KUALA LUMPUR, Nov 30: Malaysian crude palm oil futures were mixed at the close on Friday with volume staying low despite market-friendly exports data for November, traders said.
Cargo surveyor Societe Generale de Surveillance (SGS) said Malaysian palm oil exports for November stood at 1.05 million tons, up from 927,503 tons in October.
Analysts said the market was technically weak because it failed to break the key resistance of 1,200 ringgit. The low volume of 982 lots, much higher than midday’s 305 lots, but far below Thursday’s closing of 2,328 lots, indicated players were cautious.
“The market can’t even test the morning high of 1,117 ringgit after the SGS released the figures. Technically the market is weak,” said one analyst.
The market should have gone up because of the exports figures which showed steady demand from major buyers such as India and China, he added.
But a physical trader believed the market was simply waiting for fresh leads because the exports data had been factored in.
At the close, the benchmark third-month February futures was down six ringgit at 1,097 ringgit ($288.68) a ton after trading as high as 1,117 ringgit.
Three plantation analysts told Reuters November output would definitely fall, but their views differed on the extent of the decline.
October output stood at 1.14 million tons.
One analyst said November output would fall by 10 per cent to 1.03 million tons. Another said he believed output would even fall to below one million tons.
Influential private forecaster Ivan Wong had predicted this month’s output would reach 1.04 million tons, down nine per cent from October. He will issue fresh estimates on December 7.
“If we look at last year, November output only fell by one per cent month-on-month. I don’t expect to see a drastic decline now because there is no abnormality in weather,” said one analyst.
“I think November output will be only slightly lower than October,” said the analyst, who put December output at around 900,000 tons.
Analysts said palm oil trees are entering a cycle in which they will produce less fruit until February. Production had peaked in September/October.
One analyst said: “Output will be below one million tons. The rainy season makes it hard for people to harvest the fruit.”
In the physical sector, the December contract for the southern and central regions were offered at 1,070 ringgit a ton against bids at 1,065. Trade was reported at 1,065 to 1,070 for south and at 1,060 to 1,070 for central.
The January contract for the southern and central regions saw bid at 1,085 ringgit against offer at 1,095. There was no deal.—Reuters