JAKARTA (July 27): Malaysian palm oil futures were up for a third day in thin trade on Friday after hitting a three-year low midweek, although sluggish demand and abundant supply of the edible oil suggested the latest uptrend could be limited, traders said.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.2% at 2,206 ringgit (US$543.08) a tonne at the midday break.
On Wednesday, the contract hit 2,140 ringgit, its lowest level since September 2015.
Trading volume totalled 16,275 lots of 25 tonnes each at noon.
"The market is taking a breather," said a Kuala Lumpur-based trader, referring to the latest gains after the selloff earlier in the week, along with little trading activity in other edible oil markets.
Malaysian palm oil futures had climbed roughly 2% on Thursday, as prices at three-year lows boosted export demand.
Exports of palm oil products from Indonesia, the world's biggest exporter, rose 7.5% in June from a year earlier, Indonesia's palm oil association (GAPKI) said on Friday.
"Right now there's a correction and we'll see how high it can correct," the trader added, referring to expectations of high palm oil production figures.
A rise in palm oil output, which seasonally begins in the third quarter of the year, typically adds to inventory levels and weighs on prices, although some plantations have said seasonal output may fall short of forecasts and peak later than usual.
In other related oils, the September soybean oil contract on China's Dalian Commodity Exchange was up 0.3%, while the Dalian September palm oil contract rose 0.2%.
The Chicago December soybean oil contract was down 0.8% on Thursday, and was last up 0.5%.
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.
Palm oil may test a resistance at 2,218 ringgit per tonne, a break above which could lead to a gain to the next resistance at 2,249 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 0511 GMT
|MY PALM OIL||AUG8||2141||0||2138||2141||84|
|MY PALM OIL||SEP8||2184||1||2168||2185||1904|
|MY PALM OIL||OCT8||2206||4||2186||2206||5687|
|CHINA PALM OLEIN||JAN9||4834||42||4792||4838||138042|
|CBOT SOY OIL||DEC8||28.72||0.3||28.53||28.73||2576|
|INDIA PALM OIL||JUL8||622.1||0.3||621.4||624||30|
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. 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 U.S. dollars per barrel
(US$1 = 4.0620 ringgit)
(US$1 = 68.5750 Indian rupees)
(US$1 = 6.8002 Chinese yuan)