KUALA LUMPUR: palm oil futures rebounded on Tuesday, up from a five-month low touched in the previous session, tracking a revival in soyoil on the Chicago Board of Trade.
Benchmark palm oil futures for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.5 per cent to 2,707 ringgit ($613.28) a tonne by the end of the day, the first gain in four sessions and the strongest daily rise in a week.
Traded volume stood at 40,713 lots of 25 tonnes each.
“Palm is up due to soybean oil... which is holding up and is supportive for palm,” said a futures trader from Kuala Lumpur. “In the short term I see prices going back up, but output should also be picking up.” Palm oil has been range-bound since late-February with market signals mixed, as demand remains weak and output growth is still uncertain, traders said.
It is in line for a third weekly drop in four, losing 1.7 per cent on a weekly basis last week. Malaysian production in February dropped 1.4pc on month. March data is however expected to show a recovery in line with the seasonal trend, which would pressure benchmark prices of the tropical oil.
Palm oil prices also take direction from related vegetable oils, including soyoil, as they compete for a share in the global vegetable oil market.
Published in Dawn, March 29th, 2017
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