MALAYSIAN crude palm oil futures closed flat yesterday, giving up gains of almost 1 per cent as market players scaled back expectations for the exports data, which are due out today and cover Jan.1-20, traders said.
There was talk earlier in the day that palm exports for Jan. 1-20 were in the range of 950,000-990,000 tonnes, well above the December figure of 858,307 tonnes. But later in the day, market talk put the number at closer to 927,000 tonnes.
“Maybe, that’s why the market came off again,” said a local trader.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange closed unchanged at RM2,490 ringgit per tonne, after rising as high as RM2,512.
Overall volume was 17,745 lots of 25 tonnes each.
Stronger exports and a dip in production are key to bringing down palm oil stock in the world’s number 2 grower from a 13-month high in December. Palm oil prices normally correlate inversely with palm oil stocks.
The market is also closely monitoring production as rainy weather in Sabah may disrupt output this month, traders said.
“So, even though exports are slow, I do not see a big change in stock. For that reason the market is trying to consolidate,” another trader with a local investment bank said.
Cargo surveyor Intertek Testing Services and Societe Generale de Surveillance are due to unveil Malaysia’s Jan. 1-20 palm oil exports today, at 0100 GMT and 0630 GMT.
In the physical market, palm oil for January delivery was traded at RM2,465-RM2,480 per tonne in the southern region and at RM2,460-RM2,475 in the central region.
Source : Business Times