Palm rallies 3% on estimates of falling output, soyoil rebound

KUALA LUMPUR: Malaysian palm oil futures jumped more than 3% on Wednesday, its biggest intraday percentage gain in six weeks, lifted by signs of slowing production and a recovery in rival soyoil prices.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed up 139 ringgit, or 3.32%, at 4,331 ringgit ($1,033.40) a tonne, extending gains for a second consecutive session.

"Market moved up on a rebound in soybean oil prices overnight," a Kuala Lumpur-based trader said.

"Anticipation of bullish outlook in Globoil starting tomorrow in India also added to short covering activities."

Leading industry analysts are expected to present their outlook at the Globoil India edible oil conference from Thursday to Saturday.

The Malaysian Palm Oil Association estimated production during Sept. 1-20 fell 0.55% from the same week in August, traders said.

Dalian's most-active soyoil contract fell 0.45%, while its palm oil contract rose 0.2%. Soyoil prices on the Chicago Board of Trade were up 1.3%.

Palm reverses early losses on estimates of lower production

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

Stocks and riskier currencies found relief on Wednesday as market jitters around China Evergrande eased, with the embattled developer saying it could pay a coupon on one of its bonds.

Germany will end the use of palm oil as a raw material to produce biofuels from 2023, the country's environment ministry said.