Malaysian palm oil futures snapped a seven-day losing streak on Thursday to rebound from their lowest level in more than three-years as gains in rival soyaoil sparked off bargain buying. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed up 0.35 percent at 1,980 Malaysian ringgit ($472.55) a tonne.
It hit its lowest since August 2015 at 1,965 ringgit on Wednesday and had declined about 8.5 percent in the previous seven sessions of falls. Trading volumes stood at 43,917 lots of 25 tonnes each on Thursday. "At lower levels, demand is slowly emerging. The upside in soyaoil giving buyers confidence," said a Kuala Lumpur-based trader.
Palm oil prices are affected by movements of other edible oils as they compete for a share in the global vegetable oil market. The Chicago December soyabean oil contract was up 0.62 percent, while the January soyabean oil contract on the Dalian Commodity Exchange rose 0.22 percent.
Meanwhile, the January palm oil eased 0.05 percent. "The market is testing the current underlying support and players are waiting for fresh demand to drive prices higher," said a Kuala Lumpur-based trader. Exports of Malaysian palm oil products for November 1-15 rose 2 percent from a month earlier to 549,488 tonnes, said independent inspection company AmSpec Agri Malaysia.
Stockpiles at the end of October increased 7.6 percent from the previous month to 2.72 million tonnes, while production rose 6 percent to 1.96 million tonnes, official data from the Malaysian Palm Oil Board showed on Monday.
Inventories are expected to rise further in top producers Indonesia and Malaysia in the coming months, with demand unlikely to jump from key buyers as palm oil solidifies in winter months, dealers said.
India's palm oil imports are unlikely to climb over November to January even as prices for the commodity plumb their lowest in more than three years, reined in by ample local supply of rival oilseeds and as a liquidity crunch hits would-be buyers. A sharp fall in crude oil prices has also weighed on palm prices, said another Kuala Lumpur-based trader.
Palm oil prices are impacted by movements in crude oil, as the edible oil is used as feedstock to make biodiesel. Oil prices stabilised, reversing earlier declines, but market sentiment remained cautious over concerns that a supply glut may emerge amid a gloomy economic outlook. Palm oil may end its recovery around resistance at 1,996 ringgit per tonne, and then retest a support at 1,972 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.
Comments
Comments are closed for this article.