Palm oil rises to 1-1/2-month high

Malaysian palm oil futures rose to their highest in more than 1-1/2 months on Monday, on optimism that stocks could ease further, although investor caution curbed gains. Malaysian exports of palm oil for the first 25 days of the month fell 5.2 percent from a earlier, recovering from a steeper decline of 9.4 percent in the first 20 days, cargo surveyor Intertek Testing Services said on Saturday.
A recovery in export demand as buyers restock ahead of the Muslim holy month of Ramazan in July and easing production could further trim stocks, which fell to 1.93 million tonnes in April. But bullish sentiment was contained on concerns that the US Federal Reserve would reduce monetary stimulus, a step that could threaten global economic growth and commodity demand.
"Investors of crude palm oil are hopeful that inventories will continue to fall," Singapore-based Phillip Futures said in a note to clients. "On the risk aspect, remarks by Federal Reserve's Chairman Ben Bernanke ... have caused anxiety." The broker added, "Crude palm oil prices will not be immune to collective commodities selling if sentiment turns sour on this aspect."
At market close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange was up 0.4 percent at 2,380 ($787) ringgit per tonne, after rising as high as 2,389 ringgit, a level last seen on April 10. Total traded volumes were thin, at 20,405 lots of 25 tonnes each, compared to the average of 35,000 lots, as most traders remained on the sidelines awaiting further exports data by cargo surveyor Societe Generale de Surveillance due later in the day.
Indonesia's April exports of crude palm oil and its derivatives fell 12 percent from the previous month to 1.49 million tonnes, an industry body in the world's top producer of the edible oil said, partly because of falling demand on weaker global economic activity. In other markets, Brent oil crude futures fell towards $102 per barrel on Monday, due to a weak economic outlook in a well-supplied market, with oil producer cartel Opec unlikely to shift policy at a meeting this week. In vegetable oil markets, the most-active September soybean oil contract on the Dalian Commodities Exchange fell 0.3 percent. The US Chicago Board of Trade futures market was closed for the Memorial Day holiday.