KUALA LUMPUR (Dow Jones)–Crude palm oil futures on Malaysia’s derivatives exchange ended steady Friday after tumbling to their lowest levels since early February, as investor confidence took a hit in the aftermath of Moody’s downgrades of 16 Spanish banks and weak U.S. manufacturing data.
Palm oil recovered on modest bargain hunting on the back of tight global vegetable oil supplies due to production deficits in soybean-growing areas of South America and weak production growth in Southeast Asia.
The benchmark August contract on the Bursa Malaysia Derivatives ended MYR1 higher at MYR3,096 a metric ton after tumbling as much as 2% to MYR3,034/ton.
July soyoil on the Chicago Board of Trade was last trading 0.8% lower at 50.32 cents a pound by the end of trade on the BMD.
“Soyoil futures didn’t fall sharply despite weakness and nervousness in the broader markets,” said Chandran Sinnasamy, head of trading at LT International Futures (M) Sdn. Bhd.
“Muted declines in soyoil led to some buying interest in the palm oil market, as people now anticipate a possible correction after this week’s tumble,” Sinnasamy said.
Palm oil prices have fallen more than 11% over the last five weeks, mostly due to worries about Europe amid political and economic uncertainty in Greece.
While export demand may see a modest rise during the May 1-20 period, technical cues still look bearish, a technical analyst in Kuala Lumpur said, tipping next week’s range for the BMD CPO benchmark at MYR3,020-MYR3,150/ton.
In the cash market, refined palm olein for July/August/September shipment was offered at $1,022.50/ton while cash CPO for prompt shipment was offered MYR40 lower at MYR3,120/ton.
Open interest on the BMD was 117,072 lots, versus 120,462 lots Thursday. One lot is equivalent to 25 tons.
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EOD :
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