Wednesday, 08 July 2015 17:02
SINGAPORE: Malaysian palm oil futures slid for a third session on Wednesday, falling 3 percent to a six-week low as Chinese stocks tumbled and the Greek debt crisis continued to hammer markets.
Asian shares fell and the safe-haven yen rallied as Chinese stocks remained in a tailspin, shaking investors already rattled by Greece’s debt crisis.
“It all started with Greece and now markets across Asia are taking a hit,” said one Kuala Lumpur-based palm oil trader.
“Chinese commodity markets, including rubber and metals, are falling sharply which is impacting palm oil.”
The September palm oil contract on the Bursa Malaysia Derivatives exchange dropped 2.58 percent, or 57 ringgit, to 2,152 ringgit ($ 565.72) a tonne by the close.
Chinese stocks plunged after the securities regulator said the tumbling stock market in the world’s second-biggest economy was in the grip of “panic sentiment” as investors ignored a battery of support measures from Beijing.
Soybean futures on the Dalian Commodity Exchange slid to their lowest since August 2013 and soybean oil lost 4 percent to its lowest since mid-March.
Traded volume for palm stood at 28,212 lots of 25 tonnes each for the most-active contract, up from the daily average of 23,000 lots for 2015 so far.
Investors in the palm oil market are expecting the Malaysian Palm Oil Board to report later this week that the country’s palm oil output in June fell by 1.5-2 percent from a month earlier. That could bring down stockpiles as exports have been rising.
Exports of Malaysian palm oil products for June rose 9.4 percent from a month ago to 1,696,096 tonnes, cargo surveyor Societe Generale de Surveillance said.
Palm oil is expected to seek support around 2,139 ringgit and then either hover around this level or rebound moderately, according to Wang Tao, a Reuters market analyst for commodities technicals.
The support is provided by the 76.4 percent Fibonacci retracement on the uptrend from the April 29 low of 2,070 ringgit to the June 8 high of 2,362 ringgit.
