Crude palm oil futures recovered nearly two-thirds of the day’s loss after tumbling to nine-day lows on short-covering, but still finished in the red for a third straight day yesterday, traders said.
An early sell-off was sparked by faltering soya and crude oil prices amid recession fears, while late buying was partly fuelled by hopes that Malaysian palm stocks may continue to fall this month.
“I don’t think there is any sudden change in fundamentals of palm. Outside factors prompted the selling in early session but we saw support below RM1,850 level,” said a trader at brokerage firm. “Stocks are not really a concern. We should see end stocks for February close to 1.7 million tonnes. So it is still going to fall,” the trader said.
Falling Malaysian palm stocks are key in supporting the prices of the tropical oil, which have steadily climbed from the October 28 low of RM1,331. The benchmark May contract fell RM20, or 1.1 per cent, to RM1,875 per tonne, having gone down as low as RM1,842, the level unseen since February 6.
The benchmark contract has failed to hold above the key resistance level of RM2,000 in recent rally amid concerns over prospects for demand. Other traded contracts fell between RM16 and RM34. Overall volume was 13,076 lots of 25 tonnes each. - Reuters
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