Malaysian palm oil futures rose on Friday to post their third consecutive weekly gain, boosted by tight supplies and expectations of higher exports. Benchmark palm oil futures for November on the Bursa Malaysia Derivatives Exchange rose 0.1 percent to 2,578 ringgit ($643) per tonne at the close of trade, after dropping more than 2 percent in the previous session. Traded volumes stood at 54,374 lots of 25 tonnes each on Friday evening, versus the 2015 average of 44,600.
For the week, prices are up 2.1 percent, led by gains on Wednesday when the market posted its biggest daily rise in more than 10 months. Tight supplies and the anticipation of good exports have driven gains, according to a trader from Kuala Lumpur. Exports of Malaysian palm oil products jumped more than 30 percent month on month over August 1-15, according to cargo surveyors. Intertek Testing Services is scheduled to release data for August 1-20 shipments on Saturday.
Expectations of continued firm demand for exports, together with lower-than-anticipated output due to a crop-damaging El Nino last year that brings scorching heat and dry weather across Southeast Asia, helped push up palm prices by close to 10 percent over the past two weeks. The El Nino weather pattern typically hurts fruit yields across top palm producers Indonesia and Malaysia, which account for nearly 90 percent of the global palm oil output.
Palm oil is expected to retest a resistance at 2,651 ringgit per tonne, a break above which could lead to a gain to the next resistance at 2,761 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. In related vegetable oils, the Chicago Board of Trade soyabean oil December contract fell 1.3 percent, while the January soyabean oil contract on the Dalian Commodity Exchange was also slightly down by 0.1 percent.