KUALA LUMPUR: Malaysian palm oil futures reversed early losses to close higher for a third consecutive session on Wednesday, as output data from the world’s second-biggest producer’s industry regulator is awaited.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 34 ringgit or 0.88%, to 3,877 ringgit ($814.67).
The contract had earlier traded cautiously flat, balancing expectations of Malaysian Palm Oil Board (MPOB) output data while pending further insights from the World Agricultural Supply and Demand Estimates (WASDE) as well as demand estimates, said Marcello Cultrera, director at commodities consultancy Apricus 8 Pte Ltd.
“While parities have improved at destinations, there are concerns on supply levels moving forward in-line with Southeast Asian weather forecasts,” Cultrera said.
Malaysia’s palm oil stocks likely fell for three straight months to end-January, in-line with seasonal low production.
India’s January palm oil imports hit 3-month low as soyoil shipments rise
Palm oil stocks were seen falling to 2.14 million metric tons in January, down 6.62% from December, according to 10 traders, planters and analysts. Crude palm oil output was seen declining 11.83% from the previous month to 1.37 million tons.
The Malaysian Palm Oil Board will release its monthly data on Feb. 13.
Dalian’s most-active soyoil contract fell 0.22%, while its palm oil contract gained 0.14%. Soyoil prices on the Chicago Board of Trade rose 0.33%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil edged higher for a third straight day on Wednesday after industry data showed U.S. oil stocks grew less than expected and the U.S. sharply cut its forecast for the country’s oil output growth, easing concerns about potential oversupply.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, rose 0.08% against the dollar, making the commodity more expensive for buyers holding the foreign currency.
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