Wednesday, March 17, 2010

Palm futures end lower on technical buying

MALAYSIAN palm oil futures ended off one-month lows yesterday on technical buying and production concerns in the world's No.2 producer of the vegetable oil.

Benchmark June crude palm oil futures on the Bursa Malaysia Derivatives Exchange settled down RM6 at RM2,569 a tonne after going as low as RM2,500, a level not seen since Feb. 12.

Overall traded volume doubled to 20,673 lots of 25 tonnes each.

"There is a retracement as the market has been oversold for the past two days," said a trader with a foreign brokerage in Kuala Lumpur. "The dry spell is still a concern, it may hit production further this month."

Another trader said the market was on the lookout to see if stocks in Malaysia will come down further in March. He pegged the market's trading range at between RM2,500 and RM2,620 a tonne.

Crude oil prices steadied below US$80 (US$1.00 = RM3.34) a barrel in Asian hours, after a fall of nearly 2 per cent in the previous session, its biggest one-day fall in more than two weeks, as the market awaited the outcome of organization of the petrolieum exporting countries and central bank meetings.

Firm oil supported US soyoil futures that also rose on loading delays in Brazil as supplies from the ongoing harvest and rainy weather overwhelmed transportation capacity in the world's second largest soy exporter.

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