Malaysian palm oil futures climbed to a fresh six-month peak on Friday, charting a fourth straight session of gains on expectations that production will be lower than initially forecast. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 0.3% at 2,263 ringgit ($540.10) per tonne at the close of trade. It earlier rose as much as 0.7% to an intraday high of 2,271 ringgit, its highest level since Feb. 25.
Palm has gained 3.2% this week on slower-than-expected output growth and stronger exports. "There is talk of lower than initially expected output which drove the market, though it later came off," said a Kuala Lumpur-based futures trader, referring to production in Malaysia, the world's second largest palm producer. Data released by a state millers association earlier this week showed slower output growth for the first 20 days of August compared with a month earlier, according to traders.
Malaysian palm oil exports during Aug. 1-20 rose between 6.2% and 13% from a month ago, data from cargo surveyors showed. Palm prices were down in the first half of trade tracking overnight weakness in US soyaoil and on profit taking, said traders earlier in the day. US soyaoil futures on the Chicago Board of Trade were last up 0.2% on Friday, following a 0.8% decline on Thursday.
In other related oils, the September soyaoil contract on the Dalian Commodity Exchange ticked up 0.03%, while the Dalian September palm oil contract rose 1.8%. Palm oil prices are impacted by movements in related vegetable oils, as they compete for a share in the global edible oils market.
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