KUALA LUMPUR: Malaysian palm oil futures rose on Thursday, helped by steady crude oil prices and a broad improvement in global market sentiment.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was up 0.7 percent at 2,046 ringgit ($489.71) a tonne at the close of trade.

Trading volumes stood at 38,450 lots of 25 tonnes each.

“The palm market is riding on global positive sentiment and stronger overnight crude oil prices as well as soybean oil," said a Kuala Lumpur-based trader, referring to US soyoil prices on the Chicago Board of Trade.

Oil prices steadied on Thursday, under pressure from high inventories but buoyed by a drawdown in US crude stockpiles and indications that the trade war between the United States and China may be easing.

Palm oil prices are affected by changes in the price of crude oil as the edible oil is used as feedstock to make biodiesel. It is also affected by changes in soyoil prices, as they compete for a share in the global vegetable oil market.

China on Wednesday made its first major purchases of US soybeans since President Donald Trump and his Chinese counterpart Xi Jinping struck a trade war truce earlier this month, providing some relief to US farmers who have struggled to find buyers for their record harvest.

The Chicago January soybean oil contract gained 0.3 percent in the previous trading session, and was last down 0.3 percent on Thursday.

In other related oils, the January soybean oil contract on the Dalian Commodity Exchange fell 0.8 percent, and the Dalian January palm oil contract rose 0.3 percent.

Palm oil may gain further into a range of 2,056-2,074 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

Copyright Reuters, 2018