Palm oil jumps to 26-week high

Malaysian palm oil futures reversed early losses on Thursday, rising more than 1 percent on expectations of positive news from the European Union's (EU) decision on biodiesel anti-dumping duties. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange rose 1.4 percent to 2,782 ringgit ($661.12).
Traded volumes stood at 57,957 lots of 25 tonnes each at noon. Palm rose by up to 2,796 ringgit a tonne during intra-day trade, the highest price in six-and-a-half months. "It is possible the market is bullish about the EU's upcoming decision, expecting a cancellation or deferment of the anti-dumping duties, which would be good for biodiesel exports from Malaysia," a Kuala Lumpur futures trader said.
Palm slid in earlier trade as the market reacted to a strengthening ringgit. The currency has firmed over the past three days, rising 0.68 percent on Thursday and returning to its November levels. A more expensive ringgit makes palm oil less attractive to foreign buyers of the tropical oil.
Soyaoil's steady performance, meanwhile, is expected to suport palm prices. Palm oil prices are affected by movements in other edible oils that compete for a share in the global vegetable oils market. MIDF Research said in a report on Thursday strong soyabean oil prices should limit the downside for palm oil despite high palm oil inventories.
"Ongoing concern on soyabean production has kept the soyabean oil price strong at above 35 cents per pound in the CBOT market and this is supportive to palm oil," the report said. A Reuters poll among planters, analysts and traders showed that Malaysian palm oil August stocks are expected to rise towards the 2 million tonne mark, with output still close to its strongest in two years.
The Malaysian Palm Oil Board is due to release production and export data on Sept. 11. The soyabean oil contract on the Chicago Board of Trade was up 0.9 percent. The January soyabean oil contract on the Dalian Commodity Exchange was down 0.3 percent, while January palm olein fell 0.5 percent.