VEGOILS-Palm oil slips as trading resumes after break, losses likely to be limited

SINGAPORE, Feb 3 (Reuters)Malaysian palm oil futures slumped over 1% from recent highs on Thursday, following the Lunar New Year break, but selling pressure was limited due to Indonesia’s new mandate for 20% of domestic output to be sold at home.

The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange dipped 1.10% to 5,528 ringgit ($1,315.87) per tonne in early trade.

The contract hit a record high of 5,700 ringgit a tonne at the end of January, and prices are expected to remain well supported while market participants assessed how Indonesia’s new domestic sales mandate impacts crude palm oil flows from the world’s largest palm oil producer and exporter.

Strong global soybean prices amid crop health worries in South America are also expected to lend support to edible oil prices.

FUNDAMENTALS

* US soybean futures maintained their recent upward momentum in early trade, building on Wednesday’s advance to eight-month highs on the back of expectations that lower South American supplies will lift demand for US soybeans.

* Crude oil prices eased in early trade, following OPEC’s decision to stick with planned moderate output increases. O/R

* Palm oil FCPOc3 may test a resistance at 5,676 ringgit per tonne, a break above which could lead to a gain into the 5,749-5,794 ringgit range, Reuters technical analyst Wang Tao said. TECH/C

MARKET NEWS

* All three Wall Street benchmarks ended higher on Wednesday, rising for a fourth straight session after a turbulent start to the year, aided by upbeat earnings from Google-parent Alphabet and chipmaker Advanced Micro Devices.

Several key Asian markets are closed for the Lunar new year holiday. MKTS/GLOB

DATA/EVENTS

0850 France Markit Serv PMI Jan

0850 France Markit Comp PMI Jan

0855 Germany Markit Serv PMI Jan

0855 Germany Markit Comp Final PMI Jan

0900 EU Markit Serv Final PMI Jan

0900 EU Markit Comp Final PMI Jan

0930 UK Reserve Assets Total Jan

1200 UK BOE Bank Rate Feb

1200 UK GB BOE QE Corp Feb

1245 EU ECB Refinancing Rate Feb

1245 EU ECB Deposit Rate Feb

1330 US Initial Jobless Claims Jan

1445 US Markit Comp Final PMI Jan

1445 US Markit Svcs PMI Final Jan

1500 US Factory Orders MM Dec

1500 US ISM N-Mfg PMI Jan

($1 = 4.2010 ringgit)

(Reporting By Gavin Maguire; Editing by Rashmi Aich)

(([email protected]; +65 6870 3286;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Leave a Comment