KUALA LUMPUR, Feb 13: Malaysian palm oil futures fell to a two-week low on Wednesday in light trade after a long holiday weekend, with investors cautious about trading actively ahead of industry data.
Data from the Malaysian Palm Oil Board, released during the afternoon break, showed that end-stocks in Malaysia, the world’s No. 2 producer, had inched down 1.9 percent to 2.58 million tonnes in January. That was off recent record levels but missed expectations of a deeper fall.
Investors were also awaiting palm oil export data from cargo surveyor Societe Generale de Surveillance later on Wednesday.
On Saturday, cargo surveyor Intertek Testing Services said Malaysia’s shipments had surged 18 percent in the first ten days of February compared with a month earlier, but traders said export volumes still needed to rise to ‘decent’ levels.
‘Exports in the last five days of January showed an average of 50,000 tonnes shipped per day, which is good. We were expecting that to carry on in February, but obviously that is not the case,’ said a trader with a foreign commodities brokerage in Malaysia.
‘It will need to pick up in the coming days of February. We are at very high stocks here, so if that picks up then things will look a bit more rosy.’
The benchmark April contract on the Bursa Malaysia Derivatives Exchange fell to 2,506 ringgit ($809) per tonne, the lowest level since Jan. 30, before settling at 2,522 ringgit ($814) per tonne by the midday break, 1.5 percent lower than Friday’s close.
Total traded volumes were thin at 8,553 lots of 25 tonnes each, compared with the average 12,500 tonnes, with many investors still on holiday.
Financial markets in Malaysia were closed on Monday and Tuesday for the Lunar New Year holidays while markets in China, the world’s No. 2 edible oil importer, remain closed for the rest of the week.
Technical analysis showed palm oil may drop to 2,510 ringgit per tonne as a correction from the Jan. 31 high of 2,593 ringgit has not finished, said Reuters market analyst Wang Tao.
Brent crude steadied on Wednesday, holding just below a nine-month high near $119 per barrel on forecasts for faster-than-expected growth in global oil demand this year, but easing tensions in Iran subdued prices.
In competing vegetable oil markets, U.S. Soyoil for March delivery fell 0.1 percent in early Asian trade. The Dalian Commodity Exchange will resume trading on Monday. (agencies)
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