Palm edges up on stronger soyoil, weaker production outlook

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KUALA LUMPUR (April 3): Malaysian palm oil futures were up on Monday, rising from a near six-month low hit earlier in the session, and were set to snap two previous sessions of losses, gaining strength from rival oilseed soy and a weaker production outlook.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.3% at RM2,654 (US$599.91) a tonne at the midday break. It earlier hit an intraday low of RM2,643, its weakest level since Oct 14.    

Traded volumes stood at 13,123 lots of 25 tonnes each at noon.

"The market is up tracking soybean performance... And also on sentiment over production expectation,," said a futures trader from Kuala Lumpur, referring to Malaysia's palm oil output forecasts. 

March output of the tropical oil in the world's second largest producer could rise in line with the seasonal trend, but production growth is expected to be small, according to traders.

Production in February declined 1.4% on-month, according to data from the Malaysian Palm Oil Board, the industry regulator. March data is scheduled for release on April 10. 

Palm oil is expected to test a support at RM2,638 per tonne, a break below which could cause a further loss to RM2,609, according to Reuters market analyst for commodities and energy technicals Wang Tao.

Palm oil is also impacted by the price movements of related edible oils, including soyoil, as they compete for a share in the global vegetable oils market.

Soybean oil on the Chicago Board of Trade was up 0.3%. China's Dalian Commodity Exchange is closed on Monday and Tuesday for a national holiday. 

Palm, soy and crude oil prices at 0518 GMT

Contract           Month     Last   Change  Low  High  Volume
MY PALM OIL        APR7 0    +0.00 0 0      55
MY PALM OIL  MAY7    2745 +9.00    2736 2757 1195
MY PALM OIL        JUN7      2654 +8.00 2643 2668 6650
CHINA PALM OLEIN SEP7 0 +0.00 0 0 0
CHINA SOYOIL       SEP7 0 +0.00 0 0 0
CBOT SOY OIL       MAY7 31.84 +0.06    31.78 32.03 3029
INDIA PALM OIL     APR7    514.30 +1.60   513.00 514.6 299
INDIA SOYOIL       APR7     636.2    +1.10    635.3   636.7 1390

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 = RM4.4240)
(US$1 = 64.8775 Indian rupees)
(US$1 = 6.8832 Chinese yuan)