April 26, 2018 / 11:23 AM / a year ago

Vegoils: Palm oil drops to one-week low on slowing demand

KUALA LUMPUR (Reuters) - Malaysian palm oil futures ended lower on Thursday evening, having slipped to the bottom of their recent trading range, as weakening demand kept the tone bearish.

FILE PHOTO: A truck carrying oil palm fruits passes through Felda Sahabat plantation in Lahad Datu in Malaysia's state of Sabah on Borneo island, February 20, 2013. REUTERS/Bazuki Muhammad/File Photo

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,389 ringgit ($610.22) a tonne at the close of trade. Earlier in the session, it dropped to 2,387 ringgit, its lowest since April 18.

Palm saw two consecutive sessions of losses before it ended flat on Wednesday, as it was range-trading on lacklustre export data.

Trading volumes stood at 19,019 lots of 25 tonnes each on Thursday evening.

“There are no bullish factors, hence the market is sluggish,” said a Kuala Lumpur based trader, while another added that the market was down on “concerns with poor export demand.”

Malaysian palm oil shipments for April 1-25 fell 0.8-2.5 percent compared with the corresponding period last month, according to data from independent inspection company AmSpec Agri Malaysia and cargo surveyor Societe Generale de Surveillance.

Palm oil looks neutral in a range of 2,392-2,415 ringgit per tonne, and an escape could suggest a direction, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other related oils, the Chicago July soybean oil contract was trading flat, while the September soybean oil on China’s Dalian Commodity Exchange declined 0.6 percent.

The Dalian September palm oil contract dipped 0.1 percent.

Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.

($1 = 6.3220 Chinese yuan renminbi)

Reporting by Emily Chow; Editing by Sherry Jacob-Phillips and Elaine Hardcastle

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