Tuesday, 25 July 2017
KUALA LUMPUR: Malaysian palm oil futures posted their worst session in a week on Monday, racking weaker performances in rival oils.
Traders were bearish because of forecasts of rising output, but they are uncertain how high production will be in the coming months. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 0.8% at 2,553 ringgit ($597.05) at the close of trade, its sharpest daily decline since 18 July. Traded volumes stood at 26,620 lots of 25 tonnes each on Monday evening.
“The market fell tracking weaker soybean oil, as well as on concerns over higher production in the coming weeks,” said a Kuala Lumpur-based futures trader.
He added that uncertainty over the extent of output gains has resulted in lower traded volumes on Bursa. Palm oil production in Malaysia, the second-largest producer after Indonesia, is seen rising in the second half of the year, in line with seasonal trends and is expected to peak in October.
Production for 2017 is estimated to reach between 18.7 million tonnes and 19.5 million tonnes, up around 10% from levels in 2016, but below the record high of 19.96 million tonnes hit in 2015. Palm oil prices also track movements in rival edible oils, as they compete for a share in the global vegetable oils market.
The December soybean oil contract on the Chicago Board of Trade declined up to 1.2%, following forecasts of rains across the U.S. Midwest which is expected to aid crops. In other related oils, September soybean oil on the Dalian Commodity Exchange was down 1.2%, while the September palm olein contract dropped 1.8%.
Source by: Internet