Palm Futures Jump on Short-Covering

Crude palm oil futures jumped 3.4 per cent yesterday on short-covering after the market went below its 200-day moving average the previous day.

The market surged towards the close, lifted by a cargo surveyor reporting a slight recovery in exports and top industry analyst Dorab Mistry forecasting that India’s palm imports would hit a record 8.5 million tonnes this year.

Benchmark December contract on the Bursa Malaysia Derivative Exchange settled up RM71 to RM2,186, halting two straight days of declines, and moving above the 200-day moving average of RM2,141.

Volumes climbed to 12,190 lots at 25 tonnes each from the usual 10,000 lots.

“The maket was sold down heavily in the past two days and investors have rushed back in because of talk of good exports and now Dorab Mistry is due to talk in India over the weekend,” said a trader with a foreign commodities brokerage.

Palm oil fell to more than a week’s low of RM2,089 the previous day, going under its 200-day moving average, which stood at RM2,138 a tonne.

Exports appear to be rebounding. Cargo surveyor Societe Generale de Surveillance said yesterday that Malaysian palm oil product exports for Sept. 1-25 rose 3.9 per cent to 1,042,281 tonnes from the same period a month ago.

Some traders expect big buyers like China and India to resume buying while Middle Eastern countries are likely to restock after the Muslim festival. Source : Business Times

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