SINGAPORE: Malaysian palm oil futures rose to a one-week high on Wednesday, pulling away from near five-month lows earlier in the week, as investors eyed a potential fall in stocks in the world’s second-largest producer of the edible oil.
Malaysia’s April palm oil stocks likely fell 6.1 per cent to 2.04 million tonnes, with domestic consumption and lower exports outstripping a rise in output, a Reuters survey of five plantation companies showed.
Industry regulator the Malaysian Palm Oil Board (MPOB) will release official data stocks and output on Friday.
“The market is a bit bullish on the coming MPOB stocks data. On the physical side, there is some tightness in terms of cargoes for nearby months and people have come to notice this ightness,” said a Singapore-based trader with a global commodities house.
By the mid-day break, the benchmark July contract on the Bursa Malaysia Derivatives Exchange rose 1.3 per cent to RM2,289 per tonne, slightly below the intraday high at RM2,294, a level last seen on April 30.
Total traded volumes were thin at 10,882 lots of 25 tonnes each, compared to the usual 25,000 lots.
Technicals were bullish as Malaysian palm oil is expected to test resistance at RM2,295 per tonne, a break above which will lead to a further gain to RM2,335, said Reuters market analyst Wang Tao.
Traders will also be looking for an improvement in Malaysia’s palm oil exports data for May 1-10 due on Friday, after cargo surveyors reported slowing exports in April.
Shares of Wilmar International Ltd rose as much as three per cent in early trade on Wednesday after the Singapore palm oil firm posted a 23 per cent rise in first-quarter net profit, largely due to a recovery in its oilseeds and grains segment.
In other markets, Brent oil steadied above US$104 a barrel on Wednesday, recovering from earlier losses after data from China showed crude imports by the world’s No.2 consumer rose in April,
although concerns over faltering global demand growth kept gains in check.
In vegetable oil markets, US soyoil for July delivery gained 0.5 per cent in early Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange edged up 0.1 per cent.– Reuters
Source : Business Times