Palm oil inches up on weaker production data

Malaysian palm oil futures edged up a fraction on Tuesday as the market rebounded from earlier profit taking, driven by a drop in production figures. The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 0.04 percent to 2,610 ringgit ($604.17) a tonne. Traded volumes stood at 45,378 lots of 25 tonnes each.
Palm fell earlier as traders took profits on Monday's rally. Traders said the market was adrift after reacting to encouraging export figures, awaiting new cues. Exports data released on Monday boosted sentiment. Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance reported a rise of 8.9 percent and 7.1 percent, respectively, in the exports of Malaysian palm oil products for the May 1-15 period from April 1-15.
"There is still a bullish bias as the exports data was quite good. The physical market is still strong, but a strengthening ringgit may hurt sentiment in the near term," a Kuala Lumpur-based trader added. Weakness in the ringgit makes palm more attractive to holders of foreign currencies. The trader said a fall in production data brought the market back into the black.
Southern Peninsula Palm Oil Millers' Association (SPPOMA) released data on Tuesday for May 1-15 showing a fall of 2.19 percent in production. In other related vegetable oils, soyabean oil on the Chicago Board of Trade was up 0.09 percent, on track for a fourth consecutive session of gains. The September soyabean oil contract on the Dalian Commodity Exchange rose 0.70 percent, while the September contract palm olein was up 0.11 percent. Palm prices are impacted by the movements of rival oilseed soya, as they compete for a share in the global vegetable oils market.