Malaysian palm oil futures rose for the first time in five sessions on Wednesday, supported by rising export demand and strength in soyoil on the Chicago Board of Trade.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 0.1 percent to 2,770 ringgit a tonne at the end of the trading day.
The rise followed four straight declines as palm tracked weakness in related edible oils and was also pulled lower by bearish price outlooks at an industry conference last week.
Traded volumes stood at 64,331 lots of 25 tonnes each on Wednesday evening.
"The market is higher on soyoil closing (higher) last night," said one Kuala Lumpur-based futures trader, referring to CBOT soyoil.
He added that strong export data from cargo surveyors was also supporting the market, but the gains are likely to be short-lived because expectations of stronger exports are already priced in.
"The market needs to break above 2,800 ringgit to continue its bullish rally. Otherwise it will come lower to 2,740-2,750 ringgit," the trader said.
Palm oil shipments from Malaysia, the world's second-largest producer behind Indonesia, in the first 20 days of September rose 25.4 percent from the same period the previous month, data from Intertek Testing Services showed on Wednesday.
Another cargo surveyor, Societe Generale de Surveillance reported on Wednesday evening a 26.8 percent rise in shipments for the same period.
Demand for the tropical oil is seen rising throughout September as key buyers China and India stock up ahead of the mid-autumn festival and Diwali respectively, which lead to higher usage of palm oil.
Palm oil prices are also affected by movements in other edible oils including soy.
The October soybean oil contract on the Chicago Board of Trade posted its first gain in a week on Tuesday but was last down 0.1 percent on Wednesday.
The January soybean oil contract on the Dalian Commodity Exchange dipped by 0.3 percent, while the January palm olein contract fell 0.6 percent. - Reuters
Source:-Thestar.com.my
