KUALA LUMPUR: Malaysian palm oil futures recorded a third consecutive day of gains on Thursday, reaching a near two-week high as a technical rebound saw the spread with soyoil widen.
Benchmark palm oil futures for May on the Bursa Malaysia Derivatives Exchange were up 1.1 percent to 2,862 ringgit ($643.58) a tonne at the end of the trading day. They earlier hit 2,684 ringgit, the strongest since Feb. 20.
Traded volumes stood at 48,921 lots of 25 tonnes each on Thursday evening.
"There's a widening spread between both products," said a futures trader from Kuala Lumpur, referring to the price differential between palm oil and soyoil.
Soyoil, used as a feedstock in biodiesel production, surged over 6 percent on Tuesday on the Chicago Board of Trade (CBOT) on reports the US president was preparing an executive order on biofuels, even though the claims were later denied.
Palm oil prices are impacted by the movements of related oils such as soy, as they compete for a share in the global vegetable oils market. Rising soyoil prices make palm oil more price competitive.
Another trader said the market also gained on a technical rebound ahead of an industry conference in Kuala Lumpur next week.
Industry players expect leading analysts to provide bearish price forecasts at the conference. Palm prices are seen weakening between now and the second half of the year, as production levels are expected to recover when the effects of a crop damaging El Nino wear off.
Palm oil may rise to a resistance at 2,880 ringgit per tonne as it has broken above a resistance at 2,820 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.
In related vegetable oils, soybean oil on the Chicago Board of Trade fell 1.1 percent, while the May soybean oil contract on the Dalian Commodity Exchange rose 0.5 percent.
The May contract for palm olein on the Dalian Commodity Exchange was up 0.2 percent.
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