Malaysian palm oil futures ended little changed yesterday as a rebound in crude oil prices provided support amid expectations for higher stocks, traders said.
The benchmark August contract on the Bursa Malaysia’s Derivatives Exchange closed down RM6 at RM2,569 (US$736.10) per tonne. Overall volume was 7,837 lots of 25 tonnes each.
“The market has been riding on crude oil in the past days. But other than that, the market will be sensitive on demand,” a trader at a Kuala Lumpur-based brokerage said, pointing to a
slew of palm oil data which is expected next week.
Crude oil rose above US$67 a barrel yesterday after a 3.5 per cent decline the previous day, boosted by increased oil price forecast from US investment bank Goldman Sachs. Crude for July delivery rose US$1.19 to US$67.31 a barrel by 0945 GMT.
The crude oil market gives some direction to palm oil prices as rival vegetable oils like soyoil and rapeseed oil are increasingly diverted into the biodiesel sector in Europe and
the United States, leaving palm oil to satisfy much of food demand.
Another factor affecting the market was rising stocks: production has started climbing as palm oil trees are now entering the higher production season, another trader said.
Traders estimate production in June could reach 1.5 million tonnes, up from an estimated 1.4 million tonnes in May. The Malaysian Palm Oil Board will announce palm oil production in May next week. US soyoil for July delivery was up 1.1 per cent in Asian trade.
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