SINGAPORE: Malaysian palm oil futures edged down in thin trade on Thursday, hovering near a 1-month high as dealers awaited clues about market direction ahead of a holiday weekend in parts of Asia.
Prices were on track to post a near 3 percent gain for the week as a result of encouraging export data that showed firm demand, and concerns over floods in key growing regions that could curb output.
Still, traders were cautious on Thursday, as after a two-day meeting of the US Federal Reserve there was no announcement of further stimulus that could boost global economic growth and commodity demand.
"At the moment there's no cue that crude palm oil can take on the macroeconomic front. On the vegetable oils front, rising exports is something that is encouraging but that's not going to set the price trend," said Ker Chung Yang, investment analyst with Phillip Futures in Singapore.
"For the upcoming two weeks, the market will still be directionless. We have US elections and MPOB (Malaysian Palm Oil Board) stocks data in early November, from now until then there's still some time and there's no main theme that palm oil can take its cue from," he added.
By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives Exchange edged down 0.2 percent to 2,573 ringgit ($844) per tonne. Earlier, prices earlier rose as high as 2,585 ringgit, a level last seen on Sept. 28.
Total traded volumes stood at 5,859 lots of 25 tonnes each, fewer than half of the usual 12,500 lots as investors chose to stay on the sidelines ahead of the long weekend.
Malaysian financial markets will be closed on Friday for the Eid al-Adha holiday.
Demand remained resilient as cargo surveyor Intertek Testing Services reported on Thursday an 11 percent jump in Malaysia's palm exports for the first 25 days of October compared with a month ago.
Another cargo surveyor, Societe Generale de Surveillance, will issue exports data later on Thursday. Traders expect a similar uptrend.
Palm oil prices have recovered from the near 3-year low of 2,255 ringgit they touched earlier this month, but Malaysia's Affin Investment Bank warned in a research note that high stocks, demand risks and vulnerable sentiment could limit further price rises.
In a bullish sign for palm oil, Brent futures rose above $108 on Thursday as positive economic data from the world's top oil consumer, the United States, revived hopes of a recovery in demand growth, although a worsening outlook for Europe capped gains.
In other vegetable oil markets, US soyoil for December delivery edged down 0.4 percent in early Asian trade. The most-active May 2013 soybean oil contract on the Dalian Commodity Exchange was down 0.1 percent by the midday break.
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