The Edge Markets (21/02/2018) - KUALA LUMPUR (Feb 21): Malaysian palm oil futures rose marginally on Wednesday, as lower production numbers stirred some interest despite slower buying from India capping the gains.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.16% at 2,489 ringgit (US$638.21) a tonne.

Trading volumes were robust, with 55,723 lots of 25 tonnes each during the first half.

"The Indian rupee has fallen a lot, so buying power from India has reduced. The market is expecting India will not buy aggressively for now," a Kuala Lumpur-based trader said.

However, data from Southern Palm Oil Millers Association (SPPOMA) showing a 22.6% fall in production for the Feb 1-20 period, lent support. "There was some short-covering from traders who sold down on Tuesday," the trader added.

Another trader said the market picked up after digesting the lower production figures from SPPOMA, and was boosted by a weakening in the ringgit.

A weaker ringgit usually makes palm oil more attractive for holders of foreign currencies.

That said, he said the market was expecting higher production, going forward. "Given the production recovery in January and February year-on-year, we are expecting higher production this year, which will exert pressure on inventory," the trader said.

The market will take further cues from production data on Thursday, the traders said.

The Chicago Board of Trade's March soybean oil contract rose 0.03%. China's Dalian Commodity Exchange was closed for the Lunar New Year and will reopen on Thursday.

Palm oil prices are impacted by other rival edible oils, as they compete for a share in the global vegetable oils market.
    
 Palm, soy and crude oil prices as of 1104 GMT

 Contract                      Month     Last    Change    Low     High    Volume
 MY PALM OIL               MAR8     2512     +1.00      2499     2530      1558
 MY PALM OIL               APR8      2500     +6.00      2484     2508      13403
 MY PALM OIL               MAY8      2491     +4.00      2475     2500      22346
 CHINA PALM OLEIN    MAY8         0       +0.00          0           0            0
 CHINA SOYOIL            MAY8         0       +0.00          0           0            0
 CBOT SOY OIL            MAY8      32.07    +0.01       31.92     32.12     5886
 INDIA PALM OIL           FEB8     579.30   +0.10      576.80    580.4      457
 INDIA SOYOIL              MAR8     746.1     -0.30       743.7     746.9    13360
 NYMEX CRUDE            APR8     61.29     -0.50       60.92     61.70     93557
 
 Palm oil prices in Malaysian ringgit per tonne
 CBOT soy oil in U.S. cents per pound
 Dalian soy oil and RBD palm olein in Chinese yuan per tonne
 India soy oil in Indian rupee per 10 kg
 Crude in U.S. dollars per barrel
 
(US$1 = 3.9000 ringgit)
(US$1 = 64.8500 Indian rupees)
(US$1 = 6.3439 Chinese yuan)

Read more at http://www.theedgemarkets.com/article/production-fall-stirs-buying-interest-palm-oil