Malaysian palm oil futures erased earlier gains to fall to a two-week low on Thursday evening, weighed down by weaker soyaoil prices on the Chicago Board of Trade (CBOT) and as traders took profits ahead of a long weekend. The Malaysian stock market will be closed on Friday for a public holiday.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange declined 1.2 percent to 2,737 ringgit ($652.29) a tonne at the close of trade. "The market is down partly on CBOT soyaoil, and due to the long weekend," said a Kuala Lumpur based futures trader. Another futures trader earlier said the market was calm ahead of the long weekend.
"(Market) sentiment is kept under pressure due to a lack of buying confidence as production is showing some improvement," she said. Palm oil prices are affected by movements in related edible oils including soya, as they compete for a share of the global vegetable oils market. The October soyabean oil contract on the Chicago Board of Trade shed previous session's gains to trade 1.3 percent lower on Thursday.
In other related oils, the January soyabean oil contract on the Dalian Commodity Exchange fell 0.8 percent, while the January palm olein contract declined 1 percent. Palm oil may have more or less completed its correction from the Sept. 14 high of 2,876 ringgit per tonne, and is poised to resume its uptrend, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
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