04.06.2020 (TODAYonline) - KUALA LUMPUR, June 4 - Malaysian palm oil futures took a breather on Thursday after two days of sharp gains, falling on forecast of higher May stockpiles and tracking losses in crude and rival soyoil.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange slid 45 ringgit, or 1.88%, to 2,354 ringgit ($551.68) during 0252 GMT.

Palm had climbed 2.5% in the previous two sessions to hit its highest closing level in two months.

FUNDAMENTALS

* May output in Malaysia, the world's second largest producer, likely rose 3% from the month before, while inventories possibly surged 12% month-on-month to 2.28 million tonnes, according to a forecast by CGS-CIMB.

* Oil prices fell, reversing gains in the previous session, on concerns that supply will rise if major producers are unable to agree to extend the depth of output cuts that have supported recent gains.

* Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

* Dalian's most-active soyoil contract fell 0.74%, while its palm oil contract gained 0.41%. Soyoil prices on the Chicago Board of Trade were down 0.97%.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

* Palm oil may peak around its April 9 high of 2,409 ringgit per tonne, as suggested by its wave pattern, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Stronger appetite for riskier assets is set to lift Asian equities on Thursday, as government stimulus expectations support investor confidence in an economic recovery from the coronavirus.

DATA/EVENTS (GMT)

0130 Australia Retail Sales MM April

0130 Australia Trade Balance G&S April

1145 EU ECB Refinancing Rate June

1145 EU ECB Deposit Rate June

1230 US International Trade April

1230 US Initial Jobless Claims Weekly ($1 = 4.2670 ringgit) REUTERS

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