Palm rises on overnight soyoil strength, output concerns

KUALA LUMPUR: Malaysian palm oil futures extended gains for a second session on Thursday, supported by strength in soyoil markets and favourable export numbers.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.4 percent at 2,814 ringgit ($664.93) a tonne.

Traded volumes stood at 17,194 lots of 25 tonnes each at the midday break.

Movements in related oils impact palm prices as they compete for a share in the global vegetable oils market.

Palm oil rates are buoyed by the rally in soyoil prices, said a Kuala Lumpur-based futures trader.

The December soybean oil contract on the Chicago Board of Trade (CBOT) rose by 0.4 percent on Thursday.

The January soybean oil contract on the Dalian Commodity Exchange gained up to 0.4 percent. However, the January palm olein contract declined as much as 0.04 percent.

Another trader said, "It looks like the market is trading sideways. It is waiting for the next catalyst that can drive markets higher."

These probable catalysts refer to production figures for the month and final export data from cargo surveyors.

Cargo surveyor Intertek Testing Services said on Wednesday exports of Malaysian palm oil products for Oct. 1-25 rose 8.6 percent to 1,177,939 tonnes from 1,085,116 tonnes shipped during Sept. 1-25.

Meanwhile, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products for Oct. 1-25 rose 8.3 percent to 1,197,237 tonnes from 1,105,555 tonnes shipped during Sept. 1-25.

Concerns that the La Nina weather pattern could hurt production are also helping prices, the trader added.

"It looks like market watchers are expecting palm production to be lower this month as weather concerns are in play now," he added.