Malaysian palm oil futures rose on Wednesday to bounce of a more than three-month low in the afternoon session as bargain hunters shrugged off market expectations of higher supplies and weak demand. Benchmark palm oil futures for May on the Bursa Malaysia Derivatives Exchange gained 0.9 percent to 2,809 ringgit ($631) a tonne by the end of the session. The contract had earlier fallen to 2,763 ringgit, its weakest level since November 7. Traded volumes stood at 97,813 lots of 25 tonnes each on Wednesday evening.
"The market is up mainly on bargain-buying after the sharp drop yesterday," said a futures trader based in Kuala Lumpur, who had earlier expected prices to drop in the second half of trade as the market still has concerns over rising production. "Perhaps the market selloff has cooled now, with traders squaring off positions after the heavy selldown," he said later in the evening. Palm futures earlier recorder four straight sessions of losses as concerns over rising output weighed on prices and as demand remains weak.
Traders are expecting to see a recovery in output for the full month of February, as the effects of a crop damaging El Nino wear off. Palm oil shipments declined 0.8 percent in the February 1-20 time period from the same period last month, according to data from cargo surveyor Intertek Testing Services. However, data from another cargo surveyor, Societe Generale de Surveillance, showed that exports rose 1.7 percent. In related vegetable oils, soyabean oil on the Chicago Board of Trade rose 0.9 percent, while the soyabean oil contract on the Dalian Commodity Exchange fell 0.5 percent. The May contract for palm olein on China's Dalian Commodity Exchange declined 0.5 percent.
Comments
Comments are closed for this article.