FCPO Related News

KUALA LUMPUR–Crude palm oil futures on Malaysia’s derivatives exchange ended sharply lower Tuesday, pressured by overnight weakness in Chicago soy oil futures and favorable weather in South America. The new benchmark December contract at Bursa Malaysia Derivatives ended 4.2% lower at 2,861 ringgit a metric ton after falling as much as 5.3%, to MYR2,827/ton, the benchmark’s lowest level since Aug. 15.

October soy oil on the Chicago Board of Trade was trading 0.7% lower at 54.60 cents a pound by the end of trade on BMD after shedding 3.5% overnight due to improved planting outlooks in South America and amid increased supply in the U.S. due to the ongoing soybean harvest there. "Aggressive selling from speculative funds dragged Malaysian palm oil lower," a Jakarta-based trading executive said. "Sentiment has turned bearish for palm [oil] on [the] improving oilseed supply situation and crude oil’s price weakness."

Resilient demand for the edible oil failed to turn the market around. Exports for the first half of September rose 12 percent from a month ago, cargo surveyor data showed. But the increased palm oil exports in the first 15 days of September compared with a month earlier could help limit further price falls on the BMD, a planter in Perak said, referring to export estimates by cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd.  Intertek put Sept. 1-15 shipments at 680,112 tons, an increase of 12% while SGS put the figure at 660,955 tons, also up 12%.   

Technicals were bearish as, according to Reuters market analyst Wang Tao, palm oil will fall to 2,573 ringgit per tonne over the next four weeks, based on a wave analysis.