Malaysian palm oil futures rose 2.1 percent on Wednesday, recouping most of the losses from a day earlier on concerns over tight supplies, traders said. The benchmark July contract rose 55 ringgit to 2,680 ringgit per tonne ($758.99). Overall volume was nearly triple the usual amount, at 28,609 lots of 25 tonnes each.
"As long as the stock is low then I don't think the market can be bearish. We can have profit-taking for one or two days but it should bounce back quickly," said a trader at a Kuala Lumpur-based brokerage. Hamburg-based oilseeds analyst Oil World echoed the market's expectation as it forecast on Tuesday that concern about low stocks is likely to keep palm oil futures firm, continuing a recovery after a sell-off last week that was largely caused by global flu fears.
Fears over falling palm stocks in the world's number 2 producer and lower production of rival soybean in Argentina, world's third-largest exporter, sent the palm price to a nine-month high early this week. Traders said for the market to rise beyond recent highs, it will need a fresh boost from external factors, such as adverse weather conditions affecting US soybean planting.
INDONESIA PALM TRADES In Indonesia, the world's top producer of palm oil, the Jakarta-based state marketing centre did not sell any of 5,500 tonnes of palm oil offered in auction due to low bids.
Producers in Medan, which is home to Belawan port, Indonesia's main palm oil export port, did not hold a palm oil tender. Meanwhile, refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 8,800 rupiah per kg, down from 8,900 rupiah per kg on Tuesday. In the Malaysian physical market, palm oil for May delivery was sold between 2,810-2,830 ringgit per tonne in the southern and central region, up from 2,770-2,820 ringgit per tonne on Tuesday in both regions.