Malaysian palm oil futures jumped to a near three-month high on Friday, charting a second day of gains, buoyed by strong crude oil prices and technical buying. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was 1.3 percent up at 2,226 ringgit ($541.61) a tonne at the close. It was earlier as high as 2,228 ringgit, its strongest levels since Oct. 23.
Palm is up 2.4 percent for the week, a second week of gains in three. Trading volumes stood at 37,341 lots of 25 tonnes each at the end of the trading day. "Palm is up mostly on technical buying, in addition to supportive crude oil prices," said a Kuala Lumpur-based futures trader.
Oil prices rose over 1 pct on Friday after a report from OPEC showed its production fell sharply last month, easing some fears about prolonged oversupply. Palm oil prices are impacted by movements in crude oil, as the vegetable oil is used as feedstock to make biodiesel.
In related oils, the Chicago March soyabean oil contract slipped 0.03 percent, while the May soyabean oil contract on the Dalian Commodity Exchange was up 1.1 percent. The Dalian May palm oil contract rose 2 percent. Palm oil prices are impacted by movements in soyaoil rates, as they compete for a share in the global vegetable oil market.
Palm oil is biased to break a resistance at 2,198 ringgit per tonne, and rise into a range of 2,227-2,245 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.