KUALA LUMPUR: Malaysian palm oil futures jumped 1.7 percent to a more than seven-month high on Thursday, tracking strength in overnight US soyoil and on bullish forecasts for the vegetable oil, though the market pared gains towards the end of the session.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.5 percent at 2,318 ringgit ($569.32) a tonne at the close. It earlier rose as much as 1.7 percent to an intraday high of 2,344 ringgit, its highest since June 29.
Trading volumes stood at 32,216 lots of 25 tonnes each at the end of the trading day.
"The market is up, mostly tracking US soyoil," one Kuala Lumpur-based trader said, adding that expectations of easing stocks also contributed to bullish sentiment.
Malaysia's palm oil stockpiles at the end of January are forecast to fall 4.7 percent from the previous month to 3.07 million tonnes as production eases and exports increase, a Reuters survey showed.
Production is forecast to ease for a third straight month, down 10.9 percent from December to 1.61 million tonnes, in line with seasonal trends.
Meanwhile, Malaysia's January palm exports are forecast to rise by 12.4 percent from December to 1.56 million tonnes on stronger demand from Europe, the poll showed.
In related oils, the Chicago March soybean oil contract jumped 1.7 percent on Wednesday and was last up 0.1 percent.
US soybean futures edged higher on Wednesday as the government confirmed more soy purchases by China, but they were down on Thursday after four sessions of gains as concerns about lower South American yields eased on good rain forecasts.
China's Dalian Commodity Exchange is closed for the Lunar New Year.
Palm oil prices are affected by movements in soyoil, which competes for a share of the global vegetable oil market.
Palm oil could test a resistance at 2,351 ringgit a tonne, a break above which could lead to a gain to the next resistance at 2,380 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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