FCPO Strategy UPDATE: BUY once break up 2585 OR SELL above 2616, hit and run only.
(April 29): Malaysian palm oil futures declined on Friday to a new seven-week low, as palm exports slow due to stronger demand for rival soyoil.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 0.4% to RM2,593 (US$664) per tonne at the close of trade.
It declined for a third week this month, and has lost 5.6% since the start of April.
Palm earlier hit a new seven-week low of RM2,570, its weakest since March 11. Traded volumes were 40,242 lots of 25 tonnes each, versus a 2015 daily average of 44,600.
"Since the palm and soy spread is narrow, people are taking soy. We have to see if demand comes in May, that will set the tone," said a Kuala Lumpur-based trader, adding prices were unlikely to recover to RM2,700 if demand remained weak.
"We are expecting Ramadan demand but it is not showing up fully yet."
The holy Muslim month of Ramadan, known for its communal fasting and feasting, usually increases the consumption of palm oil for cooking. Demand for the tropical oil usually picks up one to two months ahead of the festival, which starts in early June this year.
Recent cargo surveyor data recorded zero to little growth in export demand for Malaysian palm oil shipments between April 1 and April 25 from a month ago.
Data for the full month of April is scheduled for release on Saturday and Tuesday, but traders expect little improvement for April 1–30.
FCPO Strategy UPDATE: BUY once break up 2609 OR SELL above 2630, hit and run only.
(April 28): Malaysian palm oil futures fell for a third session this week, tracking poor performing rival vegetable oils and on bearish local sentiment, driven by rising output and weak export demand.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 1.2% at 2,602 ringgit (US$669) per tonne at the end of trading, after earlier hitting a seven-week intraday low of 2,574 ringgit.
Traded volumes were 61,515 lots of 25 tonnes each, higher than the 2015 daily average of 44,600.
"Palm is down on external markets, (such as) Chicago Board of Trade soyoil and this morning Dalian RBD (refined, bleached and deodorized) palm olien was down sharply," said a trader based in Kuala Lumpur.
"As for local sentiment, we're seeing the weather improve. Production is up and exports are only marginally up."
The most actively-traded September contract for palm olein on the Dalian Commodity exchange declined 3.3% on Thursday, while the May Chicago Board of Trade soyoil contract lost 0.7%.
In other competing oils, the September soybean oil contract on the Dalian Commodity Exchange fell nearly 2%.
Improving weather conditions could reduce the impact of the crop-damaging El Nino phenomenon, which brings scorching heat across Southeast Asia.
FCPO Strategy UPDATE: BUY once break up 2670 OR SELL once break dn 2663, hit and run only.
(April 27): Malaysian palm oil futures declined to their lowest levels in nearly two weeks on Wednesday evening, as the ringgit recovered from a one-week low against the dollar and as traders cashed in on slow exports and improving output.
A stronger ringgit, the currency palm oil is traded in, makes the vegetable oil more expensive for foreign currency holders. The ringgit rose 0.3% to trade at 3.91 to the dollar in the evening, having slumped to its lowest level in a week to 3.9495 on Tuesday, following news of a Malaysian state-fund defaulting on a bond interest payment.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 1.6% to 2,633 ringgit (US$673) per tonne at the close of trade, its second session of declines this week.
Palm earlier hit an intraday low of 2,630 ringgit, its lowest level since April 15, and has declined 0.6% so far this week. Traded volumes were 51,472 lots of 25 tonnes each, compared with a 2015 daily average of 44,600.
"Palm is taking a cue from weaker exports and good production to cash in on the high price," a Kuala Lumpur based trader said, apart from the stronger ringgit.
Export demand for Malaysian palm oil products recorded little to no growth during April 1-25, compared with the same period a month ago, according to cargo surveyor data.
Indonesia, the world's largest palm producer, reported a 24% decline in its palm and palm kernel oil exports in March, compared with the previous month.
FCPO Strategy UPDATE: SELL FCPO JUL ONCE BREAK DOWN 2664, CUT LOSS ABOVE 2677
(April 26): Malaysian palm oil futures rose on Tuesday, up from a one-week low touched in the previous session, supported by a decline in the ringgit against the dollar.
A weaker ringgit lent support to palm but earlier gains were limited due to higher production and slowing exports, said a trader based in Kuala Lumpur.
The market later strengthened in the evening as some traders covered short positions, despite expectations that sluggish demand would eventually weigh on prices, a dealer said.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 0.8% at 2,675 ringgit (US$682) per tonne at the end of the trading day. It earlier fell for two consecutive days, seeing its sharpest decline since March 2 on Friday.
Traded volumes were 51,121 lots of 25 tonnes each, higher than a 2015 daily average of 44,600.
Malaysia's ringgit, the currency palm oil is traded in, fell 0.5% to the dollar on Tuesday, making the vegetable oil cheaper for holders of foreign currencies.
The ringgit fell to a one week low of 3.9495 per dollar, before rising to trade around 3.9200 in the evening, following news of state investment fund 1Malaysia Development Berhad defaulting on a bond interest payment.