Palm edges higher, snaps losing streak on US soyoil

KUALA LUMPUR: Malaysian palm oil futures ended the trading day slightly higher on Monday, tracking gains in US soyoil and snapping four previous sessions of losses.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 0.1 percent at 2,268 ringgit ($563.48) a tonne at the close of trade.

Trading volumes stood at 24,911 lots of 25 tonnes each in the evening.

"Palm is up, tracking US soyoil overnight prices," said a futures trader in Kuala Lumpur, referring to soyoil prices on the Chicago Board of Trade which jumped 1.5 percent on Friday.

US soybean and soyoil futures surged on Friday on a market recovery, after hitting lows prompted by concerns over an escalating trade war with China.

"In the medium term, however, the market is expecting production to rise from now until September on a seasonal basis," added the palm oil trader, explaining that this could further dampen benchmark prices.

Palm oil production typically rises in the third quarter of the year in line with the seasonal trend. Malaysian output for June is forecast to slide 11.1 percent to 1.36 million tonnes, its weakest figure for June since 2007, due to a labour shortage, according to a Reuters poll.

Official data will be released by the Malaysian Palm Oil Board on Tuesday after 0430 GMT.

In other related oils, the Chicago December soybean oil contract was down 0.2 percent, while the September soybean oil on China's Dalian Commodity Exchange rose 0.1 percent.

Meanwhile, the Dalian September palm oil contract declined 0.7 percent.

Palm oil prices track the performance of other edible oils as they compete for a share in the global vegetable oils market.

Palm oil looks neutral in a range of 2,270-2,290 ringgit per tonne, and an escape could suggest a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.