By Mei Mei Chu
KUALA LUMPUR, Nov 15 (Reuters) – Malaysian palm oil futures reversed early gains on Monday, tracking losses in rival soyoil, but hopes of higher exports during Nov. 1-15 period limited losses.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange slipped 44 ringgit, or 0.89%, to 4,891 ringgit ($1,176.57) a tonne by the midday break.
A narrowing price spread between crude palm oil and soyoil is making palm unfavourable and hurting demand, a Kuala Lumpur-based trader said.
“Crude palm oil in Malaysia need to adjust lower to continue attracting buyers,” the trader said.
Cargo surveyors are scheduled to release data on Malaysia’s exports during Nov. 1-15 later in the day, with market talk pegging a jump in shipments.
Dalian’s most-active soyoil contract DBYcv1 fell 0.04%, while its palm oil contract DCPcv1 gained 0.02%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Crude oil prices skidded, under pressure from expectations of higher supplies and weakening demand. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. O/R
Palm oil may retest a resistance at 4,998 ringgit per tonne, a break above could lead to a gain to 5,048-5,101 ringgit range, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.1570 ringgit)
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(Reporting by Mei Mei Chu; Editing by Rashmi Aich and Uttaresh.V)
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