Palm oil surges
February 09, 2013
Malaysian palm oil futures ended just slightly higher in rangebound, thin trade on Friday, posting a marginal weekly gain as traders remained cautious ahead of the Lunar New Year holiday. Market participants were waiting for US Department of Agriculture (USDA) monthly supply and demand reports later in the day, which may show tighter soybean stocks.
Lower production of soyabean and soyabean oil could shift some demand to palm oil. Malaysian inventory and output data for January from industry regulator the Malaysian Palm Oil Board (MPOB) will give more trading clues when it is released next Wednesday as the country’s markets return from the Lunar New Year break. Malaysian financial markets will be closed next Monday and Tuesday for the Lunar New Year holiday, while China’s will shut for the week.
At market close, the benchmark April contract on the Bursa Malaysia Derivatives Exchange edged up 0.4 percent at 2,560 ringgit ($833) per tonne. Prices were rangebound between 2,532 and 2,562 ringgit. Total traded volumes were thin at 16,581 lots of 25 tonnes each, compared to the usual 25,000 tonnes. For the week, prices edged up 0.1 percent higher, the fourth straight week of gains.
Technical analysis shows palm oil’s bearish target at 2,510 ringgit remains intact despite its rebound to 2,567 ringgit on Thursday, said Reuters market analyst Wang Tao. Malaysia’s palm inventory levels most likely dropped 2.9 percent to 2.55 million tonnes in January from December’s all-time high, the first decline since last June, a Reuters survey showed on Thursday. In competing vegetable oil markets, US soyaoil for March delivery lost 0.2 percent in late Asian trade. The most active September soybean oil contract on the Dalian Commodity Exchange closed 0.5 percent lower.