Palm extends gains on global cues, solid export data

KUALA LUMPUR: Malaysian palm oil futures rose on Friday and were headed for a third consecutive session of gains, on the back of strength in soyoil markets, solid export data from cargo surveyors and a weaker ringgit.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.5 percent at 2,827 ringgit ($666.59) a tonne. It has risen more than 3 percent so far in the week, in what could be its sharpest gain in six weeks.

Traded volumes stood at 16,700 lots of 25 tonnes each at the midday break on Friday.

"Palm oil is up due to strong soybean oil (market)," said a Kuala Lumpur-based futures trader, referring to the Chicago Board of Trade (CBOT) and the Dalian Commodity Exchange.

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

The December soybean oil contract on the CBOT rose by 0.3 percent. The January soybean oil contract on the Dalian gained up to 0.3 percent, while the January palm olein contract rose as much as 0.5 percent.

The market is buoyed by continued optimism about exports, while concerns that the La Nina weather pattern could hurt production also supported prices, said a second trader.

Data from cargo surveyor Intertek Testing Services showed on Wednesday that exports of Malaysian palm oil products during Oct. 1-25 rose 8.6 percent to 1,177,939 tonnes from 1,085,116 tonnes shipped a month earlier.

Data from cargo surveyor Societe Generale de Surveillance showed exports of Malaysian palm oil products during Oct. 1-25 rose 8.3 percent to 1,197,237 tonnes from 1,105,555 tonnes shipped a month ago.

Another trader attributed the rise in palm prices to a weaker ringgit. A weaker ringgit makes palm oil more attractive to buyers holding foreign currencies.

The ringgit declined 0.2 percent to 4.2410 ringgit per US dollar.

Palm oil is poised to break a resistance at 2,812 ringgit per tonne, and gain more to the Sept. 14 high of 2,860 ringgit.