Malaysian palm oil futures hit a fresh one-month top on Thursday, charting a fourth session of gains in five, as expectations of falling end-March stockpiles boosted the market. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 0.7 percent to 2,472 ringgit ($639.59) a tonne at the end of the trading day. It earlier rose to 2,478 ringgit a tonne, its highest since March 7.
Trading volume stood at 26,381 lots of 25 tonnes each at the close of trade. "The market is looking at end-stocks reducing," a Kuala Lumpur-based trader said, referring to Malaysian inventory levels at the end of March. Another trader said news of China's increase in tariffs by up to 25 percent on 128 US products including soyabeans also lent support to the market.
China's move to impose tariffs on imported US soyabeans may boost palm oil's draw in the short term, traders and analysts said, as the spread between palm and soyaoil is expected to widen as the latter becomes more costly in Beijing. Palm oil stocks in Malaysia, the world's second largest producer of the tropical oil, are expected to have slipped to their lowest in five months, down 8.6 percent from February to 2.27 million tonnes, according to a Reuters poll on Thursday.
The survey also showed exports to have risen to the highest in over a year and a half at 1.57 million tonnes, up 19.3 percent from February. Meanwhile production is seen up 11.3 percent to 1.49 million tonnes in March, its first monthly gain in five. Official data will be released by industry regulator, the Malaysian Palm Oil Board (MPOB), on April 10. In related oils, the Chicago Board of Trade's May soyabean oil contract was up 0.3 percent.
China's Dalian Commodity Exchange is closed on Thursday for a national holiday. Palm oil prices are impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market. Palm oil may rise to a range of 2,471-2,498 ringgit per tonne, according to Reuters market analyst for commodities and energy technicals Wang Tao.