Malaysian palm oil futures climbed to a one-week high in early trade on Thursday before paring gains later on concerns of rising output and weakening exports. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,720 ringgit ($643.48) a tonne at the close.
It earlier rose to 2,746 ringgit, its strongest level since Sept. 27, tracking strength in rival soyaoil on the Chicago Board of Trade (CBOT). Traded volumes stood at 47,467 lots of 25 tonnes each on Thursday evening. "The market is weighing concerns over exports and production," said a Kuala Lumpur-based trader, referring to Malaysian palm oil output in October.
A Reuters poll expects September end-stocks to notch up to 2 million tonnes, a 3.2 percent gain from 1.94 million tonnes. Output is seen rising to 1.84 million tonnes, the strongest level in nearly two years, while exports are forecast to gain 7.8 percent to 1.60 million tonnes. Official data from the Malaysian Palm Oil Board is scheduled for release on Oct. 10 after 0430 GMT.
Palm had seen stronger gains in early trade on Thursday tracking soyaoil, another futures trader said. "Gains should be sustained until the Chinese are back next week," he said, referring to the Dalian Commodities Exchange market in China which is closed this week for national holidays.
December soyabean oil on the Chicago Board of Trade climbed 1.5 percent in its previous session, its strongest daily gain in a month. It was last up 0.1 percent on Thursday. Palm oil prices are affected by the performance of related edible oils including soya, as they compete for a share of the global vegetable oils market. Palm oil is expected to test a resistance at 2,737 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.