Malaysian crude palm oil futures closed with pared losses on Wednesday on short covering after falling to 16-month lows due to worries over weak exports and losses in rival US soyaoil. Bursar Malaysia Derivatives' benchmark third-month crude palm oil contract, March, ended down 1 ringgit at 1,309 ringgit ($344.47) a tonne after touching 1,299 ringgit the lowest since September 10, 2003. Other traded contracts were down 1 to 3 ringgit.
Overall volume was a moderate 5,604 lots of 25 tonnes, up from Tuesday's 4,041 lots.
"There was some short covering after prices managed to bounce back above 1,300 ringgit. But we expect the market to remain under pressure due to weak exports," said a trader.
Dealers said slower demand, particularly from top buyer China, remained a major concern.
Leading cargo tracker Society Generate de Surveillance (SGS) on Monday reported a 16 percent drop in Malaysia's export of oil palm products for January 1-10 from a month.
China took just 26,775 tonnes during the period, compared with 75,635 tonnes in the first 10 days of December and 109,383 tonnes in November 1-10, SGS said.
Soyaoil futures on the Chicago Board of Trade closed mostly lower on Tuesday, with front months January and March both down 0.30 cent per lb.
Soyaoil and palm oil compete for similar export destinations and their prices often move in step.
In physical trade of crude palm oil on Wednesday, January and February contracts saw bids at 1,315 ringgit a tonne and offers at 1,320 ringgit in Malaysia's southern and central regions, compared with Tuesday's final bids/offers at 1,320/1,325 ringgit.
Trades for January were reported at 1,320-1,315 ringgit in both regions.
PALM OIL FUTURES:
January (south): 1320.
Open/High/Low: 1306/1314/1299.
Previous closes: 1325.
PALM OIL PHYSICALS: March (3rd month): 1309.
Previous settlement: 1310.
FUTURES:
Benchmark March down 1 ringgit to 1,309 ringgit ($344.47) a tonne.
PHYSICALS:
January offers down 5 ringgit a tonne.
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