Malaysian palm oil futures inched up 0.7 per cent yesterday as some investors took positions with an eye to potentially bullish vegetable oil stocks data in the Southeast Asian country due next week.
“They (the investors) want to be on the safe side,” said a trader with a local commodities brokerage. “Export data for the the first ten days of August are also expected to be much higher as well.”
The benchmark October contract on Bursa Malaysia’s Derivatives Exchange settled up RM16 at RM2,341, just 0.7 per cent off a seven-week high hit on Wednesday.
Malaysia’s palm oil stocks fell 3.7 per cent in July to a three-month low, as the upcoming Asian festival season spurred more demand at a time when output growth was hit by poor yields, analysts forecast in a Reuters poll.
Industry regulator the Malaysian Palm Oil Board will issue July palm oil data on Monday at 0430 GMT. Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will unveil August 1-10 on the same day.
Traders said expectations of tight supplies come as more palm oil product deals are expected in less than three weeks leading up to the Asian festival, starting with Ramadan and ending with China’s mid-Autumn festival in early October.
Ramadan, the Muslim holy month where fasts in the day are followed by feasts in the evening, will see a majority of the plantation workers in top producers Indonesia and Malaysia taking leave as well as spur orders from overseas Muslim buyers.
US crude oil edged down near US$71, worsening sentiment for vegetable oils like soyoil and rapeseed, which are increasingly channelled into the biofuel sector in Europe and South America.