Malaysia palm oil rallies on covering after losses
Malaysia palm oil rallies on covering after losses
KUALA LUMPUR (Reuters): Malaysian palm oil futures ended sharply higher on Monday, but traders said the rise was mostly a correction to the market's oversold position last week.
At the close, the benchmark third-month May futures were up 24 ringgit to 733 ringgit (US$193) per metric ton.
Other contracts for March, April, June, July, September and November were between 11 and 24 ringgit higher.
Trade was active with 2,291 lots of 25 tonnes traded.
But traders saw the rebound as a short-covering to last week's selling, saying it did alleviate their concerns about the continuous build up in physical stocks of palm oil.
Traders have said that end-February stocks of palm oil could reach 1.5 million tons, making it hard for prices to improve unless exports drastically improve.
Production in February was also expected to reach as high as 900,000 tonnes, they said.
Cargo surveyors Intertech Testing Services (ITS) and Societe Generale de Surveillance Malaysia Sdn Bhd (SGS) will issue their export figures for the first 20 days of February on Tuesday.
On Wednesday, private crop forecaster Ivan Wong is due to release his estimates for February production, exports and closing stocks. He is expected to confirm market fears that exports are rapidly falling while production is rising.
Dealers said palm oil's number one consumer, India, was expected to cut back further on purchases in March and April as harvesting for rapeseed peaks in its northern territory.
Physical February (south and central) crude palm oil was offered at 690 ringgit a ton against bids of 680. Business for south was reported at 675 to 680 ringgit while there was no trade for central.
March (south and central) saw offers at 710 ringgit and bids at 705. Southern trade was done at 700 to 705 ringgit while central business was reported at 705 to 710.
Among refined products, March RBD palm oil was offered at $202.50 a tonne FOB and April at $205.
There were offers for March RBD olein at $210 and April at $215.
March RBD palm stearin was offered at $177.50 and March palm fatty acid distillate at $165.