Palm oil rises to more than one-week highs

Malaysian palm oil futures edged up to more than one-week highs in thin trade on Monday as investors pinned their hopes on stockpiles having eased further in March, signalling stronger demand for the tropical oil, although the ringgit's recent rise capped gains.
Traders are looking ahead to the Malaysian Palm Oil Board (MPOB) data on March's inventory levels, due on Wednesday, to help gauge supply and demand fundamentals. A Reuters poll forecast Malaysia's palm oil stocks in March to have edged lower to 2.35 million tonnes as production likely eased 1.2 percent from a month ago. Stocks stood at 2.44 million tonnes at the end of February, down from a record 2.63 million tonnes at the end of December.
"The market is kind of slow today prior to the MPOB data, but should be supportive because we're expecting stocks to reduce," said a trader with a foreign commodities brokerage in Malaysia. But a strong ringgit will make margins turn worse for refiners, the trader said. "Most likely refiners will opt to stay on the sidelines, because if they buy CPO the margins will be very negative," the trader said.
By Monday's close, the benchmark June contract on the Bursa Malaysia Derivatives Exchange had climbed 1.7 percent to 2,400 ringgit ($784) per tonne. Prices earlier in the day touched 2,402 ringgit, the highest since March 29. Total traded volumes were thin at 26,880 lots of 25 tonnes each, compared to the average 35,000 lots seen so far this year.
The ringgit edged 0.1 percent lower against the dollar on Monday, giving up some gains after hitting its highest in more than 2 months on Friday due to short-covering ahead of upcoming elections. Investors are also keeping an eye on cargo surveyor export data due on Wednesday that will reveal Malaysia's shipments of palm oil products for the first ten days of April. Higher demand for refined products in March had helped offset lower crude palm oil shipments caused by a 4.5 percent export duty implemented for the month. The duty was up from zero percent in February. In vegetable oil markets, US soyaoil for May delivery rose 1.0 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodities Exchange climbed 0.7 percent.