SINGAPORE: Malaysian palm oil futures rose on Thursday to their highest in more than a month, stretching gains to a third straight week as investors were optimistic about a recovery in demand ahead of the Muslim holy month of Ramadan.
Higher export demand as buyers restock ahead of the festival in July and easing production could trim stocks further in the world’s second largest producer, whose inventory fell to 1.93 million tonnes by the end of April.
But bullish sentiment was contained ahead of the long weekend and as traders look out for further exports data due next week. The Malaysian financial markets will be closed on Friday for a public holiday.
“Although production looks likely to be lower, stocks level at the end of the month will really depend on how exports perform for the last 10 days. Resistance is at RM2,400,” said a trader with a domestic commodities brokerage in Kuala Lumpur.
By the mid-day break, the benchmark August contract on the Bursa Malaysia Derivatives Exchange had gained 0.6 per cent to RM2,373 per tonne, slightly off its high at RM2,374, a level last seen on April 11.
Total traded volumes were 10,402 lots of 25 tonnes each, slightly lower than the usual 12,500 lots.
Technical analysis is bullish as it showed a target at RM2,388 per tonne had been confirmed for palm oil, as it has pierced above a resistance at RM2,362, Reuters market analyst Wang Tao said.
For the week, prices are on track for a gain of 1.6 per cent, despite weaker exports data for the first 20 days of May, as investors look to restocking demand to support prices.
In other markets, Brent crude futures slipped towards US$102 a barrel as fresh data from China cast doubt on the strength of recovery in the world’s second-biggest oil consumer and the dollar weighed on commodity markets.
In vegetable oil markets, US soyoil for July delivery fell 0.1 per cent in early Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange fell 0.1 per cent.– Reuters
Source : Business Times