Malaysian palm oil price hits 6-week peak tracking soyoil

Crude palm oil being unloaded from tankers

KUALA LUMPUR: Malaysian palm oil futures hit their highest in six weeks on Monday, aided by rival oilseed soy's gains on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange.

The market was also up after industry regulator data on Monday showed falling production.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed 1.5 percent higher at 2,593 ringgit ($604) a tonne, its strongest daily gain in a week.

It earlier hit 2,598 ringgit a tonne, its highest level since May 25.

Traded volumes on Monday totalled 47,228 lots of 25 tonnes each.

"The market is up on external factors, the immediate reaction is to soyoil which has surged higher," said a Kuala Lumpur-based trader, adding that it was also supported by a decline in output data.
June production in Malaysia, the world's No.2 palm producer, fell 8.5 percent to 1.51 million tonnes, leading to a decline in end-stocks as well, data from the Malaysian Palm Oil Board showed on Monday.

Inventories fell 1.9 percent to 1.56 million tonnes, while exports for the full month of June dropped 8.4 percent to 1.38 million tonnes.

"The market could move up more in the afternoon because of the report, but gains could fizzle out in the next few days," said the trader, as production is seen rising on seasonal trends in the coming months while demand weakens. Shipments of palm oil products from Malaysia fell 1.9 percent during July 1-10, down from the corresponding period in June, data from cargo surveyor Intertek Testing Services showed on Monday.

However, another cargo surveyor, Societe Generale de Surveillance, showed exports rising 3.8 percent during the same period.

In other related oils, soybean oil on the Chicago Board of Trade rose 1.1 percent, while September soybean oil on the Dalian Commodity Exchange surged 2.1 percent.

The September palm olein contract was up 1.7 percent.

Palm oil prices are impacted by movements in related edible oils, as they compete for a share in the global edible oils market. - Reuters