Malaysian palm oil futures edged up on Tuesday, coming off a more than one-week low hit earlier as higher overseas sales underpinned prices.
KUALA LUMPUR: Malaysian palm oil futures surged to their highest in five months on Tuesday, recording a third straight session of gains, in response to tight supplies and strength in rival oils.
Benchmark palm oil futures for December on the Bursa Malaysia Derivatives Exchange surged 1.9 percent to 2,693 ringgit ($651) a tonne at the end of the trading day.
It earlier touched an intra-day high of 2,725 ringgit, its highest since April 22.
Traded volumes stood at 57,726 lots of 25 tonnes each, higher than the 2015 average of 44,600.
The market is up on tight supplies, said a trader in East Malaysia, adding that rising soyoil on the Chicago Board of Trade and China's Dalian Commodity Exchange also lifted palm.
Palm oil output from Malaysia, the world's second-largest producer, is still showing lagging effects of last year's dry weather El Nino, resulting in lower than average crop yields.
Malaysian production in August rose 7.3 percent, but registered its lowest August levels since 2012.
"Exports were also not too bad," the East Malaysian trader added, referring to export data from cargo surveyors which fell less than expected.
Palm oil shipments from Malaysia fell 11-12 percent during the Sept. 1-20 period versus the same duration last month.
Traders were expecting a sharper dip after record exports in August of 1.8 million tonnes, according to data from industry regulator the Malaysian Palm Oil Board.
A narrowing spread between palm and rival oilseed soy has shifted some demand to soy, dampening palm shipments in recent weeks. Consumers tend to prefer soyoil for cooking to palm and both compete for a share of the global edible oils market.
Chicago soybeans rose for a fourth straight session as excessive rains in parts of the U.S. delayed harvesting and raised concerns about crop quality.
The Chicago Board of Trade's soybean oil December contract rose 1.6 percent, while the January soybean oil contract on the Dalian Commodity Exchange also gained 3.1 percent.
Palm oil is expected to rise to 2,761 ringgit per tonne, as it has cleared a resistance at 2,651 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao. - Reuters
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