Trader's Comment: Buying on rumors and selling on facts led palm oil futures to surrender its earlier gains

Buying on rumors and selling on facts led palm oil futures to surrender its earlier gains and ended lower despite good news on stock and export data. Initially traders had started to speculate on bullish end-April palm stock and also betting on strong export figures since early trading. This sent Benchmark July09 to climb steadily through out the morning session and hit intra day high of 2745 before it closed at 2743 by midday. The data released by MPOB just after morning closed showed that end-April palm stock had fallen by 5.37% to 1.29 million tones, which is the lowest level since June 2007. However, the opening of second session had seen more of profit taking activities to emerge as market now began to sell on news after their earlier buying on rumors. Benchmark July09 slid to intra day low of 2651 and settled RM25 lower at 2660. The strong export data released by both private cargo surveyors failed to boost buying activities. Furthermore, the weak external market had provided more excuse for players to book profit. Both eCBOT soy oil and Dalian palm fell more than 1% lower during Asian time trading.