Malaysian palm oil futures rose for the first time in six sessions on Wednesday, tracking competing vegetable oils, in particular sharp gains in soyoil. Palm dropped 4.8 percent since the start of its downtrend in the six previous sessions on a strengthening ringgit and better-than-expected March output growth data from the Malaysian Palm Oil Board (MPOB).
The data showed a 16.9 percent jump in output in March from February, more than double the 8 percent growth forecast in a Reuters poll. The palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 0.8 percent to reach 2,659 ringgit ($687) per tonne at the close of trade. Traded volumes were 47,126 lots of 25 tonnes each, higher than a 2015 daily average of 44,600 lots. "Palm rose because of Dalian, and it should hold due to the fact that the market is a bit oversold," said a trader at a brokerage firm in Kuala Lumpur.
The September soybean oil contract on the Dalian Commodity Exchange rose 1.1 percent on Wednesday while the May Chicago Board of Trade soyoil contract rose 1 percent. US soybean futures had climbed to an eight-month high on Wednesday due to fund buying and concerns that rains would limit Argentinean harvests. Palm oil is expected to rise to 2,716 ringgit per tonne, as it has found support around 2,629 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. The offer price for crude palm kernel oil stood at 4,943.85 ringgit per tonne in the evening, according to price assessments by Thomson Reuters.