Malaysian palm oil futures opened at their highest in nearly seven months on Monday, notching up a sixth session of gains in seven, supported by strength in related edible oils. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange opened 1.7 percent higher at 2,333 ringgit. It was last up 1.4 percent at 2,327 ringgit ($566.46) a tonne at the end of the trading day, its strongest daily gains since Jan. 22.
Trading volumes stood at 23,679 lots of 25 tonnes each at the close of trade. "Palm is up tracking (soyaoil) strength in the Dalian Commodity Exchange," a futures trader from Kuala Lumpur, said. Palm prices rose even though data from a millers' association showed gains in January output, as the market had already factored in a pre-holiday rush to harvest, she added.
Malaysian markets will be closed on Feb. 5-6 for the Lunar New Year celebrations. Friday's strong gains in US soyaoil also helped palm. "The (millers' association) output data only shows production in Peninsular Malaysia is up," another trader said. The eastern states of Sabah and Sarawak are the country's top producing regions.
Palm oil may gain more to 2,351 ringgit per tonne as it has cleared a resistance at 2,322 ringgit, Wang Tao, a Reuters market analyst for commodities and energy technicals, said. Meanwhile, soyaoil prices on the US Chicago Board of Trade gained 1.8 percent on Friday, supported by concerns of Brazil's crop size and short-covering ahead of planned US-China trade talks next week.
The Chicago March soyabean oil contract was last up 0.3 percent on Monday. In other related oils, the May soyabean oil contract on the Dalian Commodity Exchange jumped 1.8 percent, and the Dalian May palm oil contract rose 1.5 percent. Palm oil prices are affected by movements in soyaoil rates, as they compete for a share in the global vegetable oil market.
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