Palm slips from 4-mth high on weaker crude oil, profit booking
23 Jan 2019 (The Edge Markets MY ) - KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday from a four-month high hit in the previous session and were set to snap a three-day rally, due to overnight weakness in crude oil prices and profit booking by investors.
Palm oil prices are impacted by movements in crude oil, as the edible oil is used as feedstock to make biodiesel.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell 0.2% to RM2,258 (US$546.60) a tonne.
Trading volumes stood at 11,683 lots of 25 tonnes each at the midday break.
"The market is reacting towards lower crude prices today," said a Kuala Lumpur-based futures trader, adding that the market could, however, hold at current levels as palm oil export data so far showed rising demand.
Malaysian palm oil shipments during Jan 1-20 rose in the range of 9-13% from a month earlier, according to cargo surveyors Intertek Testing Services, AmSpec Agri Malaysia and Societe Generale de Surveillance.
Another trader added that palm prices were also down on profit taking activities after the previous session's high, but that the decline could be temporary if production figures show declines in line with seasonal trend.
Crude oil had fallen about 2% on Tuesday over concerns that a slowing global economy could slow fuel demand as US shale fields surge and cuts by Russia come in below expectations.
Oil prices, however, held steady on Wednesday on hopes that increased Chinese spending would stem an economic slowdown that is showing signs of spreading and has been weighing on financial markets.
In related oils, the Chicago March soybean oil contract rose 0.3% on Wednesday, while the May soybean oil contract on the Dalian Commodity Exchange was slightly down 0.1%.
Meanwhile, the Dalian January palm oil contract gained 0.1%.
Palm oil prices are impacted by movements in soyoil rates, as they compete for a share in the global vegetable oil market.
Palm, soy and crude oil prices at 0518 GMT:
|
Contract |
Month |
Last |
Change |
Low |
High |
Volume |
|
MY PALM OIL |
FEB9 |
2162 |
-1.00 |
2147 |
2164 |
81 |
|
MY PALM OIL |
MAR9 |
2220 |
-3.00 |
2210 |
2228 |
2487 |
|
MY PALM OIL |
APR9 |
2258 |
-5.00 |
2250 |
2268 |
6250 |
|
CHINA PALM OLEIN |
MAY9 |
4742 |
+6.00 |
4726 |
4784 |
337854 |
|
CHINA SOYOIL |
MAY9 |
5668 |
-4.00 |
5636 |
5714 |
318196 |
|
CBOT SOY OIL |
MAR9 |
29.15 |
+0.09 |
29.09 |
29.2 |
3414 |
|
INDIA PALM OIL |
JAN9 |
556.60 |
-0.70 |
556.30 |
557.4 |
41 |
|
INDIA SOYOIL |
FEB9 |
765 |
-2.15 |
765 |
772 |
2110 |
|
NYMEX CRUDE |
MAR9 |
52.96 |
-0.05 |
52.69 |
53.18 |
32807 |
palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel
(US$1 = RM4.1310)
(US$1 = 71.2350 Indian rupees)
(US$1 = 6.7834 Chinese yuan)