20.03.2019 (The Edge Markets MY) - KUALA LUMPUR (March 20): Malaysian palm oil futures rose on Wednesday to a two-week high, buoyed by expectations of slowing production growth and improved exports, charting a fourth straight session of gains.
The benchmark third-month palm oil contract on the Bursa Malaysia Derivatives Exchange climbed 1.6% to 2,164 ringgit (US$532.35) a tonne, reversing last week's losses.
"The futures seem to be riding on expectations of slower growth in production," a Kuala Lumpur-based trader said, citing updates from plantations that a heat wave was affecting output.
A bumper harvest last year in Malaysia and Indonesia, the world's major producers, had flushed the market with palm oil and dampened prices.
Stockpile concerns were further fanned, after the European Union announced plans to phase out use of palm oil in renewable transport fuel by 2030.
Exports of Malaysian palm oil products for March 1-20 rose 0.8% to 925,431 tonnes, from 918,047 tonnes shipped during Feb 1-20, cargo surveyor Societe Generale de Surveillance said on Wednesday.
Independent inspection company AmSpec Agri Malaysia however reported a 2.3% fall in exports for the same period.
Another trader said there was some short covering, as the market had fallen last week and there was positive sentiment building as Malaysia and Indonesia considered retaliatory action against the EU.
Palm oil dropped 2.8% last week.
Wang Tao, a Reuters market analyst for commodities and energy technicals said a break above 2,155 ringgit could lead palm oil to a gain to 2,190 ringgit.
The Chicago soybean oil was last up 0.4%.
The Dalian Commodity Exchange soyoil contract was up 0.4%, while palm olein contract rose 1%.
Palm, soy and crude oil prices at 1122 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR9 2095 +35.00 2047 2099 500
MY PALM OIL MAY9 2128 +36.00 2081 2137 9046
MY PALM OIL JUN9 2162 +33.00 2119 2172 22394
CHINA PALM OLEIN MAY9 4486 +42.00 4446 4486 418932
CHINA SOYOIL MAY9 5558 +22.00 5506 5564 289882
CBOT SOY OIL MAY9 29.37 +0.13 29.2 29.4 6086
INDIA PALM OIL MAR9 528.80 +5.10 524.20 539.4 1374
INDIA SOYOIL APR9 741.7 +3.25 738.2 742.35 7380
NYMEX CRUDE APR9 58.50 -0.53 58.39 59.12 710
(US$1 = 4.0650 ringgit)