SINGAPORE: Malaysian palm oil futures rebounded on Tuesday on bargain hunting after the edible oil fell to nearly a three-month low the previous day, while expectations that firm exports could help ease stocks further also provided support. Palm oil fell to its lowest since Jan. 11 on Monday after the U.S. Department of Agriculture reported a larger-than-expected soybean stockpile, burnishing prospects that soybean oil supply could erode demand for palm oil. But traders took comfort from rising palm oil exports that could help trim inventories in Malaysia, the world’s second largest palm producer, where stocks stood at 2.44 million tonnes at the end of February. “Today we see a technical bounce from an oversold market,” said a dealer with a foreign commodities brokerage in Malaysia.
“Slightly better export figures may improve expectation of lower stocks, but we need to watch out because the export rise could be due to more working days in March, compared to February.” By the market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 1.9 percent to RM2,382 (US$772) per tonne. Prices fell as low as RM2,335 on Monday, the lowest in almost three months. Total traded volume stood at 34,406 lots of 25 tonnes each, a tad lower than the average 35,000 lots seen so far this year. Technical analysis indicated palm oil is expected to hover above a support at 2,339 ringgit for one or two trading sessions, Reuters market analyst Wang Tao said. Malaysia’s exports of palm oil products inched up 2.8 percent in March to 1.36 million tonnes from a month ago, cargo surveyor Intertek Testing Services said on Monday, marking the first monthly rise in four months. Another cargo surveyor, Societe Generale de Surveillance, reported a steeper 5.5 percent increase to 1.37 million tonnes.
Firm exports raised hopes that palm oil stocks may have eased at a faster pace in March. Official data on palm oil stocks, output and exports from the Malaysian Palm Oil Board, the industry regulator, will be released on April 10. In other markets, Brent crude edged above US$111 a barrel on Tuesday as prospects of stronger appetite in Asia countered concerns over the pace of economic recovery in top consumer the United States. In vegetable oil markets, U.S. soyoil for May delivery gained 0.4 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange also inched up 0.2 percent. – Reuters
Source : The Star