Palm oil rebounds

Malaysian palm oil futures rebounded on Thursday from a near one-month low hit in the previous session on falling output, with many palm investors looking for fresh direction from an industry gathering this week on the resort island of Bali. The February benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange rose to touch 2,343 ringgit per tonne, its highest level since November 16. The contract hit a near one-month low of 2,260 ringgit on Wednesday.
Palm ended 1.9 percent higher by the close at 2,342 ringgit ($555) per tonne. Prices are down about 0.8 percent for the month so far. "Prices have bottomed out and will pose a rally into December," said a Kuala Lumpur-based trader. "Output is plunging and will worsen in the first quarter. We anticipate prices to hit fresh highs moving into December," the trader said.
Traded volumes stood at 33,259 lots of 25 tonnes each, less than the 35,000 average lots usually traded by the end of session. Late on Wednesday, cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for November 1-25 remains unchanged at about 1.2 million tonnes. Palm traders say weak demand could hamper large gains in palm prices, although the onset of the monsoon season in key Southeast Asian producing countries could crimp supplies.
Many palm investors are attending the annual Indonesian Palm Oil Conference and 2016 Price Outlook being held in Bali this week, and expect to get hints on market and price direction from the industry officials and analysts gathered there. Bulging stockpiles, weak prices and new biodiesel mandates are likely to be among the topics discussed by delegates. Away from conference, Malaysia should work towards a common palm oil export duty plan with Indonesia to support its refining sector, an industry body in the No 2 producer said.
Palm oil prices may break resistance at 2,348 ringgit per tonne and revisit its November 9 high of 2,384 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. Palm oil prices to average at around 2,250 ringgit per tonne for the year ending June 2016, Malaysia's Sime Darby, the world's top planter by land size, said. In other vegetable oils, the most active soybean oil contract on the Dalian exchange added 1.4 percent.