Malaysian palm oil futures closed higher on Thursday, reversing losses in the morning session as anticipation over strong export data in the first half of May underpinned the contract. Palm had climbed to its strongest since April 6 on Wednesday on worries an El Nino weather pattern would curb yields, but expectations of weaker demand in the second half of the month curbed gains and prompted investors to take profits.
However, market talk emerged late Thursday that exports between May 1-15 were above 30 percent, turning prices around. Cargo surveyors reported an up to 45 percent surge in shipments from Malaysia in the first ten days of the month from April. "The market is expecting a strong export number tomorrow," said a Singapore-based commodity trader. Data for exports between May 1 and May 15 will be released on Friday.
The benchmark July contract on the Bursa Malaysia Derivatives exchange ended up 0.3 percent at 2,205 ringgit ($615.92) a tonne, with prices trading between 2,171-2,208 ringgit. "If export figures tomorrow are bullish, prices may rally slightly. If not, the market will come down to test the 2,080 ringgit level," a palm trader with a foreign commodities brokerage in Kuala Lumpur told Reuters.
Total traded volume stood at 45,163 lots of 25 tonnes each, higher than the average 35,000 lots. Malaysia, the world's second-largest palm grower after Indonesia, will keep its June crude palm oil export tax at zero percent, continuing duty-free exports from this month, a government circular showed on Thursday. The US July soyoil contract rose 0.3 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange dropped 0.5 percent.