Malaysian palm oil futures rose on Thursday to their highest in more than a month, stretching gains to a third straight week as investors hoped for a recovery in demand ahead of the Muslim fasting month of Ramazan. Higher export demand as buyers restock ahead of the event in July and easing production could trim stocks further in the world's second largest producer, whose inventory fell to 1.93 million tonnes by the end of April.
But bullish sentiment was contained ahead of the long weekend and as traders look out for further exports data due next week. The Malaysian financial markets will be closed on Friday for a public holiday. "Although production looks likely to be lower, stocks level at the end of the month will really depend on how exports perform for the last ten days. Resistance is at 2,400 ringgit," said a trader with a domestic commodities brokerage in Kuala Lumpur.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange gained 0.5 percent to close at 2,370 ($782) ringgit per tonne, slightly off its high at 2,375 ringgit, a level last seen on April 11. Total traded volumes were 32,836 lots of 25 tonnes each, slightly lower than the usual 35,000 lots. Technical analysis is bullish as it showed a target at 2,388 ringgit per tonne had been confirmed for palm oil, as it has pierced above a resistance at 2,362 ringgit, Reuters market analyst Wang Tao said.
For the week, prices posted a gain of 1.5 percent, despite weaker exports data for the first 20 days of May, as investors look to restocking demand to support prices. In vegetable oil markets, US soyaoil for July delivery fell 0.4 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange fell 0.8 percent.
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