Palm jumps 2pc on soyoil supply outlook
KUALA LUMPUR/JAKARTA: Malaysian palm oil futures rose nearly 2 per cent on Wednesday on market views for a smaller US soy acreage this year that could lead to less competition with soyoil and boost demand for the tropical oil.
Palm oil traders are waiting for the US plantings report due on Thursday, which may help reverse the market's 13 per cent decline so far this year. Higher palm oil output and the current dip in demand have pressured prices.
"Local sentiment is getting driven by overseas markets. The planting of soybeans is very important to the palm oil market," said a trader with foreign brokerage in Kuala Lumpur.
The benchmark June crude palm oil contract on Bursa Malaysia Derivatives closed up 1.9 per cent at 3,312 ringgit ($1,093) a tonne. The contract touched a high of 3,323 ringgit earlier, its highest since March 25.
Traded volume stood at 19,561 lots of 25 tonnes each, up from 18,442 lots on Tuesday.
Technical charts showed Malaysian palm oil could revisit its February high of 3,967 ringgit over the next three months, based on its wave pattern.
But palm oil's Malaysian fundamentals remain bearish. Output is moving into a higher cycle from the first quarter of 2011 after two years of weak yields and erratic weather.
Cargo surveyors are due to issue Malaysia's March exports on Thursday and traders expect volumes to reach 1.15 million tonnes, a tad higher than the 1.1 million tonne levels seen in February and hastening a buildup in inventories.
ICDX's June CPO futures contract was at 9,605 rupiah per kg, compared to 9,460 rupiah per kg when it opened. Market volume was 1,510 lots of 10 tonnes each.
The most active September soyoil in China's Dalian Commodity Exchange rose to 10,100 yuan versus 10,086 yuan at the open. -Reuters