FCPO Strategy UPDATE: BUY BELOW 2646 OR BUY ONCE BREAK UP 2663, hit and run only.
(May 12): Malaysian palm oil futures eased on Thursday evening to see its sharpest drop in a week as it tracked a weaker Dalian palm olein oil and on a slightly stronger ringgit, which led to a downtrend in benchmark prices.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was 1.2% lower at RM2,646 (US$659) per tonne at the close of trade, marking palm's second decline out of four sessions this week. Traded volumes were 52,993 lots of 25 tonnes each on Thursday evening, higher than a 2015 daily average of 44,600.
"Dalian RBD (refined, bleached and deodorised) palm oil was down," said a trader based in Kuala Lumpur, which dragged down benchmark palm oil prices.
The most actively traded September contract for palm olein on the Dalian Commodity exchange declined 2.9% on Thursday.
The market also declined on a stronger ringgit, the currency palm oil is traded in. The ringgit strengthened 0.4% to hit 4.0170 per dollar around Thursday evening, making palm oil more expensive for holders of foreign currencies.
Palm however is up 0.6% on a weekly basis, on track for a second straight week of gains.
"Generally this month should be strong for palm oil. As we move into the Muslim holiday, exports should improve," said the trader.
The holy month of Ramadan, which is a period of fasting and feasting for Muslims, begins in early June. The month before Ramadan starts usually sees a higher demand for palm oil for cooking.
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