Malaysian palm oil futures ended Friday marginally higher, averting a third straight session of declines, supported by a technical correction and strength in US soyaoil prices. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was 0.05 percent up at 2,219 ringgit ($540.56) a tonne but down 0.85 percent on the week for a second consecutive weekly fall. Trading volumes stood at 23,776 lots of 25 tonnes each.
"The palm market is reacting to stronger bean oil prices during Asian hours," said a Kuala Lumpur-based futures trader, referring to soyaoil on the Chicago Board of Trade. Palm oil prices are affected by movements of other edible oils that compete in the global vegetable oils market. Market sentiment remained muted, however, on rumoured declines in exports, traders said.
Palm fell more than 1 percent on Thursday after data released by the Malaysian Palm Oil Association showed a 13.8 percent increase in production for the August 1-20 period. "The market rose today on a technical rebound after Thursday's sharp drop, but the outlook is poorer on concern about production and rumours of a fall in exports," said another trader, adding that the market had expected a less than 10 percent rise in output.
Palm oil output in Malaysia, the world's second-largest producer, typically rises in the third and fourth quarters of the year in line with the seasonal trend. In related oils, the Chicago December soyabean oil contracct rose 0.4 percent on Friday The January soyabean oil contract on China's Dalian Commodity Exchange dipped by 0.03 percent, while the Dalian January palm oil contract was down 0.4 percent.
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