Palm trades at 6-month lows on stronger output, weaker overnight soy

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KUALA LUMPUR (April 12): Malaysian palm oil futures declined in early trade on Wednesday, falling to their lowest in six months, tracking weaker overnight soyoil on the Chicago Board of Trade and on concerns of higher output.

The benchmark contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 1.3% at RM2,578 (US$582.20) a tonne at the midday break. It fell to RM2,577 earlier in the session, its lowest since Oct 11. The benchmark is set for its fourth decline in five sessions.

Traded volumes stood at 22,488 lots of 25 tonnes each at noon.

"Overnight weakness in soyoil is putting pressure on palm oil prices today," said a futures trader from Kuala Lumpur.

Concerns about growing palm output also weighed on the market, another trader said.

Production of the tropical oil in the world's second largest producer is seen rising in April, as the lingering effects of the crop damaging El Nino wear off and as output rises in line with seasonal trend.

Data from industry regulator, the Malaysian Palm Oil Board (MPOB), showed that output surged 16.3% to 1.46 million tonnes in March, its first monthly gain since September, and its strongest on-month rise in over a year.

The data also showed that end-stocks rose 6.5% on-month to 1.55 million tonnes, while exports climbed 14.3% to 1.27 million tonnes.

Palm oil prices are also impacted by movements in rival edible oils, as they compete for a share in the global vegetable oils market. Soybean oil on the Chicago Board of Trade fell as much as 1.3% on Tuesday on concerns of ample supplies, before rising 0.5% on Wednesday.  

In other related oils, the September soybean oil contract on the Dalian Commodity Exchange was down 0.8%, while the September contract for palm olein on the Dalian Commodity Exchange fell 0.1%.

Palm, soy and crude oil prices at 0501 GMT

Contract          Month    Last  Change     Low   High   Volume
MY PALM OIL       APR7     2760  -78.00    2736   2840      145
MY PALM OIL       MAY7     2673  -38.00    2673   2715     1010
MY PALM OIL       JUN7     2578  -34.00    2577   2619    10544
CHINA PALM OLEIN  SEP7     5212   -6.00    5158   5262   535020
CHINA SOYOIL      SEP7     5950  -46.00    5908   6028   535900
CBOT SOY OIL      MAY7    31.21   +0.14    31.1  31.38     8702
INDIA PALM OIL    APR7   512.80   -0.90  511.00  513.3      124
INDIA SOYOIL      APR7    634.5   +1.50   631.7  634.5      150
NYMEX CRUDE       MAY7    53.49   +0.09   53.35  53.60    18469

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 = RM4.4280)
(US$1 = 64.7050 Indian rupees)
(US$1 = 6.8970 Chinese yuan)