Updates with closing price
By Brijesh Patel and Ashitha Shivaprasad
Singapore, June 6 (Reuters) –Malaysian palm oil futures closed more than 1% higher on Thursday, tracking gains in the crude oil market, while traders waitedexport and production data from the world’s second-biggest producer for more cues.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange closed 55 ringgit, or 1.4%, higher at 3,961 ringgit ($844.20) per metric ton. The contract lost 3.8% on Tuesday, itsbiggest one-day drop since May 31 last year.
“It is getting a bargain buying based on some support levels after the correction in prices and now, the energy prices are higher in Asian hours, so it is providing further support,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“Key buyer India is gradually increasing its purchases and China is also active in the market. We expect prices to go up from here.”
India’s palm oil imports rose 12.4% in May from the previous month to reach a four-month high as a recent price correction led to higher purchases, five dealers told Reuters.
Crude oil extended gains from the previous session amid growing expectations the Federal Reserve will cut interest rates in September. O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract DBYcv1 gained 1.2%, while its palm oil contract DCPcv1 added 1.6%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 1.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
“Palm oil is trading at a discount compared with other oils and that has given strength to the market,” said one Singapore-based broker.
Investor focus is shifting to the monthly palm oil data from Malaysian Palm Oil Board (MPOB), due on June 10.
Malaysian palm oil inventories by May-endwere at 1.75 million metric tons, according to a Reuters survey, up 0.39% since April.
Exports of palm oil products were estimated to have jumped by 14.32% to 1.41 million tons due to a recovery in palm’s competitive price to soybean oil in May.
($1 = 4.6920 ringgit)
Reporting by Brijesh Patel and Ashitha Shivaprasad in Singapore; Editing by Subhranshu Sahu and Sonia Cheema
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