Malaysian palm oil slips in thin trade as soya weighs

27 Oct, 2005

Malaysian crude palm oil futures were a touch softer at Wednesday's close after tracking a fresh drop in rival US soyaaoil.
Trade was also thin - less than a quarter of that seen on a typically busy day - as players avoided major transactions ahead of long holidays in the week ahead.
The market will be closed for three days next week to mark the Hindu Diwali and Eid-ul-fitr festivals.
The benchmark third-month January crude palm oil contract on Bursa Malaysia Derivatives closed down 3 ringgit at 1,418 ringgit ($376.13) a tonne, after touching an intraday low of 1,415.
The broader market was down 1 to 3 ringgit.
Overall volume was 1,396 lots of 25 tonnes each, compared with Tuesday's 4,242 lots.
The market can easily see 6,000 lots or more on a busy day, but traders are not expecting that to happen this week as players turn cautious ahead of next week's holidays.
"People are hardly doing anything," said a trader. "If anything, they're reacting to soyaaoil. That's all."
Soyaa and palm compete for exports and their prices often move in step.
Soyaaoil prices have been volatile lately as the commodity is increasingly viewed as an energy product for biofuel, rather than as a traditional source of food. In recent days, CBOT soyaaoil has closed up in formal Chicago trading, only to slip into profit taking in after-hours electronic trade.
Wednesday's trend was similar. December soyaaoil, which had closed up 0.02 cent the day before, fell 0.11 cent to 23.67 cents a lb in electronic trade.
Prices of physical Malaysian crude palm oil were unchanged from Tuesday's close, with offers for October delivery priced at 1,430 ringgit, against bids of 1,425.
Trades were reported at 1,422.50-1,430 ringgit.
PALM OIL FUTURES
October (south): 1430.00.
Open/High/Low: 1420/1421/1415.
Previous close: 1430.00
PALM OIL PHYSICALS:
January (3rd month): 1418.
Previous settlement: 1421.
FUTURES:
Benchmark January down 3 ringgit at 1,418 ringgit ($376.13) a tonne.
PHYSICALS:
Offers for October flat at 1,430 ringgit.

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