Malaysian palm oil futures touched a more than 2-year high on Friday and overtook soyaoil on the Chicago Board of Trade for the first time in almost nine years as speculation grew that production in November fell more than first thought.
A Reuters poll on Thursday forecast Malaysian palm oil production would show a 10% monthly fall in November, but three traders on Friday said they now expected it to fall as much as 13%.
Lower than expected production pushed the benchmark palm oil contract
on the Bursa Malaysia Derivatives Exchange up for a fourth straight session, up 1.4% to 2,855 ringgit ($684.65) per tonne.
The last time prices were this high was on Sept. 15, 2017.
Malaysian Palm Oil Board will release official data on Tuesday, Dec. 10.
Dry weather and lower fertiliser use - a move adopted by some growers to save costs - have affected output this year at top producers Indonesia and Malaysia, and will continue to be a factor in the coming years, leading industry analyst, James Fry said last month.
Palm futures have been soaring over the last few months on supply shortage worries and also saw its biggest weekly gain in more than two years.
"This means palm is now the premium (vegetable oil) which is not good as demand may shift to soyaoil especially during the winter months," a Kuala Lumpur-based trader told Reuters, adding that buyers already tend to gravitate towards soyaoil during colder seasons as it is easier to store.
Soyaoil on the Chicago Board of Trade last rose 1% to $625 per tonne. The last time palm oil was more expensive than soyaoil was on Feb. 22, 2011.
Gains in rival oils on the Dalian Commodities Exchange also drove palm prices higher, the trader quoted earlier said. The palm oil contract on the Dalian were up 2.2% while its soyaoil contract jumped 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Capping gains, however, was a stronger ringgit which rose 0.2% against the dollar.
Palm oil may break a resistance at 2,818 ringgit per tonne, and rise into a range of 2,857-2,911 ringgit, said Reuters analyst Wang Tao.
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