Palm oil edges up ahead of USDA report
Malaysian palm oil futures inched up on Friday, posting a weekly gain of more than three per cent, as expectations of upcoming bullish data offset investor caution after the industry’s biggest annual meeting this week.
Investors took positions ahead of the US Department of Agriculture (USDA) report due on Friday that is expected to show a smaller soybean supply, while a Reuters poll also showed Malaysian palm oil stocks are likely to ease in February.
But some market participants still remained cautious after a consensus on price forecasts for this year failed to emerge from the Bursa Malaysia palm oil conference that ended on Wednesday.
"The mixed views from the conference are kind of disappointing and with the focus now being shifted to the USDA tonight, I still believe the palm market will continue to be trading sideways," said Ker Chung Yang, investment analyst with Phillip Futures in Singapore.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange had edged up 0.7 per cent to RM2,449 per tonne, but was off a high of RM2,451, a level unseen since February 26.
Total traded volume stood at 27,046 lots of 25 tonnes each, slightly higher than the usual 25,000 lots, as investors took positions ahead of the industry data.
Technicals showed palm oil was expected to fall towards RM2,384 per tonne, as a rebound from the March 1 low of RM2,367 has been temporarily completed, Reuters market analyst Wang Tao said.
A decline of nearly a fifth in output probably eased Malaysian palm oil stocks in February to a six-month low, a Reuters survey of five plantation companies showed on Thursday.
For the week, palm oil posted a gain of 3.4 per cent, although trade volumes were thin for most of the week as market participants watched for trading cues from the conference.-- Reuters