Malaysian palm oil futures fell for a second straight session on Monday after earlier touching a four-and-a-half-year high hit in the previous session, as the market weakened on expectations that data due out on Tuesday will show a fall in export demand. Benchmark palm oil futures for March delivery dropped 0.6 percent on the Bursa Malaysia Derivatives Exchange to 3,142 ringgit ($702) a tonne at the end of the trading day after rising to a high of 3,202 ringgit earlier in the day.
Traded volumes stood at 31,018 lots of 25 tonnes each. "Traders are expecting lower export data for tomorrow," said a Kuala Lumpur-based trader, referring to shipment data scheduled for release on Tuesday by cargo surveyors Intertek Testing Services and Societe Generale de Surveillance. The market rose earlier due to more strongly performing rival oils and tight market supplies, before correcting on expectations that Tuesday's figures will show weaker export demand.
Palm has been on an upward trend in recent weeks, supported by a weaker ringgit and lower production due to the lingering effects of a crop-damaging El Nino and as year-end monsoon rains disrupt harvesting. A weaker ringgit makes palm oil cheaper for holders of foreign currencies.
Government data showed production fell 6.1 percent in November. Heavy rains and flooding throughout the month are forecast to hit output further in December. The January soybean oil contract on the CBOT was down 0.2 percent, while the May soybean oil contract on the Dalian Commodity Exchange rose 0.2 percent. In related vegetable oils, the May contract for Dalian palm olein fell 1.2 percent.
Comments
Comments are closed for this article.