JAKARTA: Malaysian palm oil rebounded on Thursday after plunging to a near 20-month low in the previous session, buoyed by expectations for solid exports data and a weaker ringgit.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 3.63% to 3,343 ringgit ($721.56) per tonne by the end of the afternoon trade, having hit its lowest level since early February 2021 on Wednesday.
The contract broke a five-session losing streak during which it fell about 17%.
“Today is a correction day on the back of slightly supportive external market, weak ringgit and potentially better export data tomorrow,” a Kuala Lumpur-based palm oil trader said. A weaker ringgit makes palm oil cheaper for buyers holding the U.S. currency.
For the Sept. 1-25 period, exports rose between 18.6% and 20.9% from a month ago, cargo surveyors said. They will release exports data of Malaysian palm oil products for the entire month on Friday.
Dalian’s most-active soyoil contract rose 1.02%, while its palm oil contract slid 0.73%. Soyoil prices on the Chicago Board of Trade gained 0.5%.
Palm hits lowest in over 1-1/2 years as recession fears dent demand
In Brazil, soybean processors have temporarily halted units as crushing margins turned negative, reflecting weak domestic demand for biodiesel and high vegetable oil inventories, analysts said on Wednesday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The Malaysian ringgit slipped to a record low on Thursday, as strong U.S. dollar continued to weigh on most Asian currencies.
Palm oil was expected to bounce into a range of 3,360-3,427 ringgit, as it found a support at 3,243 ringgit per tonne, Reuters technical analyst Wang Tao said.
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