Palm oil at 1-week high on tight supply forecast, soyoil strength
- The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 53 ringgit, or 1.42pc, to 3,790 ringgit ($915.46) a tonne during early trade, its highest since March 25.
KUALA LUMPUR: Malaysian palm oil futures rose nearly 1.5pc on Monday to hit a one-week high, tracking strong rival soyoil and on expectations of sustained tight supply.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 53 ringgit, or 1.42pc, to 3,790 ringgit ($915.46) a tonne during early trade, its highest since March 25.
Production in March likely rose 21pc month-on-month while export volumes probably grew 25pc, with stockpile at the end of month seems to have inched up to 1.31 million tonnes, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.
"Tight supply is likely to keep prices elevated, but signs of recovering supply could limit upside," she added.
FUNDAMENTALS
Malaysian Palm Oil Council said it expects the benchmark crude palm oil price to average 3,846 ringgit a tonne during the second quarter of the year and will peak at 4,190 ringgit a tonne.
The Malaysian Palm Oil Board raised its forecast for palm oil export revenue in 2021 to 75 billion ringgit ($18.12 billion), up from 73.25 billion ringgit ($17.69 billion) last year.
Soyoil prices on the Chicago Board of Trade were up 1.4pc. The Dalian exchange is closed for a public holiday.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a resistance at 3,810 ringgit per tonne, with a good chance of breaking above this level and rising into 3,887-4,011 ringgit range, Reuters technical analyst Wang Tao said.
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