Palm oil prices drop on the back of heavy sales and a weakening in Dalian palm oil
After the Christmas holiday, Malaysian palm oil futures fell on Thursday due to heavy selling and weakness of Dalian palm olein.
At midday, the benchmark March palm oil contract on Bursa Malaysia's Derivatives exchange fell 12 ringgit or 0.26% to 4,546 Ringgit ($1,017.69).
On Monday and Tuesday, the contract increased by 2.82%.
A Kuala Lumpur based trader reported that crude palm oil futures were lower due to heavy morning selling as well as overnight weakness in Dalian Palm Olein.
Dalian's palm oil contract and soyoil contract, which are the most active contracts, both fell by 0.48%. Chicago Board of Trade reopens for trading at 1430 GMT.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
Intertek Testing Services, a cargo surveyor, estimates that exports of Malaysian Palm Oil Products for the period Dec. 1-25 have decreased by 4% compared to 1,200 421 metric tonnes shipped in Nov. Amspec Agri will release its estimated exports later today.
The price of oil edged up in the thin holiday trading due to hopes for fiscal stimulus in China. This is because China is the largest oil importer in terms of volume. A decline in U.S. inventories was also a factor.
The palm ringgit's currency has strengthened by 0.38% against U.S. dollars, increasing the price of the commodity for buyers with foreign currencies.
Technical analyst Wang Tao stated that palm oil could bounce back into the range of 4,624-4684 ringgits per metric tonne as it has climbed up a falling channel.
(source: Reuters)
