KUALA LUMPUR: Malaysian palm oil futures rose to a one-week high on Wednesday evening, supported by gains in rival edible oils.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was up 0.6 percent at 2,485 ringgit ($636.04) a tonne at the close. It earlier rose as much as 1.6 percent to 2,510 ringgit, its highest since Jan. 30.
Trading volumes stood at 41,943 lots of 25 tonnes each at the end of the trading day.
“The market is up after we saw strong overnight gains in the soybean oil market,” said a Kuala Lumpur-based trader.
However, the gains may not be sustained due to weak demand for the tropical oil, he added.
Malaysian palm oil shipments are forecast to decline 8 percent in January to 1.31 million tonnes, according to a Reuters poll, while end-stocks are seen rising 0.6 percent to 2.75 million tonnes.
Output, however, is expected to fall 14.9 percent to 1.56 million tonnes.
Palm oil prices are affected by rival edible oils as they compete for a share in the global vegetable oils market.
The March soybean oil contract on the Chicago Board of Trade surged 2 percent on Tuesday, buoyed by chart-based buying and optimism US lawmakers may soon renew a $1-per-gallon biodiesel tax credit. It was last up 0.2 percent on Wednesday.
The gains were also in line with soybean futures, underpinned by dry weather curbing Argentina’s crop yields and excessive rains slowing Brazil’s harvest.
In other related edible oils, the May soybean oil on the Dalian Commodity Exchange edged up 0.5 percent while the Dalian May palm oil contract rose 0.4 percent.
Palm oil remains neutral in a range of 2,448-2,520 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.