Palm oil lower; posts second straight weekly loss

Malaysian palm oil futures inched lower on Friday, tracking weak soya markets, and posted a second straight weekly loss, with investors cautious ahead of key industry data due next week. Market participants are awaiting official data on Malaysia’s March palm inventory levels – due on Wednesday – to gauge the tropical oil’s supply and demand fundamentals. Analysts said lower stocks may provide support for prices. 

“We believe the overall data should be short-term positive to crude palm oil prices,” Alan Lim Seong Chun, research analyst with Malaysia’s Kenanga Investment Bank, said in a note to clients on Friday. The bank is revising its March inventory forecast slightly down to 2.26 million tonnes from 2.31 million tonnes earlier after revising its production and exports estimates, Lim said. 

A Reuters survey of five plantation companies showed Malaysia’s palm oil stocks likely edged to a 7-month low in March at 2.35 million tonnes. By the market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had eased 1.5 percent to 2,356 ringgit ($771) per tonne. For the week, prices suffered a 0.9 percent loss. 

Total traded volumes were thin at 20,144 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year. Technical analysis indicated palm oil faces resistance at 2,400 ringgit per tonne, a break above which will lead to a further gain to 2,420 ringgit, said Reuters market analyst Wang Tao. 

Traders are also looking out for Malaysia’s export data on Wednesday for the first 10 days of April, after cargo surveyors showed better exports in March than February boosted by higher shipments of refined products. In vegetable oil markets, US soyaoil for May delivery lost 0.1 percent in late Asian trade. The Dalian Commodities Exchange will be closed until Monday for a public holiday in China. 

Copyright Reuters, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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