The Hindu Business Line
Palm oil hits 2-week high on expectations of fall in stocks
Malaysian palm oil futures rose to a two-week high during trade on Wednesday, posting a third straight day of gains, on expectations of easing stockpiles and tracking strength in soyoil on the US Chicago Board of Trade (CBOT). The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 1 per cent at 2,175 ringgit ($533.48) a tonne at the end of the trading day.
It earlier rose as much as 1.3 per cent to 2,182 ringgit, its highest since March 21. “The market is up following external markets' strength, and many are buying on an expectation of a drawdown in stocks,” said a Kuala Lumpurbased futures trader, referring to CBOT soyoil.
We’re expecting a drawdown in stocks to around 2.85-2.9 million tonnes based on production ... and exports are on the high side.” Malaysian palm oil stockpiles rose to their highest in nearly two decades in December, and had last risen unexpectedly in February by 1.3 per cent to 3.05 million tonnes.
Official March data from the Malaysian Palm Oil Board is scheduled for release on April 10. Exports from cargo surveyors earlier this week showed Malaysian palm oil shipments were up 22-28 per cent in March from the previous month.
In other related oils, the Chicago May soybean oil contract gained 1.4 per cent on Tuesday, and was last up 0.4 per cent on Wednesday. Soybean futures had gained on expectations of progress in trade talks between the United States and top soybean buyer China. Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.