Malaysian palm oil futures jumped more than 1% on Thursday evening to hit near two-month highs, extending gains on stronger US soyaoil on the Chicago Board of Trade (CBOT) and short covering. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 1.5% at 2,058 ringgit ($500.36) per tonne at the close of trade. This marks its fourth straight session of progress, and its strongest daily gains in six weeks.
It earlier rose as much as 1.6% to 2,062 ringgit, its highest levels since June 7. "We're seeing some heavy short covering in the market, and also some strength in soyabean oil," said a Kuala Lumpur based trader, referring to US soyaoil.
"Going forward, I don't think these gains can last much longer, based on export figures and climbing production." Malaysian palm oil shipments during July 1-25 fell 4.3% from the corresponding period in June, reported independent inspection company AmSpec Agri Malaysia on Thursday. Another cargo surveyor, Intertek Testing Services, reported also on Thursday that Malaysian palm oil exports rose 0.7%.
In other related oils, US soyaoil futures on the CBOT had jumped 1.1% on Wednesday, and were last up 0.8% as of 1055 GMT on Thursday. US soyabean futures edged higher on Thursday, as traders eyed a breakthrough in a trade war between Washington and Beijing. Meanwhile, the September soyaoil contract on the Dalian exchange rose 1% and the Dalian September palm oil contract gained 0.7%.
Palm oil prices are affected by movements in related oils that compete for a share of the global vegetable oils market.