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KUALA LUMPUR, June 18: Malaysian crude palm oil futures slumped on Tuesday after a dearth of positive factors and an overnight drop in US soyaoil pushed players to take profits.
The benchmark third-month September contract ended 30 ringgit lower after a roller-coaster ride that saw it moving between a low of 1,418 and a high of 1,455.
But dealers said players were still upbeat about the market’s prospects as they prepared for another explosive month of exports.
It was good, healthy profit-taking today and maybe a little overdone because the market fundamentals have not changed, said a dealer.
Players are estimating that exports for June will cross or touch a million tons following the 939,971 tons seen in May.
Futures were likely to stay at around 1,420 ringgit a ton until June 1-20 export estimates from cargo surveyor Societe Generale de Surveillance (SGS) on Thursday.
SGS, the market’s main export tracker, said palm oil shipments for the first 15 days of June stood at 431,106 tons, up from 389,616 tons for May 1-15.
Traders said another good export performance this month would further draw down domestic stocks and support prices.
Malaysia’s palm oil stocks stood at 929,472 tons at the end of May, down from 1.06 million a month earlier and 1.21 million at end-2001.
Exports wise, we are doing better this month than last month, but the question is, are we going to hit a million tons? said another trader.
Volume in Tuesday’s futures trade totalled 4,952 lots, fractionally lower from Monday’s 5,041.
Weaker Chicago soyaoil was the only cue for the local market, which slid four ringgit at the midday break before dropping all the way.
In the physical palm oil market, June contract for the southern regions saw bids at 1,435 ringgit a ton, against sale offers at 1,440 ringgit. It was traded at 1,460-1,440.
June central was bid at 1,440 and saw sale offers at 1,445. Deals were done at 1,465-1,440.
The July contract for both south and central saw bids at 1,435 and sale offers at 1,445. Trade was at 1,460-1,450.—Reuters
