Palm hits 6-month high, but soft soyoil prices cap gains

KUALA LUMPUR: Malaysian palm oil futures extended gains to hit their highest in more than six months on Wednesday, but a slide in soyoil prices curbed the rally.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 0.32 percent at 2,838 ringgit ($676.04) by the midday break. Earlier in the session, it hit 2,864 ringgit, its highest since March 9.

Trading volumes were robust, at 22,047 lots of 25 tonnes each.

Palm remained firm after two sessions of rally, although, softer soyoil prices will now slightly weigh on palm's upward momentum, said a Kuala Lumpur-based futures trader.

"Palm oil is strong, but has come off its highest as CBOT and Dalian soyoil are also off their highs. Now all eyes are on the Globoil conference," the trader said. The market is expected to track updates and insights from industry speakers at the three-day Globoil India conference, starting Wednesday.

The trader added there was still sustainable buying in the market.

Another trader said palm oil prices were buoyed by a surge in demand from China, ahead of the Golden Week holidays.

"Palm is tracking Dalian closely. China is looking forward to its Golden Week holiday in October, and buyers are going to stock up on palm oil for the rest of September, and palm will piggyback on that," the trader added.

The Chicago Board of Trade (CBOT) soybean oil contract declined as much as 0.4 percent.

The January soybean oil contract on the Dalian Commodity Exchange slipped up to 0.3 percent, while January palm olein climbed as much as 2.5 percent.