Palm oil tracks rival oils higher but output expectations, exports weigh

Malaysian palm oil futures climbed higher on Monday as stronger rival oils helped boost prices, but smaller-than-expected exports and expectation of higher output capped gains.

The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.55% to 4,243 ringgit ($899.70) by midday break. It rose as much as 1.89% earlier in the session before easing.

The benchmark contract for May delivery gained 4.86% last week, its highest weekly jump since Jan. 12.

The contract rose to track Chicago soybean oil and Dalian’s palm oil contract’s earlier gains, but some market participants were anticipating a higher production figure from the Southern Peninsular Palm Oil Millers Association, a Kuala Lumpur-based trader said.

The higher output expectation and sluggish export data were capping the gains.

“As shown from earlier export figures, exports were slower then traders’ expectations,” the trader said.

The exportof Malaysian palm oil products for March 1-15 rose 8.4% from shipments in February 1-15, independent inspection company AmSpec Agri Malaysia said on Friday, while cargo surveyor Intertek Testing Services reported a 3.3% increase in the same period.

Dalian’s palm oil contract DCPv1 lost 0.22%, reversing some of its 2.28% gains earlier in the session.

Itsmost-active soyoil contract DBYv1 rose 0.38%, while soyoil prices on the Chicago Board of Trade BOc2 edged 0.1% up.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Tags: output, exports, prices, Malaysia, soyoil, palm oil, futures