Palm oil edges up

Malaysian palm oil futures made gains on Friday evening, their first in three sessions, tracking strength in crude oil prices and as the market saw profit taking in evening trade. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 0.5 percent to 2,414 ringgit ($619.77) a tonne at the close of trade.
The market is also up 0.6 percent for the week, charting a second week of gains in three. Trading volumes stood at 41,199 lots of 25 tonnes each at on Friday evening.
"The market is seeing some profit taking," said a Kuala Lumpur-based trader, adding that gains in crude oil prices also lent support to palm's prices. "Whenever crude reaches $70, it will be supportive to palm." Oil prices were set for a second consecutive week of gains on Friday, buoyed by tightening supplies and continued support from Opec and its allies on supply cuts.
Palm oil's gains were weaker earlier in the day, but edged up on the back of shipment data. Malaysia's palm oil exports rose 2 percent between April 1-20 versus the corresponding period last month, inspection company AmSpec Agri Malaysia on Friday. Cargo surveyor Societe Generale de Surveillance however reported a 1.8 percent decline for the same period.
On a longer term outlook, palm oil prices are expected to decline, said a futures trader earlier in the day. "Moving forward, the market should be going down as production picks up on seasonal pattern, and on a softening of exports due to the reintroduction of export duties," he said.
Malaysia extended a duty suspension implemented at the start of 2018 until end-April in a move to encourage demand to reduce inventory levels and support prices. The duties will resume in May at a 5 percent export tax rate.
Palm oil production in top growers Indonesia and Malaysia in April is forecast to rise on-month in line with seasonal trend. Malaysian March output had rose 17.2 percent month-on-month to 1.57 million tonnes, its highest March production since 2000, according to data from the Malaysian Palm Oil Board.
In other related oils, the Chicago Board of Trade's July soyabean oil contract slightly rose 0.03 percent, while September soyabean oil on China's Dalian Commodity Exchange was also up 0.03 percent.
The Dalian September palm oil contract edged down 0.04 percent. Palm oil prices are affected by movements in rival edible oils, as they compete for a share in the global vegetable oils market.