KUALA LUMPUR (Feb 7): Malaysian palm oil futures rose to a one-week high in early trade on Wednesday, supported by gains in rival edible oils.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 1% at RM2,495 (US$638.92) a tonne at the midday break, its strongest gain in over a week.
It earlier rose to RM2,505, its highest since Jan. 30.
Trading volumes stood at 17,587 lots of 25 tonnes each.
"The market is up after we saw strong overnight gains in the soybean oil market," said a Kuala Lumpur-based trader.
However, the gains may not be sustained due to weak demand for the tropical oil, he added.
Malaysian palm oil shipments are forecast to decline 8% in January to 1.31 million tonnes, according to a Reuters poll, while end-stocks are seen rising 0.6% to 2.75 million tonnes.
Output, however, is expected to fall 14.9% to 1.56 million tonnes.
Palm oil prices are impacted by other rival edible oils, as they compete for a share in the global vegetable oils market.
The March soybean oil contract on the Chicago Board of Trade surged 2% on Tuesday, buoyed by chart-based buying and optimism US lawmakers may soon renew a US$1-per-gallon biodiesel tax credit. It was last down 0.03% on Wednesday.
The gains were also in line with soybean futures, underpinned by dry weather curbing Argentina's crop yields and excessive rains slowing Brazil's harvest.
In other related edible oils, the May soybean oil on the Dalian Commodity Exchange edged up 0.5% while the Dalian May palm oil contract rose 0.3%.
Palm oil remains neutral in a range of RM2,448-2,520 per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices as of 0547 GMT
|MY PALM OIL||FEB8||2487||+6.00||2487||2499||28|
|MY PALM OIL||MAR8||2494||+19.00||2487||2505||770|
|MY PALM OIL||APR8||2495||+25.00||2487||2505||10642|
|CHINA PALM OLEIN||MAY8||5118||+14.00||5086||5142||194382|
|CBOT SOY OIL||MAR8||33.15||-0.01||33.09||33.27||5637|
|INDIA PALM OIL||FEB8||573.70||+2.80||572.50||579.9||647|
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in US cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in US dollars per barrel
(US$1 = RM3.9050)
(US$1 = 64.1500 Indian rupees)
(US$1 = 6.2525 Chinese yuan)