KUALA LUMPUR, May 10: Malaysian palm oil futures climbed to their highest in more than one week on Friday as investors looked for stocks to ease in the world’s No.2 producer, but gains were capped by a surprise fall in exports in the first ten days of May.
Exports of palm oil products for May 1-10 slid 16.7 percent to 380,047 tonnes compared to the same period in April, as smaller shipments of the crude and refined grade weighed. Demand from Europe and China was also sluggish.
But investors were expecting through the morning session that April end-stock and output data from industry regulator the Malaysian Palm Oil Board (MPOB), would be bullish.
The data was released during Friday’s midday break, with
Malaysia’s palm oil stocks at the end of April down 11.3 percent at 1,926,723 tonnes against a revised 2,173,284 tonnes at the end of March, according to MPOB.
A Reuters poll had forecast stocks to fall to a nine-month low of 2.04 million tonnes.
‘The market today is pretty strong … Everyone expects stocks to fall to 2.05 million tonnes or below,’ said a trader with foreign commodities brokerage in Kuala Lumpur.
‘The exports for the first ten days, which were not so good, may cap the market,’ he said.
The benchmark July contract on the Bursa Malaysia Derivatives Exchange rose as high as 2,321 ringgit per tonne, the highest since April 29. It closed the morning session at 2,310 ringgit ($772), up 1 percent.
Positive investor sentiment set palm on course to post a gain of 2.6 percent for the week, its biggest in seven.
Total traded volumes stood at 12,943 lots of 25 tonnes each, slightly higher than the usual 12,500 lots.
Technicals showed palm oil is expected to rise to 2,335 ringgit per tonne as it has broken above resistance at 2,295 ringgit, said Reuters market analyst Wang Tao.
Prices dipped to a near 5-month low on Monday after the ringgit surged against the dollar following the ruling coalition’s win in Malaysia’s general elections. It later rose on bargain hunting and expectations of a drop in inventories.
Another cargo surveyor Societe Generale de Surveillance will release its May 1-10 export data later Friday.
In other markets, Brent oil edged down, trading in a tight range above $104 a barrel as stronger signs of a U.S. recovery and persistent doubts over the Chinese economy gave mixed signals about demand from the world’s top two consumers.
In vegetable oil markets, U.S. Soyoil for July delivery gained 0.4 percent in early Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange rose 0.8 percent.
(agencies)
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