Malaysian palm oil futures ended three losing sessions to gain in late trade on declining output. They fell to their lowest in two weeks earlier in the day on slow export demand and as they tracked weaker-performing rival oils. Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.9 percent to 3,098 ringgit ($699) a tonne at the end of the trading day. Earlier in the session, they hit a low of 3,051 ringgit, their lowest since December 1.
Traded volumes stood at 35,883 lots of 25 tonnes each, below the 2015 average of 44,600 lots traded in a day. Traders said palm reversed course to gain in the afternoon due to lower production data for the first 10 days of December from a local millers' association. The market was down earlier before the release of official data from the Malaysian Palm Oil Board (MPOB), said a futures trader from Kuala Lumpur.
Official data from the MPOB is scheduled for release on December 14. "(The market is) squaring positions ahead of the MPOB data tomorrow and lower exports," said the trader, referring to data from cargo surveyor Intertek Testing Services. Data showed that Malaysia's palm oil exports fell in the first 10 days of December, down 8.3 percent from a month earlier.
Exports are also likely to have dropped in November, according to a Reuters poll, which saw a 9.8 percent decline from October. Output is seen dropping 2.8 percent, while end-stocks are forecast to climb 7.4 percent to 1.69 million tonnes. In related edible oils, the January soyabean oil contract on the CBOT was down 0.1 percent, while the May soyabean oil contract on the Dalian Commodity Exchange fell 0.6 percent. The May contract of palm olein on the Dalian Commodity Exchange dropped 0.7 percent. Palm oil prices track the movements of related vegetable oils, as they compete for a share in the global edible oils market.
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