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PALM OIL: Futures Drop to Track Soyoil as Tight Supply Weighed
By Anuradha Raghu
(Bloomberg) -- Palm oil for April delivery drops as much as 1% to 3,094 ringgit/ton on Bursa Malaysia Derivatives, trades -0.5% at 3,111 ringgit by midday break in Kuala Lumpur.
- Futures dragged lower by drop in U.S. soybean oil on Wednesday, says Rajesh Modi, trader at Sprint Exim in Singapore
- Soybean oil for March delivery on Chicago Board of Trade +0.1% to 34.90c/lb, -1.2% Wednesday; March soybeans -0.1% to $10.54 3/4/bu
- Price decline may be limited by short-term supply tightness and concerns about flash floods in Malaysia: Modi
- Malaysia end-Jan. stockpiles seen at 1.52-1.54m tons vs 1.67m tons in Dec.; supplies in Feb. may drop further: Modi
- Malaysia’s Jan. 1-20 crude palm oil production -11.4% m/m, according to estimates by Malaysian Palm Oil Association
- NOTE: Number of people evacuated in Pahang due to floods rose to nearly 6,000 by Thursday morning, some federal and state roads closed, according to state news agency Bernama
- In Johor, flood evacuees rise to ~8,000 people Thursday morning
- NOTE: Johor is 3rd-biggest palm-growing state in Malaysia, followed by Pahang
- Soybean oil’s premium over palm oil at ~$68/ton vs avg ~$91 over past year: data compiled by Bloomberg
- Palm oil’s premium over gasoil at ~$210/ton vs avg ~$227 over past year: data compiled by Bloomberg
- May refined palm oil on Dalian Commodity Exchange -0.2% to 6,280 yuan/ton; May soybean oil -0.3% to 6,964 yuan/ton
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