Malaysian palm oil climbs on export data

Malaysian palm oil futures rose as much as 3 percent on Monday as monthly cargo surveyor export data and a weak ringgit combined to support prices. The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange ended 2.3 percent higher at the close, at 2,152 ringgit ($505) a tonne. Prices earlier hit a near a two-week low of 2,088 ringgit, before climbing as high as 2,167 ringgit, and have now gained 8 percent so far this month.
Traded volume stood at 53,510 lots of 25 tonnes each, well above the average 35,000 lots usually traded at the end of the session. "The market opened lower and then went all the way back up, most likely on the back of the positive export figure," said a trader with a commodities brokerage in Kuala Lumpur. "The market has seized the opportunity to address last week's selling pressure."
On the data front, exports of Malaysian palm oil products for September 1-20 rose 7.6 percent, cargo surveyor Intertek Testing Services (ITS) said. A weak Malaysian ringgit, which makes palm cheaper for offshore buyers, also provided a fillip for palm, traders said. The ringgit has lost almost 18 percent so far this year, and is emerging Asia's worst performing currency.
On Friday, palm oil touched its lowest in more than a week after India raised its import tax on crude vegetable oils. "We expect this news to have relatively muted impact on CPO prices as we are of the view that the higher import duties for edible oils in India will not reduce demand for palm oil in India significantly," CIMB said in a research note. "As such, we are sticking to our average CPO price forecast of 2,230 ringgit per tonne for 2015."
Palm oil still targets 2,068 ringgit per tonne, as indicated by a Fibonacci retracement analysis, said Reuters market analyst for commodities and energy technicals Wang Tao. On the downside, Indonesia's crude palm oil output in August likely hit its highest in at least a year, a Reuters survey showed. In competing vegetable oil markets, the most active January soybean oil contract on the Dalian Commodity Exchange slipped 0.2 percent, while the US December soyoil contract added 1 percent in late Asian trading. Crude oil prices rose by more than 1 percent after data showed US drilling slowed and a report said $1.5 trillion worth of planned production was uneconomic at current prices. Palm oil often takes price direction from crude oil, as vegetable oils are increasingly used in making renewable fuels.