KUALA LUMPUR: Malaysian palm oil futures firmed on Friday ahead of a long weekend, supported by hopes for strong May exports amid top producer Indonesia’s ban on shipments, although the contract clocked its second consecutive weekly loss.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 21 ringgit, or 0.33%, at 6,363 ringgit ($1,447.45) a tonne, after hitting an intraday high of 2.8%.
For the week, palm fell 0.58%.
“Palm recovered from the deep losses yesterday on bargain hunting and strong export outlook for May but gains are still fragile with market trading on huge volatility,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Bearish elements remain, especially on expectations for Indonesia to revise its export ban and a prolonged lockdown in key market China as it seeks to stem a COVID-19 outbreak, he added.
Traders are closely monitoring signs of Indonesia lifting its export ban on crude and refined palm oil as production in the world’s biggest exporter and producer picks up.
Indonesia has impounded at least 81,000 litres of cooking oil bound for East Timor, the country’s trade ministry said, as it seeks to enforce a ban on exports of crude palm oil and its derivatives including cooking oil.
The U.S. Agriculture Department said in a monthly crop report on Thursday that U.S. farmers will harvest a record large soybean crop, but supplies will remain tight due to soaring demand from biofuel and crush sectors.
Soyoil prices on the Chicago Board of Trade were up 0.3%. Dalian’s most-active soyoil contract gained 1.5%, while its palm oil contract rose 0.7%.
The Malaysian bourse will be closed on Monday for a public holiday.
Meanwhile, Shanghai is aiming to reach zero-COVID at the community level in the next few days and will then start to steadily ease traffic restrictions and open shops, the city’s deputy mayor Wu Qing said.