Palm oil rises

Malaysian palm oil futures rose on Wednesday, fuelled by optimism that robust export demand amid easing palm production in September would help curb a rise in stockpiles in the world's second-largest grower. The Malaysian Palm Oil Association, a group of planters, estimated that crude palm oil production fell 12.2 percent between September 1 and September 20, signalling that the pace of output growth may have lost steam after surging 22 percent to 2.03 million tonnes in August.
On the other hand, demand for Malaysian crude palm oil has jumped this month, and was 21-26 percent higher in the first 20 days of September compared with the same period a month earlier. Cargo surveyors will release data for exports between September 1 and September 25 on Thursday. "Strong demand at the back of sluggish production will keep the momentum going," said Lingam Supramaniam, director at Malaysia-based commodities firm Pelindung Bestari.
The benchmark December contract on the Bursa Malaysia Derivatives Exchange ended up 1.4 percent at 2,155 ringgit ($665) per tonne, with prices rising as high as 2,157 ringgit in late intraday trading. Total traded volume stood at 41,137 lots of 25 tonnes each, above the usual 35,000.
Technicals had indicated that palm oil's intraday target was 2,060 ringgit, with the first resistance at 2,150 ringgit and the second at 2,215 ringgit, said Reuters market analyst Wang Tao. Another trader in Kuala Lumpur said palm prices could be lifted by round of technical correction. "Now the technical play has come into the picture," said the trader, who is with a foreign commodities brokerage in Kuala Lumpur.
"Prices are now in upward correction mode, so whatever bearish fundamentals, that have already been priced in, has no impact on prices." In vegetable oil markets commonly tracked by palm, the US soyoil contract for December was up 0.9 percent in early Asian trade, while the most active January soybean oil contract on the Dalian Commodities Exchange gained 0.6 percent. In Argentina, farmers are expected to plant soy on about 20 million hectares in the 2014/15 crop year, unchanged from the record high set in the 2013/14 season, Agriculture Secretary Gabriel Delgado told Reuters on Tuesday.