Malaysian palm oil futures climbed to their highest levels in two weeks on Monday, charting a fifth straight day of gains on stronger soyaoil and forecasts of weaker output.
Benchmark palm oil futures for May delivery on the Bursa Malaysia Derivatives Exchange rose 1.1 percent to 2,893 ringgit ($650) a tonne at the end of the trading day. It earlier hit 2,898 ringgit, its highest since Feb. 17, and has gained 4.4 percent since the start of the month.
Traded volumes stood at 36,939 lots of 25 tonnes each at on Monday evening.
Palm had slid 8.5 percent in February due to expectations of rising output and weakening demand, but was then lifted by soyaoil prices last week which rose on reports that the US president was preparing an executive order on biofuels, which counts soyaoil as a feedstock, although the claims were later denied.
Palm oil prices respond to movements of related oils including soyaoil because they compete for a share in the global vegetable oils market.
"Soyaoil was still trading on the higher end on Friday night and (February) production numbers are on a decline," said a futures trader from Kuala Lumpur, but he did not expect the rally to extend much longer.
"Speakers at an industry conference will be bearish in the next two days," he said, referring to a palm and lauric oil conference in Kuala Lumpur this week.
Palm prices are seen weakening between now and the second half of the year because production levels are expected to recover when the effects of a crop-damaging El Nino wear off.
Palm oil production for the full month of February is seen declining from a month ago, according to a Reuters poll, which pegged output to fall 4.5 percent to 1.22 million tonnes.
Palm oil may temporarily end its current bounce around resistance at 2,880 ringgit per tonne, said Reuters market analyst for commodities and energy technicals Wang Tao.
In related vegetable oils, soyabean oil on the Chicago Board of Trade rose 0.2 percent, while the May soyabean oil contract on the Dalian Commodity Exchange was also up 0.3 percent.
The May contract for palm olein on the Dalian Commodity Exchange gained 1 percent.
Comments
Comments are closed for this article.