MALAYSIAN crude palm oil futures edged 0.2 per cent lower on Thursday after an industry analyst said the recent rally was overdone and did not reflect rising stock levels.
The benchmark February contract on the Bursa Malaysia Derivatives Exchange shed RM6 to RM2,483 (US$735.9) by midday, after falling as low as RM2,463 earlier in the session.
But gains in commodity markets, including crude oil and soyoil, helped to limit losses in palm oil, traders said.
“The market hinges on stock levels now. We know that stocks will fall next year but what happens now is more important,” said a trader with a foreign commodities brokerage.
Thomas Mielke, executive director of Hamburg-based OilWorld said on Thursday current palm oil price levels were not sustainable as stocks in Indonesian and Malaysia had peaked at a combined 3.9 million tonnes last month.
Mielke was speaking at the Indonesian Palm Oil Conference and Price Outlook 2010 at the resort island of Bali, which started on Wednesday and also features analysts Dorab Mistry and James Fry.
Traders have long expected a small drawdown in stocks in Nov as exports were still resilient and production growth was likely to be limited by heavy rains in key oil palm growing areas in Malaysia.
U.S. crude futures rose a third of a per cent on Thursday after dropping 2.3 per cent a day earlier on a larger-than-expected build in U.S. crude inventories. The gains gave some support to vegetable oil markets.
U.S. soyoil for January delivery rose 0.9 per cent, while the most-active September soybean oil contract on China’s Dalian Commodity exchange edged higher. – Reuters
Source : Business Times
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