Malaysian palm oil up

Malaysian crude palm oil futures ended 0.8 percent higher on Wednesday, underpinned by gains in crude oil markets but fresh fears of slowing demand and a surge in palm oil reserves kept a lid on prices.
Palm oil prices, nearly 6 percent off an historic high of 3,420 ringgit reached more than two weeks ago, have also been pulled down by jittery global commodity and equity markets amid a looming US recession, traders said.
The benchmark April contract on the Bursa Malaysia Derivatives Exchange finished up 24 ringgit at 3,224 ringgit ($997) per tonne, after rising as high as 3,254 ringgit in trade.
Other traded months rose between 10-35 ringgit. Overall trade stood at 8,957 lots of 25 tonnes each. "Crude oil is providing most of the support but there are some grave concerns about the demand-supply fundamentals," one dealer from a foreign brokerage said.
He added: "Palm oil stockpiles have surged and the market talk is that cargo surveyors will release very bearish exports for the whole of January." Oil climbed to a two-week high above $92 a barrel on Wednesday, as investors anticipate that a second US interest rate cut this week will overshadow news of a build in US crude stockpiles.
Palm oil often tracks moves in the energy markets because the biodiesel industry uses the vegetable oil as feedstock. Much of the vegetable oil's gains this year have been supported by crude oil prices. But red-hot prices of palm oil have dented exports with cargo surveyors Intertek Testing Services and Societe Generale de Surveillance, reporting declines for January 1-25 to be as much as 29 percent.
Both cargo surveyors will unveil estimates for the whole month on Thursday. Malaysia's January palm oil stocks are likely to rise 8.2 percent to 1.82 million tonnes, the highest in at least 25 years as exports fall sharply on record high prices, a Reuters poll showed on Wednesday.
In Malaysia's physical market, crude palm oil for January and February shipments in the southern region was quoted at 3,220/3,230 ringgit a tonne. Trades were unquoted by the end of the trading session.