Palm oil sees strongest gain in almost three weeks

Malaysian palm oil futures snapped snap a four-session decline on Friday evening, seeing its strongest gains in nearly three weeks, on a weaker production outlook and tracking overnight gains in US soyaoil. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 1.5 percent at 2,284 ringgit ($570.86) per tonne at the close of trade, its strongest intraday gain since July 5.
Palm oil futures have been camped in negative territory for most of this month, and the contract is down 2.1 percent this week, marking its fourth straight weekly decline. Trading volumes stood at 38,600 lots of 25 tonnes each at the close of trade. "Falling production seems to be supportive of the market," said a Kuala Lumpur based trader, as this will ease stockpiles.
Malaysian palm oil output declined 2.1 percent to 1.53 million tonnes in May, according to official data from an industry regulator, marking a second consecutive monthly fall. Palm was also tracking strength in soyaoils on the US Chicago Board of Trade, said traders at the market's midday break. The Chicago July soyabean oil contract was up 0.3 percent on Thursday, while September soyabean oil on China's Dalian Commodity Exchange edged down 0.1 percent.
In other related oils, the Dalian September palm oil contract rose as much as 0.6 percent. Palm oil prices track the performance of other edible oils, as they compete for a share of the global vegetable oils market.