Palm falls more than 1% on bearish production outlook

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KUALA LUMPUR (May 3): Malaysian palm oil futures reversed earlier gains to close 1% down on Friday, falling on bearish production outlooks to chart the biggest weekly drop since early November.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was finished 1.1% down at 2,010 ringgit (US$485.39) a tonne for its sixth decline in as many sessions.

Palm had earlier lost as much as 1.3% to 2,006 ringgit, its weakest since Dec 11.

For the week, palm lost 5.1% for a second straight weekly decline. 

"Market sentiment is still weak overall," one Kuala Lumpur-based trader said, adding that the industry outlook for production was still bearish.

Palm oil production in Malaysia, the second-largest producer behind Indonesia, rose to 1.67 million tonnes in March, up 8.3% from February, the latest government data shows.
Palm prices had fallen 3% on Thursday, on weakness in soyoil prices on the Chicago Board of Trade and soft demand sentiment.

Chicago soybean futures were on track for a fourth straight weekly loss on Friday, as expected higher U.S. production and slowing demand in top buyer China dragged prices lower.

Malaysia this week said it would defer export duties on crude palm oil for the rest of the year, in an effort to boost exports and expand in new markets.

Traders, however, say this may have little effect, given duty has been at zero percent since September. 

In related edible oils, the Chicago May soybean oil contract declined 0.5% on Thursday and was flat at 1105 GMT.    

Chinese markets are closed for a national holiday and will reopen on Monday.

Palm, soy and crude oil prices at 1107 GMT

Contract Month Last Change Low High Volume
MY PALM OIL MAY9 0 +0.00 0 0 0
MY PALM OIL JUN9 1980 -22.00 1978 2016 2643
MY PALM OIL JUL9 2007 -25.00 2006 2046 18548
CHINA PALM OLEIN MAY9 0 +0.00 0 0 0
CHINA SOYOIL MAY9 0 +0.00 0 0 0
CBOT SOY OIL MAY9 27.23 +0.00 0 0 424
INDIA PALM OIL MAY9 518.00 +1.50 516.30 520.6 839
INDIA SOYOIL MAY9 735.4 -0.05 733.3 738.5 5840
NYMEX CRUDE JUN9 61.70 -0.11 61.30 61.91 134034

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. 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 U.S. dollars per barrel

(US$1 = 4.1410 ringgit)
(US$1 = 69.2475 Indian rupees)
(US$1 = 6.7337 Chinese yuan)