Malaysian palm oil futures rebounded on Tuesday, helped by an increase in soyaoil prices, after falling to their lowest in almost eight weeks in the previous session. The benchmark palm oil contract for the December delivery on the Bursa Malaysia Derivatives Exchange rose 1.6% to 2,168 ringgit ($517.05) per tonne, its biggest single day gain in two weeks. The benchmark recovered the 1.6% decline it made over the previous two sessions.
"Palm continues to track soya, while (the) market is following closely on production data," a palm trader in Kuala Lumpur said. US soyaoil futures on the US Chicago Board of Trade rose 0.5% on Tuesday, following a 0.8% gain in the previous session. Palm oil prices are affected by movements in other vegetable oils, as they compete for a share in the global edible oils market. Malaysia's September palm output data is expected next week, and the market is estimating a rise in output which may send stocks higher as exports stayed sluggish, the trader said.
Exports of Malaysian palm oil products for September fell nearly 20% from a month earlier, cargo surveyor Intertek Testing Services said on Monday. "The sooner the production slows down, the easier for palm prices to appreciate," the trader said, adding that the palm benchmark contract is expected to trade between 2,100 and 2,200 ringgit as the market awaits production data.
Palm oil may stabilize around a support at 2,113 ringgit per tonne, and bounce towards a resistance at 2,168 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. The Dalian commodity exchange is closed for the rest of this week for holidays.
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