KUALA LUMPUR (Nov 10): Malaysian palm oil futures snapped a four-day losing streak on Monday as export demand picked up, with prices further lifted as investors covered short positions ahead of a U.S. government report on its grains acreage.
The U.S Department of Agriculture is scheduled release its global supply-demand report for farm products at 1700 GMT that is expected to show ample world supplies.
"There was lots of short covering from foreign trade house and funds ahead of the USDA report tonight," said a trader with a local commodities brokerage in Malaysia.
Palm oil prices were also supported by a report from the Malaysian Palm Oil Board that showed end-stocks in the world's No. 2 producer rose 3.7 percent to a 20-month high of 2.17 million tonnes in October, just above a Reuters poll estimate of 2.16 million tonnes.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose 1.9 percent to 2,237 ringgit ($672) per tonne by Monday's close.
Total traded volume stood at 49,488 lots of 25 tonnes, above the daily average of 35,000 lots.
Shipments of Malaysian palm oil products rose 1.3 percent to 400,614 tonnes between Nov. 1 and 10, according to cargo surveyor Intertek Testing Services (ITS), with China increasing imports even as Europe and India trimmed theirs.
Societe Generale de Surveillance reported that exports for the same period eased 0.2 percent to 395,249 tonnes shipped.
Technicals were bearish and showed palm oil may fall to 2,180 ringgit per tonne, as indicated by a Fibonacci retracement analysis, Reuters market analyst Wang Tao said.
Last week palm recorded its biggest weekly fall in three months, with a 4.7 percent drop, dragged by steep losses in crude oil and soyoil prices that could dent food and fuel demand for the oil.
But on Monday, the U.S. soyoil contract for December rose 0.9 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodities Exchange gained 1 percent.
Oil markets also recovered. Brent crude rose by $1 towards $85 a barrel on Monday, climbing for a second straight session as protests in Libya disrupted supply and the U.S. dollar fell away from four-year highs.
The MPOB said that exports of Malaysian palm oil products in the month of October fell 1.4 percent to 1.61 million tonnes, slightly below expectations of a 3.1 percent drop. Crude palm oil production fell 0.2 percent to 1.89 million tonnes.
Market players said Malaysian palm production is also in focus in November and December. Output typically weakens towards the year-end as the rainy monsoon season unfurls, bringing thunderstorms and heavy floods to plantations.
Floods complicate harvesting and transportation of fresh fruit bunches to mills where they have to be quickly crushed, and delays can result in poorer quality of oil produced.
Palm, soy and crude oil prices at 1040 GMT
Contract Month Last Change Low High Volume
MY PALM OIL NOV4 2205 +13.00 2185 2205 147
MY PALM OIL DEC4 2234 +34.00 2204 2237 1724
MY PALM OIL JAN5 2237 +42.00 2197 2241 26259
CHINA PALM OLEIN MAY5 5366 +62.00 5280 5368 764366
CHINA SOYOIL MAY5 5956 +56.00 5904 5962 456296
CBOT SOY OIL DEC4 32.69 +0.10 32.40 32.77 7162
INDIA PALM OIL NOV4 449.10 +0.10 445.80 449.50 480
INDIA SOYOIL NOV4 586.65 -2.45 585.80 590.00 9765
NYMEX CRUDE DEC4 79.71 +1.06 78.35 79.85 38182
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
($1 = 3.3295 Malaysian ringgit)
($1 = 6.1196 Chinese yuan)
($1 = 61.49 Indian rupee)