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 VEGOILS-Palm inches up on hopes of smaller May production

Yahoo News (13/05/2020) - KUALA LUMPUR, May 13 (Reuters) - Malaysian palm oil futures edged higher on Wednesday, underpinned by a lower production outlook for the current month, but prices were capped as April inventories were at a five-month high and on worries over a coronavirus-led demand slump.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 9 ringgit, or 0.45%, to 2,002 ringgit ($462.14) per tonne by 0251 GMT, after falling 1.3% in the previous session.


* Analysts expect slower production growth this month after output surged 18.23% in April in Malaysia, the world's No. 2 producer. Kenanga Research forecast monthly growth of 2.7% in May production, while CGS-CIMB pegged output to fall 3%.

* "Production figures have increased 41% from the lows in January, inferring that a breather could be in store in the upcoming months ... before the usual peak production period in the (second half of the calendar year)," Adrian Kok, an equity analyst at Kenanga Investment Bank, said in a research note.

* Malaysia's April palm oil inventories jumped 18.3% to 2.05 million tonnes from the previous month, the highest since December, as production surged, data from the Malaysian Palm Oil Board showed on Tuesday.

* Malaysian palm oil industry leaders warned of depressed prices this year as the pandemic cuts global demand and boosts inventories, with the biggest producer warning of painful cost cuts.

* Dalian's most-active soyoil contract gained 0.11%, while its palm oil contract slipped 0.27%. Soyoil prices on the Chicago Board of Trade were trading up 0.3%.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

* Palm oil may retest a resistance at 2,014 ringgit per tonne, a break above which could lead to a gain into a range of 2,043 ringgit to 2,072 ringgit, Reuters technical analyst Wang Tao said.


* Asian equities were set to pull back on Wednesday as heightened concerns about virus infections and timing of a vaccine outweighed a lift from rebounding oil prices and upbeat corporate earnings in Europe.


0130 Australia Wage Price Index QQ, YY Q1

0600 UK GDP Est 3M/3M March

0600 UK GDP Estimate MM, YY March

0600 UK Manufacturing Output MM March

0600 UK GDP Prelim QQ, YY Q1

($1 = 4.3320 ringgit)

(Reporting by Mei Mei Chu; Editing by Anil D'Silva)

Read more at https://malaysia.news.yahoo.com/vegoils-palm-inches-hopes-smaller-033357511.html

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