VEGOILS-Palm oil rangebound as higher May stockpile weighs
KUALA LUMPUR, June 13 (Reuters) – Malaysian palm oil futures edged up on Tuesday in range-trading, with larger-than-expected May inventories pressuring the market.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange gained 14 ringgit, or 0.42%, to 3,363 ringgit ($728.08) a metric ton by the midday break.
Malaysia’s end-May palm oil inventories rose for the first time in four months, after output surged to its highest level so far this year, data from the Malaysian Palm Oil Board (MPOB) showed on Monday.
Stockpiles in the world’s second-largest producer rose 12.63% from the month before to 1.69 million metric tons.
In related oils, Dalian’s most-active soyoil contract DBYcv1 fell 0.2%, while its palm oil contract DCPcv1 eased 0.8%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.1%.
Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
“The U.S.-Europe arbitrage opportunity offered on the cross- border trade by the bean oil basis versus the U.S. biofuels domestic requirements is supporting the widening of the price spread between soybean oil and palm olein,” said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd.
This is improving palm oil’s relative value to edible oils, he added.
($1 = 4.6190 ringgit)
(Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Rashmi Aich)
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