Palm snaps a 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 lower November exports.

The benchmark palm-oil contract for February delivery at the Bursa Derivatives Exchange in Malaysia lost 62 Ringgit or 1.24% to close at 4,958 Ringgit ($1,112.41) per metric ton.

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 soyoil contract with the highest trading volume fell 0.98% while palm oil rose 1.31%. 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 oil market, 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.

(source: Reuters)