MALAYSIAN crude palm oil fell yesterday for the first time in over a week on a
firmer US dollar and weaker technicals, and as traders took profits
from the run of gains.
But the market, which has risen 34 per
cent in 2010, may rally further if more monsoon rains lash oil palm
estates in Malaysia and dry weather heightens the risk of a poor South
American soy crop, traders said.
A jump in US bond yields
boosted the dollar for a second day after President Barack Obama
proposed to extend Bush-era tax cuts, fuelling inflation concerns and
questions about a stable recovery for the world’s largest economy.
Investors trimmed their exposure to riskier assets and bought more US
dollars, triggering profit-taking across the agricultural commodity
space.
“The US dollar created some excuses to take profit as
well as some weak technicals. Most palm oil players will sit tight
until the Malaysian Palm Oil Board issues likely bullish data
tomorrow,” said a dealer with a foreign trading firm.
The
benchmark Feb 2011 crude palm oil contract on the Bursa Malaysia
Derivatives Exchange ended 0.4 per cent lower at RM3,594 a tonne, easing
from a 29-month high hit on Monday.
Traded volume more than
doubled to 24,790 lots of 25 tonnes each from the usual 10,000 lots as
traders booked profits after a public holiday on Tuesday.
Reuters
technical analysis suggested Malaysian palm oil will retrace to
RM3,496 per tonne as it completed a five-wave cycle at Monday’s high of
RM3,618 .
Traders are expecting bullish numbers from the MPOB
tomorrow after a Reuters poll forecast palm oil stocks probably fell
in November.
Other vegetable oils broadly fell, with China’s
markets on the lookout for any monetary tightening from the world’s
largest consumer of commodities.
US soyoil for December
delivery fell 1.2 per cent and the most active September 2011 soyoil
contract on China’s Dalian Commodity Exchange dropped 1.5 per cent.
Source : Business Times
