Crude Palm Oil Futures Ends Down On Selling Pressure, Soyoil

Crude palm oil futures on Malaysia's derivatives exchange ended mostly lower in rangebound trade Wednesday, with investors taking cues from other commodities and weaker equity markets in the region, liquidating positions to take profit.

The benchmark February contract on the Bursa Malaysia Derivatives ended MYR35 lower at MYR2,526 a metric ton after moving between MYR2,502 and MYR2,542/ton.

"The market will remain in consolidation mode as it is likely Dec. 1-10 exports are only up marginally, while the market is also concerned about a build-up in palm inventories," said a senior trading executive from Kuala Lumpur.

Traders said long positions were liquidated and fresh short positions were set up as there aren't going to be any major positive leads in the next trading session.

Prices will likely move in a narrow band in Thursday's morning session, and could stay rangebound in the afternoon unless bearish cues emerge in production data due from the state-linked Malaysian Palm Oil Board, most traders said.

Surprises in Dec. 1-10 export data from cargo surveyors could also move prices.

Lower soyoil prices added to the downward pressure on palm oil.

January soyoil at the Chicago Board of Trade was trading 39 cents lower at 40.10 cents a pound in electronic trading toward the end of trade on the BMD.

"December export figures as a whole aren't going to be exciting, as major palm oil buyers such as China have already replenished their stocks. The sharp rise in palm oil prices will also deter major purchases by overseas buyers," said a Malaysia-based exporter.

Nevertheless, tightness in global soyoil supply will help underpin soyoil and palm oil prices, analysts said.

"Fears of a strengthening El Nino and logistical limitations in restocking (vegetable oils) will buoy prices," said an analyst from Singapore-based DBS Vickers.