Malaysian crude palm oil futures rose 2.1 percent on Monday to an 11-week closing high supported by strong exports in the first fifteen days of November and a jump in crude oil prices, traders said. The rise in exports, coupled with a disruption to production as a result of heavy rains, could soften any further increase in Malaysia's palm oil stocks from a 10-month peak in October.
Cargo surveyors' estimates showed on Monday that palm oil exports in the first 15 days of November rose as much as 21.3 percent to 717,936 tonnes. "That (export) number gives some support to the market, but I think it is not really good enough to lower ending stocks," said a trader at a Kuala Lumpur-based commodities brokerage, referring to palm stocks at the end of November.
He also said that due to heavy rains, palm production in the first fifteen days could be slightly lower from the same period in October but any improvement in weather conditions could still bring up the whole month's output marginally. The benchmark February contract on Bursa Malaysia Derivatives Exchange rose 48 ringgit to 2,336 ringgit ($694.20) per tonne, a level not seen since August 28.
Overall volume shot up to 19,487 lots of 25 tonnes each from the usual 10,000 lots. Oil prices rose a dollar to above $77 a barrel on Monday, regaining most of last week's 1.4 percent losses as the dollar drifted lower. Palm tends to track energy prices because of its use in biodiesel, which competes with fossil-based fuels.
Other vegetable oil markets were also higher supported by the weak dollar. Most-active US soybean for December delivery was up 0.57 percent while December soybean oil in China's Dalian Commodity Exchange rose 1.39 percent. In the Malaysian physical market, palm oil for November delivery was traded at 2,260-2,270 ringgit per tonne in the southern and central regions.
INDONESIAN TRADES; In Indonesia, the state marketing centre, based in Jakarta, failed to sell any of 13,000 tonnes palm oil offered in an auction due to low bids. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold a palm oil tender. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 6,650-6,700 rupiah ($0.712) per kg, against 6,600 rupiah per kg on Friday.