KUALA LUMPUR: Malaysian palm oil futures jumped more than 1 percent in the second half of trade on Thursday, ending the day higher on expectations of slowing February output in line with seasonal trend and improving exports.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent at 2,272 ringgit ($557.68) a tonne at the close of trade, snapping four days of losses.

The market earlier rose as much as 1.6 percent to an intraday high of 2,286 ringgit.

Trading volumes stood at 29,505 lots of 25 tonnes each at the close of trade.

“The market is up on production expectations,” said a Kuala Lumpur-based trader, adding that participants expected output in February to decline.

Production would also decline as February has fewer working days due to national holidays for the Lunar New Year in Malaysia, he said.

Output of palm oil, the world’s most widely used edible oil, typically declines during the first quarter of the year in line with seasonal trends.

Another trader added that expectations of better exports in the first half of February versus the previous month also supported the market in the evening.

Malaysian palm oil output in January declined 3.9 percent to 1.74 million tonnes from the previous month, while exports rose 21.2 percent to 1.68 million tonnes, according to data from the
Malaysian Palm Oil Board.

In other related oils, the Chicago March soybean oil contract was up 0.5 percent, while the May contract on the Dalian Commodity Exchange was flat at 1036 GMT.

The Dalian January palm oil contract was up 0.1 percent.

Palm oil prices are affected by movements in soyoil rates, as they compete for a share in the global vegetable oil market.

Palm oil may keep hovering above support at 2,249 ringgit or bounce towards resistance at 2,285 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals. – Reuters

Source: https://www.thestar.com.my/business/business-news/2019/02/15/palm-snaps-four-days-of-losses-on-likely-lower-february-output/#t45lIlT21gkZqjzM.99