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.
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