Malaysian palm oil futures ended higher on Thursday, recovering from the morning session and snapping four straight days of losses as weak prices attracted buying interest for the tropical oil. Weak overseas oil and soy markets had dragged the benchmark contract down, which led to prices hitting their lowest in nearly three weeks on Wednesday, although robust export demand helped put a floor under prices. "At this level demand is returning," said a trader with a local commodities brokerage in Malaysia. "Fresh buyers are entering the market after the recent sell off."
By Thursday's close, the benchmark August contract on the Bursa Malaysia Derivatives exchange had edged up 0.8 percent to 2,158 ringgit ($599.28) a tonne. Total traded volume stood at 42,418 lots of 25 tonnes each, above the average 35,000 lots. "With production tapering circa 5 to 8 percent, demand leap-frogging 50 percent and the weaker ringgit...we anticipate prices to recover again," the Malaysian-based trader added.
Export data released by cargo surveyors on Wednesday showed an up to 53 percent surge in shipments of Malaysian palm oil between May 1-20, from the same period a month ago. A turnaround in competing crude and soyoil markets also provided support. The US July soyoil contract was up 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange gained 0.4 percent.