Palm oil hit 1-week high

SINGAPORE: Malaysian palm oil futures rose to a one-week high on Wednesday, pulling away from near five-month lows plumbed 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 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 tightness," said a Singapore-based trader with a global commodities house.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange rose 1.3 per cent to close at RM2,290 per tonne, slightly below the intraday high at RM2,294, a level last seen on April 30.

Total traded volumes were thin at 23,202 lots of 25 tonnes each, compared to an average of 35,000 lots.

Technicals were bullish with Malaysian palm oil 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, oil steadied above US$104 a barrel after a rise in crude imports by the world’s No.2 consumer, China, though concerns about global demand kept a lid on prices.

In vegetable oil markets, US soyoil for July delivery gained 0.2 per cent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange edged up 0.3 per cent.-- Reuters

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