KUALA LUMPUR, Oct 4: Malaysian crude palm oil futures lost more than half a per cent on Tuesday as a drop in rival soyaoil sparked profit-taking in a market that closed up one per cent the previous day.
Bursa Malaysia Derivatives’ benchmark third-month crude palm oil contract, December, closed at 1,465 ringgit ($388.49) a ton — one ringgit shy of the day’s low.
Other traded months fell one to 23 ringgit, with the exception of spot October, which rose five ringgit.
Overall volume was 5,047 lots of 25 tons each, below Monday’s 7,154. The market typically sees 6,000 lots or more on a busy day.
Prices opened up but came under pressure after soyaoil on the Chicago Board of Trade weakened in electronic trade, which runs before formal business beginning at 1400 GMT.
There was long liquidation and profit-taking, a palm oil dealer said of the day’s trend.
Traders expected the market to move in a narrow range over the next few days and stick to the CBOT for direction if there were no other leads.
They pegged resistance for December at 1,500 ringgit and support at 1,470. Prices received a boost last week after a rally in soyaoil coincided with speculation of strong exports of palm oil in coming months as Europe’s demand for biofuels grows.
Sales of palm oil are also traditionally higher in the third quarter due to more demand from the Middle East, Pakistan and India ahead of the Ramazan and Diwali festivals.
Offer prices of physical crude palm oil followed the weaker trend in futures, although the drop was just 5 ringgit in the key southern region.
Physical crude palm oil for October saw offers at 1,480 ringgit a ton and bids at 1,472.50 in the south. In the central region, offers/bids stood at 1,470/1,465.
Trades closed at 1,480-1,475 ringgit in the south and 1,475-1,470 in the central zone.
