MUMBAI (July 26): Malaysian palm oil futures climbed roughly 2% on Thursday, supported by gains in rival US soyoil and as a price correction to a near three-year low boosted export demand.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 1.76% at RM2,201 (US$542.39) a tonne at the end of the trading day, after rising 0.5% on Wednesday.
Trading volume stood at 51,242 lots of 25 tonnes each at the close of trade.
"Export demand is picking up at lower level," said a Kuala Lumpur-based trader, referring to the fall in palm prices to RM2,140 on Wednesday, the weakest since September 2015.
Exports of Malaysian palm oil products for July 1 to 25 rose 5% from the corresponding period last month, inspection company AmSpec Agri Malaysia said on Wednesday.
The gains in US soyoil and crude oil prices also supported the market, said another Kuala Lumpur-based trader.
US soyoil rose following soybean futures, which climbed nearly 2% on expectations of higher exports to Europe after talks between Washington and the European Union.
Palm oil prices are usually affected by the performance of other edible oils as they compete for a share in the global vegetable oils market.
The Chicago December soybean oil contract was up 0.8%.
In other related oils, the September soybean oil contract on China's Dalian Commodity Exchange was up 1%, while the Dalian September palm oil contract rose 0.4%.
The upside in palm oil was limited as production is expected to be higher this month in Malaysia and Indonesia, traders said.
Palm oil looks neutral in a range of RM2,149-2,187 per tonne, and an escape could suggest a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
(US$1 = 68.67 Indian rupees)
(US$1 = 6.77 Chinese yuan)
(US$1 = RM4.0580)