KUALA LUMPUR: Malaysian palm oil futures extended early gains on Wednesday, snapping two straight sessions of losses on improved demand outlook, while the market awaited Malaysian Palm Oil Board (MPOB) data for further direction.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed up 72 ringgit, or 1.95%, to 3,765 ringgit ($824.21) per metric ton.

Refinitiv Agriculture Research said it was widely expected that supplies would gradually improve during the high crop season, increasing stock levels in the second-half of 2023.

“However, industry players expressed their views that H2 recovery might be lower than expected,” it said in a note, adding that the steady export trend would likely continue.

“The increased demand is partly due to refiners increasing their purchases for upcoming festivals and uncertainty over supplies from the Black Sea.”

The MPOB is scheduled to release July supply and demand data on Thursday. A Reuters survey estimated July inventories to rise 4.2% from the month before to a five-month high of 1.79 million tonnes as production climbed.

Cargo surveyors are also scheduled to release August 1-10 export shipment data on Thursday, with traders anticipating a jump in demand.

In top producer Indonesia, consumption of palm oil-based biodiesel in the first six months of this year was 5.41 million kilolitres, data from palm oil fund agency BPDPKS showed.

Dalian’s most-active soyoil contract gained 0.9%, while its palm oil contract also rose 0.9%. Soyoil prices on the Chicago Board of Trade were up 1%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.