KUALA LUMPUR, Oct 19: Malaysian crude palm oil futures fell more than half per cent at Wednesday’s close, weighed down by thin leads and mixed prices of Chicago soyaoil.
The benchmark third-month January crude palm oil contract on Bursa Malaysia Derivatives ended down 11 ringgit, or 0.75 per cent, at 1,439 ringgit ($381.69) a ton — well below the 1,450 mark which had been a key support this week.
The contract fell as much as 15 ringgit earlier on Wednesday to an intraday low of 1,435.
Dealers said the market could take a further hit later in the week if performance of palm oil exports for Oct. 1 to 20 proved weaker than the first 15 days of the month.
Two independent surveyors of Malaysian palm oil exports — Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS) — are due to release on Thursday shipment estimates for Oct. 1 to 20 compared with Sept. 1 to 20.
Dealers said ITS’s figures for Oct. 1 to 20 were expected to be around 810,000 tons, or about 4.5 per cent higher than Sept. 1 to 20.
This compares against the growth of 8.1 per cent for Oct. 1 to 15 estimated by the cargo surveyor.
This certainly doesn’t look good at all, said a futures trader.
Aside from the January contract, other traded months for palm oil closed down 7 to 19 ringgit.
Overall market volume was 6,245 lots of 25 tons each, versus Tuesday’s 4,870 lots. The bulk of the trade was in the afternoon.
People wanted to clear their positions before tomorrow’s export numbers, said another trader. Some had been wanting to sell from morning, after seeing the soyaoil prices.
Soyaoil and palm oil compete for exports and their prices often move in step.
Soyaoil futures on the Chicago Board of Trade ended mixed on Tuesday, after rallying sharply the day before on promises of biodiesel.
In Wednesday’s electronic trade, conducted during Asian business hours, December soyaoil lost a further 0.17 cent to 24.27 cents a lb.
Prices of physical crude palm oil were also down, following the trend in futures. The October contract saw offers at 1,445 ringgit and bids at 1,440, against Tuesday’s close of 1,460/1,455.
Trades were reported at 1,445 to 1,440 ringgit.—Reutera
