KUALA LUMPUR: Malaysian palm oil futures held steady at a one-month top in early trade on Friday, in line to chart weekly gains of nearly 5 percent, on expectations of dwindling stockpiles and improved exports.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.1 percent at 2,206 ringgit ($540.69) a tonne at the midday break. It earlier rose to 2,218 ringgit, its highest levels since March 4.
Palm is also up 4.7 percent so far on-week, in line for a second weekly gain in three weeks.
A futures trader in Kuala Lumpur said the market, which had been overbought this week, is seeing some corrections now.
Palm oil futures had gained over 1 percent in its past three trading sessions, as industry players expect March data from industry regulator the Malaysian Palm Oil Board to show a decline in inventory levels.
Malaysia's palm oil stockpiles are likely to have dropped during March to its lowest mark in five months, according to a Reuters survey, as a hefty jump in exports outpaced production gains.
March inventories are expected to have fallen 6.4 percent from February to 2.85 million tonnes, the lowest since October 2018, while exports are pegged to come in at 1.63 million tonnes, a 23.4 percent rise from the previous month.
The Malaysian Palm Oil Board is scheduled to release March data on April 10.
Malaysian palm oil stockpiles rose to their highest in nearly two decades in December, and last increased unexpectedly in February by 1.3 percent to 3.05 million tonnes. <MYPOMS-TPO>
In other related oils, Chicago May soybean oil contract was down 0.2 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
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