Palm rises for 2nd day on U.S. soyoil gains, improving export demand

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MUMBAI (July 26): Malaysian palm oil futures jumped more than 1% in early trade on Thursday, supported by gains in rival U.S. 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 1.1% at 2,187 ringgit (US$539.60) a tonne, after rising 0.5% on Wednesday.

Trading volume stood at 20,023 lots of 25 tonnes each at noon.

"Export demand is picking up at lower level," said a Kuala Lumpur-based trader, referring to the fall in palm prices to 2,140 ringgit 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 U.S. soyoil and crude oil prices also supported the market, said another Kuala Lumpur-based trader.

U.S. 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 0.6%.

In other related oils, the September soybean oil contract on China's Dalian Commodity Exchange was up 0.8%, 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 2,149-2,187 ringgit per tonne, and an escape could suggest a direction, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

 Palm, soy and crude oil prices at 0509 GMT

Contract Month Last Change Low High Volume
MY PALM OIL AUG8 2125 22.00 2117 2138 200
MY PALM OIL SEP8 2171 20.00 2164 2176 1,644
MY PALM OIL OCT8 2187 24.00 2177 2192 9,292
CHINA PALM OLEIN SEP8 4692 18.00 4670 4706 108,804
CHINA SOYOIL SEP8 5558 44.00 5512 5578 143,018
CBOT SOY OIL DEC8 28.98 1.10 28.75 29.04 3,705
INDIA PALM OIL JUL8 618.30 1.10 617.70 620.00 77
INDIA SOYOIL AUG8 743.80 1.80 743.55 744.90 3,290
NYMEX CRUDE SEP8 69.36 0.06 69.30 69.74 35,318

 Palm oil prices in Malaysian ringgit per tonne
 CBOT soy oil in U.S. cents per pound
 Dalian soy oil and RBD palm olein in Chinese yuan per tonne
 India soy oil in Indian rupee per 10 kg
 Crude in U.S. dollars per barrel   

(US$1 = 4.0530 ringgit)
(US$1 = 68.67 Indian rupees)
(US$1 = 6.77 Chinese yuan)