KUALA LUMPUR: Malaysian palm oil futures rose to a two-week high during early trade on Wednesday, in line for a third straight day of gain, on expectations of easing stockpiles, and tracking strength in soyoil on the US Chicago Board of Trade (CBOT).
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 1.2 percent at 2,179 ringgit ($534.07) a tonne at the midday break, its highest since March 21.
"The market is up following external markets' strength, and many are buying on an expectation of a drawdown in stocks," said a Kuala Lumpur-based futures trader, referring to CBOT soyoil.
"We're expecting a drawdown in stocks to around 2.85-2.9 million tonnes based on production... and exports are on the high side."
Malaysian palm oil stockpiles rose to their highest in nearly two decades in December, and had last risen unexpectedly in February by 1.3 percent to 3.05 million tonnes. <MYPOMS-TPO>
Official March data from the Malaysian Palm Oil Board is scheduled for release on April 10.
Exports from cargo surveyors earlier this week showed Malaysian palm oil shipments rose in March, up 22-28 percent from the previous month.
In other related oils, the Chicago May soybean oil contract gained 1.4 percent on Tuesday, and was last up 0.1 percent on Wednesday. Soybean futures had gained on expectations of progress in trade talks between the United States and top soybean buyer China.
Meanwhile, the May soyoil contract on the Dalian Commodity Exchange rose 1.2 percent, and the Dalian May palm oil contract gained 2.3 percent.
Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
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