Palm hits 1-week high on technical buying

KUALA LUMPUR: Malaysian palm oil futures hit one-week highs on Wednesday, supported by technical buying and expectations of a slight rise in end-September inventory levels.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent at 2,709 ringgit ($641.26) a tonne at the midday break, heading for a second straight gain after four consecutive losing sessions.

Earlier in the session, it rose to its strongest level since Sept. 28 at 2,711 ringgit.

Palm, which had shed 1.5 percent last week in its second straight weekly decline, has gained 0.5 percent so far this week.

Traded volumes stood at 17,641 lots of 25 tonnes each at noon on Wednesday.

"The market is seeing some technical buying as profit-taking had happened earlier," said a futures trader from Kuala Lumpur.

"Stocks are also not expected to increase by much, and there is some buying that we see from India and Africa. People did not buy too much last month when prices were high, so now they are buying to maintain stock levels," he said.

Palm oil shipments from Malaysia, the world's second largest producer of the tropical oil, rose about 10 percent for the full month of September, compared with the previous month, showed data from cargo surveyors.

In other related edible oils, the December soybean oil contract on the Chicago Board of Trade was up 0.1 percent. China's Dalian Commodity Exchange is closed for a national public holiday.

Palm oil prices are affected by the performance of related edible oils including soy, as they compete for a share of the global vegetable oils market.

Palm oil may retest a support at 2,651 ringgit per tonne, according to Reuters market analyst for commodities and energy technicals Wang Tao.