KUALA LUMPUR (Reuters) - Malaysian palm oil futures rose on Thursday, pulling back from a more than 22-month low hit in the previous session, as traders took the opportunity to buy at low prices ahead of Eid festivities during the weekend.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 0.8 percent at 2,336 ringgit ($586.20) per tonne, after logging eight straight sessions of falls.
It fell to as low as 2,300 ringgit on Wednesday, its lowest since July 28, 2016.
Trading volumes stood at 20,276 lots of 25 tonnes each.
Traders were covering ahead of the long weekend as the market was oversold, a trader based in Kuala Lumpur said.
“Market has achieved the technical objective at 2,300 ringgit per tonne, suggesting that the recent low level is attractive to buy. Recovery in overseas commodities markets added support for the correction,” the trader said.
Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.
The Chicago July soybean oil contract rose 0.1 percent.
The September soybean oil on China’s Dalian Commodity Exchange climbed as much as 0.5 percent while the Dalian September palm oil contract rose as much as 0.2 percent.
“I trust the market is on a correction phase since it has been on a bear run since last week,” another trader said, adding that the steady rise in production and end stocks, as well as low exports and weakening soyoil were making it hard for palm to rally otherwise.
Markets in Malaysia close early today on the eve of the Muslim festival of Eid, and will reopen only next week.
The tropical oil declined 1.3 percent this week and 3.8 percent so far this month on weak demand and outlook.
($1 = 3.9850 ringgit)
($1 = 67.58 Indian rupees)
($1 = 6.3947 Chinese yuan)
Reporting by Liz Lee; Editing by Sunil Nair