JAKARTA: Malaysian palm oil futures dropped 3.3 per cent by midday today, moving in line with rival soybeans, as investors locked in profits after prices rose to a 10-week high a day earlier.
The recent rally in palm was aided by market hopes for a demand pickup ahead of Asian festivals, which coupled with a drop in production, could put further pressure on Malaysian palm oil stocks this month from a 3-month low in July.
“It is a good profit-taking day after so many days of rally. The fall in external markets yesterday just provided a good excuse to sell,” said a trader at a Kuala Lumpur-based brokerage.
“The fundamentals do not change. I mean we are going to have consistent strong demand and a drawdown in production due to the Ramadan fasting season,” the trader added.
The benchmark October contract on Bursa Malaysia’s Derivatives Exchange dropped RM84 to RM2,431 a tonne. Overall volume was 7,378 lots of 25 tonnes each.
US soybean futures fell 4.4 per cent in Asian hours, extending a 2 per cent drop on Thursday on a bout of profit-taking and good weather in the US that should ensure a record crop.
In the Malaysian physical market, palm oil for August delivery was traded at RM2,490-RM2,500 ringgit in the southern region and at RM2,485-RM2,490 in the central region. – Bloomberg Source : Business Times]]>