Palm oil rises

Malaysian palm oil futures rose to the highest in more than two months on Thursday, buoyed by optimism that stocks of the tropical oil in the world's second largest producer could have dropped in May. A Reuters survey on Wednesday showed that end-stocks in Malaysia may have eased to 1.78 million tonnes last month, their lowest in almost a year, as exports and domestic consumption offset near-stagnant production.
Investors are now awaiting official stocks and output data scheduled to be released by industry regulator the Malaysian Palm Oil Board (MPOB) on Monday for more trading cues. Export data for the first ten days of June will also be announced on the same day. "Today the market is supportive because of the follow through from Wednesday's gains - now there's expectations that stocks would fall below 1.8 million tonnes," said a trader with a foreign commodities brokerage.
"Traders are waiting for next week's MPOB report and export data. Exports in June 1-10 should be around 400,000 tonnes, slightly better than May 1-10, as we move into the festive month," the Kuala Lumpur-based trader added, referring to the Muslim holy month of Ramazan, which begins in July this year. At market close, the benchmark August contract on the Bursa Malaysia Derivatives Exchange rose 1.3 percent to 2,434 ($790) ringgit per tonne, slightly below its intraday high at 2,436 ringgit, its loftiest since March 27.
Total traded volumes stood at 28,268 lots of 25 tonnes each, thinner than the average 35,000 lots as traders stayed on the sidelines ahead of next week's data. Technicals showed palm oil faces resistance at 2,420 ringgit per tonne, a break above which will lead to a further gain towards 2,457 ringgit, Reuters market analyst Wang Tao said.
Prices of the edible oil have also been supported by a steady decline in stocks, from a record high of 2.63 million tonnes in December, as seasonally weaker production in the first half of the year helped offset sluggish exports. In vegetable oil markets, US soyaoil for July crept up 0.2 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange ended almost unchanged.