Malaysian palm oil futures rose for a third consecutive day on Wednesday, tracking a rally in alternative vegetable oils to reach a near two-week high. Palm has gained 1.7 percent so far this week after falling for two weeks. The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 0.8 percent to settle at 2,709 ringgit ($701) per tonne at the end of the trading day. It earlier hit an intraday peak of 2,733 ringgit, the highest since April 7.
Traded volumes were 51,945 lots of 25 tonnes each, higher than the 2015 daily average of 44,600. "Palm oil is getting a free ride from external markets," said a Kuala Lumpur-based trader, referring to alternative vegetable oils. "The market is very strong today (on the) soybean and oil run up, this morning Dalian RBD (refined, bleached and deodorised) palm olein also ran up."
The most actively traded September contract for palm olein on the Dalian Commodity exchange surged 2 percent on Wednesday. Among alternative oils, the September soybean oil contract on the Dalian Commodity Exchange gained 1.6 percent, whereas the May Chicago Board of Trade soyoil contract dropped 0.4 percent. Palm oil may rise to 2,776 ringgit per tonne, as it has resumed its uptrend from the Nov. 25 low of 2,260 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.
The offer price for crude palm kernel oil had risen to 5092.66 ringgit per tonne on Wednesday from 4,960.38 ringgit the day before, according to price assessments by Thomson Reuters. It had hit a five-year high of 5,506.02 ringgit at the end of March. "It's seen some correction, but we're still seeing tight supplies and some consumers haven't covered," said a trader. "We're still seeing some buying."