Palm hits seven-week top, tracking soyoil

KUALA LUMPUR: Malaysian palm oil futures hit a seven-week high on Tuesday, tracking gains in rival edible oils, before easing to be flat at the midday break.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was at 2,593 ringgit ($603.58) a tonne at the midday break. It earlier hit a high of 2,614 ringgit a tonne, its strongest level since May 23.

Traded volumes stood at 22,878 lots of 25 tonnes each at the noon.

The market rose on stronger oils on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange, but profit taking capped gains, said a futures trader from Kuala Lumpur.

"The market is still riding on the firmness in the CBOT amid the weather play. Profit taking is checking the upside," the trader said, referring to gains in soy prices due to hot, dry weather expected across the US plains.

Palm oil competes with related oils such as soy for a share in the global vegetable oils market.

Soybean oil on the Chicago Board of Trade posted its strongest daily gains in four months in overnight trade, curing to a four-month high before dipping 0.3 percent.

Palm oil has been on an uptrend this week, in line with soyoil and on expectations of falling output.

June production in Malaysia, the world's No.2 palm producer, fell 8.5 percent to 1.51 million tonnes, leading to a decline in end-stocks as well, data from the Malaysian Palm Oil Board showed on Monday.

In other related oils, the September soybean oil on the Dalian Commodity Exchange rose 1.4 percent, while the September palm olein contract was up 0.4 percent.

Palm oil may break a resistance at $2,599 ringgit per tonne and rise into a resistance zone of 2,614-2,628 ringgit, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.