The Star Online (14/05/2019) - KUALA LUMPUR: Malaysian palm oil futures recovered ground on Monday after earlier hitting a five-and-a-half month low, as industry association data showing shrinking output eased concerns over high inventories and rising production.

The market had fallen earlier on concerns over the U.S.-China trade war and expectations of rising output in the coming months.

Global stocks and commodities markets fell as the United States and China appeared at a deadlock over trade negotiations on Sunday, with Washington demanding promises of concrete changes to Chinese law and Beijing saying it would not swallow any "bitter fruit" that harmed its interests.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was last up 0.1% at 1,985 ringgit ($476.93) a tonne at the close of trade on Monday, snapping three previous sessions of losses.

The market earlier fell as much as 1.2 percent to 1,960 ringgit, its lowest levels since Nov. 27.

"The market recovered losses due to the Southern Peninsular Palm Oil Millers Association data," said a Kuala Lumpur-based trader, noting the data showed declining output during the first 10 days of May versus the corresponding period last month.

Data from the Malaysian Palm Oil Board showed that production in April fell 1.4% from the previous month to 1.65 million tonnes, while inventories fell 6.6% to 2.73 million tonnes.

Palm oil may fall into a range of 1,953-1,967 ringgit per tonne, said Reuters market analyst for commodities and energy technicals Wang Tao.

In related oils, the Chicago July soybean oil contract dropped 1.2%, while the May soyoil contract on the Dalian Commodity Exchange traded flat.

The Dalian May palm oil contract slipped 1%. Palm oil prices are affected by movements in soyoil, with which it competes for global market share. – Reuters

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