BANGKOK, Jan 15: Malaysian crude palm oil futures rose on Monday on concerns that continued heavy rain and floods could hit supplies in the key southern growing region, dealers said.
A rise of rival soyaoil futures on the Chicago Board of Trade also supported palm oil prices.
The benchmark third-month March contract on the Bursa Malaysia Derivatives exchange closed up 46 ringgit at 1,935 ringgit a ton ($553) after trading between 1,934 ringgit and 1,966 ringgit.
The market was up today on two major factors. First thing, Chicago's soybean oil was up last Friday, a Malaysian dealer in Kuala Lumpur said.
The next reason is bad weather in south Malaysia. These are the two major factors supporting the market even though exports in the first fifteen days were not so good. Exports of Malaysian palm products between Jan. 1 and Jan.
15 fell 6.1 per cent to 472,181 tons from the 503,097 tons shipped between Dec. 1 and 15, cargo surveyor Societe Generale de Surveillance (SGS) said on Monday.
Other traded contracts were up 43 and 64 ringgit. Overall volume was 15,918 lots of 25 tons each against Friday's 14,110 lots.
Fears of disease gripped Malaysia's flood-devastated south on Monday and more than 100,000 evacuees were crammed into emergency shelters.
The latest floods follow the return of heavy monsoon rains to the southern states after severe flooding last month.
Production is expected to go down further, another dealer said.
In the United States, soybean futures on the Chicago Board of Trade rose to a one-year high on Friday, riding the coattails of the hot corn market after the USDA released bullish data, traders said.
March soybean oil closed 0.79 cent per pound higher at 29.15 cents. Soyaoil and palm oil compete for exports and their prices often move in step.
Chicago Board of Trade's electronic trading during Asian hours was closed on Monday. Most US financial markets were closed on Monday for Martin Luther Jr. Day.
The Malaysian palm oil futures market was likely to trade in a wide range and meet resistance at 1,970 ringgit with support at 1,900 ringgit on Tuesday, dealers said.—Reuters