Malaysian palm oil futures slipped today, tracking overnight losses in rival soy oil, as traders await key palm oil board data though the market is on course for a second weekly gain.
The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange slid RM50, or 1.28 per cent, to RM3,861 a metric tonne by the midday break.
For the week, palm oil has gained nearly 2 per cent.
“Weather trading remains at the forefront of the US agriculture market, while the palm is focused on actual June production numbers from the Malaysian Palm Oil Board and the scope of July export recovery,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Expectations for a recovery in export shipments are high with a hefty palm oil discount in place and from restocking activities in China and India, Varqa said.
The Malaysian Palm Oil Board is scheduled to release June supply-and-demand data on Monday.
A Reuters’ survey on Wednesday forecast end-June inventories to rise 10.5 per cent from the month before to 1.86 million metric tonnes due to slow exports and nearly flat output.
But traders are concerned of a sharper decline in production, which may squeeze inventory levels.
Dalian’s most-active soy oil contract DBYcv1 fell 0.8 per cent, while its palm oil contract DCPcv1 lost 1.1 per cent. Soy oil prices on the Chicago Board of Trade BOcv1 ticked higher after a 3.5 per cent overnight slump.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil looks neutral in a range of RM3,853-3,925 per metric tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.
