most of the day’s 2.2 per cent loss as investors moved to cover their
short positions in an oversold market, traders said.
“The idea
that the market was technically terribly oversold brought back good
short-covering interest,” said a trader with a Kuala Lumpur-based
brokerage.
The tropical oil hit an eight-week low in early
trade, extending a 5.3 per cent fall from last week as the market was
dragged down by weaker crude oil and rival soy prices.
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Derivatives Exchange settled down RM5, or 0.2 per cent, at RM2,490,
after tumbling as low as RM2,439, the lowest intraday level since Nov.
24.
Overall volume shot up to 21,638 lots of 25 tonnes each compared to the usual 10,000 lots.
Oil fell for the sixth consecutive session to below US$78 (US$1.00 =
RM3.34) a barrel yesterday, as renewed concerns over energy demand and
the outlook for economic growth prompted investors to sell positions.
“I think the market is undergoing a corrective rebound.
Rumours that Jan.1-15 (palm oil) production was down double-digits added to the strength,” another trader said.
Stronger exports and a dip in products are key to bringing down palm
oil stock in the world’s number 2 grower from a 13-month high in
December. Palm oil prices normally correlate inversely with palm oil
stocks.
Traders are also cautiously awaiting the midweek
release of Jan. 1-20 palm oil exports estimates by cargo surveyors for
fresh clues on fundamental strength.
In the physical market,
palm oil for January delivery was traded at RM2,440-RM2,470 per tonne
in the southern and central regions.
Source : Business Times
