Crude palm oil futures on Malaysia's derivatives exchange rebounded Thursday as investors covered shorts on an improved demand outlook while gains in soyoil supported prices, said trade participants.
Prices rose as much as 2% to an intraday high of MYR2,154 after trading in a narrow range throughout the day as sentiment improved on hopes festive demand for palm oil had risen.
The benchmark October CPO contract on the Bursa Malaysia Derivatives ended MYR32 higher at MYR2,145 a metric ton, the highest finish for CPO futures since July 21.
Traders estimate Malaysia''s July palm oil exports to be up 10%-14% on month at 1.35 million to 1.40 million tons. Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are scheduled to issue export data Friday.
In June, Intertek and SGS estimated palm oil exports around 1.23 million tons.
"CPO prices closed firmer after fairly choppy trade in the morning session. Prices are likely to remain firm tomorrow," said a Kuala Lumpur-based trading executive.
Prices may test resistance at MYR2,190 should the export data meet market expectations, the trader said.
A 10% rise in exports may push palm oil stocks lower to 1.36 million tons as demand may outpace Malaysia''s palm oil output, traders and analysts said.
Palm oil stocks in June stood at 1.41 million tons, according to data from the Malaysian Palm Oil Board.
CPO's gains were also boosted by higher soyoil and crude oil prices.
Toward the end of trade on the BMD, soyoil futures on e-CBOT rallied, with August soyoil trading 56 points higher at 33.73 cents a pound.
In the cash market, cash palm olein for August was offered $10 higher at $680/ton and September shipment was offered at $675/ton, while October/November/December was offered $10 higher at $667.50/ton.
No trades were reported in the afternoon session as the market awaited the export data. The bid-offer gap was around $10/ton, said a Singapore-based trading executive.
Cash CPO for prompt shipment was offered MYR40 higher at MYR2,230/ton.
The trading volume of CPO futures fell to 10,704 lots from 15,366 lots Wednesday, while open interest fell to 83,246 lots from 83,742 lots. One lot equals 25 tons.