Palm gains on expectations of better demand, overnight soyoil

KUALA LUMPUR: Malaysian palm oil futures climbed in first-half trade on Monday on improved outlook for exports due to expected demand ahead of festivities, and further buoyed by firmer overnight soyoil.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.68 percent at 2,669 ringgit ($615.97) a tonne by the midday break.

Traded volumes stood at 22,800 lots of 25 tonnes each at noon.

"The market is reacting to positive sentiment over exports, as everyone is looking at better exports ahead of Ramadan," said a Kuala Lumpur-based trader.

The trader said upbeat export data could likely keep palm on an upward momentum, leading up to the festive period.

Cargo surveyor Intertek Testing Services' data on Monday showed exports of Malaysian palm oil products for the May 1-15 period rose 8.9 percent to 617,697 tonnes, from 567,280 tonnes shipped during April 1-15.

"Overnight soyoil prices have improved tremendously, lending support to palm as well," he added.

Soybean oil on the Chicago Board of Trade was up 0.3 percent, continuing northward after two sessions of gains, while the September soybean oil contract on the Dalian Commodity Exchange rose 0.3 percent.

Palm prices are impacted by the movements of rival oilseed soy, as they compete for a share in the global vegetable oils market.

However, from a technical perspective, Reuters market analyst for commodities and energy technicals Wang Tao said palm oil may retrace into a range of 2,621-2,627 ringgit per tonne, as it failed to break a resistance at 2,674 ringgit.

In other related vegetable oils, the September contract for palm olein was unchanged.