Malaysian palm oil futures recovered from a one-week low hit earlier on Thursday as traders forecast slowing output amid some short-covering. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.5 percent at 2,005 ringgit ($481.74) a tonne at the close.
It earlier dropped to 1,979 ringgit, its lowest since Nov. 28, tracking weakness in other related edible oils and crude. Trading volumes stood at 49,351 lots of 25 tonnes each at the end of the trading day. "The market is supported by the production factor," said a Singapore based trader, explaining that output is expected to ease in December from the previous month.
Official data for November is scheduled for release on Dec. 10 from the Malaysian Palm Oil Board. Another trader added that the market was also up on some short covering. A Reuters poll on Wednesday showed that Malaysia's palm oil stocks at end-November are likely to touch the 3-million-tonne mark, their highest in recent years, as the drop in exports outpaced lean production.
November production is seen falling 2.1 percent to 1.92 million tonnes, while exports are forecast to drop 10.6 percent to 1.41 million tonnes. In other related oils, the Chicago December soybean oil contract was down 0.3 percent, while the January soybean oil contract on the Dalian Commodity Exchange fell 0.4 percent. Palm oil is impacted by movements of other edible oils, as they compete for a share in the global vegetable oil market.
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