KUALA LUMPUR: Malaysian palm oil futures surged more than 3-month high on Thursday, driven by big gains in comparative soy markets as well as optimism that growing food consumption amid weakening palm output will underpin prices into next year.
The most active January soybean oil contract on the Dalian Commodities Exchange jumped more than 3 percent to a 1-1/2 month high in early Asian trade, while the US soyoil contract for December edged up 0.1 percent.
US soybeans rose to a seven-week peak and were trading around $10.46 a bushel early Thursday, buoyed by a slow start to its anticipated record soybean harvest.
By the midday break, the benchmark January contract on the Bursa Malaysia Derivatives Exchange had edged up 0.9 percent to 2,284 ringgit ($694) per tonne. Prices peaked at 2,302 ringgit in intraday trade, their highest since July 21.
Total traded volume stood at 25,373 lots of 25 tonnes, more than double the usual 12,500 lots.
Technicals looked bullish. Malaysian palm oil is expected to rise to 2,340 ringgit per tonne, as it has cleared resistance at 2,295 ringgit, said Reuters market analyst Wang Tao.
Both Indonesia and Malaysia account for about 85 percent of the world’s palm oil supply.
Prices would likely also draw support from rising demand in India and China, the world’s biggest edible oil buyers, the analysts said.
