* Palm reaches 2-week low in the evening at 2,541 rgt/t
* Speculation of higher output, technical selling depresses
market -trader
(Updates latest prices)
By Emily Chow
KUALA LUMPUR, May 18 (Reuters) – Malaysian benchmark palm
oil futures reversed gains to hit a two-week low on Wednesday,
as speculation over higher output and technical selling dragged
the market lower.
The new palm oil contract for August delivery on
the Bursa Malaysia Derivatives Exchange fell 1.5 percent to
2,561 ringgit ($ 633) per tonne at the evening close. It earlier
dipped to 2,541 ringgit, its lowest since May 4.
Traded volumes stood at 68,295 lots of 25 tonnes each at the
end of the trading day, more than the 2015 daily average of
44,600.
“We’re seeing a technical sell off, which only happens once
the 2,600 ringgit range is broken and profit taking comes in,”
said a Kuala Lumpur-based trader.
“There could be speculation of better output on the back of
massive rains in recent weeks, but rain is subjective to
location.”
Improving output would weigh down on palm’s benchmark
prices, which gained nearly 10 percent in the first quarter of
the year on declining production from a crop-damaging El Nino.
The El Nino weather event causes scorching heat across
Southeast Asia, lowering yields and impacting palm oil
production in top producers Indonesia and Malaysia.
Gains in palm benchmark prices, which have risen 4.6 percent
so far this year, could also be capped by slower demand growth
in top consumers China and India.
Malaysian palm oil shipments for the first half of May grew
14-16 percent from a month ago, a slower growth rate versus the
22-32 percent export rise seen in the first 10 days of May.
In competing vegetable oils, the September soybean oil
contract on the Dalian Commodity Exchange rose 0.5
percent, while the Chicago Board of Trade soyoil contract for
August was down 0.4 percent.
Palm, soy and crude oil prices at 1030 GMT:
Contract Month Last Change Low High Volume
MY PALM OIL JUN6 2592 -41.00 2577 2646 288
MY PALM OIL JUL6 2587 -38.00 2563 2639 10288
MY PALM OIL AUG6 2564 -39.00 2541 2616 36441
CHINA PALM OLEIN SEP6 5174 -72.00 5120 5336 1369028
CHINA SOYOIL SEP6 6000 -34.00 5924 6148 1029326
CBOT SOY OIL JUL6 32.39 -8.90 32.29 33.05 8661
INDIA PALM OIL MAY6 539.00 -8.90 537.10 544.8 1834
INDIA SOYOIL MAY6 631.6 -5.55 630.9 635.3 3720
NYMEX CRUDE JUN6 48.44 +0.13 48.03 48.58 46643
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($ 1 = 4.0450 ringgit)
($ 1 = 66.9600 Indian rupees)
($ 1 = 6.5352 Chinese yuan)
(Reporting by Emily Chow; Editing by Biju Dwarakanath and David
Evans)
