KUALA LUMPUR: Malaysian crude palm oil futures edged up on Wednesday, as bullish price outlook from leading analysts at a key conference lifted investor sentiment and reversed earlier losses.
Leading analyst Dorab Mistry said prices would hit 4,000 ringgit by the end of June due to low palm oil output cycle, strong demand from India in peak summer months and stocking by Muslim countries ahead of the fasting month
"Markets were pathetically quiet ahead of the analysts' price forecasts, and prices were stuck within tight range. However, bullish views are expected and that will likely put sellers on hold," said a dealer with a foreign commodities brokerage in Kuala Lumpur.
Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.7 percent to close at 3,266 ringgit ($1,080) per tonne. The benchmark futures are trading 2.8 percent higher this year.
Traded volumes picked up after the midday break, standing at 22,106 lots of 25 tonnes each, compared to the usual 25,000 lots
Top analyst James Fry presented a few scenarios based on crude oil price and its impact on palm oil futures, given the edible oil is being increasingly used as a feedstock for biofuels
On the technicals side, Reuters analyst Wang Tao said signals are mixed for palm oil as it resists a fall below support at 3,218 ringgit per tonne
Brent crude climbed above $122 on Wednesday after China said it would boost energy imports this year while concerns persist over supply risks and Iran's nuclear program, despite the country's offer for talks with major powers
In other vegetable oil markets, the US soyoil contract for March delivery gained 0.6 percent in Asian trade and the most active September 2012 soyoil contract on China's Dalian Commodity exchange fell 0.5 percent.
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