KUALA LUMPUR, Oct 4: Malaysian palm oil futures edged up on Friday, lifted by overnight U.S. Soyoil markets, but trade was muted as investors waited for an industry report on stocks and output volume in the world’s second-largest producer.
Market players and industry analysts expect Malaysia’s palm production to rise sharply in September and October, as tropical oil palm trees enter a seasonal cycle that encourages growth of fresh fruit.
Stocks at the end of August stood at 1.67 million tonnes, according to the industry regulator, the Malaysian Palm Oil Board. Data for September’s end-stocks, exports and output will be released on Oct. 10.
‘Today we opened higher due to the appreciation of bean oil yesterday,’ said a trader with a foreign commodities brokerage.
‘But the market is waiting for further information on palm oil stocks. Without any new leads, the market is just trading in a range,’ the Kuala Lumpur-based trader added.
By the midday break, the benchmark December contract on the Bursa Malaysia Derivatives Exchange had edged up 0.3 percent to 2,309 ringgit ($724) per tonne.
Palm has been stuck in rangebound trade for most of the week, leaving prices flat, in line to post a weekly loss of 0.04 percent.
Total traded volume stood at only 4,514 lots of 25 tonnes each, less than half the average 12,500 lots.
‘Without Chinese investors in the market, we’re a bit quiet,’ the trader added. Chinese markets, including the Dalian Commodities Exchange, are closed for a public holiday and will reopen on Oct. 8.
Technicals showed that the neutral range of Malaysian palm oil had narrowed to 2,285-2,332 ringgit per tonne, Reuters market analyst Wang Tao said.
Larger supplies of palm oil could outstrip demand and weigh on prices, which have lost 5.3 percent so far this year.
Leading vegetable oil analyst Dorab Mistry earlier predicted that a surge in output of global oilseeds could drag palm oil prices to new lows of 2,000 ringgit per tonne in January 2014.
In other markets, Brent crude oil futures fell below $109 a barrel on Friday on concern that a prolonged U.S. government shutdown would hurt oil demand, but losses were limited as a storm in the Gulf of Mexico curbed supply.
Weaker crude oil prices could shift some demand away from palm oil, which is used as a green alternative to produce biofuels.
In competing vegetable oil markets, the U.S. Soyoil contract for December edged down 0.5 percent in early Asian trade.
(AGENCIES)
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