VEGOILS - Palm extends losses to second session as profit taking weighs
Malaysian palm oil futures continued to fall for the second session in a row on Wednesday. Profit-taking was a major factor, but concerns about 'El Nino and its impact on production were also a positive.
By midday, the benchmark contract for?palm?oil delivery in November on the Bursa Derivatives exchange fell 15 ringgit (0.3%), to 4,961 Ringgit ($1,220.12) per metric ton.
Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. He said that the market will continue to be volatile, with some profit-taking. However, the overall trend is bullish. This is due to El Nino and the lack of rain expected.
He said that the market was also waiting for data from the Malaysian Palm Oil Board.
MPOB will release its August demand and supply data on Thursday.
The oil price rose Wednesday morning, with an increase of more than $1 after new attacks in the Middle East raised concerns about supply disruptions.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Dalian's palm oil contract, which is the most active contract in Dalian, fell by 1.39% while soyoil prices dropped by 1.15%. Prices of soyoil on the Chicago Board of Trade fell by 0.07%.
Palm oil follows the price movement of competing edible oils as it competes to gain a share of the global vegetable oil market.
The palm ringgit's currency of trade weakened by 0.22% against dollars, making it slightly cheaper for buyers with foreign currencies.
An Energy Ministry presentation during a parliamentary?hearing revealed that Indonesia used 10,7 million?kilolitres palm oil-based biodiesel between January and early September, when it rolled out its B50 blend across the country.
Technical analyst Wang Tao stated that palm oil could test a support level of 4,930 Ringgit per metric ton. A break below this may cause a drop into the range 4,876-43,903 Ringgit.
(source: Reuters)
