MUMBAI: Malaysian palm oil futures rose for the first time in three days on Thursday, tracking gains in rival soyoil and a likely drop in the production in December, although weak exports capped the upside.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 21 ringgit, or 0.57%, to close at 3,691 ringgit ($790.36). It fell 1.7% on Wednesday.
“Palm oil production in December is expected to be lower, but the market is closely monitoring export numbers, which currently indicate a drop for the month,” said Mitesh Saiya, trading manager at Mumbai-based firm Kantilal Laxmichand & Co.
Exports of Malaysian palm oil products for Dec. 1-Dec. 10 fell 4.1% to 7.4% from the Nov. 1-Nov. 10 period, cargo surveyors said.
Malaysia’s palm oil stocks at the end of November fell for the first time in seven months as production slumped more than exports, data from industry regulator showed on Tuesday.
Palm posts biggest daily drop in 7 weeks on slowing exports
The increase in soyoil prices also provided support to palm oil, Saiya said.
Soyoil futures on the Chicago Board of Trade were up 0.6% after losing 2.5% in the previous two sessions.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Argentina, a leading soyoil exporter, allowed the peso currency to plunge over 50% to 801 per dollar on Wednesday.
Oil prices rose on Thursday, extending the previous session’s gains, on a bigger-than-expected weekly withdrawal from U.S. crude storage and a weaker dollar after the U.S. central bank signalled lower borrowing costs for 2024.
Palm oil may revisit its Dec. 7 low of 3,641 ringgit per metric ton as the bounce from this level has been deeply reversed, Reuters’ technical analyst Wang Tao said.
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