KUALA LUMPUR: Malaysian palm oil futures inched higher on Thursday, as anticipation of lower output and strong demand from key destinations supported the market.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 18 ringgit, or 0.45%, to 3,983 ringgit ($943.39) a metric ton at the midday break. The contract fell 3.9% in the previous two sessions.
Crude palm oil futures traded higher on the expectation that production and export would remain bullish in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“We see production pace slowing down and robust demand going forward,” he added.
The Malaysian Palm Oil Board is expected to release its June supply and demand data on July 10.
Dalian’s most-active soyoil contract rose 0.38%, while its palm oil contract added 0.1%. Soyoil prices on the Chicago Board of Trade were down 0.27%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Palm oil ends lower as Middle East tensions weigh
The Bursa Malaysia Derivatives Exchange palm oil contract will be closed on Friday for a public holiday.
Crude oil prices inched higher, extending gains from the previous day as a larger-than-expected draw in U.S. crude stocks signalled firm demand, while investors remained cautious about the Iran-Israel ceasefire and stability in the Middle East.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.31% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Cargo surveyors estimated that exports of Malaysian palm oil products for June 1-25 rose between 6.6% and 6.8%, compared with the same period a month ago.
Malaysia has lowered its July crude palm oil reference price, a change that decreases the export duty to 8.5%, a circular on the Malaysian Palm Oil Board website showed.
Palm oil may retest support of 3,978 ringgit per ton, with a good chance of breaking it and falling towards 3,938 ringgit, Reuters technical analyst Wang Tao said.
Comments
Comments are closed for this article.