Malaysian palm oil futures rose slightly on Thursday as industry data showing declining production lent support. The January benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange had gained 0.1 percent to 2,333 ringgit ($535.09) a tonne by the end of the trading day.
"Besides the weakening ringgit, production in the first 10 days of November from SPPOMA was lower by 30 percent," said a trader based in Kuala Lumpur, referring to data from the Southern Peninsula Palm Oil Millers' Association compared with a month earlier. "The reduction in production put a bottom on prices, but I don't think this can sustain."
Palm was also supported by a weaker ringgit, making the vegetable oil cheaper for holders of foreign currencies. The ringgit traded weaker against the dollar on Thursday before closing flat in the evening. Traded volume stood at 35,674 lots of 25 tonnes each, slightly above the average 35,000 lots usually traded in a day. Palm oil may break a support at 2,319 ringgit per tonne, and fall more towards the next support at 2,232 ringgit, as indicated by its wave pattern and a Fibonacci retracement analysis, said Reuters market analyst for commodities and energy technicals Wang Tao. In other vegetable oil markets, the US December soyoil contract rose 0.3 percent, while the January soybean oil contract on the Dalian Commodity Exchange dropped 0.2 percent.
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