SINGAPORE: Malaysian crude palm oil futures edged up to a new nine-month high on Thursday, as strong export numbers painted a rosy demand outlook for the edible oil and soybean supply fears in South America lifted sentiment.
An improvement in Malaysian exports for the first fifteen days of March has helped palm oil extend its gain to almost 7 percent this year, while positive news such as the Greek debt swap deal and improving US retail sales also lifted sentiment.
"Generally the external markets have been quite strong and news on the external fronts have been quite positive. Soybean prices are also on the uptrend, lifted partly by the improving confidence of the global economy," said Ivy Ng, an analyst with Malaysia's CIMB Investment Bank.
"On top of that, people are a bit concerned in view of the continuous downgrade of the South American soybean crop, so this could prompt them to try to buy ahead."
By the midday break, benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange rose 0.3 percent to close at 3,396 ringgit ($1,101) per tonne. Prices touched a new high of 3,403 ringgit, a level not seen since last June.
Traded volumes were thin on Thursday at 6,780 lots of 25 tonnes each, just slightly more than half of the usual 12,500 lots.
On the technicals front, Reuters market analyst Wang Tao said palm oil faces a resistance at 3,398 ringgit per tonne, a break above which will open the way towards 3,440 ringgit.
Cargo surveyor Intertek Testing Services reported a 37 percent increase in Malaysian exports for the first 15 days of the month to 697,804 tonnes, pointing to brightening demand prospects.
Export data showed European demand for palm oil more than doubled from 50,000 tonnes a month ago to almost 126,000 tonnes.
Another cargo surveyor Societe Generale de Surveillance will issue export data later in the day.
Market players are keeping a close watch on the official planting forecasts from the US Department of Agriculture due end of the month to get a gauge of soybean output for the year.
A lower soybean output will help support prices of palm oil, which competes with crushed soybean oil for use in the food and fuel sectors.
US oil futures inched up in Asian trading on Thursday as strong US economic data, signalling a recovery in the world's largest economy and supply worries spurred by tensions over Iran's nuclear programme supported oil prices.
In other vegetable oil markets, the most active US soyoil contract for May delivery and the most active September 2012 soyoil contract on China's Dalian Commodity exchange both edged up 0.2 percent.
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