KUALA LUMPUR: Malaysian palm oil futures ended higher after reversing earlier losses on Tuesday, despite the anticipation of higher output and inventories.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 35 ringgit, or 0.91%, to 3,868 ringgit ($913.34) a metric ton at the close. The contract has risen for three consecutive sessions.
Prices are weaker due to the anticipation of increased stocks while production is expected to be as high as last month, a Kuala Lumpur-based trader said.
“With the current export figures and the possibility of stocks rising, buyers are looking at lower prices. Chicago soyoil is also dropping from high levels, while Dalian is not showing any signs of strength,” the trader added.
The Malaysian Palm Oil Board is expected to release its monthly supply and demand data on June 10.
Cargo surveyors estimate that exports of Malaysian palm oil products during May 1-25 rose between 7.3% and 11.6%, compared with the same period a month ago.
Malaysian palm oil futures range-bound on weaker soyoil
Dalian’s most active soyoil contract rose 0.21%, while its palm oil contract gained 0.8%. Soyoil prices on the Chicago Board of Trade climbed 1.01%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices were little changed as easing trade war concerns offset expectations OPEC+ will decide to increase their output at a meeting later this week.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.47% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
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