KUALA LUMPUR (Dow Jones)–Crude palm oil futures on Malaysia’s derivatives exchange fell for a fourth consecutive day and touched a six-week low Friday as disappointing economic data this week generated worries about global economic growth.
Most market participants refrained from making aggressive bets ahead of a slew of data due to be released next week.
The benchmark July contract on Bursa Malaysia Derivatives ended 0.6% lower at MYR3,358 a metric ton after climbing into positive territory midday due to short covering. It hit a low of MYR3,335/ton, the lowest since March 22, in afternoon trade.
“There’s no change to CPO’s fundamentals,” a broker in Singapore said. “Trade was a tad choppy today as traders squared off positions while awaiting Malaysia April crop supply and stock data next week.”
Improving Malaysian export demand and tight global supplies of vegetable oils helped limit the downside. “The disruption of supply due to erratic weather could tighten the global stock-to-usage ratio to 8.2% from 8.6% last year, and boost global vegoil prices,” an analyst at a Kuala Lumpur-based bank said.
Exporters tip outbound palm oil shipments to rise further in May due to higher demand from India, China and Europe. April exports rose around 9%-10% to around 1.35 million tons, according to estimates by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd.
Both surveyors are scheduled to issue May 1-10 shipment data next week. Industry regulator Malaysian Palm Oil Board is due to issue April output data May 10.
In the cash market, refined palm olein for June was traded at $1,147.50/ton, free on board Malaysian ports, a Singapore-based physical market broker said.
Cash CPO for prompt shipment was offered MYR10 lower at MYR3,400/ton.
Open interest on the BMD was 128,166 lots, versus 128,633 lots Thursday. One lot is equivalent to 25 tons.
A total of 31,440 lots of CPO were traded versus 33,591 lots Thursday.
Here is my chart on CPO price >>
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