Mumbai, May 10 (Commoditiescontrol): Malaysian palm oil futures sustained a third consecutive session of decline, culminating in a closure at a three-month nadir on Friday. This downward trend mirrors the subdued performance of Dalian counterparts and was further exacerbated by data released earlier in the day by the Malaysia Palm Oil Board (MPOB), which notably impacted market sentiment.
The benchmark palm oil contract for July delivery, as traded on the Bursa Malaysia Derivatives Exchange, concluded the session with a decrease of 21 ringgit, or 0.55%, settling at 3,810 ringgit ($804.31) per metric ton. This marks the lowest closure observed since mid-February. Notably, the contract has experienced a weekly decline of 0.88%, extending a five-week consecutive downturn, the longest observed since December 2017.
Concurrently, Dalian's most-active soyoil contract and its palm oil counterpart both recorded losses of 2.04%.
In parallel markets, soyoil prices on the Chicago Board of Trade witnessed a 1.01% increase, attributed to sluggish progress in soy harvesting within Brazil's Rio Grande do Sul state.
MPOB's report, revealing an increase in Malaysia's palm oil stocks by the end of April for the first time in six months, due to a surge in production despite a decline in exports, has instilled a "slightly bearish" sentiment.
Additionally, market participants await the imminent release of the U.S. Department of Agriculture's supply-and-demand report, anticipated to provide insights into the global supply landscape. Expectations are aligned towards the revelation of ample supplies both within the United States and on a global scale.
Furthermore, Malaysia's industrial production data for March, depicting a 2.4% increase year-on-year, slightly below expectations, was released by government sources on Friday.
In terms of export performance, Malaysian palm oil product shipments for May 1-10 registered a decline of 14.2% to 369,920 metric tons, compared to the corresponding period in April, as reported by cargo surveyor Intertek Testing Services. Independently, inspection company AmSpec Agri Malaysia noted a similar decline of 14.8% during this period.
In currency markets, the Malaysian ringgit, the currency of trade for palm oil, exhibited a marginal strengthening of 0.03% against the dollar.
Consider short positions at current levels eyeing a target of 3720 and setting a stop loss at 3820. No upside trades are recommended until prices close above the 3835 threshold.
Global Futures Palm oil and Soy Oil
(By Commoditiescontrol Bureau; +91-9820130172)
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