Palm futures flat as players cover positions
MALAYSIAN palm futures ended unchanged yesterday as some buyers took some positions after a key industry analyst predicted that prices of the vegetable oil could reach RM3,000 if the crude oil market strengthened.
The benchmark August contract on Bursa Malaysia’s Derivatives Exchange ended flat at RM2,505 per tonne (after going as low as RM2,440). Overall volume climbed to 12,897 lots of 25 tonnes each from 10,000 lots.
“I am surprised James Fry was that bullish. Players are just covering positions just in case the market starts to jump again on speculative trade,” said a trader with a local commodities brokerage.
yesterday, although he declined to give a timeframe.
Oil slipped on Thursday as global markets dropped on government debt worries but held firmly above US$63 a barrel as OPEC met in Vienna to discuss the group’s oil output and what price the world could afford to pay.
Crude oil markets give some direction to palm oil prices as rival vegetable oils like soyoil and rapeseed oil are increasingly diverted into the biodiesel sector in Europe and the United States, leaving palm oil to satisfy much of food demand.
US soyoil markets edged higher with the July delivery up 0.01 per cent in Asian hours. The most-active September soyoil contract on Dalian’s Commodity Exchange fell 0.6 per cent.
In the Malaysian physical market, palm oil for May and June shipment traded at RM2,560 and RM2,570 in the southern region.