Malaysian crude palm oil rose 1.58 percent on Friday after reaching a six-week high on concern erratic weather may cut competitive crop yields and on strong demand ahead of Ramadan in August. The benchmark October contract on Bursa Malaysia's Derivatives Exchange rose 38 ringgit to 2,449 ringgit a tonne, after hitting an intraday high of 2,461 ringgit - a level last seen in June 4.
Overall volume stood at 26,327 lots of 25 tonnes each, nearly three times the usual 10,000 lots. "The market finished in positive territory after a neighbouring grain market surge," a trader in a local brokerage firm said. "Continued festival demand amid yields concern and weather scares in the United States will keep the market bullish."
Hot weather may also slow palm oil production, supporting the market amid strong demand ahead of Ramadan, a month-long fasting period from sunrise to sunset. The fast is ritually broken in the evening, often with a large communal meal. Palm oil is likely to continue gaining next week and may break the 2,500 ringgit level as dry weather in the United States may continue to offer support on soybean markets, another trader said. Players are also awaiting fresh leads from export numbers for the first 20 days which will do to come out on Tuesday.
Weather in the US Midwest is being closely watched, as the corn and soy crop go through a crucial development phase. Some meteorologists expect a high-pressure ridge to bring hot, dry conditions to the area in late July, which could cut corn and soy yield potential. Soyaoil markets also rose on Friday. US soyaoil for August delivery rose 0.23 percent while the most active January soyaoil contract on China's Dalian Commodity Exchange rose 1.26 percent.
INDONESIA PALM TRADES: The Jakarta-based PT KPB Nusantara, formerly known as the state marketing centre, sold 5,000 tonnes of crude palm oil offered in an auction on Friday with the top price at 7,327 rupiah ($0.810) per kg, against 7,248 rupiah per kg on previous day.
There was no palm oil auction in Medan, home to Indonesia's main palm oil export port of Belawan. Refiners in Jakarta offered refined, bleached, deodorised (RBD) palm oil, used for cooking oil, 7,825 rupiah per kg, against 7,725 rupiah per kg on previous day.
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