Malaysian palm oil futures ended flat on Tuesday, as a recent commodities rout that dented investors’ appetite for riskier assets offset earlier gains on bargain hunting. The weak sentiment spread to the vegetable oil markets, with palm oil falling to a low of 2,281 ringgit per tonne on Monday – its weakest since December, and the most active Dalian soybean oil contract tumbling to the lowest since its initiation.
“The market is quiet today due to uncertain factors in the external markets. Prices look to be supported at the 2,250 ringgit level and face resistance at 2,320 ringgit,” said a trader with foreign commodities brokerage in Malaysia. The new benchmark July contract on the Bursa Malaysia Derivatives Exchange ended flat at 2,301 ringgit ($757) per tonne.
Total traded volumes stood at 40,241 lots of 25 tonnes each, higher than the average 35,000 lots. Technical analysis showed a bearish target at 2,249 ringgit per tonne remained unchanged for Malaysian palm oil, Reuters market analyst Wang Tao said. Malaysian palm oil shipments for the first half of the month fell by 4 percent from a month ago, said one cargo surveyor Intertek Testing Services, while another surveyor Societe Generale de Surveillance reported a steeper 7.2 percent drop.
Market participants will be keeping a close watch on the next export data for the April 1 to 20 period to gauge stocks level. A 10 percent increase in shipments in March helped ease inventory level to 2.17 million tonnes, the lowest in seven months. In other vegetable oil markets, US soyaoil for May delivery gained 0.8 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange recouped some losses after falling as much as 2.4 percent earlier.
