Palm trades lower on profit taking ahead of Christmas holidays
Malaysian palm oil futures dropped 0.62% on Tuesday as traders took profits ahead of the Christmas holidays. The market’s rally from Indonesia’s B40 biodiesel news has largely been priced in, with cautious trading amid year-end book closures. Analysts expect Indonesia’s biodiesel mandate expansion to be implemented gradually.
KUALA LUMPUR: Malaysian palm oil futures slipped on Tuesday as traders booked profits ahead of the Christmas holidays.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell RM28, or 0.62 per cent, to RM4,514 a metric tonne at the midday break.
Crude palm oil futures traded sideways-to-lower on profit taking ahead of the Christmas holidays, said Anilkumar Bagani, commodity research head at Sunvin group.
Monday’s price rally, driven by Indonesia’s B40 biodiesel news, has been largely priced in, with market participants now remaining cautious amid year end book closures, he added.
The contract gained 2.46 per cent on Monday, snapping six straight sessions of losses.
Indonesia’s plan to expand its biodiesel mandate from Jan. 1 looks increasingly likely to be implemented gradually, analysts said last Wednesday, as industry participants seek a phase-in period.
Dalian’s most-active soyoil contract rose 0.87 per cent, while its palm oil contract gained 1.24 per cent. Soyoil prices on the Chicago Board of Trade were down 1.06 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices were up on Tuesday in thin trade ahead of the Christmas Day holiday, with prices supported by U.S. economic data and rising oil demand in India, the world’s third-largest oil importer.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, remained unchanged against the dollar.
The Bursa Malaysia Derivatives Exchange will be closed on Wednesday for Christmas.
Palm oil may bounce further into the range of RM4,624 to RM4,684 per metric tonne, as it has climbed a falling channel, Reuters technical analyst Wang Tao said.
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Source : Business Times
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