Malaysian palm oil futures rose on Friday, gaining for a second straight week, as investors pinned their hopes on a recovery in exports in the second half of May to help ease stocks. Malaysian palm oil shipments for the first half of the month fell as much as 8 percent, cargo surveyor data showed, but the decline was smaller than the drop of nearly a fifth in the first ten days, suggesting that export demand could be recovering.
Stronger exports could eat into stocks that dipped below the psychological mark of 2 million tonnes in April, to 1.93 million tonnes, providing support for prices that have gained 0.7 percent this week. "It looks neutral to supportive at the moment, and I would still think it is just range-bound. The complete bull trend has not been established yet. We are still looking forward to Ramadan demand," said a Singapore-based trader with a global commodities house, referring to the Muslim holy month that starts early in July.
At market close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange was up 1 percent at 2,336 ringgit ($774) per tonne. Prices traded in a tight range between 2,327 and 2,342 ringgit. Total traded volumes stood at 31,976 lots of 25 tonnes each, slightly lower than the usual 35,000 lots.
Technicals showed palm oil is expected to rise to 2,346 ringgit per tonne as the rebound from the May 6 low of 2,230 ringgit has been extended, said Reuters market analyst Wang Tao. Traders are looking ahead to the first 20 days' exports data, due on Monday, for a better indication of the demand trend. Malaysia, the world's second largest producer, announced this week it would set its crude palm oil export tax for June at 4.5 percent, unchanged since March. In vegetable oil markets, US soyoil for July delivery rose 0.6 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange gained 1.4 percent.
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