Malaysian crude palm oil futures ended up on Thursday, with talk of big impending purchases by India and steady palm oil sales in October pulling the market back from early lows.
The benchmark third-month January palm oil contract on the Malaysia Derivatives Exchange closed 12 ringgit, or 0.8 percent, up at 1,431 ringgit ($376.58) a tonne.
It could test the psychologically-important 1,450 ringgit barrier next week if export estimates of palm oil for October - due from cargo surveyors - turned out to be as good as numbers from September, dealer The market opened down on Thursday, tracking losses in rival US soyoil. By midday, the January contract had hit a low of 1,405 ringgit. But it rose in the last hour of trade on comments by industry officials that India may require another 50,000-300,000 tonnes of oils between October and December - on top of the 900,000 it imported in the last quarter of 2003.
Malaysian exporters also told Reuters that India could end up taking between 30 and 50 percent more palm oil in the next two months, compared with its monthly need of around 100,000 tonnes.
"People were excited by all these and the market suddenly jumped," said a trader. Another reason for the turnaround was talk that export estimates for September could be around 1.22 million tonnes - little changed from the 1.33 million tonnes estimated for September by leading cargo surveyor Societe Generale de Surveillance.
In the interim period, dealers said the market seemed well supported at 1,400 ringgit a tonne.
"It looks like we're holding around here until next week's export data for October, unless there's too much pressure from the CBOT before that," said a trader.
Soyoil futures on the CBOT, or Chicago Board of Trade, fell 0.35-0.58 cent a lb on Wednesday as news of fresh soybean harvests and deliveries to the market prompted selling. Soyoil and palm oil compete for the same export markets and their prices often move in step.
CBOT soyoil prices have been erratic for more than two weeks since US agriculture authorities predicted a record soybean output of 3.1 billion bushels for 2004.
Prices of physical crude palm oil also rose, with dealers citing demand for spot shipments as one reason.
Physical oil for the combined months of October and November saw buyers/sellers at 1,465/1,475 ringgit a tonne in Malaysia's southern and central regions, against Tuesday's close of 1,460/1,470.
Trades for prompt shipment closed at 1,465-1,470 ringgit a tonne in both regions.
PALM OIL FUTURES:
October-November (south): 1475.
Open/High/Low: 1411/1431/1405.
Previous close: 1470.
PALM OIL PHYSICALS:
January (3rd month): 1431.
Previous settlement: 1419.
FUTURES:
Benchmark January up 12 ringgit at 1,431 ringgit ($376.58) a tonne, reversing early losses, on news that India could be buying palm oil in big way before the year ends. Talk of steady palm oil exports in October also helped.
PHYSICALS:
Also ended higher, with offers for the combined October/November contract up 5 ringgit to 1,475 ringgit a tonne.
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