Malaysian palm oil futures firmed on Thursday after a sharp fall in the previous session, with supply worries also providing support, although concerns of weakening demand capped gains.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Derivatives Exchange gained 39 ringgit, or 0.91%, to 4,340 ringgit ($1,024.07) a tonne during early trade. The contract shed 2.4% on Wednesday.
The palm market ignored losses in Dalian and Chicago to trade higher following two days of declines, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
“Bargain buying and dominating sentiments of tight supply ahead of export and production data kept the market in the positive,” he said.
The market is awaiting data on Malaysia’s exports during Aug. 1-20, after cargo surveyor statistics showed shipments during the first two weeks of August declined up to 24%.
Malaysia on Wednesday maintained its September export tax for crude palm oil at 8%, but raised its reference price to 4,255.52 ringgit ($1,006.51) per tonne.
Dalian’s most-active soyoil contract DBYcv1 fell 0.5%, while its palm oil contract DCPcv1 eased 0.8%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a support at 4,261 ringgit per tonne, a break below which could cause a fall to 4,169 ringgit, Reuters technical analyst Wang Tao said.
Source: Reuters (Reporting by Mei Mei Chu; editing by Uttaresh.V and Ramakrishnan M.)