Crude palm oil futures edged lower yesterday as weaker crude oil and equity markets stalled a rally driven by supply fears in the Southeast Asian country.
“Investors booked profits as they felt the rally was overdone and they wanted some breathing space before the release of the July palm oil data by the Malaysian Palm Oil Board (MPOB), which is bound to be bullish,” said a trader with a local broker.
The benchmark October contract on Bursa Malaysia’s Derivatives Exchange settled down RM10 to RM2,325.
The palm oil market hit a 7-week high on Wednesday on news Sabah plantations faced 15 per cent drop in July output due to biological oil palm tree stress. A Reuters poll showed Malaysia’s palm oil stocks in July had dropped 3.7 per cent to a three-month low as the upcoming Asian festival season spurred more demand at a time when output growth was hit by poor yields, a Reuters poll showed yesterday.
MPOB, an industry regulator, will announce July palm oil data on Monday at 4.30pm.
Traders said more palm oil product deals were expected in less than three weeks leading up to the Asian festival, starting with Ramadan and ending with China’s mid-Autumn festival in early October.
Ramadan, the Muslim holy month where fasts in the day are followed by feasts in the evening, will see a majority of the plantation workers in top producers Indonesia and Malaysia taking leave as well as spur orders from overseas Muslim buyers.]]>