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
|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|
|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|
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)