Malaysian palm oil futures gained on Wednesday, snapping three days of losses, with investors buying after prices dropped to a one-month low earlier in the session and on concerns year-end floods in the country could hurt production. "I heard there are worries about floods in the Johor area, and we have also seen some technical buying," said a Singapore-based trader with a global commodities house, referring to the state that accounts for almost 15 percent of Malaysia's total palm production.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange gained 1.1 percent to close at 2,397 ringgit ($786) per tonne. Prices earlier fell to their weakest since October 8 at 2,364 ringgit. Total traded volumes stood at 43,064 lots of 25 tonnes each, much higher than the usual 25,000 lots. Technicals showed palm oil could rebound to 2,423 ringgit, as support held firm at 2,377 ringgit, Reuters market analyst Wang Tao said.
Malaysia's palm oil exports rose 10 percent to a 2012-high at 1.6 million tonnes in October, and the steep discount between palm oil and soybean oil could uncover more demand and help ease swelling stocks. Stock levels in Malaysia, the world's No 2 palm oil producer, were projected to reach a record 2.67 million tonnes in October, a Reuters survey showed on Tuesday. In other vegetable oil markets, US soyoil for December delivery inched up 0.3 percent in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange was almost flat.
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