Malaysian crude palm oil futures closed lower on Tuesday, as players took profit after a strong rally and prices of rival soyaoil declined. The benchmark February contract on the Bursar Malaysia Derivative exchange finished down 23 ringgit at 1,898 ringgit ($522) a tonne after touching a high of 1,935 ringgit.
"The market was heavily overbought, it gave up some of the gains mainly because of profit-taking and sooyabean oil," one dealer said. The market has gained almost 13 percent this month, boosted by higher soyaoil prices and forecast of strong demand for vegetable oil-based biodiesel in the coming months.
The benchmark contract hit a high of 1,976 ringgit on Monday, the highest in more than 2 1/2 years. Other traded months closed down between 20 and 35 ringgit. Overall volume stood at 18,309 lots of 25 tonnes each. Chicago Board of Trade soyaoil ended 0.10 to 0.26 cent firmer, with December up 0.22 at 29.11 per lb., after surging to a contract high of 29.34 overnight.
But the December contract was down 0.14 cents to 28.97 cents per lb in electronic trade on Tuesday. Malaysia's palm oil output is expected to decline in coming months because of widespread rains during the monsoon that started this month. Dealers said the market-awaited production and closing stock data for November, to be issued by the state-run Malaysian Palm Oil Board on December 11.
In the physical palm oil market, December shipments were quoted at 1,860/1,875 ringgit a tonne. Trades were done between 1,865 and 1,900 ringgit a tonne.
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