Malaysian palm oil futures were up on Monday, rising from a near six-month low and snapping two sessions of losses as they gained strength from rival oilseed soya and a weaker production outlook.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.6 percent at 2,662 ringgit ($601.45) a tonne at the end of the day. It hit an intraday low of 2,643 ringgit, its weakest since October 14.
Traded volumes stood at 32,700 lots of 25 tonnes each on Monday evening. "The market is up tracking soyabean performance ... And also on sentiment over production expectation," said a trader in Kuala Lumpur, referring to Malaysian palm oil output forecasts. March output of the tropical oil in the world's second largest producer could rise in line with the seasonal trend, but production growth is expected to be small, according to traders.
Production in February declined 1.4 percent month-on-month, according to data from the Malaysian Palm Oil Board, the industry regulator. March data is scheduled for release on April 10. Palm oil is expected to test a support at 2,638 ringgit per tonne, a break below which could cause a further loss to 2,609 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao. Palm oil is also impacted by the price movements of related edible oils, including soyaoil, as they compete for a share in the global vegetable oils market. Soyabean oil on the Chicago Board of Trade was up 0.7 percent. China's Dalian Commodity Exchange is closed on Monday and Tuesday for a national holiday.
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