VEGOILS-Palm Declines on Profit-Taking After Previous Session’s Gains

December 18th, 2017

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Category: Oilseeds

(Reuters) –  Malaysian palm oil futures fell in early trade on Monday on profit-taking, after recording its biggest daily gains in nearly five months in the previous trading session.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.4 percent at 2,541 ringgit ($622.03) at the midday break.

Palm had seen a downward trend in recent weeks, sliding on bearish sentiment over weak demand and high stockpiles, before jumping nearly 3 percent to reach its highest levels in a week in its previous trading session.

Trading volumes stood at 12,201 lots of 25 tonnes each at the midday break on Monday.

A trader said the market fell on profit taking, as it “lacks catalysts to drive short-term gains.” However, further declines look unlikely, he added.

“Production may decline for another month,” he said, referring to the full-month output for December.

Palm oil output sees seasonal decline at year end before rising around the second quarter of the year.

Output in November was last down 3.3 percent on-month to 1.94 million tonnes, according to the most recent official data from industry regulator the Malaysian Palm Oil Board. MYPOMP-CPOTT

In other related oils, the January soybean oil contract on the Chicago Board of Trade rose 0.6 percent, while the January soybean oil contract on the Dalian Commodity Exchange was up 0.1 percent.

The Dalian January palm olein contract gained 0.7 percent.

Palm oil prices are affected by other edible oils as they compete for a share in the global vegetable oils market.

 

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