Malaysian crude palm futures ended higher on Wednesday as a gain in soyaoil and crude oil markets supported prices. But fears that global demand would be dented by red hot palm oil prices, which struck a record high of 3,013 ringgit per tonne last week, weighed on the market.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange settled up 10 ringgit at 2,934 ringgit ($877) a tonne. "Palm oil's sensitivity to crude and soyaoil prices still holds sway over most factors but if demand is going to dry up because of the high prices, this will be the best reason to take profit," said a trader with a local brokerage.
Other traded months edged higher while the spot month was unchanged. Overall trade fell to stand at 8,287 lots of 25 tonnes each from 12,000 lots that change hands on a routine day. Cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS) will unveil export data for the first half of November on Thursday.
High prices of the commodity, which are still up 47 percent this year, have already led to reports of dismal export figures. SGS said on Monday that exports of palm products for November 1-10 fell 11.4 percent to 429,643 tonnes from 484,670 tonnes shipped between October 1 and 10.
Oil edged up on Wednesday, rebounding from two sessions of losses as prices backed away from record highs, on expectations data would show US oil inventories fell for a fourth-straight week. US light crude for December delivery rose 70 cents to $91.87 a barrel, after dropping more than 3.5 percent on Tuesday.
Soyabean futures on the Chicago Board of Trade rose more than 1 percent in Asia trade on Wednesday, extending gains overnight on strong demand from China, the world's top importer of the oilseed.
Soyaoil futures also jumped with the December contract gaining nearly 0.7 percent at 44.53 cents per pound. Palm oil and soyaoil usually track movements in the crude oil market because of growing demand for both commodities as feedstock for biodiesel.
Malaysia's crude palm oil output fell 1.39 percent to 1,579,809 tonnes in October from a revised 1,602,065 tonnes a month, official crop agency Malaysian Palm Oil Board said on Monday. In Malaysia's physical market, crude palm oil for November shipment in the southern region was quoted at 2,920/2,930 ringgit a tonne. Trades were done between 2,930 and 2,950 ringgit.
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