JAKARTA: Malaysian palm oil futures reversed losses on Thursday to rise on supply concern and strength in Chicago soyoil, but weak demand capped gains.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange climbed 40 ringgit, or 0.91%, to 4,453 ringgit ($1,055.46) a metric ton at closing, after falling for two straight sessions.
“The much anticipated rise in third-quarter production is not there,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Malaysia’s palm oil stocks surged to a 20-month high in end-August due to increased production and a slight drop in exports, data from the Malaysian Palm Oil Board showed. However, palm oil output in July and August was 1.87% lower compared with the same period last year.
Exports of Malaysian palm oil products in the September 1-10 period fell between 1.2% and 8.4% from the same period a month ago, cargo surveyor Intertek Testing Services and inspection firm AmSpec Agri Malaysia said on Wednesday.
The market is still seeking demand, that is the biggest headwind,“ Supramaniam said.
Dalian’s most-active soyoil contract gained 0.17%, while its palm oil contract was down 0.11%. Soyoil prices on the Chicago Board of Trade (CBOT) rose 0.55%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil may retest support at 4,381 ringgit per metric ton, a break below which could open the way towards 4,343 ringgit.
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