SINGAPORE: Malaysian crude palm oil futures edged up on Thursday as exports staged a tentative recovery and a market correction took place after prices hit a near 10-month low earlier this week.
Futures dropped on Tuesday to the lowest since last October, as higher output and slower exports initially raised concerns over swelling stocks in Malaysia.
But prices pulled back after the latest export data on Wednesday showed signs of recovery for the first half of August, signalling stocks could come under pressure after hitting a 5-month high in July.
"It looks like there have been some profit-taking from traders who shorted a few days back. After all the market has come down by almost 300 ringgit," said a Singapore-based trader with a foreign commodities house.
By the midday break, the benchmark November palm oil futures on the Bursa Malaysia Derivatives Exchange inched up 0.2 percent to 2,906 ringgit ($916) per tonne. The contract hit a low of 2,820 ringgit on Tuesday, a level not seen since Oct. 18 last year.
Total traded volumes stood at 14,845 lots of 25 tonnes each, slightly higher than the usual 12,500 lots.
On the technicals front, palm oil faces a resistance at 2,906 ringgit per tonne, and will retrace to 2,870 ringgit, said Reuters market analyst Wang Tao.
Traders avoided taking risky positions ahead of a long weekend asMalaysian markets will be closed on Monday and Tuesday Muslim festival of Eid ul-Fitri.
Malaysia's palm oil exports rose 7.6 percent from a month ago to for the Aug. 1-15 period thanks to higher shipments to China and India, according to cargo surveyor Intertek Testing Services.
Another cargo surveyor, Societe Generale de Surveillance, reported a 10.3 percent rise for the same period.
The market is also watching out for a possible return of El Nino by end of the year as the dry weather pattern could damage oil palm crops for top producers Indonesia and Malaysia.
Brent crude held steady on Thursday, staying near a three-month high above $116 on concerns about disruptions to supply from the Middle East and a steeper-than-expected drawdown in oil stocks in the world's top consumer, the United States.
In other vegetable oil markets, the most active US soyoil contract for December delivery lost 0.3 percent and the most active January 2013 soyoil contract on the Dalian Commodity Exchange was up by 0.1 percent.
Comments
Comments are closed for this article.