KUALA LUMPUR: Malaysian palm oil futures rose on Thursday, as traders were expecting robust export demand from key destinations while also awaiting Malaysian Palm Oil Board demand and supply data for further cues.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 38 ringgit, or 0.86%, to 4,480 ringgit ($1,065.40) a metric ton at the midday break.
The contract fell 0.76% in the previous session.
The Malaysian bourse will be closed on Friday for a public holiday.
Crude palm oil futures traded higher as traders are expecting September export demand to stay strong while also awaiting Malaysian Palm Oil Board data and exports figures next week, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“The production numbers will be the key determinant of the next market direction,” he said.
Malaysia’s palm oil inventories are forecast to rise for a sixth consecutive month in August, as production continues to outpace exports despite a recovery in demand, a Reuters survey showed on Wednesday.
Dalian’s most-active soyoil contract rose 0.14%, while its palm oil contract gained 0.3%.
Soyoil prices on the Chicago Board of Trade were up 0.06%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices slid, extending a decline of more than 2% in the previous trading session, as investors and traders look ahead to a weekend meeting of OPEC+ where producers are expected to consider another increase in output targets.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.14% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Palm oil may test support zone of 4,367 ringgit to 4,381 ringgit per metric ton, a break below could open the way toward 4,343 ringgit.
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