Malaysian palm oil futures made their biggest single-day climb in over a week after sinking to a three-week low earlier on Wednesday, as weak demand generally kept prices under pressure. At Wednesday's close, the February benchmark palm oil contract on the Bursa Malaysia Derivatives exchange was up 1.09 percent at 2,317 ringgit ($528.03) per tonne, its biggest climb in percentage terms since November 9. Earlier it fell to 2,274 ringgit, its lowest since October 27.
"The market is still holding up though there is some pressure on prices. It is depressed as demand is not coming in," said a trader based in Kuala Lumpur. Despite the latest cargo surveyor export data showing 2-4 percent gains for the first 15 days of November compared with a month before, the trader said fundamental factors for the market were still not strong. "I don't think that data is going to help, (it rose) maybe because there was a backlog of shipments. Stocks, production and demand still don't look good," he said.
Malaysia's palm oil stocks rose to a near 15-year high at the end of October following a surprise rise in output by the world's second-largest producer, dampening benchmark prices for palm. Indonesia's output, however, is seen dropping slightly in October from the previous month, according to a Reuters survey, due to the effects of choking haze. Traded volume stood at 45,811 lots of 25 tonnes each, well above the roughly 35,000 lots usually traded daily.
Palm oil is expected to drop to 2,233 ringgit per tonne, as it has pierced below a support at 2,291 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. In competing vegetable oil markets, the US December soyoil contract gained 0.8 percent while the January soybean oil contract on the Dalian Commodity Exchange gained 0.15 percent.
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