KL palm oil ends off lows on short covering

KL palm oil ends off lows on short covering

KUALA LUMPUR (Reuters): Malaysian palm oil futures recouped some losses by the close on Wednesday on short covering after a bearish crop report from private forecaster Ivan Wong had pressured prices.

Wong said Malaysia's palm oil output was estimated to have risen 6.5 percent to 1.0 million tons in January from a month earlier. He had earlier put the production at between 910,000 and 915,000 tons.

Wong put end-January stocks at 1.50 million tons, up from an earlier projection of 1.37-1.38 million tons and compared with 1.41 million at the end of December.

Exports in January were estimated at 770,000 tons, down from 894,000 in December.

"The figures are certainly bearish and confirmed earlier market talk," said one trader in Kuala Lumpur.

"Short covering helped limit the fall but the outlook is not encouraging at all. You cannot be comfortable with such a high stocks level at this time of the year," he said.

The benchmark third-month April futures contract ended down three ringgit at 747 ringgit ($196.58) a ton after trading as low as 735.

Volume increased to 2,354 lots against 1,963 on Tuesday. Overnight falls in soyoil futures on the Chicago Board of Trade also weighed on earlier prices.

Physical prices were also lower but activity was generally light due to a holiday in several states.

February (south) crude palm oil was offered at 690 ringgit a ton against bids of 685. It traded earlier at 680.

March (south) saw offers at 725 ringgit and bids of 720. Among refined products, February RBD palm oil was offered at $200 a ton FOB and March at $207.50.

There were offers for February RBD olein at $207.50 and March at $212.50.

February RBD palm stearin was offered at $190 and February palm fatty acid distillate at $182.50.