Malaysian crude palm oil futures dropped 2.2 per cent today, retreating from last week’s six-and-a-half month highs, as it factored in Friday’s drop in U.S. soyoil prices and slowing exports.
U.S. soyoil, however, edged up 0.6 per cent today, after falling heavily last week thanks to a report on higher soybean output.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange traded RM57 lower at RM2,563 (US$746.3) by the midday break. The contract on Friday hit RM2,628, a level unseen since June 2.
“Palm oil was playing catch up with the declines in U.S. bean oil markets last week and slower exports has raised fears again of higher stocks in December,” a trader with a foreign commodities brokerage said.
“Also, the market was overbought last week and caught in a bear trap,” the trader said, referring to last week’s surge, where market participants, who were initially bearish, triggered stop-loss short covering when prices ran up quickly.
Exports of Malaysian palm oil products for Dec. 1-20 fell 7.7 per cent to 858,307 tonnes from 930,133 tonnes shipped between Nov 1 and 20, cargo surveyor Intertek Testing Services said.
The most-active September 2010 soyoil contract on China’s Dalian Exchange slipped in line with other weaker soyoil markets.
Traders said the losses in the Chinese market were not related to reports that Beijing may release vegetable oil reserves to counter domestic edible oil prices.
“About 60 to 70 per cent of bean oil markets in China is controlled by foreign commodities prices. China has no absolute power to regulate its prices,” said one trader from Beijing. – Reuters Source: Business Times]]>