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
|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|
|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|
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)