Palm drops following weakness in soyoil

KUALA LUMPUR: Malaysian palm oil futures reversed gains on Tuesday after hitting a five-week high, with sentiment dented by weakness in the Chicago Board of Trade (CBOT) soyoil and expectations of slower export growth.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.4 percent at 2,777 ringgit ($656) a tonne by Tuesday evening after rising as much as 0.8 percent to 2,808 ringgit, their highest since Sept. 19, earlier in the session.

Traded volumes stood at 47,628 lots of 25 tonnes each at the midday break.

The drop of palm prices was due to a fall in the soyoil futures on the CBOT, said Kuala Lumpur-based futures traders.

The December soybean oil contract on the Chicago Board of Trade (CBOT) dropped by 0.4 percent by the end of Tuesday.

Palm prices are impacted by the movements of related oils as they compete for a share in the global vegetable oils market.

"It looks like the market may be concerned that strong exports may not come through, with some preliminary numbers showing a marginal increase in exports," said a trader.

Another trader said the market was expecting exports data to show a smaller increase for the Oct. 1-25 period.

Cargo surveyor Intertek Testing Services released data on Friday that showed exports of Malaysian palm oil products during Oct. 1-20 rose 11.6 percent to 951,339 tonnes from 852,206 tonnes shipped a month earlier.

In other related edible oils, the January soybean oil contract on the Dalian Commodity Exchange gained 0.2 percent on Tuesday, while the January palm olein contract rose 1.1 percent.