Palm oil climbed for a second day, paring the biggest monthly loss since July, as some investors closed bets on further declines ahead of the Chinese Lunar New Year holidays.
The contract for April delivery advanced 0.8 per cent to RM2,563 a metric tonne on the Bursa Malaysia Derivatives, the highest level at close for the most-active futures since January 24. Futures retreated 3.6 per cent this month, the first such drop in four. The exchange will not trade in the afternoon today because of the Lunar holiday.
Stockpiles in Malaysia climbed to the highest level in nine months in December as exports fell, according to the nation’s palm oil board. Inventories may expand further this month as shipments are declining further, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental Singapore Pte.
“There is some short covering taking place ahead of the holidays,” Thiagarajan said, referring to investors reversing bets on further declines. “Rallies won’t be sustained as weaker exports have led to speculation that inventories may grow.”
Shipments from Malaysia fell 9.4 per cent to 1.03 million tonnes in the first 25 days of January from the same period a month earlier, according to Intertek, a surveyor. Exports fell 10.5 per cent to 1.02 million tonnes, said SGS (Malaysia) Sdn Bhd.
The Malaysian markets will be shut for the Lunar holiday tomorrow and will reopen on February 4 after a local holiday on February 3. Markets in China, the world’s second-largest palm oil importer, will be shut from tomorrow through February 6 for the Lunar New Year holidays.
Soybean oil for March delivery was at 37.11 cents a pound on the Chicago Board of Trade from 37.08 cents yesterday, while soybeans fell 0.2 per cent to US$12.6675 a bushel.– Bloomberg
Source : Business Times