Crude palm oil futures on Malaysia’s derivatives exchange ended up Thursday as investors covered short positions while the overnight jump in crude and soyoil prices were supportive, trade participants said.The benchmark January contract on the Bursa Malaysia Derivatives ended MYR42 higher at MYR2,210 a metric ton, after trading in a MYR2,187-MYR2,224/ton range.
The contract traded higher throughout the day, holding above MYR2,200 levels on weather concerns that might have slowed down oil palm harvesting, said a Kuala Lumpur-based trading executive.
Tropical rains and thunderstorms continue to lash Malaysia’s oil palm growing regions in Sabah and Sarawak.
The Malaysian weather bureau upgraded a heavy rain alert earlier this evening for Pahang and Sarawak areas. It said heavy rains are likely to continue tonight in several areas.
While such weather isn’t likely to affect production for now, it is affecting market sentiment, trade participants said.
“If rains remain heavy and uninterrupted, there may be some logistics problem especially for oil palm estates in hilly and low-lying areas,” said a plantation executive from Malaysia-based plantation firm.
In the near term prices may see some correction as production may have risen to 20% for the first 20 days in October, said a Malaysia-based exporter.
Prices may test support at MYR2,160-MYR2,180 in the near term, a Kuala Lumpur-based trader said.
The contract was also supported by a jump in crude and soyoil prices in after-hours trade Wednesday[...]
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