KUALA LUMPUR, Nov 29: Malaysian crude palm oil rebounded due to late short covering on Thursday but with players anxious about export figures for the whole of November, traders said.
At the close, the benchmark third-month February futures was up seven ringgit at 1,103 ringgit ($290.26) a ton after trading as high as 1,115 ringgit. It had touched a low of 1,086 ringgit. Volume was heavy at 2,328 lots.
“The market had firmed on news India is non-commital about any immediate plans to revise the base prices for palm olein. It broke the resistance of 1,100, but there was no follow through when price went up further to 1,115 ringgit,” said one trader.
“Technical selling happened after the market fell back to 1,100 again. But last minute covering pushed up prices,” he added.
Traders said the market was waiting for the export figures for the whole of November due on Friday, adding that the amount needed to be good in order to move the market which had anticipated this month’s exports to reach at least one million tons.
Some plantation analysts said November palm oil could hover below one million tons.
The market was abuzz with talk November output may not be as low as influential private forecaster Ivan Wong had predicted. Wong said this month’s output would reach 1.04 million tons, down nine per cent from October.
One analyst said he expected November output to fall by 10 per cent. Another said heavy rains would cut output.
“Definitely, November’s output will be lower than October’s. It will be below one million tons. People will find it difficult to harvest the fruit during the monsoon season,” said the analyst.
“November is crucial because it sets output trend for the coming months. Also next year, trees will be entering a cycle in which they will produce less fruit,” he added.
In the physical sector, the December contract for the southern region was offered at 1,070 ringgit a ton against bids at 1,065. Trade was reported at 1,065 to 1,070.
The December contract for the central region was offered at 1,075 ringgit a ton against bids of 1,065. Deal was reported at 1,070.
The January contract for the southern and central regions saw bid at 1,080 ringgit against offer at 1,090. There was no deal.—Reuters
