KUALA LUMPUR: Malaysian palm oil futures surged over 1% on Monday, hitting the highest in two months on the back of strength in related edible oils and a weaker ringgit.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 1.1% at 2,085 ringgit ($499.58) per tonne at the midday break on Monday.
It earlier rose as much as 1.3% to 2,088 ringgit, its strongest level since May 31.
Palm oil may rise to 2,113 ringgit per tonne, as it has cleared a resistance range of 2,076-2,083 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Palm oil's gains were attributed to Friday's surge in U.S. soyoil futures on the Chicago Board of Trade, and current gains in related edible oils on China's Dalian Commodity Exchange.
U.S. soyoil futures on the CBOT had gained nearly 2% on Friday, but were last down 0.9% as of 0500 GMT on Monday. The September soyoil contract on the Dalian exchange rose 2.4% and the Dalian September palm oil contract gained 2%.
Chicago soybean futures lost ground on Monday, falling for four out of five sessions, as an escalating trade war between Washington and Beijing caused headwinds to the market.
Palm oil prices are affected by movements in related oils that compete in the global vegetable oils market.
The ringgit, palm's currency of trade, eased 0.4% against the dollar to 4.1730 on Monday afternoon.
A weaker ringgit typically makes palm oil cheaper for holders of foreign currencies.
Meanwhile, a Reuters poll forecast that Malaysian palm oil stockpiles likely rose for the first time in five months, edging up to a three-month high, as production gains outpaced a rise in exports.
Inventories are forecast to have gained 1.8% from the previous month to 2.47 million tonnes at end-July, while output would rise 11.4% to 1.69 million tonnes, its highest since
January and the biggest monthly gain in 10 months. Exports were seen rising 3.8% from June to 1.44 million tonnes in July.
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