KUALA LUMPUR (July 25): Malaysian palm oil futures fell to a near three-year low on Wednesday before reversing course as new demand emerged.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.5% at RM2,163 (US$534) a tonne at the end of the trading day.
It earlier fell to RM2,140, its weakest level since September 2015.
Trading volume totalled 50,728 lots of 25 tonnes each at the close of trade.
"Soyoil saw some upside yesterday," said a Kuala Lumpur-based trader, referring to soyoil futures on the US Chicago Board of Trade.
US soyoil rose in line with soybean futures, which hit a two-week high on Tuesday as the United States said it would provide up to US$12 billion in aid to shield American farmers from economic pain stemming from its trade disputes with China.
The Chicago December soybean oil contract gained 0.9% on Tuesday, and was last up 0.1%.
A rise in palm oil exports was supportive for palm, the trader added, but cautioned that further gains could be capped by concerns about rising production in line with seasonal trends.
Exports of Malaysian palm oil products for July 1 to 25 rose 5% versus the corresponding period last month, inspection company AmSpec Agri Malaysia said on Wednesday.
Cargo surveyor Societe Generale de Surveillance reported a 5.6% rise for the same period.
In other related oils, the September soybean oil contract on China's Dalian Commodity Exchange was up 0.2%, while the Dalian September palm oil contract rose 0.4%.
Palm oil prices are usually affected by the performance of other edible oils as they compete for a share in the global vegetable oils market.
Signals are mixed for palm oil, as it failed to break a support at RM2,149 per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 1055 GMT
|MY PALM OIL||AUG8||2106||+8.00||2090||2115||720|
|MY PALM OIL||SEP8||2150||+8.00||2130||2165||3816|
|MY PALM OIL||OCT8||2164||+11.00||2140||2176||19969|
|CHINA PALM OLEIN||SEP8||4672||+18.00||4664||4688||104880|
|CBOT SOY OIL||DEC8||28.61||+0.01||28.5||28.63||3383|
|INDIA PALM OIL||JUL8||615.00||-0.50||612.00||616.9||299|
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel
(US$1 = RM4.0530)
(US$1 = 68.7100 Indian rupees)
(US$1 = 6.7634 Chinese yuan)