KUALA LUMPUR: Malaysian palm oil futures edged lower at the midday break on Thursday, in line to snap two sessions of gains, on expectations of bearish official data on December inventories, production and exports.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.2 percent to 2,178 ringgit ($531.87) a tonne at noon, coming off a near three-week high it had hit in the previous trading ession.
Trading volumes stood at 7,656 lots of 25 tonnes each during the first half of trade. <1FCPO-TOT>
Data from industry regulator the Malaysian Palm Oil Board (MPOB), released after the market paused for the midday break, showed end-stocks rising 6.9 percent from the previous month to 3.21 million tonnes.
The inventory levels are at their highest in at least 19 years, according to Refinitive Eikon data. <MYPOMS-TPO>
Meanwhile, December production fell 2 percent from the previous month to 1.81 million tonnes while exports edged up 0.6 percent from November to 1.38 million tonnes, according to MPOB data.
"Exports came in lower than expected and with high imports, stocks are above our estimates, which is considered bearish," said a Kuala Lumpur-based trader. "I think the market will come off during the second trading session."
Another trader had also said that the decline in December's production was lower that expected.
A Reuters survey had forecast palm oil's end-December stockpiles to edge up 4.3 percent to 3.14 million tonnes, while production was seen falling 3.6 percent to 1.78 million tonnes.
Exports were also forecast to gain 4.7 percent to 1.44 million tonnes.
Palm oil may fall to 2,150 ringgit per tonne, as it failed again to break a resistance at 2,198 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related oils, the Chicago March soybean oil contract was trading flat at 0558 GMT, while the March soybean oil contract on the Dalian Commodity Exchange edged up 0.8 percent.
Meanwhile, the Dalian January palm oil contract rose 1.3 percent.
Palm oil prices are impacted by changes in soyoil prices, as they compete for a share in the global vegetable oil market.
Comments
Comments are closed for this article.