Palm oil lifted by strength in soy oil markets

KUALA LUMPUR: Malaysian palm oil futures climbed 0.6 percent by midday on Monday, tracking gains in soybean oil and other edible oil contracts on the Dalian Commodity Exchange.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange rose to 2,758 ringgit ($652.01) a tonne by midday. It had gained 0.7 percent on Friday, although it shed 0.3 percent last week.

Traded volumes at the midday break on Monday stood at 23,426 lots of 25 tonnes each.

Traders said the upward movements on rival edible oil markets have buoyed palm prices.

"Looks like the market is responding to ... bean oil gains last week due to a US Environmental Protection Agency (EPA) decision," said a Kuala Lumpur-based futures trader.

The December soybean oil contract on the Chicago Board of Trade (CBOT) rose 0.98 percent on Friday, after the EPA retreated from a series of proposed changes to the nation's biofuels policy that would have reduced demand.

Palm prices are impacted by movements of related oils as they compete for a share in the global vegetable oils market.

"Strong bean oil and Dalian (prices) are holding up the market now, but sentiment could fall back to being cautious ahead of Oct. 1-20 production figures from the Malaysian Palm Oil Association," another trader said.

Data from the Southern Palm Oil Millers Association (SPPOMA) on Monday showed that production for the Oct. 1-20 period rose 20.6 percent, from the same period last year, the trader added.

The CBOT soybean oil contract dropped 0.2 percent early on Monday.

The January soybean oil contract on the Dalian Commodity Exchange gained 0.7 percent on Monday, while the January palm olein contract rose 1.5 percent.