Malaysian crude palm oil futures rose 1.8 percent on Friday helped by firmed crude and soyoil markets but bearish fundamentals capped further gains. The benchmark August contract on the Bursa Malaysia Derivatives Exchange settled up 67 ringgit a tonne at 3,690 ringgit ($1,127) a tonne after trading as high as 3,712 ringgit.
Prices for other traded months ranged between a gain of 35 and 85 ringgit, with 11,357 lots of 25 tonnes each traded. "We have plenty of oils here and is probably a lot too in Indonesia while demand is very slow. The whole scenario is very bearish," said a Kuala Lumpur-based trader.
"But crude oil and soyoil are supportive. We're very slowly following it." Soy futures on the Chicago Board of Trade rose in the previous session as storms swept through the US Midwest, causing flooding that is destroying crops and forcing processors to close plants.
July soybeans contracts were up 20 cents at $15.36-1/2 per bushel, while the July soyoil contract was up 1.20 cents at 66.20 cents per lb. But July soyoil eased 0.09 cent to 66.11 cent per lb during Asian trade on Friday. Oil prices dropped below $136 a barrel on Friday after volatile trading in the previous session spurred by threats to supplies from Nigeria, the world's eighth-largest oil producer.
US crude oil was $1.44 down at 135.30 a barrel by 1015 GMT. It recouped a $4 fall on Thursday, ending 36 cents higher at $136.74 a barrel "The upper side is well-capped by slow demand, high production and stocks. Whenever the prices go higher, somebody will sell it down because nobody has faith in the market," the trader said.
Malaysia's crude palm oil stocks rose a higher-than-expected 6.9 percent to 1,913,360 tonnes in May, from a revised 1,789,799 tonnes in April, official data showed. Exports were also weak, with Malaysian palm oil products shipped between June 1-10 falling 12 percent to 360,000 tonnes from 409,238 tonnes for May 1-10, said cargo surveyor Intertek Testing Services said. Societe Generale de Surveillance said palm oil shipments for the period fell 4.3 percent to 389,300 tonnes.
But dealers said overseas demand may pick up in coming weeks as buyers lock in supplies ahead of the festive season in key buying coutries such as India and Pakistan. In the cash market, crude palm oil for June in the southern region was traded at 3,660-3,700 ringgit.
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