(Feb 19): Malaysian palm oil futures retreated on Friday evening to give up gains made earlier in the day as traders expected to see weaker February export demand data in a report on Saturday.
The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange fell 0.6% to close at RM2,585 (US$615.04) per tonne. It retreated from an intraday high of RM2,629 as prices were supported by a weakening ringgit then.
Traded volume stood at 41,911 lots of 25 tonnes each.
"The reality is now sinking in, as exports are indeed poor," said a trader from a Kuala Lumpur-based brokerage firm.
Another trader said while the market was propped up by a weaker ringgit in morning trade, further gains would be capped due to slowing demand for the tropical oil.
"The market would have gone up further but, because of exports, gains will be capped," he said.
Exports of the tropical oil for Feb 1–20 are expected to be lower compared with the same time period a month ago, indicating weaker demand. The data will be released by cargo surveyors on Saturday.
Malaysian shipments for the first half of February fell between 14% and 16% from the corresponding time period in January, as demand from top palm consumers China and India slowed.
The ringgit fell by 1% against the dollar on Friday evening, reaching 4.2030 and tracking the drop in crude oil prices. Oil futures fell as a record build in US crude stocks drew concerns about global oversupply.
A weaker ringgit, the currency palm oil is traded in, makes the vegetable oil cheaper for holders of foreign currencies.
Palm oil faces resistance at RM2,618 per tonne, and may retrace to a support at RM2,576, said Reuters market analyst for commodities and energy technicals Wang Tao.
In competing vegetable oil markets, the May soybean oil contract on the Dalian Commodity Exchange lost 0.1%, while the Chicago soyoil contract for March dropped 0.8%.
Palm, soy and crude oil prices at 1012 GMT
| Contract | Month | Last | Change | Low | High | Volume |
| MY PALM OIL | MAR6 | 2523 | +1.00 | 2521 | 2555 | 1238 |
| MY PALM OIL | APR6 | 2566 | -19.00 | 2565 | 2608 | 4466 |
| MY PALM OIL | MAY6 | 2585 | -15.00 | 2585 | 2629 | 22524 |
| CHINA PALM OLEIN | MAY6 | 5034 | +20.00 | 4974 | 5036 | 961806 |
| CHINA SOYOIL | MAY6 | 5776 | -8.00 | 5736 | 5778 | 487938 |
| CBOT SOY OIL | MAR6 | 31.57 | +2.30 | 31.54 | 31.94 | 5808 |
| INDIA PALM OIL | FEB6 | 485.00 | +2.30 | 484.80 | 490.40 | 731 |
| INDIA SOYOIL | FEB6 | 620.00 | +1.35 | 619.30 | 620.00 | 1190 |
| NYMEX CRUDE | MAR6 | 30.40 | -0.37 | 30.35 | 30.73 | 6344 |
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel
(US$1 = RM4.2030)
(US$1 = 68.5350 Indian rupees)
(US$1 = 6.5197 Chinese yuan)
(US$1 = 68.5350 Indian rupees)
(US$1 = 6.5197 Chinese yuan)
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