Malaysian palm futures climbed to their highest in a week on Thursday, recording a second consecutive session of gains as stronger crude oil supported the market. Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.2 percent to 3,079 ringgit ($690) a tonne in the evening. Earlier in the session, they hit an intraday high of 3,091 ringgit, the strongest since November 24.
Traded volumes stood at 39,540 lots of 25 tonnes each, below the 2015 average of 44,600 lots traded in a day. Last week, palm oil rallied to post six consecutive sessions of gains, hitting a four-year high of 3,098 ringgit on November 24. While palm rose, tracking stronger crude oil as well as related edible oils on the Chicago Board of Trade and China's Dalian Commodity Exchange, gains were muted ahead of the official data release from the Malaysian Palm Oil Board on December 13, a trader from Kuala Lumpur said.
"People are waiting for the MPOB report. Some say production will be higher, some maintain that it will be unchanged. Export numbers will be low." "Another reason why the market is not able to go too high is because of China," said the trader, referring to China's moves of introducing regulatory measures to curb a rally in commodities prices. Crude oil prices surged over 10 percent after the Organization of the Petroleum Exporting Countries agreed to cut output on Wednesday and tackle a global supply glut. Palm tracks the movements of crude oil prices, as the tropical oil is used as a component in making biodiesel, a crude oil substitute.
Palm oil faces a resistance at 3,093 ringgit per tonne, a break above which could lead to a test of the next resistance at 3,158 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao. In related vegetable oils, the January soyabean oil contract on the CBOT was up 0.6 percent. The May soyabean oil contract on the Dalian Commodity Exchange rose 0.7 percent, while May palm olein on the Dalian gained 1 percent.