JAKARTA: Malaysian palm oil futures dropped for a third session on Friday to post a weekly decline, as buying momentum during early trading over a likely fall in stocks dissipated.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 0.93% to 4,052 ringgit ($920.70) per tonne, erasing its gains in the morning session. The contract lost 2.92% this week.
The initial optimism about lower December inventory evaporated after the market digested data outlooks, according to a Kuala Lumpur-based trader. Another trader said market participants were looking for new leads to guide their positions.
“As estimates for MPOB December end stocks are still above 2 million tonnes, and it’s at 3 year highs, buying momentum in Malaysian palm oil fizzled out,” the first trader said.
Malaysia’s palm oil inventories at end-December are estimated to shrink 5.3% to 2.17 million tonnes from prior month, their lowest levels in four months as production and exports slowed, according to a Reuters survey.
Production declined 3% to 1.63 million tonnes, while exports fell 1% to 1.5 million tonnes, according to the poll.
Soyoil prices on the Chicago Board of Trade were up 0.54%, while Dalian’s most-active soyoil contract edged 0.18% higher while its palm oil contract rose 0.34%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may slide a bit more into a narrow range of 3,997 ringgit to 4,022 ringgit per tonne, as it has broken a support at 4,109 ringgit, Reuters technical analyst Wang Tao said.
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