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Palm oil edges higher but lower June export expectations cap gains
[NEW DELHI] Malaysian palm oil futures edged up on Monday after touching their lowest level in nine months earlier in the session but gains were capped as sentiment remained weak on expectations of lower exports in June.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange were up 0.27 per cent at RM2,247 (S$755.83) per tonne as of 0738 GMT, after falling to as much as RM2,217 earlier in the day, the lowest level since Oct 9, 2015.
"The Malaysian Palm Oil Board's (MPOB) data for June is expected to show higher stocks and lower exports," said a trader from Kuala Lumpur. The MPOB data is due on July 12.
The September contract for soybean oil, a substitute for palm oil, on the Dalian Commodity Exchange rose 1.2 per cent, while the most actively traded September contract for palm olein surged 1.7 per cent, tracking gains in US soyoil.
China is the world's second-largest palm oil consuming country after India.
US soyoil futures were 0.7 per cent higher.
Higher stockpiles in Malaysia should pressure palm oil prices lower, forecast a Reuters poll of eight traders, analysts and planters. The survey showed inventories likely rose 7.4 per cent to 1.77 million tonnes in June, while exports slumped 6.4 per cent from May.
Output is seen rising for a fourth consecutive month in line with seasonal trend to reach 1.51 million tonnes.