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KUALA LUMPUR: Malaysian palm oil futures jumped as much as 4.6% on Wednesday, bouncing back from this week’s early declines, tracking rival oils on the Dalian and Chicago exchanges and helped by tight production concerns.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed up 150 ringgit, or 3.62%, to 4,293 ringgit ($1,017.30) a tonne, extending gains for a second straight session.

The market rebounded on technical buying after Monday’s sharp drop, a Kuala Lumpur-based trader said.

Palm oil fell nearly 6% on Monday after cargo surveyors reported a decline in July exports.

Investors are awaiting estimates for July supply and demand data, typically released ahead of Malaysian Palm Oil Board (MPOB) data scheduled for Aug. 11, for more direction.

July production is expected to remain tight despite estimates of output ticking up in some regions amid the peak production season.

Refinitiv Commodities Research lowered its estimates for Malaysia’s production in the 2020/21 season to 18.2 million tonnes, down 1% from its last update, as labour shortages amid nationwide lockdowns remain a concern.

It raised its estimates for top producer Indonesia’s production to 48 million tonnes, up 1.5% from its last update.

“Despite the prevailing COVID-19 situation in the country, its impact on production is minimal so far, according to palm oil producers,” Refinitiv said in a note.

Dalian’s most-active soyoil contract rose 2.4%, while its palm oil contract climbed 3.6%. Soyoil prices on the Chicago Board of Trade were up 1%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

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