KUALA LUMPUR: Malaysian palm oil futures reversed early losses on Tuesday to scale to their highest closing in a month, as traders assessed slow exports against forecasts of a steep drop in supply ahead of key data.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 42 ringgit, or 1.12%, to 3,804 ringgit ($857.72) a tonne, extending a four-session winning streak.
Palm earlier fell as much as 2.45%.
“Market is pricing in a possible dip in end-April stocks and the weather vagaries that comes along with the emergence of El Niño,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
The Malaysian Palm Oil Board (MPOB) is scheduled to release data for April supply and demand on Wednesday, with surveys indicating slowing exports amid a steep drop in inventories and production.
Many are bracing for bullish sentiment, leading to the short covering seen this week, Paramalingam said.
In related oils, Dalian’s most-active soyoil contract fell 1.2%, while its palm oil contract lost 0.1%. Soyoil prices on the Chicago Board of Trade were up 0.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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