Malaysian palm oil gains

Malaysian crude palm oil futures ended 1.4 percent higher on Thursday, buoyed by robust prices of rival soyabean oil, traders said. Palm oil players were caught between soyaoil's overnight gains at the Chicago Board of Trade and fears that a seasonal uptake in palm oil output could swamp rising demand.
A factor which prevented gains to break 2,550 ringgit resistance level. The benchmark October contract on the Bursar Malaysia Derivatives Exchange settled up 35 ringgit, or 1.4 percent, at 2,535 ringgit ($731) per tonne. "Soyabean oil prices were strong in anticipation of bullish USDA data and this has helped to pull up the palm oil market," said one trader.
"Players are also waiting for tomorrow's data but there is talk that production has grown by 15 percent in July, which is quite worrying." Other traded months rose between 26 and 40 ringgit in overall trade of 10,851 lots of 25 tonnes each.
July exports, stocks and output numbers will be released by the Malaysian Palm Oil Board on Friday and cargo surveyors Interlake Testing Services and Society General de Surveillance will release export data for August 1-10 on the same day.
Chicago Board of Trade soyabean futures reached a near three-week high on Wednesday as crop worries due to heat and dryness in the southern US Midwest fuelled a rally, traders said.
Soyaoil ended 0.36 to 0.55 cent per lb. firmer. August was up 0.50 at 37.22 cents per lb. but in electronic trading on Thursday, the contract slipped 0.20 cents to 37.02 cents per pound. Soyaoil and palm oil compete for exports and their prices often move in step.
Palm oil, used in products ranging from confectioneries and cosmetics to biofuels, is more than 8 percent off an historic high of 2,764 ringgit reached in June. Asia's vegetable oil demand for the festival season has been dampened by surging prices and a seasonal upswing in production from Southeast Asia could result into swelling stockpiles.
Buying for the holy Muslim month of Ramazan has been subdued from South Asia and the Middle East while China has cut down imports as it focuses on soyabeans, traders said.
Singapore's Joint Asian Derivatives Exchange was closed on Thursday for a national holiday. In the physical market, crude palm oil for August shipment in Malaysia's southern region was quoted at 2,570/2,575 ringgit a tonne. Deals were done at 2,570 and 2,575 ringgit.