Malaysian palm oil futures snapped two sessions of losses to gain on Thursday evening, lifted by better performing crude oil and rival oilseed soya. Palm made its sharpest daily jump in two weeks on September 2, and then hit a near three-week high of 2,662 ringgit a tonne on Tuesday.
It later declined on estimates of rising production before a data release next Tuesday by the Malaysian Palm Oil Board (MPOB). A Reuters poll had forecast 9.7 percent growth in output for August, and for end-stocks to decline to 1.60 million tonnes. Benchmark palm oil futures for November on the Bursa Malaysia Derivatives Exchange rose 0.5 percent to 2,610 ringgit ($646) per tonne at the end of the trading day. Traded volumes reached 37,335 lots of 25 tonnes each, below the 2015 average of 44,600.
"Soyabean oil started moving higher, and crude oil looks firm," said a futures trader from Kuala Lumpur. "Sideways trading is expected until next Tuesday when MPOB data is released." Palm oil is influenced by prices of soyaoil and related products, as they compete for a share in the global vegetable oils market.
In related vegetable oils, the Chicago Board of Trade soyabean oil December contract gained 0.8 percent, and the January soyabean oil contract on the Dalian Commodity Exchange edged up 0.1 percent. Palm oil prices also respond to the performance of crude oil, which rose over 1 percent on Thursday after US data showed a large drawdown in stocks. Palm oil is used for blending into biodiesel, a substitute for crude oil.
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