Palm snaps five-day rally as soyoil weakens
Malaysian palm futures dropped on Monday, ending a streak of five consecutive sessions in which they had gained. They were dragged lower by a decline in the prices of soyoil in Dalian and Chicago, and lowered exports for November.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery fell 30 ringgit (0.6%), to 4,990 Ringgit ($1,119.39), a metric tonne.
The contract gained 6.9% in November. This was its fourth consecutive monthly gain.
A Kuala Lumpur based trader stated that "Today's crude Palm Oil Futures are experiencing a profit-taking rally after the recent rallies on the backs of Dalian and Chicago soyoil being softer, as well as lower export numbers for the month November."
Dalian's palm oil contract rose 1.29%, while the most active soyoil contract fell 0.64%. After the Thanksgiving holiday, trading in soyoil resumed at the Chicago Board of Trade.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
According to Intertek Testing Services, a cargo surveyor and AmSpec Agri Malaysia, an independent inspection company, the Malaysian palm oil exported in November is estimated to have declined between 9.3% to 10.4%.
Indonesia increased its crude palm oil reference price (CPO) for December from $961.97 a metric tonne in November to $1,071.67, putting the export tax at $178 a ton.
Technical analyst Wang Tao stated that palm oil prices could test resistance at 5,070 Ringgit. A break above this level would open the door to the range of 5,128-5206 ringgit.
(source: Reuters)
