Palm oil up nearly 1 percent on better demand outlook

Malaysian palm oil futures rose for a second consecutive session by the close on Friday, climbing by nearly 1 percent and buoyed by expectations of rising demand and tracking gains in palm kernel oil prices. Another trader said palm prices were also supported by overnight gains in US soyaoil on the Chicago Board of Trade.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 0.9 percent at 2,681 ringgit ($625.23) on Friday evening, also its strongest intraday gains in a week. Traded volumes stood at 51,892 lots of 25 tonnes each at the close of trade.
"The market is up on expectations of strong demand," said a futures trader from Kuala Lumpur, as key markets India and China could stock up on purchases of the tropical oil ahead of the Diwali and mid-Autumn festivals in October. Malaysian palm oil exports for the first half of August dropped compared with the corresponding period in July, according to data from cargo surveyors.
Intertek Testing Services reported a 14.6 percent decline, while Societe Generale de Surveillance showed a 12.8 percent drop. Another trader added that crude palm oil was supported by gains in palm kernel oil, which rose to its highest in nearly three months on Thursday. The price of palm kernel oil, a substitute of coconut oil usually used to make soap, detergent and cosmetics, was last at 4,894.24 ringgit a tonne, its highest since May 25. Palm oil may test a resistance at 2,687 ringgit per tonne, a break above which could open the way towards the next resistance at 2,759 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.
In other related oils, the October soyabean oil contract on the Chicago Board of Trade made gains on Thursday, rising as much as 1.1 percent for its strongest daily gain since July 28. It was last up slightly 0.1 percent on Friday. The January soyabean oil on the Dalian Commodity Exchange rose up to 1.2 percent, while the January palm olein contract was also up 1.7 percent. Palm oil prices are impacted by the movements in related edible oils, as they compete for a share in the global vegetable oils market.