KUALA LUMPUR: Malaysian palm oil futures closed at an over seven-month high on Thursday, their sixth straight session of gains, tracking strength in rival Dalian oils and on concerns over production. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed up 80 ringgit, or 2.85%, to 2,891 ringgit ($697.47) a tonne, its highest closing since Jan. 23.

Palm touched an intraday high of 3.24% during the session. The market is mainly focused on supply forecasts for September and the fourth quarter, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.

Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics, said market participants were awaiting August production forecast from the Malaysian Palm Oil Association for more price direction. Market participants were expecting production in Malaysia to slip marginally or rise 2% at most as a dry spell last year hurt yields, but recent analyst surveys have indicated that output may come slightly stronger.

A producers' association in Colombia said palm oil production in the world's fourth-largest producer would rise 10% this year to 1.65 million tonnes. Meanwhile, fiscal stimulus in China, the world's second-largest buyer, and the recent depreciation of the US dollar are boosting commodity prices, Caroline Bain, Chief Commodities Economist at Capital Economist, wrote in a note.

"China's commodity imports are also growing strongly, but we suspect that the pace of purchases may slow soon as higher prices curb opportunistic buying." Dalian's most-active soyaoil contract rose 1.44%, while its palm oil contract gained 1.36%. Soyaoil prices on the Chicago Board of Trade were up 0.86%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.