JAKARTA: Malaysian crude palm oil futures fell 0.7 per cent yesterday, after short-covering narrowed a loss of as much as 2 per cent due to a drop in crude oil prices and talk of lower exports for the first half of December, traders said.
“The market tried to move down below the RM2,500 level when rumours came out but then we saw some short-covering,” said a trader at a Kuala Lumpur-based brokerage.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled down RM17 at RM2,513, after going as low as RM2,488 in early trade. Overall volume was 11,673 lots of 25 tonnes each.
Oil headed lower for a ninth straight session yesterday to trade below US$70 a barrel, pressured by concerns over weak fuel demand and brimming inventories.
There was talk in the market that cargo surveyor Intertek Testing Service (ITS) estimates, due out today, may put Malaysia’s December 1-15 palm oil exports at 609,000-610,000 tonnes, compared to 674,148 shipped for Nov.ember 1-15, traders said.
Another cargo surveyor, Societe Generale de Surveillance (SGS), will also announce its estimate. “It may turn out that SGS is a bit lower than” ITS’s estimate, the same trader said.
Firm exports are key to using up palm oil inventories in the world’s number 2 producer. Exports dropped 2.02 per cent to 1.93 million tonnes in November.
In the Malaysian physical market, palm oil for December delivery was traded at RM2,445-2,455 per tonne in the southern region, and at RM2,435-2,445 in the central region.
Source: Business Times