KUALA LUMPUR/JAKARTA: Malaysian palm oil futures extended gains for a fourth day on Thursday to their highest in more than one week, underpinned by expectations of lower production and inventories while market participants await March palm oil data due next week.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 25 ringgit, or 0.67%, to 3,732 ringgit by midday. The contract have gained 6.26% so far for the week.
“The general market consensus is of a decline in Malaysian palm oil inventories by the end of March below 2 million tonnes and a further reduction to 1.65-1.7 million tonnes by the end of April,” commodity research head of Sunvin Group Anilkumar Bagani said.
Malaysian palm oil inventory shrank as world’s biggest palm oil exporter Indonesia raised domestic market obligation and restricted export, diverting global palm oil demand to Malaysia, while production remained uncertain, he added.
Cargo surveyors are scheduled to release March exports data on Friday, while a millers’ association has pegged a 22.9% slump in March 1-25 output, analysts said.
Palm oil may rise into 3,773-3,810 ringgit
Dalian’s most-active soyoil contract rose 0.6%, while its palm oil contract climbed 0.51%.
Soyoil prices on the Chicago Board of Trade were down 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may rise into a range of 3,773 ringgit to 3,810 ringgit per tonne to fill a gap forming on March 22, Reuters technical analyst Wang Tao said.
Source: Brecorder
