KUALA LUMPUR: Palm oil futures firmed on Monday on strong early September exports, as traders awaited key data from Malaysia’s palm oil board.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 11 ringgit, or 0.31%, to 3,605 ringgit ($800.93) a tonne by the midday break. Exports during Sept. 1-10 rose between 9.3% and 16.2% from the same period in August, cargo surveyors said on Saturday.
Malaysia’s end-August inventories climbed 18.16% from the previous month to 2.09 million tonnes, its highest in 33 months, according to Malaysian Palm Oil Board (MPOB) data released during the midday break.
Production rose 9.7% with peak production season getting underway, while exports fell 1.9%.
MPOB data is a confirmation of building stocks despite relatively strong exports in light of rising competition from top producer Indonesia, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Palm oil’s discount over competing oils continues to support demand but it is resulting in world soy oil and sun oil prices to ease, forcing palm oil to stay lower to keep its discount intact, Bagani said. Soyoil prices on the Chicago Board of Trade fell 0.9%.
Palm oil may retest 3,666 ringgit
The Dalian Commodity Exchange was 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 retest a resistance at 3,666 ringgit per tonne, a break above could lead to a gain into 3,738-3,783 ringgit range, Reuters technical analyst Wang Tao said.
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