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Malaysia palm oil at 1-month high on soyoil
calendar16-07-2007 | linkReuters | Share This Post:

14/7/07 (Reuters)  - KUALA LUMPUR: Malaysian crude palm oil futures ended at one-month highs on Friday, after prices of rival soybean oil rose due to lower US government estimates for soybean reserves.

Expectations of better export demand from the food sector spurred a bout of short covering that supported the market.

The benchmark September contract on the Bursa Malaysia Derivatives Exchange settled eight ringgit higher at 2,623 ringgit ($762) a tonne.

Other traded months rose between five and 34 ringgit, except for the spot month which was down five ringgit in overall trade of 13,114 lots of 25 tonnes each. Industry officials say palm oil demand will pick up from July as buyers lock in supplies for the Muslim fasting month of Ramazan, which is due in September.

Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will release export data for July 1-15 next week on Monday.

Palm oil is just about five percent off a historic high of 2,764 ringgit reached in early June on robust demand from top importers China and India and dwindling supplies at home.

Chicago Board of Trade soybean futures rose to a near three-year high on Thursday as the market remained technically strong and jitters about dryness in the western belt sparked additional buying, traders said.

The monthly crop data released by the US Department of Agriculture estimated 2007/08 US ending soy stocks at 245 million bushels, 75 million bushels lower than its June forecast. Soyoil ended up 0.19 to 0.27 cent per lb, with July up 0.20 at 37.75 cents per lb — below the contract high of 37.85 cents made earlier.

Malaysian palm oil tracks the US soyoil market because both commodities are used in products ranging from cookies to lipstick and biodiesel. reuters