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Palm edges lower but costlier rival oils contain slide

Palm's losses was however limited by a rise in rival oil prices.

Reuters|
Nov 12, 2019, 11.56 AM IST
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Reuters
Palm-oil-1---reuters
"The drop was perhaps due to technical selling since we are unable to hit a new high today and yesterday was overbought," said a Kuala Lumpur based trader.
Malaysian palm oil futures fell on Tuesday, after two days of gains, although higher prices of rival edible oils limited losses.

The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange was down 0.1 per cent at 2,625 ringgit ($634.36) by midday.

"The drop was perhaps due to technical selling since we are unable to hit a new high today and yesterday was overbought," said a Kuala Lumpur based trader.

The contract rose to a near two-year high in the previous session at 2,657 ringgit a tonne on a Malaysian Palm Oil Board announcement that stockpiles and production in October unexpectedly dropped.

Stockpiles stood at 2.3 million tonnes at the end of October, down 4.1 per cent from the previous month, while output was down 2.5 per cent at 1.8 million tonnes from the previous month.

This compared with prediction of a 2 per cent rise in Malaysian palm oil output in October to 1.88 million tonnes, according to a Reuters poll.

Palm's losses was however limited by a rise in rival oil prices.

Dalian's January palm oil contract last traded 1.7 per cent higher, while the soyoil contract rose 0.7 per cent.

Elsewhere, the U.S. soyoil futures on the Chicago Board of Trade BOc2 were up 0.04 per cent.

Palm oil is affected by price movements in related oils as they compete for share in the global vegetable oils market.

Palm oil FCPOc3 may retrace into a range of 2,543-2,573 ringgit per tonne, as it faces a strong resistance at 2,666 ringgit, Reuters analyst Wang Tao said.
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