Crude palm oil futures edged higher yesterday but shed some of the day’s gain on late selling because of worries over poor fundamentals including weak exports and higher production, traders said.
“I guess the current sentiment does not favour buyers chasing the market. Anticipation of higher production and stocks will continue to cap the upside,” said a trader at a Kuala Lumpur brokerage.
The benchmark December contract on the Bursa Malaysia Derivative Exchange settled up RM15, or 0.7 per cent, at RM2,077 ringgit a tonne, after going as high as RM2,100 ringgit. Trade volumes were at 12,322 lots of 25 tonnes each.
“Sellers are also protective at this level as a decisive breach would set off further short covering,” the same trader said.
An early rally was mainly led by oil prices rising for the third day to above US$71 (US$1.00 = RM3.48) a barrel as an industry report showing a small drawdown in US crude stockpiles last week fed optimism for a recovery in energy demand. Energy prices tend to influence vegetable oil markets as petroleum diesel competes with biodiesel.
In the physical market, palm oil for October delivery was traded at RM2,120-RM2,130 in the southern region and at RM2,110-RM2,120 in the central region. Source : Business Times]]>