KUALA LUMPUR, May 8 (Reuters) - Malaysian palm oil futures climbed 2% on Friday, as traders said Indonesian inventories of the vegetable oil dipped in March, although the contract was set for a sharp weekly loss.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 42 ringgit, or 2.21%, to 1,989 ringgit ($462.56) per tonne by 0246 GMT.
Stocks of palm oil in Indonesia, the world’s top producer of the commodity, fell to 3.42 million tonnes in March from the month before, while production fell to 3.58 million tonnes, a Singapore-based trader said, citing Indonesian Palm Oil Association data.
Palm oil has ended lower for the past three sessions, and has lost 5% so far this week, pressured by forecasts of April end-stocks in Malaysia rising 10% from March as coronavirus-driven lockdowns around the world sharply reduced demand.
* Oil prices rose on Friday as more countries began easing lockdowns set in place to stop the coronavirus spreading, giving hope that demand for fuels will pick up after the economic devastation caused by the pandemic.
* Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
* Dalian’s most-active soyoil contract gained 0.52%, while its palm oil contract rose 0.92%. Soyoil prices on the Chicago Board of Trade were up 0.23%.
* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
* Palm oil may test a resistance at 2,014 ringgit per tonne, a break above could lead to a gain into the range of 2,043 to 2,072 ringgit, Reuters technical analyst Wang Tao said.
* Asian stocks were set to track Wall Street gains on Friday, after upbeat corporate earnings took the focus off upcoming data that is expected show the worst U.S. unemployment rate in more than 70 years.
0030 Japan Services PMI
1230 US Non-Farm Payrolls
1230 US Unemployment Rate
1230 US Average Earnings YY ($1 = 4.3000 ringgit)
Reporting by Mei Mei Chu; Editing by Aditya Soni