Tuesday, 07 July 2015 17:22
SINGAPORE: Malaysian palm oil finished lower on Tuesday, under pressure from concerns over Greece’s position in the euro zone and weakness in rival soybean oil, although losses were limited by expectations of lower production.
The September palm oil contract on the Bursa Malaysia Derivatives exchange dropped 1.1 percent, or 25 ringgit, to 2,210 ringgit ($ 581.6) a tonne by close.
“Fundamentally, the market should move higher as we are expecting lower production data but soybean oil in China is down and the market is still suffering from the crisis in Greece,” one Kuala Lumpur-based trader said.
Chicago soybeans fell to a one-week low as dry weather in parts of the US Midwest after weeks of heavy rain improved crop prospects.
US soyoil fell 0.5 percent, while the most active soybean oil contract on the Dalian Commodity Exchange slid 1 percent.
The market is expecting the Malaysian Palm Oil Board to show the country’s palm oil production declined by 1.5 to 2.0 percent in June from a month earlier, in a report later this week. That could bring down stocks as exports have been rising.
Exports of Malaysian palm oil products for June rose 9.4 percent to 1,696,096 tonnes from the 1,550,675 tonnes shipped in May, cargo surveyor Societe Generale de Surveillance said.
Traded volume stood at 32,616 lots of 25 tonnes each, slightly below the daily average of 35,000 lots.
Palm oil had climbed to 2,285 ringgit on Friday, the highest since June 25.
On the technical front, palm oil is still targeting 2,216 ringgit per tonne as it has broken support at 2,250 ringgit.
The support was provided by the 38.2 percent Fibonacci retracement on the uptrend from the April 29 low of 2,070 ringgit to the June 8 high of 2,362 ringgit, according to Wang Tao, a Reuters market analyst for commodities technicals.
Oil rose on Tuesday after one of its biggest sell-offs this year but looked vulnerable to more falls after China’s stock market took another tumble and Greece moved closer to leaving the euro zone.
Investors also kept a close eye on talks in Vienna over Tehran’s nuclear programme that could lead to increased exports of Iranian crude at a time of global oversupply.
