KUALA LUMPUR: Malaysian palm oil futures eased on Thursday, paring gains from the previous session, dragged by weakness in rival edible oils and concerns over the U.S banking crisis.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 23 ringgit, or 0.58%, to 3,944 ringgit ($875.67) a tonne by the midday break.
Palm fell for a fourth time in five sessions to hit its lowest in a month. “Futures was reeling from the impact of banking sector crisis rocking the wider financial markets,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Asian stocks slid and investors turned to the safety of gold, bonds and dollars as Credit Suisse became the latest focal point for fears of a banking crisis, leaving markets on edge ahead of a European Central Bank meeting later in the day.
Malaysia’s exports for March 1-15 surged between 55% and 72% from the same period in February as shipments to India jumped ahead of the Muslim festival of Eid, according to cargo surveyors data on Wednesday.
In top producer Indonesia, palm oil producers sold 360,150 tonnes of cheap cooking oil to the domestic market in February, the country’s trade minister said on Wednesday, short of a government target designed to ensure supply to local consumers.
Despite firm fundamentals, the macro outlook has turned sharply negative and uncertainty over the El Nino weather conditions is also on the cards, Varqa said.
Palm oil snaps 3-day losing streak as demand surges
Untimely rains and hailstorms could damage India’s key winter-sown crops, such as wheat, rapeseed and chickpeas, just before harvesting begins for plants that have already suffered some heat stress, industry and weather department officials said.
Dalian’s most active soyoil contract fell 2.7%, while its palm oil contract lost 1.5%. Soyoil prices on the Chicago Board of Trade were down 0.2%.
Palm oil may break a support of 3,892 ringgit per tonne, and fall into a range of 3,810-3,856 ringgit after a brief bounce, Reuters technical analyst Wang Tao said.