Malaysian palm oil futures climb

Malaysian crude palm oil futures rose 3 percent on Thursday, rebounding from two straight days of declines after gains in the soyoil market, traders said.
Palm oil prices, up 10 percent this year, have been fuelled by a supply squeeze due to last year's monsoon rains and robust demand in the food sector as China locks in supplies for the Lunar New Year in February.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange rose as much as 113 ringgit to 3,376 ringgit ($1,032) a tonne. The contract settled at 3,360 ringgit. Palm oil futures hit a record of 3,420 ringgit on Monday after a rally in commodity markets.
"Financial players are back in the market to take up new positions as soyoil appears to have halted its losses," said a senior trader with a foreign commodities brokerage in the Malaysian capital. "Speculative desire is the mood." Other traded months rose between 88 and 117 ringgit. Overall volume doubled to 20,798 lots of 25 tonnes each, from about 10,000 lots that usually change hands on a routine day.
Chicago Board of Trade March soyoil fell 0.58 cent to 52.73 cents per lb, with back months down 0.32 to 0.62 cent in a downward correction after the recent run-up to record highs.
But in Asian trade, the contract rebounded on short-covering, dealers said. "Slight gains in the US crude markets have given some support to soyoil and palm. In fact, traders in these commodity markets are rushing to take up positions," an analyst with a local brokerage said. Oil steadied above $90 on Thursday, taking a breather from losses of more than $3 in the past two days as a hefty build in US crude stocks compounded concerns of a slowing US economy.
Crude oil markets often influence the price movements of vegetable oils such as soybean oil and palm oil due to their possible use as a feedstock for biodiesel. Prices of palm oil, used in products ranging from chocolates and body lotion to biofuel, have scorched exports for the first half of January.
Cargo surveyor Intertek Testing Services reported a decline of 46 percent to 394,395 tonnes in January 1-15, while Societe Generale de Surveillance, said exports during the period fell 38.3 percent to 461,598 tonnes.
Refined palm oil futures in China's Dalian Commodity Exchange also rose on Thursday, with the most-active May contract gaining 1.29 percent to 10,244 yuan ($1,413) a tonne by 1026 GMT. In Malaysia's physical market, crude palm oil for January shipment in the southern region was quoted at 3,350/3,380 ringgit a tonne. Trades were done between 3,350 and 3,365 ringgit.