Palm oil dips on weaker US soy, profit-taking before industry meet

Palm oil dips on weaker US soy, profit-taking before industry meet
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KUALA LUMPUR (March 2): Malaysian palm oil futures dipped slightly in early trade on Thursday, after two sessions of gains, tracking weaker soyoil on the Chicago Board of Trade (CBOT) and on some profit-taking ahead of an industry conference next week.

Benchmark palm oil futures for May on the Bursa Malaysia Derivatives Exchange fell 0.1% to RM2,828 (US$635.79) a tonne at the midday break.

Traded volumes stood at 20,808 lots of 25 tonnes each at noon on Thursday.

"The overseas market this morning is weaker," said a futures trader from Kuala Lumpur, referring to CBOT soyoil.

"There's also some profit-taking ahead of the palm and lauric oil conference as most think the outlook there will be bearish."

Industry players expect leading analysts to provide bearish price forecasts at a conference next week. Palm prices are seen weakening between now and the second half of the year, as production levels are expected to recover when the effects of a crop damaging El Nino wear off.

Palm oil prices track the movements of related oils such as soy, as they compete for a share in the global vegetable oils market.

Soyoil, used as a feedstock in biodiesel production, weakened after it surged over 6% on Tuesday on reports that the US president was preparing an executive order on biofuels, even though the claims were later denied.

Palm oil may rise to a resistance at RM2,880 per tonne as it has broken above a resistance at RM2,820, said Reuters market analyst for commodities and energy technicals Wang Tao.

In related vegetable oils, soybean oil on the Chicago Board of Trade fell 0.8%, while the May soybean oil contract on the Dalian Commodity Exchange rose 0.3%.

The May contract for palm olein on the Dalian Commodity Exchange was also slightly down 0.03%.

Palm, soy and crude oil prices at 0532 GMT

Contract          Month    Last  Change     Low   High   Volume
MY PALM OIL       MAR7     2925  -26.00    2925   2935       22
MY PALM OIL       APR7     2871   -4.00    2856   2874      519
MY PALM OIL       MAY7     2828   -3.00    2812   2837    10193
CHINA PALM OLEIN  MAY7     5862   -2.00    5844   5906   319372
CHINA SOYOIL      MAY7     6678  +22.00    6648   6716   267382
CBOT SOY OIL      MAY7    34.43   -0.29   34.41  34.64     4832
INDIA PALM OIL    MAR7   536.40   -1.40  536.30  537.9      273
INDIA SOYOIL      MAR7      667   +1.75     665    675     3040
NYMEX CRUDE       APR7    53.54   -0.29   53.53  53.78    19023

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 = RM4.4480)
(US$1 = 66.7250 Indian rupees)
(US$1 = 6.8828 Chinese yuan)