Palm oil futures in Malaysia up slightly Aug. 16 as traders bet strong exports bring stocks below 2 million tonnes this month
August 17, 2011
Palm oil futures in Malaysia crept higher Aug. 16 with traders betting strong exports would bring stocks below 2 million tonnes this month, but the volatility in the financial markets has kept investors cautious, Reuters reported Aug. 17.
High stocks in Malaysia and Indonesia, and the unstable markets amid the recent downgrading of U.S. credit, have weighed palm oil. Trading was lighter Aug. 17 on investor caution, with exports continuing their solid performance and stocks coming down this month due to a fall in production during the Muslim holiday season, a foreign commodities broker said.
By mid-day Aug. 17, KPOc3, the benchmark contract on the Bursa Malaysia Derivatives Exchange, increased 0.4% to 3,015 ringgit (US$1,012) per tonne. On Aug. 16, prices reached near two-week highs at 3,045 ringgit per tonne. Traded volumes were light overall, with 5,043 lots of 25 tonnes traded compared with an average of 12,500 lots.
There was a negative turn in technicals, with the 3,144 ringgit per tonne bullish target being replaced with a bearish target of 2,917 ringgit, according to Retuers analyst Wang Tao.
For the first 15 days of August, Malaysian palm oil exports jumped more than a fifth with the trend expected to continue, according to traders.
There is likely to be a slide in production as estate workers take leave for the Muslim holy month of Ramadan, which began earlier this month an will end with the Eid celebration in late-August.
U.S. soyoil for September delivery remain unchanged in Asian trade, while May 2012 soyoil contracts, China’s most actively traded, rose 0.3%.
Strong demand for soybean, soyoil and soymeal are likely to push agricultural commodities prices higher in China, a trader with a Shanghai-based foreign brokerage.
The primary source of this article is Reuters, London, England, on Aug. 17, 2011.