Malaysian palm oil futures extended gains on Thursday evening, supported by strength in soyaoil markets, favourable export numbers and end of year production concerns. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.3 percent at 2,813 ringgit ($664.62) a tonne.
Traded volumes stood at 39,474 lots of 25 tonnes each by the end of Thursday. Movements in related oils impact palm prices as they compete for a share in the global vegetable oils market. Palm oil was buoyed by a rally in soyaoil prices, said a Kuala Lumpur-based futures trader.
The December soyabean oil contract on the Chicago Board of Trade (CBOT) rose by 0.3 percent on Thursday. The January soyabean oil contract on the Dalian Commodity Exchange rose 0.5 percent. However, the January palm olein contract declined by 0.07 percent.
Another trader said the market appeared to be trading sideways. "It is waiting for the next catalyst that can drive markets higher." This refers to production figures for the month and final export data from cargo surveyors. Cargo surveyor Intertek Testing Services said on Wednesday exports of Malaysian palm oil products for Oct. 1-25 rose 8.6 percent to 1,177,939 tonnes from a month ago, while Societe Generale de Surveillance said exports of Malaysian palm oil products for the same period rose 8.3 percent to 1,197,237 tonnes.
Concerns that the La Nina weather pattern could hurt year-end production are also helping prices, traders said. "Higher production from October may be limiting the upside on palm but it is unable to pressure the market lower as players are expecting production to taper off towards end of the year," said a trader.
The Malaysian Palm Oil Association (MPOA) released higher production figures for Oct. 1-20, showing that production was up by 10.5 percent. Meanwhile, the palm oil January contract may break a resistance at 2,812 ringgit per tonne, and gain more to the Sept. 14 high of 2,860, says Reuters market analyst for commodities and energy technicals, Wang Tao.