SINGAPORE: Malaysian palm oil futures rebounded on Tuesday on bargain-hunting a day after a radical Cyprus bailout proposal had prompted declines, although gains were capped as uncertainty remained ahead of a vote on the plan.
Cyprus was set to reject a divisive tax on bank deposits in a vote on Tuesday, pushing the island closer to a debt default and banking collapse. The proposal announced over the weekend triggered declines in the global commodities and financial markets on Monday.
Palm oil traders were also looking ahead to Malaysia’s March 1-20 export data on Wednesday for better indication of export demand after nearly flat growth in shipments for the first half of the month.
“Market players are hoping for higher exports to help ease stocks further,” said a trader with a foreign commodities brokerage in Malaysia. The country’s palm inventory level fell to 2.44 million tonnes in February from January’s 2.58 million tonnes on seasonally slower production.
By market close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had gained 1.3 per cent to RM2,417 per tonne. Prices traded in a range between RM2,397 to RM2,426 ringgit.
Total traded volume stood at 31,142 lots of 25 tonnes each, higher than the usual 25,000 lots.
Technical analysis shows Malaysian palm oil looks neutral in a range of RM2,383 to RM2,460 per tonne, and an escape will point a future direction, said Reuters market analyst Wang Tao.
Palm oil futures also drew some support from stronger soybean and soybean oil prices, after the oilseed edged higher on supply concerns from South America.
Palm oil tracks soybean oil prices closely as they are typically used as substitutes for one another.– Reuters
Source: Business Times