21.03.2019 (The Edge Markets MY) - KUALA LUMPUR (March 21): Malaysian palm oil futures hit a more than two week high on Thursday, as easing concerns about high output and expectations of better export demand buoyed investor sentiment.
The benchmark third-month palm oil contract on the Bursa Malaysia Derivatives Exchange was up 0.4% at 2,172 ringgit (US$534.98) a tonne, locking in a fifth straight session of gains, after earlier hitting its highest level since March 4.
"Earlier expectations of a production increase is changing and exports are picking up," said a Kuala Lumpur-based trader, adding that hot weather could also lead to slowing output.
Top producers Indonesia and Malaysia had a bumper harvest last year, flushing the market with palm oil and dampening prices. And European Union plans to phase out palm oil in renewable transport fuel by 2030 have added to concerns.
Cargo surveyor Societe Generale de Surveillance reported on Wednesday a rise of 0.8% in exports of Malaysian palm oil products for the March 1-20 period, compared with the same period a month ago.
Meanwhile, a stronger ringgit made the vegetable oil less attractive to buyers holding foreign currencies, limiting the gains in palm oil prices.
The ringgit rose as much as 0.3% against the dollar to its strongest level since last July.
"The ringgit has continued to appreciate after the U.S. Federal Reserve signalled no rate hike," said another trader.
Palm oil is expected to test resistance at 2,190 ringgit per tonne, a break above which could lead to a gain to 2,227 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
The Chicago soybean oil contract was last up 0.4%. The Dalian Commodity Exchange soyoil contract was 0.3% higher, and the palm olein contract was
Palm, soy and crude oil prices at 1046 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR9 2090 -5.00 2082 2098 1357
MY PALM OIL MAY9 2137 +7.00 2120 2148 5257
MY PALM OIL JUN9 2172 +8.00 2154 2184 18458
CHINA PALM MAY9 4492 +26.00 4470 4502 294702
CHINA SOYOIL MAY9 5550 +18.00 5530 5572 158422
CBOT SOY OIL MAY9 29.39 +0.12 29.28 29.45 4257
INDIA PALM OIL MAR9 0.00 +0.00 0.00 0 0
INDIA SOYOIL APR9 740.7 +2.25 738.2 742.35 8520
NYMEX CRUDE MAY9 59.93 -0.30 59.81 60.33 123235
(US$1 = 4.0600 ringgit)
(US$1 = 6.6824 Chinese yuan)
(US$1 = 68.5100 Indian rupees)