Malaysian palm oil futures traded higher on Monday evening to register their fifth session of gains, tracking strength in related edible oils and ahead of an official September data release this week. As well as tracking soyaoil on China's Dalian Commodity Exchange and the Chicago Board of Trade, one trader said the market was buoyed by expectations of strong Malaysian palm oil shipment data from cargo surveyors Intertek Testing Services and Societe Generale de Surveillance.
The Malaysian Palm Oil Board is also scheduled to release official data for September on October 10. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,735 ringgit ($646.57) a tonne at the close.
Traded volumes stood at 49,765 lots of 25 tonnes each on Monday evening. However, traders said gains could be short-lived, with the potential for prices to drop by the end of the week. "I don't think market gains can be sustained as there is an increase in Indonesian and Malaysian production," one Kuala Lumpur-based trader said.
Palm oil production typically increases in the third and fourth quarters. September output is seen rising to 1.84 million tonnes, the strongest in nearly two years, a Reuters poll showed, while end-stocks are expected to have risen by 3.2 percent from a month earlier to 2 million tonnes, their highest since February 2016.
Exports are forecast to gain 7.8 percent to 1.6 million tonnes. In related edible oils, the December soyabean oil contract on the Chicago Board of Trade rose up to 0.4 percent. The January contract on China's Dalian Commodity Exchange gained up to 0.6 percent, while the January palm olein contract rose as much as 1.3 percent.
Palm oil prices are affected by the performance of related edible oils that compete for a share of the global vegetable oils market. Palm oil could break resistance at 2,737 ringgit a tonne and rise into a range of 2,765-2,791 ringgit, said Wang Tao, Reuters market analyst for commodities and energy technicals.
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