KUALA LUMPUR: Malaysian crude palm oil futures dropped 2.5 percent on Monday, retreating from last week’s six-and-a-half month highs on Friday’s drop in U.S. soyoil prices as well as slowing exports.
U.S. soyoil edged up 0.2 percent on Monday, after falling heavily last week thanks to a report on higher soybean output.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange settled down RM65 ringgit at RM2,555 ($744.5) per tonne, its sharpest one-day drop since Oct. 2.
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 have 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 percent to 858,307 tonnes from 930,133 tonnes shipped between Nov. 1 and 20, cargo surveyor Intertek Testing Services said.
Another surveyor, Societe Generale de Surveillance, reported a 7.4 percent drop to 884,042 tonnes in the same period from a month ago. Source: Business Times