KUALA LUMPUR: Malaysian palm oil futures rose to a more-than-one-month high on Wednesday, reversing intraday losses caused by a bout of technical correction, as hopes of stronger exports provided support.
Shipments of Malaysian palm products jumped 32-34 percent in
the first half of September compared to a month ago, cargo
surveyor data showed, with demand for crude palm oil more than
doubling after the No. 2 grower scrapped export duties for
September and October.
"Today it may correct lower a bit before pulling up to 2,180
ringgit and 2,250 ringgit in the coming days or weeks," said a
trader with a foreign commodities brokerage in Malaysia.
The benchmark December contract on the Bursa
Malaysia Derivatives Exchange rose to 2,150 ringgit in late
trade, the highest level since Aug. 14, before ending up 1.0
percent at 2,140 ringgit ($665) per tonne.
Total traded volume stood at 71,020 lots of 25 tonnes,
double the usual 35,000 lots.
Technicals showed that palm oil may end its current rebound
around a resistance at 2,142 ringgit per tonne before starting a
correction towards 2,055 ringgit, said Reuters market analyst
Wang Tao.
Despite the stronger exports, gains in palm were still
limited, as prospects of surging supplies of rival oilseeds
threaten to overwhelm global demand and water down interest for
the tropical oil.
Leading vegetable oil analyst Dorab Mistry on Monday
forecast palm prices to drop to 1,900 ringgit over the
next few weeks, and warned that prices need to stay low to
remain competitive over substitute edible oils such as soy and
sunflower.
"Investors are digesting the external bearishness with
domestic bullishness," said a second trader with a
Malaysia-based commodities brokerage.
The trader added that weaker palm prices could attract
bargain hunters looking for cheap deals.
"Going forward we are seeing some short-term correction
circa 2,080-2,060 ringgit, which will provide a good opportunity
for buyers to buy on dips."
Production of crude palm oil may lose steam in September,
some traders said, after jumping 22 percent in August to 2.03
million tonnes. [ID:nL3N0RA2H7[
A group of millers in southern Malaysia estimate the output
between Sept. 1-15 dropped about 11 percent from a month ago.
In rival vegetable oil markets, the U.S. soyoil contract for
December rose 1.0 percent in late Asian trade, while the
most active January soybean oil contract on the Dalian
Commodities Exchange shed 0.6 percent.
In other markets, Brent crude oil consolidated around $99
per barrel on Wednesday, recovering from a sharp sell-off, on
hopes the Organization of the Petroleum Exporting Countries
(OPEC) would help reduce a global supply glut by cutting output.
Palm, soy and crude oil prices at 1013 GMT
Contract Month Last Change Low High Volume
MY PALM OIL OCT4 2160 +39.00 2110 2160 1029
MY PALM OIL NOV4 2141 +40.00 2093 2141 16508
MY PALM OIL DEC4 2140 +22.00 2104 2150 31050
CHINA PALM OLEIN JAN5 5238 +2.00 5212 5248 438936
CHINA SOYOIL JAN5 6058 -38.00 6028 6076 460888
CBOT SOY OIL DEC4 33.33 +9.40 33.04 33.33 6074
INDIA PALM OIL SEP4 464.10 +9.40 453.50 465.50 774
INDIA SOYOIL SEP4 642.00 +2.90 637.50 642.00 2130
NYMEX CRUDE OCT4 94.91 +0.03 94.43 94.96 20668
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
($1 = 3.216 Malaysian ringgit)
($1 = 6.1401 Chinese yuan)
($1 = 60.96 Indian rupees)- Reuters
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