KUALA LUMPUR (Aug 1): Malaysian palm oil futures edged lower in range-bound trading on Wednesday as forecasts of rising production and inventories in the coming months weighed on the market.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was 0.1% lower at RM2,193 (US$539.48) a tonne at the midday break. The contract was down after two straight sessions of gains.
Trading volume stood at 14,203 lots of 25 tonnes each at noon.
"Market seems quiet today, but is towards the downside as end-stocks and production are climbing. Any bullish news is only temporary," said a Kuala Lumpur-based trader, adding that inventories could go above 3 million tonnes by year-end.
Inventories in Malaysia, the world's second-largest palm oil producer, had climbed to the highest in nearly two decades in November 2015 at 2.9 million tonnes.
Meanwhile, palm oil exports in July fell 3.9% from the previous month, inspection company AmSpec Agri Malaysia reported on Tuesday.
In other related oils, the Chicago December soybean oil contract declined 0.6%, while the September soybean oil contract on China's Dalian Commodity Exchange slipped 0.2%.
The Dalian September palm oil contract fell 0.2%.
Palm oil prices are influenced by the performance of other edible oils as they compete for a share in the global vegetable oils market.
Palm oil looks neutral in a range of RM2,187-2,218 per tonne, and an escape could suggest a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 0455 GMT
|MY PALM OIL||AUG8||2130||-2.00||2123||2130||2|
|MY PALM OIL||SEP8||2176||+2.00||2171||2181||1478|
|MY PALM OIL||OCT8||2193||-1.00||2190||2201||6872|
|CHINA PALM OLEIN||JAN9||4848||+2.00||4840||4876||216476|
|CBOT SOY OIL||DEC8||29.13||-0.10||29.12||29.27||4596|
|INDIA PALM OIL||AUG8||597.00||-2.70||595.30||598||300|
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US 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 US dollars per barrel
(US$1 = RM4.0650)
(US$1 = 68.5375 Indian rupees)
(US$1 = 6.8185 Chinese yuan)