Palm edges up tracking US soyoil strength

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KUALA LUMPUR (July 25): Malaysian palm oil futures extended gains on Thursday morning and hit fresh one-month highs, tracking strength in US soyoil on the Chicago Board of Trade (CBOT).

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was last up 0.1% at RM2,031 (US$493.32) per tonne, heading for a fourth straight session of gains.

It earlier rose as much as 0.6% to RM2,042, matching the highs seen on June 20, before paring some gains.

Palm oil may end its rise around a resistance at RM2,038 per tonne, and then fall towards RM2,001, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

"Strength in competing vegetable oils is likely to spill over to our local front and extend palm oil's gains," said a Kuala Lumpur-based trader, adding that the market then pared its gains on profit-taking.

Declining exports could also further cap price gains.

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.

US soyoil futures on the CBOT had jumped 1.1% on Wednesday, and were last up 0.4% as of 0531 GMT on Thursday.

US soybean futures edged higher on Thursday, as traders eyed a breakthrough in a trade war between Washington and Beijing.

In other related oils, the September soyoil contract on the Dalian exchange rose 1.2% 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.