Malaysian palm oil futures rose to their highest in one-and-a-half months on Tuesday and recorded their biggest monthly rise in more than five years, as strong export demand and gains in Chinese soyoil markets lifted sentiment. Despite the swift recovery in palm prices this month, underlying concerns about swelling oilseed supplies capped the rally and pulled palm to post its biggest quarterly drop in two years.
Exports of Malaysian palm oil products for September rose 16.3 percent from a month earlier to 1,497,828 tonnes, cargo surveyor Intertek Testing Services said, thanks to robust demand from India, China and Europe. Another cargo surveyor Societe Generale de Surveillance showed that exports for the same period rose 16.5 percent. Both surveyors reported bigger crude palm oil shipments compared to August.
The recovery in export demand would help prevent another jump in inventories in the No 2 producer, traders said. “The market is holding very well on the back of exports and the Dalian which is up a bit,” said a trader with a foreign commodities brokerage in Kuala Lumpur. “It’s in a trading range between 2,170 and 2,250 ringgit.” The benchmark December contract on the Bursa Malaysia Derivatives Exchange rose to 2,222 ringgit in late trade, the highest since August 11, before settling at 2,216 ringgit ($676) per tonne at Tuesday’s close, a 1.3 percent gain.
Palm prices have gained nearly 15 percent this month to notch their biggest monthly gain since April 2009, after plunging to a more-than-five-year low of 1,914 ringgit in early September. The tropical oil, however, has lost 8.7 percent in the third quarter of this year to post its biggest quarterly loss since 2012. Total traded volume stood at 43,225 lots of 25 tonnes each, above the usual 35,000 lots.
Technicals indicate palm oil may climb to a resistance at 2,224 ringgit, a break above which will lead to a further gain to 2,262 ringgit, according to market analyst Wang Tao. He added that the first support is at 2,163 ringgit and the second at 2,125 ringgit. In vegetable oil markets, the US soyoil contract for December fell 0.5 percent in late Asian trade. The most active January soybean oil contract on the Dalian Commodities Exchange gained 1.1 percent. Market players will also be keeping a close watch on Malaysia’s palm oil inventories in September, after stocks jumped 22 percent to 2.05 million tonnes at end-August.
Source : Reuters, 2014
