KUALA LUMPUR, Oct 11: Malaysian crude palm oil futures ended just 1.3 percent higher on Thursday as players cashed in profits after the market scaled a four-month peak in the morning session on surging soyaoil and speculative buying.
Traders said prices were also weighed down by the steadily strengthening ringgit against the dollar.
The benchmark December contract on the Bursa Malaysia Derivatives Exchange settled up 35 ringgit to 2,680 ringgit ($797) a ton, after going as high as 2,700 ringgit, a level not seen since June 6.
With all the excitement in the palm oil market because of soyabean oil and fantastic exports, players just want to make some profits and square their positions before the long weekend break,” said one trader.
The Malaysian palm oil market will be closed on Monday to mark the Muslim festival of Eid -ul-Fitr.
The stronger ringgit is also putting pressure on prices as profit margins have been eroding quickly,” said another dealer.
It’s a matter of trying to stay afloat. Other traded months rose between 12 and 41 ringgit. Overall volume stood at 10,827 lots of 25 tons each.
The commodity, in demand for making sweetmeats and other delicacies for the festive season, is just 3 per cent off an historic high 2,764 ringgit.
The Malaysian ringgit eased as far as 3.382 per dollar on Thursday, a day after rising past 3.38 to a nine-and-a-half-year high. By 1019 GMT, it strengthened to 3.364 per dollar.
A stronger ringgit makes the ringgit-based commodity expensive for overseas buyers.
Soybeans and soy-product futures led the Chicago Board of Trade agricultural markets higher on Wednesday, with soybeans continuing to recover from this week’s slide to a four-week low, traders said. December soyaoil ended 0.48 cent stronger at 39.47 cents per lb. On Thursday, the contract rose 12 cents in electronic trade to 39.59 cents per pound by 1019 GMT.
Soyaoil and palm oil are used in products ranging from confectionaries and cosmetics to biofuel and their prices often move in step. Exports of Malaysian palm oil products for Oct. 1-10 rose 11.9 per cent to 462,292 tons, from 413,299 tonnes shipped between Sept. 1 and 10, cargo surveyor Intertek Testing Services said on Wednesday.
Another cargo surveyor, Societe Generale de Surveillance said exports in the same period rose 44.8 percent to 484,670 tons.
Malaysia’s crude palm oil output rose 2.74 per cent to 1,602,065 tons in September from a revised 1,559,362 tons a month earlier, official crop agency Malaysian Palm Oil Board said on Wednesday.
December palm oil on Singapore’s Joint Asian Derivatives Exchange was untraded by 1019 GMT.
In Malaysia’s physical market, crude palm oil for October shipment in the southern region was quoted at 2,780/2,795 ringgit a ton. Trades were done between 2,770 and 2,790 ringgit.—Reuters