Malaysian crude palm oil futures fell on Monday as players unwound positions in late trade, after holding the market up in the on gains reflected in rival US soyaoil. Dealers saw on Tuesday as another day of uncertainties as the exchange imposes higher trading deposits ahead of a weeklong market holiday beginning on Thursday.
Market participants were also awaiting a spate of trade data due on Wednesday.
The benchmark January palm oil futures closed 10 ringgit, or 0.7 percent, down at 1,407 ringgit ($370.26) a tonne. It had risen to an intrude high of 1,424 ringgit before falling to a low of 1,401 one ringgit above the key psychological support of 1,400.
Other contracts settled nine to 13 ringgits lower. Trade totalled 5,974 lots of 25 tonnes each.
The volume was less than half of that. "Everyone's kind of jittery, thinking what's going to happen the next two days," said a trader. "If they're not jittery, they're busy planning their holidays."
The Malaysian Palm Oil Board releases official production, exports and closing stock numbers for October while cargo surveyors Society Generale de Surveillance and Interlake Testing Services issue export estimates for November 1-10 both on Wednesday.
Leading private crop forecaster Ivan Wong will unveil his final estimates for October a day before the palm oil board. From Thursday, the exchange would be closed for a week as Malaysia celebrates two religious festivals back-to-back.
It reopens on November 17. Prices opened steady on Monday, spurred on Friday's rise in soyaoil futures on the Chicago Board of Trade (CBOT). CBOT soyaoil closed 0.15 to 0.39 cent a lb higher on technical covering.
Soyaoil and palm oil compete for the same export destinations and their prices often move in step. Dealers said players were also cautious of building positions ahead of Tuesday's higher deposits requirement for trades.
The exchange is raising deposits on all open positions to safeguard the market from undue volatility when it resumes trade after the holidays. The deposit for a single lot of palm oil, accounting for 25 tonnes, will be raised to 2,750 ringgit a tonne from 2,250 ringgit for spot month contracts.
For forward contracts, the new deposit will be 2,500 ringgit, up from 2,000 ringgit currently. Prices of physical crude palm oil also ended down. Physical oil for spot November saw buyers/sellers at 1,465/1,470 ringgit a tonne in Malaysia's southern and central regions, against on Friday's close of 1,470/1,475.
Trades were reported at 1,470-1,465 ringgit in both regions. December saw bids/offers at 1,455/1,460 ringgit a tonne, against on Thursday's 1,460/1,470. Trades were reported at 1,455 in the south.
PALM OIL FUTURES:
November (south): 1470.
Open/High/Low: 1423/1424/1401.
Previous closes: 1475.
PALM OIL PHYSICALS:
January (3rd month): 1407.
Previous settlement: 1417.
FUTURES:
Benchmark January down 10 ringgit to 1,407 ringgit ($370.26) a tonne.
PHYSICALS:
November offered five ringgit a tonne lower.
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