Palm snaps three-day losing streak on November supply crunch

KUALA LUMPUR: Malaysian palm oil futures rose 1pc on Thursday, snapping a three-day losing streak on lower November supply, but slow December exports capped gains.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange ended up 47 ringgit, or 1.4pc, at 3,405 ringgit ($838.67) a tonne, after rising nearly 2pc earlier in the session.

Malaysia's palm oil end-stocks in November fell to a more than three-year low as production slumped and exports fell more than expected, the Malaysian Palm Oil Board (MPOB) data showed. Production shrank 13.51pc to 1.49 million tonnes compared to October.

Exports from the world's second largest producer during Dec. 1 to 10 fell 6pc compared with the same period in November, as shipments to China dropped by more than half, cargo surveyors said.

MPOB numbers are more or less within market expectations, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

"Prices are expected to trade within a tight range ahead of the next major report, which is from the USDA (U.S. Department of Agriculture) scheduled for release tonight," he said.

The USDA world supply and demand report to be issued later in the day is expected to show a drop in South American crops and a crunch in corn and soybean supplies.

Dalian's most-active soyoil contract fell 0.03pc, while its palm oil contract gained 0.1pc. Soyoil prices on the Chicago Board of Trade were up 1pc.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.