Palm oil climbs on expectation of better exports

31 Jan, 2019

Malaysian palm oil futures rose on Wednesday, recovering from their largest fall in two weeks in the previous session, as expectations of better export data lifted market sentiment. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange climbed 0.35 percent to 2,302 ringgit ($560.51) a tonne.
Trading volumes stood at 32,647 lots of 25 tonnes each. The futures contract rose to its highest in nearly seven months, supported by related edible oil prices on Monday, and charted a sixth session of gains in seven. It then fell 1.4 percent on Tuesday, recording the largest decline in two weeks.
"The market is expecting strong exports for January," said a futures trader from Kuala Lumpur, pointing to talk of favourable export data among traders. "The market will likely continue to range here in anticipation of the long holiday," another Kuala Lumpur-based trader said. Malaysian markets will be closed on Feb. 5-6 for the Lunar New Year celebrations.
There is also better demand in palm oil contracts for February and March delivery, supported by higher pricing in Indonesia, the trader added. "Stocks in Indonesia seem to have been decreasing since December," he said. Palm oil may slide further into a range of 2,256-2,274 ringgit per tonne, following its failure to break a resistance at 2,322 ringgit, Wang Tao, a Reuters market analyst for commodities and energy technicals said.
In other related oils, the Chicago March soyabean oil contract was up 0.27 percent. The May soyabean oil contract on the Dalian Commodity Exchange was down 0.45 percent, while the Dalian May palm oil contract fell 0.5 percent. Palm oil prices are affected by movements in soyaoil rates, as they compete for a share in the global vegetable oil market.

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