Palm oil steady at one-month top on hope of inventory fall

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KUALA LUMPUR (April 5): Malaysian palm oil futures held steady at a one-month top in early trade on Friday, in line to chart weekly gains of nearly 5%, on expectations of dwindling stockpiles and improved exports.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 0.1% at RM2,206 (US$540.69) a tonne at the midday break. It earlier rose to RM2,218, its highest levels since March 4.

Palm is also up 4.7% so far on-week, in line for a second weekly gain in three weeks.

A futures trader in Kuala Lumpur said the market, which had been overbought this week, is seeing some corrections now.

Palm oil futures had gained over 1% in its past three trading sessions, as industry players expect March data from industry regulator the Malaysian Palm Oil Board to show a decline in inventory levels.

Malaysia's palm oil stockpiles are likely to have dropped during March to its lowest mark in five months, according to a Reuters survey, as a hefty jump in exports outpaced production gains.

March inventories are expected to have fallen 6.4% from February to 2.85 million tonnes, the lowest since October 2018, while exports are pegged to come in at 1.63 million tonnes, a 23.4% rise from the previous month.

The Malaysian Palm Oil Board is scheduled to release March data on April 10.

Malaysian palm oil stockpiles rose to their highest in nearly two decades in December, and last increased unexpectedly in February by 1.3% to 3.05 million tonnes.

In other related oils, Chicago May soybean oil contract was down 0.2%.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.

Palm, soy and crude oil prices at 0553 GMT

Contract          Month     Last  Change     Low   High  Volume
MY PALM OIL       APR9      2140  +40.00    2120   2140      14
MY PALM OIL       MAY9      2176   +3.00    2170   2186     311
MY PALM OIL       JUN9      2206   +2.00    2199   2218    6957
CHINA PALM OLEIN  MAY9         0   +0.00  0 0 0
CHINA SOYOIL      MAY9         0   +0.00   0 0 0
CBOT SOY OIL      MAY9     29.13   -0.07    29.1  29.21     989
INDIA PALM OIL    APR9    544.40   +3.50  540.20  546.7     582
INDIA SOYOIL      APR9       740   +3.15  735.25  740.4    3180
NYMEX CRUDE       MAY9     62.14   +0.04   61.93  62.22   24149

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 = RM4.0800)
(US$1 = 6.7167 Chinese yuan)
(US$1 = 69.2110 Indian rupees)