JAKARTA: Malaysian palm oil rose on Friday, as traders snapped up deals after a two-day selloff and bet on improving fundamentals over the weekend, but gains were limited as some investors waited for clearer direction.
By Friday's close, the benchmark January contract on the Bursa Malaysia Derivatives Exchange was up 1.09 percent at 2,142 ringgit ($654.25) per tonne and was down 1.8 percent on the week.
"The market is holding quite well. Yesterday, palm really dropped so today it retraced back a bit but still continued in a tight range," said a trader with a foreign commodities brokerage in Kuala Lumpur. The contract traded in a range of 2,128 ringgit to 2,145 ringgit.
Malaysian palm oil futures fell to their lowest in more than three weeks on Thursday, dragged by sliding crude prices and worries that bigger supplies of rival edible oils would snatch food and fuel demand away from palm.
Total traded volume on Friday stood at 39,881 lots of 25 tonnes, above the daily traded average of 35,000 lots.
Relatively light trading volume in the morning session showed that traders were waiting for a signal on price, the trader said. "They are waiting for any new development in the market to change direction."
A second trader at a foreign commodities brokerage in Kuala Lumpur said traders were also betting on improvements to fundamentals over the weekend.
Technicals showed palm is expected to test resistance at the 2,150 ringgit per tonne level, a break above which will lead to a further gain to 2,178 ringgit, said Reuters market analyst Wang Tao.
In other markets, Brent crude rose more than a dollar to above $87 a barrel on Friday, bouncing from near four-year lows as investors bought back into a market they said was oversold in the short term.
In other competing vegetable oil markets, the U.S. soyoil contract for December edged down 0.25 percent in early Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange fell 1.12 percent. - Reuters
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