Palm oil on the European vegetable oils market rallied with Malaysian palm oil futures on Friday because of concerns over lower production due to dry weather caused by the El Nino weather pattern. Palm oil was offered between $10 and $22.50 a tonne higher after Malaysian palm oil futures closed between 52 And 67 ringgit per tonne up as low supply concerns and bullish price sentiments from the Price Outlook conference held in Kuala Lumpur earlier this week.
"Prices on the European cash market rose overall, also because of continued short-covering in Chicago and due to a weaker dollar," one broker said. At 1730 GMT CBOT soyaoil futures were between 0.26 and 0.64 cents per lb higher on fund short-covering and recent strength in Brazil's currency, which may erode the competitive advantage of Brazilian soyabeans on the global export market. Strong energy markets also supported soyaoil futures.
Liquid oils -EU rapeoil, soyaoil and sunoil- were mostly offered between unchanged and eight euros a tonne up from Thursday, tracking CBOT soyaoil. Stronger rapeseed futures, on the hope that firmer energy prices will boost demand by biofuels producers, also supported rapeoil. Lauric oils tracked the trend in palm oil futures, on the fear that El Nino will reduce production, and were supported by a weak dollar, which underpins prices quoted in that currency. Sellers offered material between $15 and $45 a tonne up from Thursday.