In The News - 02/12/2005
Malaysian palm oil closed up 0.7 percent after technical buying in late trade propped up a market down from the start of the week till early Friday.
But dealers doubted the market's momentum would carry through into the new week, saying fundamentals were not supportive.
"People have bought on a herd mentality after seeing someone else buy," said a trader. "I don't think you'd call that sound fundamentals."
The third-month crude palm oil contract on Bursa Malaysia Derivatives, February <KPOG6>, ended up 10 ringgit at 1,397 ringgit ($369.72) a tonne.
Its high for the day was 1,400 ringgit -- its famous support level for two months before this week's depressing prices.
The outlook for palm oil had turned progressively worse in recent weeks, with industry experts predicting that physical stocks of the commodity had reached 1.6 million tonnes -- their highest level ever -- at end-November due to poor exports.
The Malaysian Palm Oil Board -- the government agency overseeing the industry -- will issue on Dec. 12 official stock numbers, as well as exports and production data, for November.
The market began Friday's trade with the same factors that had plagued it from Monday. But it rebounded in the last hour or so, after touching a low of 1,382 ringgit.
Aside from the benchmark February, other traded months settled up 6 to 10 ringgit <0#KPO:>.
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