SINGAPORE, July 3: Malaysian palm oil futures edged up on Wednesday amid hopes stocks could have dropped in June, but gains were limited by concerns about rising output in the world’s No.2 producer.
Prices were stuck in a tight range in the morning session as investors refrained from taking risky bets ahead of next week’s official stocks data from the Malaysian Palm Oil Board (MPOB).
Market participants expect rising exports to ease stocks further from May’s 1.82 million tonnes, the lowest in nearly a year, although increasing production could cap the fall.
‘We need to see the production number, which could rise around 8-9 percent. Stocks could range around 1.75-1.78 million tonnes. The market is just mostly in a wait-and-see mode now,’ said a dealer with a foreign commodities brokerage in Kuala Lumpur.
By the midday break, the benchmark September contract on the Bursa Malaysia Derivatives Exchange had gained 0.6 percent to 2,353 ringgit ($740) per tonne, off a more than one-month low of 2,324 ringgit hit on Tuesday.
Total traded volumes stood at 9,753 lots of 25 tonnes each, way below the usual 12,500 lots as most investors stayed on the sidelines. Prices moved in a 2,342 to 2,357 ringgit range.
Technicals show palm oil may briefly touch or pierce below a support of 2,330 ringgit before rebounding towards 2,391 ringgit, Reuters market analyst Wang Tao said.
Malaysian palm oil shipments in June rose 5-7 percent from a month ago, as purchases spiked ahead of the Muslim holy month of Ramadan that starts next week, cargo surveyor data showed.
Cargo surveyors will report exports data for the first 10 days of July next week. Shipments are expected to rise on last-minute buying before Ramadan. Consumption of the edible oil typically rises during the holy month as Muslims gather for communal feasts to break their fast.
In other markets, U.S. Oil surged past the $100-per-barrel mark to hit a 14-month high as traders bet on a large decline in crude inventories in top consumer the United States, while tensions in the Middle East also cushioned prices.
In vegetable oil markets, U.S. Soyoil for December edged up 0.1 percent in early Asian trade. The most-active January soybean oil contract on the Dalian Commodities Exchange fell 0.3 percent. Palm, soy and crude oil prices at 0435 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUL3 0 +0.00 0 0 0
MY PALM OIL AUG3 2350 +8.00 2346 2356 397
MY PALM OIL SEP3 2353 +14.00 2342 2357 4983
CHINA PALM OLEIN JAN4 5890 -6.00 5878 5918 197740
CHINA SOYOIL JAN4 7352 -22.00 7332 7384 345666
CBOT SOY OIL DEC3 45.65 +0.03 45.55 45.77 1806
NYMEX CRUDE AUG3 101.91 +2.31 99.59 102.18 40895
Palm oil prices in Malaysian ringgit per tonne CBOT soy oil in U.S. Cents per pound Dalian soy oil and RBD palm olein in Chinese yuan per tonne Crude in U.S. Dollars per barrel ($1=3.18 ringgit)
(agencies)
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