By Mei Mei Chu
KUALA LUMPUR, October 21 (Reuters) – Malaysian palm oil futures rose on Friday and headed for a weekly rise as the onset of the monsoon season stoked production concerns, but gains were capped by gloom October exports.
The reference palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange rose 9 ringgits, or 0.22%, to 4,105 ringgits ($866.77) per tonne at the midday break.
For the week, the contract has rebounded and is up 7.1% so far.
Storms and the high risk of flooding during the year-end monsoon season – which lasts between October and January – are likely to disrupt harvesting activities and hurt production in the world’s second-largest palm producer.
The market is supported by expectations of lower production and a weak ringgit, while weak exports and weekend profit taking would limit the upside, a Kuala Lumpur-based trader said.
Exports of Malaysian palm oil products from October 1 to 20 fell between 4.3% and 8.4% of the same week in September, according to two cargo inspectors. Another company, AmSpec Agri Malaysia, estimated exports increased by 3.3%.
In related oils, Dalian’s most active soybean oil contract DBYcv1 edged up 0.1%, while its palm oil contract DCPcv1 fell 0.7%. Chicago Board of Trade Soybean Oil Price BOcv1 were down 0.2%.
Talks on extending a July deal which took over Ukraine Exports of grain and fertilizers from the Black Sea are not progressing much because Russian concerns are not duly taken into account, the Russian ambassador in Geneva said on Thursday.
Malaysia’s financial markets will be closed on Monday for the Diwali festival.
Palm oil is biased to fall to a range of 3,958 to 4,001 ringgit per tonne, following its failure to break resistance at 4,194 ringgit, Reuters technical analyst Wang Tao said. TECHNICAL/C
($1 = 4.7360 ringgit)
(Reporting by Mei Mei Chu; Editing by Uttaresh.V and Savio D’Souza)
((Meifong.chu@thomsonreuters.com))
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