Malaysia crude palm oil futures closed broadly higher on Friday ahead of a key industry report on Monday which traders said will likely show a drop in the country's palm oil inventory. At the close, the benchmark June contract jumped 3.8 percent to 2,594 ringgit ($810.9) per tonne and the May contract added 1.3 percent to close at 2,553.
Overall traded volume stood at 16,708 lots of 25 tonnes each - sharply higher than the usual 10,000 lots. "Expectations of a supportive MPOB report have led to some short-covering activities in the market," said a trader from a foreign brokerage.
The trader was referring to the scheduled release on Monday of Malaysia's end-March palm oil stocks, production, exports and imports data by industry regulator the Malaysian Palm Oil Board (MPOB). Malaysian palm oil stocks could fall to a six-month low in March, as higher overseas demand along with local consumption outweighed a recovery in production, a Reuters poll showed.
Apart from the MPOB report, traders will also watch closely the release of April 1-10 palm oil export data on Saturday by cargo surveyor Intertek Testing Services. Another surveyor Societe Generale de Surveillance will release the export numbers on Monday.
Traders said firmer crude oil prices as well as overseas vegetable oil markets also contributed to the upbeat sentiment on the local palm oil futures market. Oil rose above $86 in Asian hours to near 18-month highs as positive US economic indicators and rallying equities lifted expectations for sustained energy demand growth in the number one energy consumer. On Friday, May soyoil contract on the Chicago Board of Trade was up 0.7 percent and the most active September soyoil delivery on China's Dalian Commodity Exchange rose 0.5 percent.
INDONESIA PALM TRADES In Indonesia, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, sold 7,500 tonnes of crude palm oil in an auction at a top price of 7,360 rupiah ($0.813) per kg, against 7,375 rupiah per kg on Thursday. Producers in Medan, home to Indonesia's main palm oil export port of Belawan, did not hold any palm oil tenders on Friday. Palm, soy and crude oil prices at 1032 GM.