, the US August soyoil contract rose 0.5 percent, while the most active soybean oil contract on the Dalian Commodity Exchange was 0.3 percent lower. A recent sell-off in Chinese stock markets and its impact on demand is weighing on palm sentiment, said a second trader, referring to one of the world's top importers of the tropical oil. "Bearish forces are lining up against palm oil, including slowing demand from China and India," the trader added.
Crude oil prices steadied after a larger-than-expected draw in US crude and gasoline stocks was balanced by a stronger dollar, making fuel more expensive for holders of other currencies. On the upside, the Malaysian ringgit traded near 17-year lows and is the currency that benchmark palm is priced in, offering some support to palm oil. Traders are also keeping an eye on weather conditions at Asian palm plantations for any potential upside from an El Nino dry weather pattern.
Comments
Comments are closed.