Palm oil advanced for the first time in three days on speculation that a drop to the lowest level in more than four months was overdone.
The contract for July delivery gained as much as 1.5 percent to 2,288 ringgit ($750) a metric ton on the Bursa Malaysia Derivatives, and was at 2,279 ringgit at 3:16 p.m. in Kuala Lumpur. Futures lost 2.3 percent in the two days through yesterday when they dropped to 2,255 ringgit, the lowest closing level since Dec. 13.
Shipments from Malaysia, the second-largest producer, dropped 6.4 percent to 864,206 tons in the first 20 days of April from a month earlier, surveyor Societe Generale de Surveillance said yesterday. Exports fell 4.9 percent to 882,469 tons, surveyor Intertek said April 20. Declining exports and expectations of higher production may lead to an increase in stockpiles this month, according to Ker Chung Yang, an analyst at Phillip Futures Pte.
Futures gained on “some bargain-hunting” by investors as the “market is kind of oversold,” Ker said by phone from Singapore. “We still see the risk of prices going lower.”
Reserves dropped to a seven-month low of 2.17 million tons in March as shipments gained for the first time in five months, according to the Malaysian Palm Oil Board. Futures lost 23 percent in 2012 when stockpiles rose to a record.
Soybean oil for July delivery gained 0.2 percent to 48.70 cents a pound on the Chicago Board of Trade and soybeans climbed 0.4 percent to $13.70 a bushel.
Refined palm oil for September delivery rose 1 percent to close at 6,020 yuan ($975) a ton on the Dalian Commodity Exchange, after closing yesterday at the lowest level for the most-active contract since October 2009. Soybean oil ended little changed at 7,412 yuan a ton.
To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at email@example.com
To contact the editor responsible for this story: James Poole at firstname.lastname@example.org