May 4, 2018 / 5:35 AM / a year ago

VEGOILS-Palm sees strongest gains in 2 weeks on falling stocks forecast

    * Malaysia April stocks seen falling to 6-month low -
Reuters poll
    * Gains in overnight US soyoil also support palm - Trader
    * Malaysia Palm Oil Board to release data on May 10

    By Emily Chow
    KUALA LUMPUR, May 4 (Reuters) - Malaysian palm oil futures
clocked their strongest gain in two weeks in early trade on
Friday on expectations of falling inventories, after a sharp
decline on Thursday evening and being largely range-bound this
    The benchmark palm oil contract for July delivery
on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at
2,337 ringgit ($594.35) a tonne at the midday break, its biggest
gain since April 20. It earlier fell to a low of 2,324 ringgit,
its weakest level since August 2016. 
    The market, however, fell 1.8 percent for the week so far,
in line for a second consecutive weekly decline. 
    Trading volume stood at 17,156 lots of 25 tonnes each at the
midday break.
    "The market is up on expectations that end-stocks will
drop," said a futures trader in Singapore. "Consumption could
also be supported due to Ramadan," he said, referring to the
Muslim fasting month which begins in mid-May this year.
    Ramadan typically leads to higher usage of palm oil for
cooking in Muslim majority regions, which sees devotees break
day-long fasts with communal feasting.
    Malaysian palm oil inventories at end-April are expected to
fall 4.1 percent to 2.23 million tonnes, its lowest in six
months, according to a Reuters poll of nine traders, planters
and analysts.
    Meanwhile, the survey respondents also forecast that April
exports will fall 5.5 percent on-month to 1.48 million tonnes,
but output will remain flat at 1.57 million tonnes. 
    Official data for the month of April is scheduled for
release by industry regulator the Malaysian Palm Oil Board on
May 10 at around 0430 GMT.
    Another trader added that overnight gains in U.S. soyoil on
the Chicago Board of Trade provided additional support to palm. 
    The Chicago July soybean oil contract rose as much
as 0.7 percent on Thursday, but was last down 0.4 percent on
    In other related oils, the September soybean oil on China's
Dalian Commodity Exchange fell 0.3 percent, while the
Dalian September palm oil contract declined 0.8 percent.
    Palm oil is impacted by movements in rival edible oils as
they compete for a share in the global vegetable oils market. 

    Palm, soy and crude oil prices, as of 0500 GMT
 Contract          Month    Last  Change     Low    High  Volume
 MY PALM OIL       MAY8        0   +0.00       0       0       0
 MY PALM OIL       JUN8     2334   +5.00    2322    2338    1029
 MY PALM OIL       JUL8     2337   +5.00    2324    2342    7795
 CHINA PALM OLEIN  SEP8     4946  -40.00    4930    4958  272680
 CHINA SOYOIL      SEP8     5756  -16.00    5728    5770  238446
 CBOT SOY OIL      JUL8     30.7   +0.00   30.66   30.75    2587
 INDIA PALM OIL    MAY8   635.90   +2.80  633.00     636     162
 INDIA SOYOIL      MAY8    747.9   +1.60   746.5   748.9     830
 NYMEX CRUDE       JUN8    68.36   -0.07   68.33   68.66   26630
  Palm oil prices in Malaysian ringgit per tonne
  CBOT soy oil in U.S. 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 U.S. dollars per barrel
($1 = 3.9320 ringgit)
($1 = 66.6800 Indian rupees)
($1 = 6.3452 Chinese yuan)    

 (Reporting by Emily Chow; Editing by Sunil Nair)
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