JAKARTA: Malaysian crude palm oil futures dropped 1.8 per cent yesterday amid caution ahead of the release of monthly estimates for US soy output from the US Department of Agriculture (USDA) later yesterday, traders said.
Analysts expect USDA to raise its US soybean and corn production estimate.
Last month, USDA forecast the soybean harvest at a record 3.2 billion bushels and corn at RM12.8 billion bushels, the second-largest in history.
A bigger vegetable oils supply prospect could set a negative tone for the market, which has come under pressures on the prospect of further increases in palm stocks amid weaker exports and higher production.
“People were talking about acceleration of harvests before Eid al-Fitr holidays. So production is on the rise. I guess that contributed to market weakness apart from the USDA report,” said a trader at a Kuala Lumpur-based commodities brokerage.
“Market sentiment has not recovered so any bearish news could easily spark selling,” the trader added.
The benchmark November contract on the Bursa Malaysia Derivative Exchange dropped RM39 to RM2,145 a tonne. Overall volume was at 12,382 lots of 25 tonnes each.
In the Malaysian physical market, palm oil for September delivery was traded at RM2,230 in the southern and central regions.
Source : Business Times]]>