Today Online (29/09/2020) JAKARTA, Sept 29 (Reuters) - Malaysian palm oil futures reversed from early gains to close lower on Tuesday as an upcoming week-long holiday in China dampened demand prospects and a faster U.S. soy harvest put pressure on the rival oil.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed down 1.7% at 2,774 ringgit ($667.63) a tonne, having earlier risen to 2,847 ringgit.
Traders in China were unloading their positions ahead of the Golden Week holiday from Oct. 1-8.
"The Dalian Commodity Exchange is going on holiday soon which means no export demand from China for one week," a Kuala Lumpur-based palm trader said.
Meanwhile, U.S. soybean harvest was 20% complete as of Sunday, the U.S. Department of Agriculture said in a weekly crop progress report on Monday, ahead of the five-year average of 15% and the average estimate in a Reuters analyst poll of 18%.
The harvest was weighing on prices of soyoil, the trader said.
Soyoil futures on the CBOT were down 1.2%, while Dalian's soyoil contract for January delivery fell 0.3%.
Palm oil prices are affected by related oil as they compete for a share in vegetable oil market.
Earlier in the session, palm oil was supported by concerns over supply disruption as Malaysia on Thursday imposed strict movement restrictions in four districts in Sabah after the state saw more than 1,000 COVID-19 infections in September.
Sabah contributes around 25% of the crude palm oil produced in Malaysia, the world's second-largest exporter of the oil. REUTERS
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