April,05(Agencies)—— Malaysian palm oil futures slipped on Wednesday after touching a near three-week high the previous day, although a forecast of shrinking stockpiles limited the losses.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 56 ringgit, or 1.41%, to 3,910 ringgit ($889.85) a tonne by the midday break. The contract had risen 5.45% in the last two sessions.
Palm prices are expected to recover, supported by positive fundamentals and external markets, Refinitiv Commodities Research said in a note.
“Earlier, heavy rains and floods in Malaysia had resulted in weaker output, while Indonesia’s export restrictions prompted buyers to turn towards the Malaysian palm oil supply,” it said.
A Reuters survey forecast Malaysian stockpiles at end-March to plunge 16.3% from the month before to 1.77 million tonnes, its lowest since July.
Production rose nearly 2% to 1.28 million tonnes, while exports jumped 25% to 1.39 million tonnes, according to a survey published ahead of Malaysian Palm Oil Board data due next week.
Meanwhile, the ringgit, palm’s currency of trade, rose 0.23% against the dollar, making the commodity more expensive for holders of foreign currency. Soyoil prices on the Chicago Board of Trade were up 0.2%.
The Dalian exchange was closed for a public holiday. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may fall to 3,853 ringgit per tonne, following its failure to break a resistance at 3,963 ringgit, Reuters technical analyst Wang Tao said.
Pakistan Rupee Exchange Rate