Malaysian palm oil futures rose on Friday as traders took up positions ahead of a slew of industry reports that could shed light on a decline in vegetable oil supplies. The US Department of Agriculture's supply-demand report on Monday will update the agency's crop forecasts in the light of hot and dry weather hurting US soy yields that could lift soyoil's premium to palm oil.
On the same day, industry regulator Malaysian Palm Oil Board will issue August stocks data that may show declines for a second month as exports and local demand outstrip production during a key Muslim festival. But cargo surveyors are likely to show a drop in Malaysian exports for the period September 1-10 as buying normalises, although some traders say top importers India and China are waiting for prices to fall still more before committing.
"Expectations of bullish USDA numbers are holding the market up. After that is over, have you seen what happens when you kick a rock off a cliff," said a trader in Kuala Lumpur. The benchmark November palm oil on the Bursa Malaysia Derivatives Exchange settled up 0.8 percent at 3,050 ringgit ($1,019.56) per tonne. Exchange volumes stood at 16,106 lots at 25 tonnes each versus the usual 25,000 lots in muted trading ahead of the industry data next week. Cargo surveyor Intertek Testing Services is set to issue Malaysia's September 1-10 palm oil exports and traders expect the levels at 379,000 tonnes - some 36 percent lower than the same period a month ago. "There is some normalising on export data. We need to watch and see if Indian buyers will wait for prices to come down a little for committing purchases," said another trader.
New palm oil export tax rules in Indonesia, the world's top palm oil producer, will kick in on September 15, a trade ministry official said on Friday. The taxes favour refined palm oil shipments. Traders said the minimal tax saving if palm oil firms sold RBD palm olein instead of crude palm oil would be $80-$100 a tonne. US soyoil for October delivery inched up 0.2 percent in late Asian trade. The most active May 2012 soy oil on China's Dalian Commodity Exchange rose 0.4 percent.