KUALA LUMPUR, Sept 13: Malaysian crude palm oil futures closed up more than half a per cent, recouping losses from the previous day as players moved to cover shorts after a pick-up in physical sales of oil.
Some dealers saw further gains, saying the makret appeared to have touched a floor on whatever bearish news was expected for the week.
Others were cautious, saying weak prices of soyaoil after the second largest US soya crop forecast for this year might pressure palm oil in the near term.
The benchmark third-month crude palm oil contract on Bursa Malaysia Derivatives, November, ended up 10 ringgit at 1,387 ringgit ($368) a ton after Monday’s seven-ringgit loss on bearish crop and export figures.
At midday it was up just five ringgit.
We bought about 30,000 tons of olein in the physical markets of both Malaysia and Indonesia, and people began covering in futures after seeing that, said a trader at a large brokerage.
The broader futures market closed down one ringgit to up 11.
Volume totalled 4,777 lots of 25 tons each, little changed from Monday’s 4,813 lots. The market can reach 6,000 lots or more on an active day.
Dealers said earlier on Tuesday that the fundamentals for palm oil were not too strong after a bearish supply-demand report for August and flat export numbers for Sept. 1 to 10.
The official Malaysian Palm Oil Board said output of palm oil grew 5.6 per cent in August from July.
The market had been expecting growth of below 4 per cent.
MPOB said exports were up 8.31 per cent, in line with market forecasts, but stocks jumped 4.72 per cent, against expectations of about 3.7 per cent.
Independent cargo surveyor Societe Generale de Surveillance had indicated in a separate report that exports of palm oil for Sept. 1 to 10 were almost unchanged from Aug. 1 to 10.
In physical dealings of crude palm oil, September saw offers closing at 1,385 ringgit a ton and bids at 1,380 in the southern region of Malaysia. Offers for the central zone closed at 1,380 ringgit while bids wrapped at 1,370.
Trades for the south were at 1,375-1,380 ringgit while the central region reported business at 1,365-1,372.50. —Reuters
