Malaysian palm oil futures climbed to an almost 13-month high on Wednesday, as traders continued to bet on a brighter demand outlook for palm oil following expectations of a smaller soyabean crop in coming months. The US Department of Agriculture said in a much-anticipated report on Friday that farmers would plant less soyabean than expected, indicating global oilseed supply will tighten further and helping palm oil cross the psychological 3,500 ringgit mark.
"If you are talking about an extraordinary leap, rather than a minor day-to-day fluctuation, it's more likely credited to the USDA report," said Selena Leong, an analyst at DMG & Partners Research in Singapore. Benchmark June palm oil futures on the Bursa Malaysia Derivatives Exchange gained 0.7 percent to close at 3,557 ringgit ($1,161) per tonne. Prices went to 3,574 ringgit, a level not seen since March 9 last year.
Traded volumes stood at around 20,989 lots of 25 tonnes each, lighter than the usual 25,000 lots. Palm oil is expected to range between 3,528 ringgit and 3,590 ringgit per tonne for one trading session before either dropping below or rising above that range, Reuters market analyst Wang Tao said.
Exports of palm oil from No 2 producer Malaysia rose in March from a month ago, after four straight months of declines, as indicated by data from cargo surveyors. Market players have also turned their focus to Malaysian palm oil stocks, which stayed above 2 million tonnes in February, to determine the consumption and production trend for the edible oil. Stocks data for March will be released next week by industry regulator Malaysian Palm Oil Board. In other vegetable oil markets, the most active US soyaoil contract for May edged up 0.1 percent in Asian trade. China's Dalian Commodity exchange is closed for public holidays and trading will resume on Thursday.