KUALA LUMPUR, Nov 2: Malaysian crude palm oil futures held firm on Friday, a touch below record peaks as investors split between booking profits and shortcovering against an anticipated rise in crude and soyaoil, traders said.
Palm oil, which struck its fifth record high at 2,959 ringgit per ton on Thursday, is expected to break past the 3,000-ringgit level if crude prices resume their rally, traders said.
The benchmark January contract settled down 13 ringgit to stand at 2,917 ringgit ($873) a ton, after going as low as 2,881 ringgit.
Today’s closing price was evidence of the market’s volatile mood, a trader said.
There are some who still want to take profits on the weakness of crude and soyoil markets but others are betting on these markets to rise, which may be happening overnight. Other traded months fell between 7 and 23 ringgit. Overall volume stood at 11,000 lots of 25 tons each.
Palm oil reaching the 3,000 ringgit level is a possibility so long as crude oil hits $100 a barrel but if crude oil’s momentum breaks, it will remain a dream. The commodity, up more than 46 per cent this year, had initially been rising on strong global demand and an expected supply shortfall in the coming months, traders said.
But in late Asian trade on Friday, December soyabean oil inched up 0.21 cent to 42.28 cents per pound after closing 0.24 cent per lb weaker at 42.07 the previous day. Palm oil and soyaoil increasingly track movements in the crude oil market because of growing demand for both commodities as feedstock for biodiesel.
In Malaysia’s physical market, crude palm oil for November shipment in the southern region was quoted at 2,930/2,935 ringgit a ton. Trades were done between 2,920 and 2,930 ringgit.
