KUALA LUMPUR (March 1): Malaysian palm oil futures jumped to a one-week high on Wednesday, supported by strong gains in Chicago Board of Trade soyoil, though market sentiment remained cautious ahead of an industry conference in Kuala Lumpur next week.
Benchmark palm oil futures for May on the Bursa Malaysia Derivatives Exchange rose 2.2% to RM2,831 (US$636.82) a tonne on Wednesday evening, its strongest daily gain in two months. It earlier hit RM2,835, its highest since Feb 21.
Traded volumes stood at 67,107 lots of 25 tonnes each at the close of trade.
"Palm opened higher based on soyoil movement overnight," one Kuala Lumpur futures trader said, referring to soyoil futures on the Chicago Board of Trade.
Soyoil jumped as much as 6% on Tuesday after reports that the US President Donald Trump was preparing an executive order on biofuels, which count soyoil as a feedstock. The claims were later denied.
However, the trader added that market players were cautious overall because leading analysts are expected to make bearish comments at an upcoming conference.
Production is expected to rise from the second quarter of the year as the crop-damaging effects of El Nino wear off and fresh fruit yields recover.
"Buyers know analysts will give calls on the negative side," the trader said.
Palm oil could break resistance at RM2,820 a tonne and rise to the next resistance level at RM2,880, said Wang Tao, Reuters market analyst for commodities and energy technicals.
In related vegetable oils, soybean oil on the Chicago Board of Trade gained 1.1%, while the soybean oil contract on the Dalian Commodity Exchange rose 1.3%.
The May contract for palm olein on the Dalian Commodity Exchange was also up 1.3%.
Palm oil prices track the movements of related oils because they compete for a share in the global vegetable oils market.
Palm, soy and crude oil prices at 1037 GMT
|MY PALM OIL||MAR7||2951||+53.00||2880||2951||46|
|MY PALM OIL||APR7||2870||+65.00||2822||2876||2930|
|MY PALM OIL||MAY7||2826||+61.00||2783||2835||33456|
|CHINA PALM OLEIN||MAY7||5856||+74.00||5818||5922||659580|
|CBOT SOY OIL||MAY7||34.3||+0.28||33.78||34.47||17058|
|INDIA PALM OIL||MAR7||539.50||-7.30||532.10||543.9||2510|
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 = RM4.4455)
(US$1 = 66.8450 Indian rupees)
(US$1 = 6.8791 Chinese yuan)