Palm oil recovers
November 07, 2012: Malaysian palm oil futures edged up on Tuesday, recovering from their lowest in more than three weeks the previous day, although gains were capped by concerns over stockpiles and uncertainty ahead of the US elections.
Investors also turned their focus to the risk from floods in Malaysia that could hamper production and ease pressure on swelling stocks in the world’s No.2 producer, but fears remained that inventory could still climb to a fresh high.
Industry regulator the Malaysian Palm Oil Board (MPOB) will issue October stocks data on the coming Monday.
“Everybody is looking at the MPOB number that is expected to reach 2.7 million tonnes, and the market is reacting badly to that,” said James Ratnam, an analyst with Malaysia’s TA Securities.
By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives Exchange edged up 0.2 percent to 2,416 ringgit ($789) per tonne. Prices on Monday fell to 2,381 ringgit, the weakest since October 12.
Total traded volumes stood at 10,025 lots of 25 tonnes each, a touch lower than the usual 12,500 lots, as traders were cautious ahead of the US elections.
Technicals showed palm oil could stage a rebound to 2,470 ringgit as a fall from the October 25 high of 2,615 ringgit has temporarily ended, said Reuters market analyst Wang Tao.
Other vegetable oil markets also recovered from the previous day’s losses. US soyaoil for December delivery edged up 1.2 percent in early Asian trade, while the most active May 2013 soybean oil contract on the Dalian Commodity Exchange inched up 0.4 percent.