Crude palm oil futures on Malaysia's derivatives exchange tumbled Monday, reflecting a sharp drop in soyoil futures, Dalian palm oil and a weakening global economic outlook, although slightly positive palm oil export data limited the fall.
The benchmark May contract at Bursa Malaysia Derivatives settled 64 ringgit lower at 2,470 ringgit a metric ton after testing MYR2,461/ton, the lowest for the benchmark since Jan. 29.
March soyoil futures on the Chicago Board of Trade settled 1.9% lower Friday at 50.35 cents a pound. However, the contract was 0.3% higher in screen trade at 1000 GMT.
Cargo surveyor Intertek Agri Services said Monday that Feb. 1-25 palm oil exports from Malaysia rose 4.7% on month to 1.15 million tons. Another surveyor, SGS (Malaysia) Bhd., said Feb. 1-25 shipments rose 2.7% from the corresponding period in January to 1.13 million tons.
Market sentiment is weak because of the bleak global economic outlook, exacerbated further by bearish data from China on Monday, a Kuala Lumpur-based trading executive said.
The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 50.4 in February compared with a final reading of 52.3 in January.
This in turn pressured prices of many commodities, including those of palm oil, traders said.
Rainfall over the past week and forecasts of continued favorable weather this week in the world's top exporter of soyoil, Argentina, weighed on prices of both soyoil and palm oil, as did forecasts of a record soybean crop and rising soybean inventories in the U.S., they said.
On Friday, the U.S. Department of Agriculture forecast soybean stocks to jump to 250 million bushels at the end of the 2013-14 marketing year, compared with its projection of 125 million bushels at the end of the 2012-13 year, which ends Aug. 31.
Investors keenly await an industry conference next week in Kuala Lumpur, where eminent analysts Dorab Mistry and James Fry will likely present their outlook for palm oil for 2013.
Prices could easily edge toward the MYR2,500-MYR2,600/ton band if analysts are bullish, a second Kuala Lumpur-based trading executive said.
Meanwhile, in the cash market, refined palm olein for March was offered at $832.50/ton, while cash CPO was offered at MYR2,400/ton.
Open interest on the BMD was 201,834 lots versus 167,287 lots Friday. One lot is equivalent to 25 tons.
A total of 37,569 lots of CPO were traded versus 20,589 lots Friday.
Ending BMD CPO futures prices in MYR/ton: Month Close Previous Change High Low Mar'13 2,419 2,478 -59 2,455 2,409 Apr'13 2,449 2,509 -60 2,458 2,438 May'13 2,470 2,534 -64 2,482 2,461 Jun'13 2,488 2,552 -64 2,500 2,478