Palm Futures Ease After 3-Day Rally

JAKARTA: Malaysian palm oil futures edged lower today as investors locked in gains from a three-day rally in absence of fresh leads, traders said. “Technically the market was in overbought region so people just made profit. Good fundamentals are still intact with stocks are deteriorating,” said a trader at a Kuala Lumpur-based brokerage. The price of the tropical oil — used in various products from soap to biodiesel — has surged 6 per cent in the previous three sessions of consecutive gains, buoyed by a drop in Malaysia’s palm oil stock to a three-month low in July. Traders said the stock level may drop further this month as demand is gaining support from the upcoming Asian festival starting with Ramadan holy month in the second half of August. July Malaysia’s palm oil stock level of 1.33 million tonnes was lower than the 1.4 million tonnes seen as needed for the processing industry to function normally. The benchmark October contract on Bursa Malaysia’s Derivatives Exchange was down RM5 or 0.2 per cent atRM2,460 ringgit a tonne. The contract hit the day’s high of RM2,490 and a low of RM2,410. Overall volume was 17,914 lots of 25 tonnes each, bigger than the usual 10,000 lots. Source : Business Times


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