Palm up af­ter six ses­sions of losses as global mood im­proves


Malaysian palm oil fu­tures were trad­ing higher on Thurs­day af­ter six ses­sions of losses, track­ing global eq­uity and com­modi­ties mar­kets and as the re­cent sell­off brought down palm prices to an at­trac­tive level for buy­ers.

By the mid­day break, the bench­mark palm oil con­tract for Novem­ber on the Bursa Malaysia De­riv­a­tives ex­change had gained 1.2 per­cent to 1,890 ring­git ($444.39) a tonne, on track for its big­gest sin­gle-day gain since July 21.

Traded vol­ume stood at 22,738 lots of 25 tonnes each, well above the roughly 13,500 lots usu­ally traded by mid­day. "What's pos­i­tive is that mar­gins are good for lo­cal re­fin­ers," said a trader in Kuala Lumpur, adding that the re­cent mar­ket tur­moil has widened the price gap be­tween ri­val bean oil and palm oil prod­ucts, mak­ing them at­trac­tive for the con­sumer. The palm bench­mark hit its low­est since March 2009 on Tues­day, and lost 9.4 per­cent in the six ses­sions to Wed­nes­day.

Wang Tao, a Reuters mar­ket an­a­lyst for com­modi­ties and energy tech­ni­cals, said palm oil is ex­pected to drop to 1,853 ring­git per tonne, driven by a wave v. This is the fi­nal wave of a five-wave cy­cle that de­vel­oped from the Aug. 18 high of 2,069 ring­git. A weaker Malaysian ring­git also helped the com­mod­ity as it makes palm cheaper for off­shore buy­ers. The ring­git has been emerg­ing Asia's worst per­form­ing cur­rency, los­ing 17 per­cent so far this year, on weak­ness in global cur­ren­cies and do­mes­tic politic woes. In com­par­a­tive veg­etable oils, the US Septem­ber soy­oil con­tract was 1 per­cent higher in early Asian trade, while the most ac­tive soy­bean oil con­tract on the Dalian Com­mod­ity Ex­change was down 0.1 per­cent.

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