Palm oil slides on overnight soy oil losses

30 April 19

Malaysian palm oil futures charted a third session of loses in four on Thursday evening, tracking weakness in overnight U.S. soy oil prices and on forecasts of slower-than-expected declines in output.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 0.6% at 2,157 ringgit (US$521.77) a tonne at the close of trade, after earlier rising to a three-day top of 2,179 ringgit.

“Front-month palm prices are under pressure on production outlook” said a Kuala Lumpur-based trader, adding that this caused palm prices to fall in early trade. 

“The market is still sideways, waiting for fresh direction”.

Another trader said overnight declines in soy oil prices on the U.S. Chicago Board of Trade weighed on palm oil prices, while a weaker ringgit limited the fall.

“Due to soy’s prices, Malaysia’s export data had no effect”, he said.

Malaysian palm oil exports rose between 1.4%-8.9% during April 1-25 versus the corresponding period last month, according to data from three cargo surveyors on Thursday.

Weakness in the ringgit, palm oil’s traded currency, usually makes the edible oil cheaper for foreign buyers. The ringgit was down 0.2% at 4.1340 per dollar.

In other related oils, the Chicago May soybean oil contract fell 0.5% on Wednesday, and was up 0.3% on Thursday.

Soybean prices had declined on ample global supplies and dimming prospects for U.S. exports.

The May soy oil contract on the Dalian Commodity Exchange fell 0.2%, and the Dalian May palm oil contract was down 0.3%.

Palm oil prices are affected by movements in soy oil, as they compete for a share in the global vegetable oil market.

 Palm, soy and crude oil prices at 1040 GMT 

 Contract          Month    Last  Change     Low   High  Volume

 MY PALM OIL       MAY9     2050  -29.00    2050   2078     230

 MY PALM OIL       JUN9     2129  -21.00    2129   2156    3631

 MY PALM OIL       JUL9     2157  -13.00    2156   2179   15578

 CHINA PALM OLEIN  MAY9     4314  -12.00    4310   4338   29018

 CHINA SOY OIL      MAY9     5276  -10.00    5268   5294   34172

 CBOT SOY OIL      MAY9       28   +0.08    27.9     28    1803

 INDIA PALM OIL    APR9   539.20   +1.00  537.80  539.6     582

 INDIA SOY OIL      MAY9   747.55   +4.15   738.8  748.5   10530

 NYMEX CRUDE       JUN9    66.14   +0.25   65.54  66.28  119714

 Palm oil prices in Malaysian ringgit per tonne

 CBOT soy oil in U.S. 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 U.S. dollars per barrel

(US$1 = 4.1340 ringgit)

(US$1 = 70.2025 Indian rupees)

(US$1 = 6.7438 Chinese yuan)

Source: The Edge Markets