Malaysian palm oil futures rose to a one-week high in a thin trading session on Thursday, as investors positioned themselves ahead of a key plantings report in the United States due later. The benchmark June crude palm oil contract on Bursa Malaysia Derivatives was 0.4 percent higher at 3,326 Malaysian ringgit ($1,098) a tonne.
Earlier, the contract touched 3,343 ringgit, its highest level since March 23. "Up a little," said one palm oil analyst. "Perhaps due to (possible) news that less soybean will be planted, and hence positive for soy oil and palm oil." The US plantings report due on Thursday may help reverse the market's declines this year.
A Reuters poll showed the US soybean area plantings for 2011 will be 76.870 million acres, down 534,000 acres from the 2010 figure. By the end of the first quarter, palm oil prices slipped 12 percent, having tracked other commodities lower as unrest in the Middle East and an earthquake in Japan sent investors scrambling for perceived safe-haven assets.
"Risk is off, that's what we're seeing across the board, with the market waiting for the USDA (data)," said Abah Ofon, an agricultural commodities analyst at Standard Chartered Bank. "I'm looking for acreage to narrow, which is going to be bullish soybeans," he added. "That is going to be supportive for the entire oils complex, and supportive of palm oil."
Higher palm oil output and the current dip in demand have pressured prices in recent months. Traded volume stood at 16,826 lots of 25 tonnes each, down from 19,561 lots on Wednesday. In other data, exports of Malaysian palm oil products for March fell 0.5 percent to 1,105,440 tonnes from 1,110,672 tonnes shipped in February, cargo surveyor Intertek Testing Services said.
"It is expected to some degree but slightly less sluggish than I thought," Ofon said on the Malaysian data. "I don't expect output to increase substantially until the second half of the year." Output is moving into a higher cycle from the first quarter of 2011 after two years of weak yields and erratic weather. Technical charts show Malaysian palm oil could revisit its February high of 3,967 ringgit over the next three months, based on its wave pattern.
ICDX's June CPO futures contract was at 9,625 rupiah per kg, compared to 9,610 rupiah per kg when it opened. Market volume was 652 lots of 10 tonnes each. In related markets, the most active September soyoil in China's Dalian Commodity Exchange was at 10,124 yuan versus 10,140 yuan at the open.
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