Palm edges up on stronger soyoil, weaker production outlook

KUALA LUMPUR: Malaysian palm oil futures were up on Monday, rising from a near six-month low hit earlier in the session, and were set to snap two previous sessions of losses, gaining strength from rival oilseed soy and a weaker production outlook.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.3 percent at 2,654 ringgit ($599.91) a tonne at the midday break. It earlier hit an intraday low of 2,643 ringgit, its weakest level since Oct. 14.

Traded volumes stood at 13,123 lots of 25 tonnes each at noon.

"The market is up tracking soybean performance... And also on sentiment over production expectation,," said a futures trader from Kuala Lumpur, referring to Malaysia's palm oil output forecasts.

March output of the tropical oil in the world's second largest producer could rise in line with the seasonal trend, but production growth is expected to be small, according to traders.

Production in February declined 1.4 percent on-month, according to data from the Malaysian Palm Oil Board, the industry regulator. March data is scheduled for release on April 10.

Palm oil is expected to test a support at 2,638 ringgit per tonne, a break below which could cause a further loss to 2,609 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.

Palm oil is also impacted by the price movements of related edible oils, including soyoil, as they compete for a share in the global vegetable oils market.

Soybean oil on the Chicago Board of Trade was up 0.3 percent. China's Dalian Commodity Exchange is closed on Monday and Tuesday for a national holiday.