KUALA LUMPUR, Nov 17: Malaysian crude palm oil futures recovered on Thursday after a three-day slide, but dealers said the market might still slip below key support in the coming days unless soyaoil rebounded.
The third-month crude palm oil contract on Bursa Malaysia Derivatives, February, closed up 2 ringgit at 1,417 ringgit ($374.94) a ton.
The benchmark contract fell to a low of 1,403 ringgit in morning trade, near key support at 1,400.
We probably closed higher because some people are setting the market up for profit-taking, said one trader.
I don’t think we can hold above 1,400 for long if the losses in soyaoil keep up,” another dealer said.
Soyaoil futures on the Chicago Board of Trade have been down lately due to large US stocks of the commodity.
At Wednesday’s close, December CBOT soyaoil lost 0.15 cent to close at 22.19 cents a lb.
It remained weak in Thursday’s electronic trade, conducted during Asian business hours.
Other traded months in palm oil closed between 14 ringgit down and 2 ringgit up.
Overall volume was 5,402 lots of 25 tons each, little changed to Wednesday’s 5,543 lots. The market can easily surpass 6,000 lots on a busy day.
Weak soyaoil prices aside, the palm oil market has also been weighed down in recent days by the weak performance of exports this month due to long holidays for Diwali and Eid al-Fitr festivals.
Cargo surveyor Societe Generale de Surveillance (SGS) said on Monday that Malaysian exports of oil palm products for Nov. 1-15 were estimated to have fallen 16.7 per cent from figures tracked for Oct. 1-15.
SGS had earlier estimated a 40 per cent drop in shipments for Nov. 1-10.
In physical dealings of crude palm oil on Thursday, the November and December contract saw buyers/sellers at 1,415/1,420 ringgit a ton.
Trades were reported at 1,405 to 1,415 ringgit in the southern and central regions of Malaysia. —Reuters
