Malaysian palm oil futures touched a three-day high on Thursday on expectations that production gains will taper off at the end of the year. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,027 ringgit ($484.58) a tonne at the close, a second straight day of gains after three days of losses.
During the session, it had climbed as much as 1.2 percent to a three-day high of 2,038 ringgit. For November, prices are down 5.8 percent so far after hitting a three-year low of 1,940 ringgit on Tuesday due to weak demand and after the world's top exporter Indonesia said it would temporarily remove a levy on palm oil.
Trading volumes stood at 47,197 lots of 25 tonnes each at the close of trade. "It looks like the market is reacting towards expectations of lower production gains for November," said a Kuala Lumpur based futures trader. Malaysian palm oil production rose 6 percent in October to 1.96 million tonnes on the previous month. Output in November is expected to rise further but by a smaller amount.
Palm was also supported by overnight gains in soyaoil on the US Chicago Board of Trade. Palm is affected by movements of other edible oils as they all compete in vegetable oil market. The Chicago December soyabean oil contract rose more than 2 percent on Wednesday, in line with soyabean gains as traders covered short positions as they waited to see if US-China talks at the G20 summit would defuse a trade row that has choked US soyabean exports to China.
Chicago soyaoil prices were last down 0.4 percent. In other related edible oils, the January soyabean oil contract on the Dalian Commodity Exchange was up 0.1 percent, while the January palm oil contract gained 1.6 percent.
Comments
Comments are closed.