Malaysian palm oil futures ended 2% higher on Thursday, tracking a rebound in crude oil and gains in rival soyabean oil, with bargain buying after palm fell to near 9-month lows further boosting prices.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange settled 44 ringgit higher, or up 2.1% to 2,119 ringgit ($486.11) per tonne, the highest intraday rise since April 7.
"Better export demand from cash market buying due to lower prices and a rebound in equities supported higher futures," said Sathia Varqa, owner of Singapore-based Palm Oil Analytics.
Chinese palm import margins at ports have improved since palm prices have fallen $78 since March 31, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
The Malaysian Palm Oil Association (MPOA) estimated palm oil output for April 1-20 to jump 25.9%, according to traders on Wednesday. "Albeit the higher production number reported by MPOA, traders are more keen to buy at current levels, with most technical indicators showing an almost 'oversold' situation," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd. Dalian's most-active soyaoil contract gained 2.6%, while its palm oil contract was up 0.9%. Soyaoil prices on the Chicago Board of Trade also rose 2.3%.
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