March 28, 2019 / 5:26 AM / 3 months ago

Palm hits over one-week low as high stocks weigh on market

KUALA LUMPUR (Reuters) - Malaysian palm oil futures edged down to a more than one-week low in early trade on Thursday, as high inventory levels continued to weigh on the market.

A man assist trucks carry palm oil fruit on a damaged road at Mesuji Raya village in Ogan Komering Ilir, South Sumatra province, Indonesia, January 11, 2017. Antara Foto/Budi Candra Setya/ via REUTERS/Files

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.4 percent at 2,128 ringgit ($522.21) a tonne by the midday break, after hitting a more than one-week low of 2,106 ringgit earlier in the session. It was headed for a fourth session of losses in five.

“The market is down as Dalian came down, and also due to our high stocks,” said a futures trader in Kuala Lumpur, referring to China’s Dalian Commodity Exchange.

Palm oil inventories in Malaysia, the world’s second-largest producer and exporter, rose 1.3 percent to 3.05 million tonnes in February from a month earlier.

Stockpiles reached 3.21 million tonnes in December, the highest since January 2000, according to Refinitiv Eikon data.

Palm oil may test a resistance at 2,155 ringgit per tonne, as it has found a support at 2,110 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other related oils, the Chicago May soybean oil contract fell 0.2 percent, while the May soyoil contract on the Dalian Commodity Exchange declined 0.3 percent.

The Dalian May palm oil contract fell 0.8 percent.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.

($1 = 4.0750 ringgit)

($1 = 6.7295 Chinese yuan)

($1 = 68.9980 Indian rupees)

Reporting by Emily Chow; Editing by Subhranshu Sahu

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