Malaysian palm oil futures edged higher on Thursday evening to snap four sessions of declines on a technical correction and support from a strong demand outlook. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was 0.3 percent higher at 2,243 ringgit ($541.40) a tonne at the close of trade, after hitting a two-week low in the previous session.
Trading volumes stood at 27,168 lots of 25 tonnes each at the end of the trading day. "Palm is seeing a correction after yesterday's slump failed to extend today," said a Kuala Lumpur-based trader. "External markets are weaker today, so palm's upside will be limited," she said, referring to soyaoil on the US Chicago Board of Trade.
Improving demand could have also supported the market, said another futures trader, adding that Malaysian palm oil shipments may see a double-digit rise in September on festive demand. Exports are also likely to be supported by the zero percent crude palm oil tax rate for September, down from 4.5 percent last month.
Malaysian palm oil exports in the first 10 days of September surged from a month earlier, data from cargo surveyors showed. Societe Generale de Surveillance, Intertek Testing Services and AmSpec Agri Malaysia reported gains of 44 percent, 63 percent and 69.5 percent respectively for the period. Palm oil may stabilise around support at 2,227 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
In other related oils, the Chicago September soyabean oil contract declined 0.2 percent, while the January soyabean oil contract on China's Dalian Commodity Exchange fell 1.3 percent. Meanwhile, the Dalian January palm oil contract was 0.7 percent lower. Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.