Palm hits 5-week high on gains in rival oils

KUALA LUMPUR: Malaysian palm oil futures extended gains into a third session on Tuesday and hit a five-week high, tracking gains in rival edible oils.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.5 percent at 2,800 ringgit ($661.55) a tonne by midday after rising as much as 0.8 percent to 2,808 ringgit, their highest since Sept. 19, earlier in the session.

Traded volumes stood at 20,588 lots of 25 tonnes each at the midday break.

The uptick in rival edible oils continued to support palm prices, said traders.

Palm prices are impacted by the movements of related oils as they compete for a share in the global vegetable oils market.

"Last night, soybean oil on the CBOT was up and today, oils on the Dalian commodity exchange are up, but now the market is off highs," said a Kuala Lumpur-based futures trader.

The December soybean oil contract on the Chicago Board of Trade (CBOT) closed 1.4 percent higher on Monday, extending gains in to a third session, after the US Environmental Protection Agency backed off from a series of proposed changes to the nation's biofuels policy.

The January soybean oil contract on the Dalian Commodity Exchange gained 0.4 percent on Tuesday, while the January palm olein contract rose 1.1 percent.

"It looks like the market is reacting on expectation of stronger exports in the coming weeks," said another trader.

Cargo surveyor Intertek Testing Services released data on Friday that showed exports of Malaysian palm oil products during Oct. 1-20 rose 11.6 percent to 951,339 tonnes from 852,206 tonnes shipped a month earlier.

Meanwhile, Wang Tao, a Reuters market analyst for commodities and energy technicals, said palm oil may test a resistance at 2,812 ringgit per tonne, a break above which could open the way towards the Sept. 14 high of 2,860 ringgit.