Malaysian palm oil futures edged up on Wednesday, breaking a three-day losing streak as traders look to square their positions ahead of the holidays. Benchmark palm oil futures for March delivery rose 0.65 percent on the Bursa Malaysia Derivatives Exchange to 3,113 ringgit ($695.33) a tonne by the midday break.
Traded volumes stood at 32,451 lots of 25 tonnes each. A trader based in Kuala Lumpur said the market was covering its position in anticipation of the upcoming festive long weekend. "There is some covering interest due to the coming holidays; people not wanting to sell more and booking a square position instead," the trader said.
Earlier in the day, traders saw the contract tracking improved sentiment for rival oils. Palm prices are influenced by other vegetable oils as they compete for a share of the global edible oils market. "The market is not reacting to the fundamentals overall - stocks are still not enough and demand is not forthcoming. The levels at which palm is traded currently are not justified. It should typically be lower in December," another trader said.
The May contract for Dalian soyabean oil was down 0.34 percent, while the May palm olein contract on Dalian slipped 0.51 percent. In other related vegetable oils, the January soyabean oil contract on the CBOT was 0.17 percent higher. Palm fell on Tuesday for the third consecutive session, dropping 1.56 percent on weak soyaoil and poor exports data.
In the previous week futures rose to a 4-1/2 year high, supported by a weak ringgit and favourable government data showing declining output and lower inventory levels.
A weaker ringgit makes palm oil cheaper for holders of foreign currencies.
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