Malaysian crude palm oil futures tumbled yesterday as investors pocketed profits from the recent rally ahead of the release of end-November stocks data, traders said.
Industry regulator Malaysian Palm Oil Board (MPOB) is due to release end-November stocks data today.
“The market has been going up for many days, so it is normal to see some profit-taking especially prior to MPOB data,” said a trader at a Kuala Lumpur-based brokerage, adding that weak overseas markets further dented sentiment.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled down RM35t, or1.4 per cent, at RM 2,526 a tonne. Overall volume at 20,978 lots of 25 tonnes each was double the usual 10,000 lots.
US soybean for January delivery dropped 1.04 per cent in Asian hours, while most-active September soybean oil contract in China’s Dalian exchange fell 2.4 per cent.
“The end (November) stocks are supposed to be higher and I think the market has anticipated it, so the price fall is temporary,” another Malaysian trader said.
A Reuters poll showed stocks hit a one-year high of 2.03 million tonnes in November as output was still higher than exports despite falling at a faster pace. Analysts have been bullish on a longer-term price outlook, with influential analysts James Fry and Dorab Mistry forecasting the palm oil price would go up to RM3,000 next year assuming that stocks will decline.
In the Malaysian physical palm oil market, asks/bids for December delivery were quoted at RM2,450/2,480 a tonne in the southern region and at RM2,450/2,470 in the central region.
Source: Business Times