Malaysian crude palm oil futures rose 3.8 percent on Tuesday, their biggest daily rise in percentage terms in five weeks, ending a five-day losing streak as investors covered their short positions, traders said. "When the price crossed 2,200 ringgit, it must have triggered buying by some people" on expectations of a rally, said a trader at a Kuala Lumpur-based brokerage.
The benchmark November contract on the Bursa Malaysia Derivative Exchange settled up 80 ringgit at 2,210 ringgit ($631.42) a tonne. It was the biggest daily gain in percentage terms since August 3. Overall volume was 12,942 lots of 25 tonnes each. Traders said a rally in rival soybean prices and crude oil also provided some support to the rebound.
The oil price rose above $69 a barrel on Tuesday ahead of an Opec meeting, which analysts said would see more target compliance rhetoric but no change in output limits. Palm lost 10.1 percent in the previous five sessions, pressured by cargo surveyors' estimates of a drop in August palm exports to about 1.3 million tonnes, from 1.4 million in July, and news of improved rainfall in palm-growing areas that raised the prospect of higher output.
Malaysian Palm Oil Board (MPOB) is due to announce August palm oil exports, production and closing stocks on Thursday. A Reuters poll showed on Tuesday that Malaysian palm oil stocks in August climbed 7.3 percent to a six-month high as exports returned to normal after sharply rising on festival-related demand a month earlier.
INDONESIA PALM TRADES: In Indonesia, the state marketing centre based in Jakarta, sold 9,000 tonnes of palm oil at a top price of 6,983 rupiah ($0.699) per kg, against 6,866 rupiah on Monday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, sold palm oil at 6,900-7,000 per kg. They did not hold a palm oil tender a day ago. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,900-7,050 rupiah per kg against 7,100 rupiah a day ago.