FCPO Strategy UPDATE : BUY AUG17 ONCE BREAK UP 2562, hit and run only.
(May 18): Malaysian benchmark palm oil futures reversed gains to hit a two-week low on Wednesday, as speculation over higher output and technical selling dragged the market lower.
The new palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange fell 1.5% to 2,561 ringgit (US$633) per tonne at the evening close. It earlier dipped to 2,541 ringgit, its lowest since May 4.
Traded volumes stood at 68,295 lots of 25 tonnes each at the end of the trading day, more than the 2015 daily average of 44,600.
"We're seeing a technical sell off, which only happens once the 2,600 ringgit range is broken and profit taking comes in," said a Kuala Lumpur-based trader.
"There could be speculation of better output on the back of massive rains in recent weeks, but rain is subjective to location."
Improving output would weigh down on palm's benchmark prices, which gained nearly 10% in the first quarter of the year, on declining production from a crop-damaging El Nino.
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