Another cargo surveyor Societe Generale de Surveillance reported a 5.5 percent increase to 1.37 million tonnes for the month. But the market continued to feel the weight of the larger-than-expected soybean stocks reported by the US Department of Agriculture (USDA). Plentiful soybeans for crushing into oil may divert some demand away from competing palm oil.
“It looks like the USDA’s bearish stock level is still leading palm,” said a Singapore-based trader with a global commodities house. “A marginal increase in exports is not enough to counter the bearishness … I think we will have to see how low the production cycle is going to be in order to have some supportive news.” By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had lost 1.8 percent to 2,336 ringgit ($756) per tonne. Prices earlier fell to 2,335 ringgit, a level last seen on January 11.
Total traded volume stood at 31,364 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year. A slight increase in exports and seasonal slowdown in production could trigger a further decline in Malaysia’s palm oil stockpiles in March. Official data on inventory levels will be released next week.
In other markets, Brent crude eased to under $110 a barrel on Monday after Chinese manufacturing data missed market expectations, signalling possibly slower demand growth in the world’s second-largest oil consumer. In vegetable oil markets, US soyoil for May delivery lost 1.3 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange edged 1.4 percent lower.