KUALA LUMPUR: Malaysian palm oil futures rose for a second straight session on Wednesday, tracking strength in rival Dalian oils and as exports picked up amid slowing production.
The benchmark palm oil contract, for January delivery, on the Bursa Malaysia Derivatives Exchange settled up 30 ringgit, or 1.1%, to 2,888 ringgit ($697.25) a tonne.
Earlier in the session, the contract rose to an intraday high of 2.8% and hit its highest since Oct. 15.
Palm oil prices had jumped 3% on Tuesday after cargo surveyor data showed Malaysian exports during Oct. 1-20 rose 4% from a month earlier.
Data from millers showed production during Oct. 1 to 20 fell 10% from the prior month, Cultrera added.
Market participants expect production in Malaysia to decline in the fourth quarter, hit by a labour shortage and wet weather conditions, after output in the seasonally strong month of September belied expectations by growing just 0.3%.
However, ample rainfall will boost production in Malaysia in the 2020/21 season by 2% from the previous year to 19.7 million tonnes, Refinitiv senior analysts wrote in a report. Output in top producer Indonesia was pegged to rise 7% to 48.2 million tonnes.
Crude palm oil futures will likely hover at a support of 2,700-2,900 ringgit per tonne throughout the fourth quarter of 2020, Refinitiv wrote.
Dalian’s most-active soyaoil contract rose 2.5%, while its palm oil contract gained 2.8%. Soyaoil prices on the Chicago Board of Trade were up 0.8%.
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