Malaysian palm oil futures hit more than three-week highs on Thursday as traders bet on strong overseas demand on the back of firm commodity markets. "Rumours saying that palm oil exports during May 1-20 could hit 780,000 to 800,000 tonnes, that's very high," a trader with foreign brokerage in Kuala Lumpur told Reuters, referring to key export data due on Friday.
Earlier this week, cargo surveyors showed palm oil exports in the first half of this month jumped as much as 33 percent to 601,984 tonnes from one month ago. The benchmark August crude palm oil contract on Bursa Malaysia Derivatives closed 1.9 percent higher at 3,360 ringgit ($1,107.997) per tonne. It earlier touched 3,367 ringgit - the highest since April 25.
Palm oil was further bolstered by adverse crop weather in Europe and the United States, which threatened to curb grain supplies, fuelling a rally across commodity futures. "This is the beginning of the weather market. Palm oil was supported by overseas grain futures at a time when domestic export data looks good," the same trader added. Reuters technical analysis showed palm oil would rise to 3,454 ringgit per tonne, as it has cleared a resistance at 3,300 ringgit. On the other hand, talks over higher stocks this month kept some players on the sidelines.
"Stocks could rise about 11 to 12 percent this month," said another trader in Kuala Lumpur, who expects cargo surveyors to show little or no growth in Malaysia's May 1-20 palm oil export data due on Friday. US soyoil for July delivery rose 0.6 percent in Asia trading hours, while the most active January 2012 China soyoil contract on Dalian Commodity Exchange climbed 0.7 percent.
"Soyoil gained momentum from the overseas market," said Zhan Zhi Hong, a Shenzhen-based oil analyst with China Merchant Bank. "But overall sentiment in Chinese financial markets remains bearish and cautious as there are no clear indications on the trend of the domestic economy," the analyst added.
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