Palm drops on weaker soyoil, slower demand growth

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KUALA LUMPUR (April 16): Malaysian palm oil futures fell to a two-week low on Tuesday, in line for a second session of declines, tracking weaker soyoil on the US Chicago Board of Trade amid slower-than-expected demand growth.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 0.5% to RM2,151 (US$522.98) a tonne at the midday break.

It had earlier fallen to RM2,139, its weakest level since April 2.  

"The market today is down as we are still lacking strong demand. It's not there, buyers are either well bought or are waiting for prices to come further down. Sustained demand is not there," said a physical trader.

Malaysian palm oil shipments for the first half of April rose 1.5-6.7% from the corresponding period last month, cargo surveyors reported on Monday.

Palm was also down mirroring overnight declines in US soybean oil futures, said another trader. The Chicago May soybean oil contract had fallen 0.5% on Monday, and was down 0.4% on Tuesday.

Palm oil may fall to RM2,110 per tonne, as it has broken a support at RM2,155, according to Reuters market analyst for commodities and energy technicals Wang Tao.

In other related oils, the May soyoil contract on the Dalian Commodity Exchange lost 0.9%, and the Dalian May palm oil contract also declined 0.9%.

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

Palm, soy and crude oil prices at 0531 GMT

Contract          Month    Last  Change     Low    High  Volume
MY PALM OIL       MAY9     2078  -16.00    2066    2081     201
MY PALM OIL       JUN9     2131  -11.00    2121    2137    4670
MY PALM OIL       JUL9     2151  -10.00    2139    2155    6062
CHINA PALM OLEIN  MAY9     4422  -42.00    4406    4452   39882
CHINA SOYOIL      MAY9     5390  -48.00    5372    5422   67060
CBOT SOY OIL      MAY9    28.71   -0.10    28.7   28.79    1470
INDIA PALM OIL    APR9   534.10   +0.30  531.60   534.1     198
INDIA SOYOIL      APR9   738.25   -0.50   738.2  738.25     190
NYMEX CRUDE       MAY9    63.33   -0.07   63.25   63.60   23681

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 = RM4.1130)
(US$1 = 6.7086 Chinese yuan)
(US$1 = 69.4840 Indian rupees)