Crude palm oil futures finished flat yesterday, recouping losses of up to 2.4 per cent earlier in the day, as a rebound in crude oil and soy prices sparked some short-covering in late trade, traders said.
The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange closed flat at RM2,208, after dropping as low as RM2,154 early in the day. Overall volume was 18,601 lots of 25 tonnes each.
“The market was trading lower almost the whole day but fortunately crude oil, soybean, and soybean oils recovered in the last hour of trade,” said a trader at a Kuala Lumpur-based brokerage.
“Some day-traders who sold early have also covered their short positions during the last one hour,” he added.
Traders said market weakness during most of the day, despite strong exports data, indicated concerns that exports are not good enough to absorb rising output.
As a result, palm oil stock will rise again at the end of October from an eight-month peak of 1.58 million tonnes in September. Palm oil prices correlate inversely to palm oil stocks.
Exports of Malaysian palm oil products for October rose 15.8 per cent to 1,422,008 tonnes from 1,227,983 tonnes shipped in September, cargo surveyor Intertek Testing Services said yesterday.
Another surveyor, Societe Generale de Surveillance, estimated exports for October rose 13 per cent to 1,434,850 tonnes, from 1,269,337 tonnes shipped in September.
Oil rose above US$77 (US$1.00 = RM3.46) a barrel yesterday, retracing some of the previous session’s drop, as manufacturing data from China helped to allay fears about the pace of the rebound in global energy demand.
On the physical market, November South dropped to RM2,170 per tonne from RM2,260 per tonne last Friday.]]>