Malaysian crude palm oil futures jumped as much as 3.8 percent on Wednesday to hit two-month highs as rising crude oil markets boosted global vegetable oil prices. But underlying palm sentiment was weak due to fears that stock levels in Malaysia and Indonesia were building up, traders said.
The benchmark January palm oil contract on the Bursa Malaysia Derivatives Exchange gained as much as 83 ringgit to 2,273 ringgit ($665) a tonne, a level unseen since September 2, before settling at 2,260 ringgit. Overall volumes shot up to 17,119 lots of 25 tonnes each from the usual 10,000 lots on speculative trades. Technicals, however, looked solid, dealers said.
Palm oil prices have gone above the 50-day moving average of 2,206 ringgit and an immediate resistance level was 2,275 ringgit. A report by oilseed analysts Oilworld that global palm oil prices would start rising from December thanks to reduced stocks, lifted market sentiment, traders said.
Oil went above $80 a barrel on Wednesday, supporting soyoil markets across the globe. US soyoil for December delivery rose 0.5 percent as a slow harvest pace offset prospects for a bumper soybean crop. The most-active May soybean oil contract on China's Dalian Commodity Exchange edged up 0.5 percent.