KUALA LUMPUR (March 3): Malaysian palm oil futures rose slightly late on Friday, charting a fourth consecutive session of gains on forecasts that February inventory levels could remain flat.
Flat or declining inventory levels usually lend support to palm oil prices. End-stocks in Malaysia fell 7.6% to 1.54 million tonnes in January. Official data for February is scheduled for release on March 10.
Benchmark palm oil futures for May delivery on the Bursa Malaysia Derivatives Exchange were up 0.03% at RM2,863 (US$643.08) a tonne at the end of the trading day, after gaining about 4% in the last three sessions.
For the week, they have gained 2% in their first weekly rise in three.
Traded volumes stood at 40,918 lots of 25 tonnes each on Friday evening.
"Market signals are very mixed," said one Kuala Lumpur-based futures trader, who said that the market was reacting to expectations of flat inventory levels in February, and also looking ahead to an upcoming industry conference next week which is likely to produce bearish forecasts for prices.
"No one wants to take a strong, long position ahead of the palm and lauric oil conference," said another trader.
The market was down in early trade on Friday, in response to the expectations that leading analysts will give bearish price forecasts at the conference.
Palm prices are expected to weaken between now and the second half of the year as production levels are expected to recover when the effects of a crop-damaging El Nino wears off.
In related vegetable oils, soybean oil on the Chicago Board of Trade fell 0.3%, while the May soybean oil contract on the Dalian Commodity Exchange was down 0.1%.
The May contract for palm olein on the Dalian Commodity Exchange gained 0.4%.
Palm oil is expected to test a support at RM2,820 per tonne, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm, soy and crude oil prices at 1039 GMT
|MY PALM OIL||MAR7||3000||+21.00||2974||3005||94|
|MY PALM OIL||APR7||2920||+9.00||2883||2925||2066|
|MY PALM OIL||MAY7||2863||+1.00||2833||2869||23403|
|CHINA PALM OLEIN||MAY7||5896||+24.00||5822||5924||513128|
|CBOT SOY OIL||MAY7||34.02||+0.12||34||34.32||7586|
|INDIA PALM OIL||MAR7||536.60||-3.00||535.10||538.8||1615|
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 = RM4.4520)
(US$1 = 66.8275 Indian rupees)
(US$1 = 6.8970 Chinese yuan)