Malaysian palm oil futures rose on Thursday, tracking gains in competing vegetable oil markets, with expectations of a drop in production in December also helping lift prices. The benchmark February contract on the Bursa Malaysia Derivatives Exchange closed up 0.9 percent at 2,195 ringgit ($629), adding to a 2.1 percent gain in the previous session following upbeat export data for early December.
Prices have recovered from a low of 2,119 ringgit hit on Tuesday, the lowest since December 3. Total traded volume stood at 52,780 lots of 25 tonnes, above the average 35,000 lots. "We are tracking gains in US soy, and palm is holding in a firm range between 2,150 ringgit and 2,200 ringgit," a trader with a foreign commodities brokerage said.
US soybean futures rose 0.5 percent, though gains were capped by forecasts of bumper Brazilian production. US soyoil contract for January rose 1.1 percent in late Asian trade, while the most active May soybean oil contract on the Dalian Commodity Exchange fell 1.3 percent. Another trader said the market was supported by expectations that production in December would drop significantly due to monsoon rains. "Production for the month of December could be ... 20 percent lower." Brent crude edged higher towards $65 a barrel helped by a weaker US dollar, although prices remained close to a five-year low on signs that already ample supply will be even more plentiful in 2015.
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