Palm edges up on technicals, lower-than-expected production data

KUALA LUMPUR: Malaysian palm oil futures ended higher on Monday, as lower-than-expected production data and a technical rebound helped prices reverse early losses due to weakness in rival oils in the United States and China.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange climbed 60 ringgit, or 1.63%, to 3,752 ringgit ($906.50) a tonne, snapping three straight sessions of losses.

Weakness in commodities across the board weighed on sentiment earlier in the day, but a heavy selldown last week has prompted some technical rebounds in the market, said a Kuala Lumpur-based trader.

The futures contract also found some support from lower-than-expected production data, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group, adding that the pressure to stay competitive among other oils had dragged prices earlier.

Last week, leading analysts said major vegetable oil prices, such as palm oil and soybean oil, had likely already peaked at multi-year highs in 2021 and while prices were expected to fall, they would not likely collapse.

Meanwhile, China, the world's second-largest palm oil buyer, allowed the import of red palm oil from Malaysia, the Malaysian Palm Oil Board said in a statement.

Dalian's most-active soyoil contract fell 2.08% and its palm oil contract dropped 2.37%. Soyoil prices on the CBOT rose 0.25%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.