Malaysian crude palm oil futures soared as much as 4.2 percent on Thursday, recovering from 10-month lows as gains in crude oil seeped into vegetable oils markets, dealers said. But palm oil prices, which have slipped more than 13 percent this year and are down more than 41 percent from their March peak, may struggle to test the 2,700 ringgit level as rising exports may not soak up palm stocks, dealers said.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose as high as 108 ringgit or 4.2 percent to 2,656 ringgit ($798) a tonne. The contract then settled up 72 ringgit at 2,620 ringgit.
"Vegetable oil markets were lifted up by gains in crude oil. But other than that, it is bearish because we have very good ending stocks and production is picking up," said a dealer in a local brokerage. He added: "Everybody is now waiting for the export number because it's the only one that can pull the market higher."
Contracts for other traded months rose between 41 and 84 ringgit. Overall volume shot up to 14,088 lots of 25 tonnes each from the usual 10,000 lots. Cargo surveyor Intertek Testing Services and Societe General de Surveillance will unveil estimates for August 1-20 on Friday.
Oil rose by more than $1 to above $117 a barrel on Thursday, building on gains triggered in the previous session by a larger-than-expected drop in US crude and gasoline inventories, and disruptions to Caspian supplies. Some vegetable oil markets followed suit. The most-active January 2009 soyoil contract on China's Dalian Commodity Exchange rose 2.1 percent but September soyoil at the Chicago Board of Trade fell 0.4 percent during Asia trading.
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