PETALING JAYA: Palm oil futures for June settled at RM2,070 per tonne in Wednesday trade, the highest in about six months following a rise in exports for the month of March after two months of decline.

The settlement price was the highest since early October.

According to Bloomberg data gathered from cargo surveyor Societe Generale de Surveillance (SGS), palm oil exports for March rose 5.4% to 1.22 million tonnes.

AmResearch Sdn Bhd analyst Gan Huey Ling said in a report that the outlook for soybean and palm oil prices was positive given the lower-than-expected soybean planting acreage in the US.

Palm oil prices track soybean and crude oil prices.

Gan said the US Department of Agriculture forecasts farmers to plant 76 million acres of soybean, lower than Bloomberg consensus estimates of 79.1 million acres.

She said the SGS survey showed palm oil exports to the US expanded 50.1% month-on-month in March while to the EU it rose 46.7%. However, exports to China decreased 7.7%.

Meanwhile ECM Libra Investment Bank Bhd said in a recent report that palm oil inventory levels were back to 2007 levels.

“February statistics indicated that production saw another sharp dip due to the rainy season and exports continued to climb year-on-year,” it said.

AmResearch’s Gan has an “Overweight” call on the plantation sector due to improving supply-demand dynamics.

“Our picks in the sector are KL Kepong and IOI Corp while among smaller companies, we’ve buy calls on Asiatic Development and IJM Plantations,” she added.