SINGAPORE: Malaysian palm oil futures closed at their highest level in ten days on Thursday, as falling inventories and bargain hunting outweighed softer exports data.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange rose 31 ringgit, or 0.83%, to 3,754 ringgit ($847.40) a metric ton, ending at its highest since Aug. 5. Exports of Malaysian palm oil products for Aug. 1-15 fell 22.3% from a month earlier, independent inspection company AmSpec Agri Malaysia said on Thursday.
Data from cargo surveyor Intertek Testing Services showed exports declined 20.2% during the same period. Malaysia’s palm oil stocks in July shrank 5.35% from the previous month to hit a four-month low, the Malaysian Palm Oil Board said earlier this week.
The reduction in end-month stocks was notably larger than expected, Phillip Nova commodity strategist Darren Lim said in a note. Palm oil and soyoil imports in the world’s top importer India jumped to near one-year highs in July, as refiners increased purchases for upcoming festivals amid a correction in prices, the Solvent Extractors’ Association of India (SEA) said on Wednesday.
Palm oil with stagnant production should find good support around 3,600 ringgit ($812.64) despite a narrow spread with soy oil, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.
Chicago soyoil is heavily oversold and the risk of a market reversal is “quite imminent”, although global macro weaknesses, higher US production and lower Chinese demand will keep a cap on a sharp reversal, he said.
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