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Morning markets: holiday time turns palm volatile

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Traders had warned of a potentially roller-coaster day in Kuala Lumpur palm oil prices, as seasonal holidays denied investors their usual stabilising pegs.

So it turned out, with palm oil jumping 1.6% to match its five-month high on Thursday – a holiday in the influential US markets - before plunging back into negative territory.

On the bullish side, more wet weather is hitting South East Asia, with Meteorlogix forecasting at four inches or more for some areas of Malaysia on Friday, and giving an outlook of "rain, showers and thundershowers Friday through Sunday",

Indonesia, the biggest palm oil producing nation, was in for "tropical showers and thundershowers" on Thursday, delivering potentially three inches of rain or more, followed by "additional showers and thundershowers Friday through Sunday.

And some investors are taking an upbeat view of Wednesday's positive export data too.

Palm jumped to 2,521 ringgit a tonne in morning deals.

Profit-taking

However, profit-taking and moves to reduce risk were always likely to be a threat on a day ahead of a long weekend in Malaysia, with the market closed on Friday for Hari Raya Haji.

And so it turned out, with palm slipping to 2,467 ringgit a tonne by 07:30 GMT, down 15 ringgit on the day.

Oil, a key indicator for the vegetable oil, was also showing caution amid trade thinned by America's Thanksgiving holiday, which means New York will be for closed floor dealing.

In electronic trading, oil slipped 1.2% to $77.03 a barrel for New York light crude, January delivery.

By Agrimoney.com

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