Malaysian palm oil futures notched up a second day of gains on Wednesday, climbing to a five-week high, buoyed by firm soyaoil on the Chicago Board of Trade and expectations of lean production growth in October. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,260 ringgit ($544.71) a tonne at the end of the trading day.
It earlier rose to an intra-day high of 2,265 ringgit, its highest level since September 7. Trading volumes stood at 40,192 lots of 25 tonnes each at the close of trade. "Soyaoil prices are supportive along with the outlook that production gains are reducing," said a palm futures trader based in Singapore.
Palm oil output in Malaysia, the world's second-largest producer, typically peaks in the third or fourth quarter of the year before tapering off over the year-end. Production levels rose 14.4 percent in September at 1.85 million tonnes, according to data from the Malaysian Palm Oil Board. The output was its strongest in 10 months and its highest September levels since 2015.
In other related oils, the Chicago December soyabean oil contract rose as much as 0.4 percent, while the January soyabean oil contract on the Dalian Commodity Exchange dropped up to 0.2 percent. Meanwhile, the Dalian January palm oil contract gained up to 0.3 percent.
Palm oil prices are affected by movements of other edible oils as they compete for a share in the global vegetable oils market. Palm oil may retrace into a range of 2,214 ringgit-2,228 ringgit per tonne, before retesting a strong resistance at 2,251 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Comments
Comments are closed for this article.